Social enterprise is an exciting new sector of the economy that provides solutions to some of our community’s largest issues, such as unemployment and lack of education and access to healthcare.
By merging social mission with competitive business strategies — mixing mission with margin — these businesses are achieving social change. Called the “fourth sector” by Harvard Business Review, this “for-benefit structure … is likely to reshape the future of capitalism.”
A social enterprise exists to solve some type of social issue, but instead of seeking funding in the traditional charitable model, these businesses seek to use the powerful economic engine of capitalism to fund their missions. While many entrepreneurs make charitable donations or run “socially responsible businesses,” a social enterprise is different because their social aims are primary, and their profits are secondary.
Communities that support these types of businesses realize that social enterprises offer products and services they would use every day anyway (such as food service or custodial services). They realize that when they purchase these services from a social enterprise their money works twice — they are receiving goods or services, but they are also investing in the health of their community by helping employ some of the most disadvantaged populations.
Each year social enterprise businesses serve an untapped labor market made up of thousands of people from disabled and disenfranchised populations that may include at-risk youths, disabled and homeless adults, formerly incarcerated veterans and individuals with mental illness. Very often, these people are reliable employees, even more motivated to work than the typical applicant, but are often overlooked by employers. By providing employment opportunities to these populations, social enterprises are reducing financial costs often shouldered by the community to support them.
For example, in a recent study done by AspenPointe and presented to the White House and the U.S. Secretary of Labor, they found that 100 former military members with no support services cost the Colorado Springs community $6.8 million as they accessed crisis services, the court system, the emergency room, etc.
Once AspenPointe’s social enterprise helps the active-duty service members, veterans, and family members navigate through complex systems, the community saves up to $5.8 million. In addition to the massive cost savings, this research shows that quality of life and self-efficacy are also increased, thereby alleviating the revolving door issue that faces so many human service organizations.
While social enterprises’ emphasis is on a double or triple bottom line, for-profit businesses can get involved as well. With unemployment rates around 7.8 percent for the nation, there has been a lot of discussion regarding how to increase hiring, and social enterprise can help businesses understand the value and the power they can bring to our economy by employing certain populations.
As two examples, the Bureau of Labor and Statistics reports that teen unemployment is at 24 percent and the unemployment rate for young male veterans ages 18 to 24 is 29.1 percent. This scale of unemployment in able-bodied subgroups creates an even larger challenge for our economy and our community.
Without the means to support themselves, many of these people will be faced with legal issues, substance use and mental health issues, and homelessness which again drives up community and taxpayer costs.
Both of these populations have been served by AspenPointe Café at the El Paso County Citizens Service Center. This social enterprise consists of a 14-week Culinary Training program that helps train and place graduates in jobs with local universities and large hotels for example. So when someone orders a cup of coffee or a meal at the Café, his money works twice.
The true power of a job and business is to provide not only a paycheck, but also to give people purpose. By keeping these populations employed, it increases their quality of life and ensures their well-being. As more and more communities embrace this philosophy and more social enterprise businesses are created, we are strengthening the health and prosperity of communities by providing opportunities to those in need.
Jonathan Liebert is vice president of enterprises for AspenPointe, a nonprofit social enterprise that applies market-based strategies to achieve a social purpose.