Social Enterprise and Earned Income Strategies: Adding More "Bottom Lines"

By Aaron Shiffman, Executive Director of Brooklyn Workforce Innovations

Social enterprise has earned gilded status among for-profits and nonprofits alike, among donors and funders, and in the media - and for good reason. Today, the practice of operating social enterprises has become more widespread, more strategic and more impactful than ever before. By its very definition, social enterprise addresses what many have been clamoring for decades: "nonprofits should operate more like real businesses."

Discussing that broad sentiment's sensibility is a topic for another blog post, but it is clear that many social enterprises are effectively applying business principles and discipline to support human services missions. By definition, according to the Social Enterprise Alliance, social enterprises are businesses whose primary purpose is the common good. Social enterprises have exploded in number since the 1970s and 80s, and some are remarkably close to becoming household names: Network for Good, Greyston Bakery, Housing Works, and JUMA Ventures. Commonly associated with youth services and workforce development organizations, social enterprises are creating jobs and building careers for those struggling to find work in their local job market.

Beyond the typical social enterprise's core role - generating revenue to support work on behalf of those less fortunate - something that deserves attention is the way many non-profits are using earned income strategies and social enterprises to concurrently create multiple social benefits. Many go beyond earning revenue, creating jobs, and - in the case of innovative workforce development enterprises - facilitating an extended on-the-job paid learning environment for unemployed men and women. They are additionally producing environmental gains and some hone their activities and missions to create products that improve the lives of their mission-aligned business customers.

One example of this in New York City is Brooklyn Woods whose cabinet-making and installation social enterprise activities are affiliated with a woodworker skills training program of the same name. Brooklyn Woods is one of six skills training programs offered by Brooklyn Workforce Innovations (BWI). BWI's programs have enabled nearly 5,000 low-income New Yorkers obtain employment with significant opportunity for advancement. Its mission is to empower low- and moderate-income people by helping them gain access to living-wage employment opportunities and career paths.

Honing its line of business to meet local need and demand for its products, Brooklyn Woods builds hundreds of kitchen cabinets and bathroom vanities for primarily multi-unit residential buildings. A core part of Brooklyn Woods' model is its use of low-environmental-impact materials. The materials used are locally-sourced whenever possible, all wood used is FSC certified, and unlike many manufactured wood products, they are formaldehyde-free. Cabinet doors are finished with low-VOC water based lacquers, which do not offset chemicals into the homes they are installed in or the workshop they are created in. Kitchen cabinets, bathroom vanities and other custom millwork have been manufactured for a broad range of residential and commercial developers, including Habitat for Humanity NYC (one of Brooklyn Woods' oldest customers) to well-established for-profit housing developers like the Hudson Companies and Dunn Development, which regularly purchase Brooklyn Woods cabinetry for their affordable and market-rate residential properties. Brooklyn Woods' high-quality, environmentally friendly cabinets can be found in homes for the formerly-homeless and for wealthy homeowners alike.

In the past few years, Brooklyn Woods cabinet production activities have represented an investment of nearly $1.3 million in local job creation for individuals with barriers to employment. Fifty three graduates of its seven-week workforce development program have been hired since 2007 to temporarily work in the shop for several months after graduating from skills training, further preparing them for careers in woodworking and fabrication. Just last year, of the 10 graduates hired to work with on earned income projects, 100% of them were subsequently placed into permanent positions with local businesses, all achieving wage increases and benefiting from this critical first supported job placement (Brooklyn Woods trainees have multiple, significant barriers to employment and many have uneven work histories).

At a time when government support for workforce development is waning and private philanthropic funding continues to become more competitive, creating triple - or even quadruple - bottom lines at a social enterprise is more critical than ever before. To learn more about BWI or to support organizations with social missions seeking to create jobs for unemployed Americans please visit our JobRaising Challenge website.