RIO DE JANEIRO, Brazil (CNN) -- Flavio Canto spent most of his teenage years training in judo, in hopes he would achieve Olympic gold. But today, the Brazilian athlete considers his defeat at the 2000 Olympic trials one of his greatest victories.
More than 1,000 students are enrolled in judo athlete Flavio Canto's Reaction Institute.
The loss led Canto -- who later won bronze at the 2004 Olympic Games -- back to his native Rio de Janeiro. Since then, he has helped thousands of young people from the city's toughest shanty towns find hope in the midst of hardship.
"I've never seen any place as beautiful as Rio de Janeiro, but it does have its dark side," said Canto, 34. "There is violence all over."
Millions of poor families populate Brazil's favelas, or shanty towns, and roughly 60 percent of the country's homicides happen there, according to Brazil's Institute of Applied Economic Research.
The favelas' vulnerable youth face two constant challenges, Canto said: falling victim to the violence or choosing to become a young perpetrator of it.
"It's the kids who have it toughest," said Canto. "They are told every day, 'You're not going to advance. If you are born in the favela, you're going to die in the favela.' And that's an idea that we try to break."
Through his Instituto Reação (Reaction Institute), Canto empowers youths by providing free judo training and education programs. Do you know someone who should be a CNN Hero? Nominations are open at CNN.com/Heroes
"We have a very strong pull to attract the kids. They come here thinking they're going to learn to fight," said Canto. Once in the program, instead of fighting in the streets, youths "learn to fight the proper way -- only in the dojo [judo arena]." Watch Canto and his students in action in the dojo »
Although Canto has spent most of his adulthood mentoring favela kids, he said he did not always know how to help. But while volunteering in a government-sponsored judo training project in 2000, Canto said he realized that sports were a powerful tool to change people's lives.
The project lost its sponsorship soon after, and Canto was the only one to continue training the children.
He sought help from friends and family to sustain a judo training program for the favela youths. After he collected $3,000 through monthly pledges, the Reaction Institute was born.
Every youngster in the institute must participate in judo and educational classes Monday through Saturday, year-round. Canto said the institute teaches the values of discipline, humility, courage and determination through judo -- Japanese for "gentle way" -- and applies them to other activities.
Since 2000, Canto's institute has grown to four locations throughout Rio. More than 1,000 students are enrolled in the program, but Canto hopes to continue expanding to meet an ongoing need; there are 500 children on the waiting list in Rio's largest favela, Rocinha, alone.
Diego Cardoso dos Santos, 21, credits Canto and his judo training for earning him a scholarship to attend a private university and for helping his 11-year-old brother, Joao Victor, heal. Watch how Canto's program helps Victor and other favela youths »
Victor witnessed his father's murder when he was 6 years old and joined the institute a short time after. Today, he has more confidence and pride.
"I am learning more and more and developing myself," Victor said. "My friends think that one day we can be like Flavio. He was [about] 13, a little bit bigger than me when he won with the black belt. It is incredible!"
Canto said the inspiration goes both ways. While teaching his students to fight for their dreams, they inspired him to continue pursuing his. In 2004, he earned an Olympic bronze medal in Athens, Greece. But for Canto, the long-awaited achievement wasn't just a personal victory.
"We won an Olympic medal in Athens," Canto stressed. "They were there with me. If they didn't exist, the medal wouldn't exist."
But seeing his students excel both in judo and academics is the best reward, said Canto.
"We now have college graduates and national champions. I have some kids who will be ready for the 2012 Olympics," he said. "They don't need to just follow the destiny everyone told them they would have. They can change it. They're the true heroes."
Want to get involved? Check out the Reaction Institute and see how to help.