Ten Thousand Villages has seventeen retail locations and thirty-eight contract retail locations in the U.S. and Canada, as well as 300 allied stores that sell their products. But it is not a typical retail chain. It’s a nonprofit selling handicrafts made by seventy-six artisan groups in twenty-seven countries, creating job opportunities for more than 20,000 craftspeople—60 percent of whom are women.
Their “maker-to-market model” pays a 50 percent advance to the artisans, allowing them to buy materials. The rest is paid before products are exported; any damages and losses are absorbed by Ten Thousand Villages.
And 92 percent of sales revenue—roughly $99 million over the last sixteen years—is reinvested into this system; the remaining 8 percent covers administrative and other costs. Individual stores are responsible for their rent and other expenses.
“It’s really a sustainable, market-based approach to support [craftspeople] and help lift them out of poverty,” says Carter, a McKinsey consultant who first connected with the store as a U-M MBA student in 2017.
Before Ten Thousand Villages opened on S. Main in 2004, supporters spent two-and-a-half years organizing and raising money. Since then, “We always came close to covering costs with sales—sometimes a little more, sometimes a little less,” Carter says. “In 2018 we exceeded. We were in great shape. In 2019 we did well, covering our costs.”
But in 2020 and 2021, pandemic losses wiped out the store’s financial cushion—and this month, its lease is expiring.
The store’s new landlords, Purnima Baluja and her husband, Indertej Reen, are sympathetic. They owned and operated Shalimar restaurant two doors down from 1994 to 2015, and already owned that space and the storefront that’s now Bitty & Beau’s Coffee.
They paid $1.26 million in January 2020 to buy Ten Thousand Villages’ spot. But the next year, its property tax bill nearly doubled, from a bit over $17,000 to nearly $34,000.
“I said, ‘Oh my God, we can’t afford it,’” Baluja recalls.
In Michigan, property tax increases are capped at 5 percent or the previous tax year’s inflation rate, whichever is less. Governments still assign properties an assessed value—their best guess at what it would sell for, divided by two—but owners pay taxes on the capped taxable value.
The year after a property is sold, though, it’s “uncapped,” and the taxable value snaps back to the full assessed value.
“In 2020, before the uncapping, we had an assessed value [on the storefront] of $417,800 and taxable value, $251,645,” explains city assessor Jerry Markey. “The 2021 value for the subject property increased to $504,800.”
“My real estate person is saying [Ten Thousand Villages’ rent] should be triple,” Baluja says. “I said, ‘No … I really can’t make him pay that much or he will go’.”
“We mostly are run by volunteers,” Carter says. “We keep costs as low as possible so we can return even more to the artisans.”
As an undergrad, Carter visited Haiti, Puerto Rico, and eventually Cameroon, where he managed a water project for Engineers Without Borders. The experience was so fulfilling that after he graduated, he spent seven years doing humanitarian work in Africa.
He returned to the United States to pursue an MBA, he says, because “I believed I could have even greater impact through business solutions to poverty.” He was drawn to the Ross School of Business by a quote from then-dean Scott DeRue: “Business is the most powerful force on the planet for positive change.”
Carter says he saw that firsthand during a recent visit to a group of artisans in Kenya. During the financial crisis of 2007–2008, they “lost all their other customers,” he says. But Ten Thousand Villages kept buying, “stocking the handicrafts in warehouses, even though we couldn’t sell them, just to ensure that they could survive.”
Now it’s the store that needs help to survive. For the first time since 2004, it’s fundraising. At press time, an online fundraiser (donorbox.org/covid-recovery-campaign) had raised $11,247.45 toward a $50,000 goal.
It also needs to replenish its workforce: “A lot of our volunteers are retirees, so the pandemic is a bigger concern for them, naturally,” Carter says.
Baluja says that she wants to help the store as well as Bitty & Beau’s, a chain that employs people with intellectual and developmental disabilities. Paying thousands of additional dollars per month in taxes is unsustainable, she says, but “God has really been very very kind to us, so we want to give back something … and we really want them to make it.”
Carter says that relocating would probably not be financially viable due to moving expenses. Scheduled construction projects may also hurt business. Carter says Main is projected to be completely shut down from March until July to replace water mains.
“The sidewalk will be open, but how many people are going to be walking through a construction zone?” he asks.
Yet he remains optimistic about sales, the fundraising campaign, and the future of Ten Thousand Villages of Huron Valley. “We’re confident [customers] will return,” Carter says. “We’re one of the more successful stores, and we’re on a good trajectory to get back.
“Our landlord is currently working on a lease renewal plan that will be manageable for us in order to help us out,” he emails. “I am confident we will come to a solution.”