Back in the early 1990s, I was a youth counselor working to help gang-active teenagers turn their lives around. One of the approaches I tried was to launch a T-shirt production company co-managed by the youth. The business never made a lot of money, but it did get a small group of gangbangers off the street and introduced them to valuable work and life skills.
The experience changed the way I think about nonprofit work. Instead of begging for grants, why couldn't nonprofits become self sustaining and simultaneously meet their mission by launching their own businesses?
That is exactly what's happening with the rise of the so-called social enterprise, or business with a social mission. Although it's not a brand new concept (think Goodwill and Salvation Army thrift stores), there is a growing interest among nonprofits in earned income ventures. Current ventures include everything from landscaping services employing the homeless, to solar installation companies for low-income housing, to manufacturers of low cost eyeglasses for the poor. These nonprofit and for-profit businesses are able to support the mission of their organizations and generate revenue for greater self sufficiency and profitability -- achieving what many refer to as the "double bottom line." (By adding environmentally friendly goals some ventures also aim for a "triple bottom line.")
The social enterprise sector is coming of age in part driven by a younger generation of socially minded entrepreneurs, many of whom are being trained at top universities like Harvard, Stanford, UC Berkeley, and Duke. Social enterprise business plan competitions abound, and many graduates are starting their own ventures right out of college and business school -- both in the United States and overseas.
Organizations like Ashoka and Echoing Green are providing support to help successful social entrepreneurs scale their ventures domestically and globally, and a whole new "social capital" market is emerging to invest in and sustain these new ventures. New for-profit/nonprofit hybrid models like the L3C are being experimented with. There is even a new certification program for triple bottom line companies called B Corp.
As a result, more and more organizations and entrepreneurs are jumping in.
According to Lisa Nitze, President of the Social Enterprise Alliance, North America's largest social enterprise association, "our organization is expanding internally and our network of social enterprises, corporations, for-profits, nonprofits, and service providers is growing exponentially." The SEA currently has 750 members and eight established regional chapters in San Francisco, LA, Maryland, North Texas, Nashville-Middle Tennessee, Chicago, Massachusetts and Tampa Bay. Four more chapters are in formation in St. Louis, the Twin Cities, Columbus and Colorado.
Says Nitze, "The economic downturn, while creating challenges, does have a bright spot. The widening gap between social needs and the means to meet those needs are being met by social enterprise. Social enterprise is forming a stable and healthy backbone of nonprofits... it is the business of hope."
Hope (and profit) is exactly what is being generated by ventures like the Women's Bean Project in Colorado. This $2 million business makes and sells gourmet foods such as bean soups, coffee, and salsa mixes. But unlike your typical gourmet food company, the Women's Bean Project employs women who have histories of poverty and unemployment. Most do not have a GED or high school diploma and are single mothers who have been on public assistance or incarcerated. Many are recovering from substance abuse. The women work 75 percent of the time at the Bean Project and spend the other 25 percent of their time receiving training in life skills and childhood nutrition, etc.
Financially and socially successful companies like the Women's Bean Project are among many we don't often read or hear about. Nevertheless these businesses and their accompanying success stories are on the rise.
My own social enterprise story has a happy ending. Those teenagers I once worked with are now grown men and most are gainfully employed. Some even volunteer to mentor youth who similarly fell into the gang lifestyle. While the social enterprise they worked in is long shuttered its mission lives on in the example and personal successes of these men. That's an ending money alone couldn't buy.