Social enterprise has become a popular path for addressing pressing social issues. This approach involves the use of market-based strategies to revitalize low income neighborhoods or improve the livelihoods of individuals. Here are some examples
- Creation of loan programs for promising small businesses in areas that have traditionally had limited access to capital.
- Hiring and training of adults with checkered backgrounds in skill-building industries such as manufacturing or retail.
- Operation of restaurants that employ people who have learning disabilities coupled with magnetic personalities.
Such social enterprises build the participants’ job skills, financial health, and career outlook while simultaneously meeting a market’s demand for goods and services.
For a quick overview of the philosophy of social enterprise, see this overview from the Zell Lurie Institute at the University of Michigan’s Ross School of Business.
Across the Atlantic, the United Kingdom’s major banks have banded together to launch a dramatic social enterprise program. Big Society Capital allocates over £1 billion to enterprises in areas such as mentoring and employment programs, retail franchises, and renewable energy research and production. The fund, which is a privately run trust comprised of business, nonprofit, and government leaders, pools money from bank accounts that have been dormant for at least fifteen years. The fund receives a return on the profits from these enterprises as well as government rewards for achieving desired social results. This money fuels a virtuous cycle whereby the fund channels new income into additional charitable endeavors. Nonprofit organizations that receive money from the fund benefit from access to quantities of capital that would usually require more assets as a prerequisite, such as property.
The Big Society Capital concept is based on approaches that emerged in the United States. In fact, many social enterprises had their genesis in America. Here are prominent examples of social enterprise funds and proponents, many of which now operate on a global scale:
- Accion International, based in Boston, Massachusetts, with affiliates worldwide
- Ashoka, based in Arlington, Virginia, with affiliates worldwide
- Edna McConnell Clark Foundation, based in New York City, New York
- Initiative for a Competitive Inner City, based in Boston, Massachusetts
- Roberts Enterprise Development Fund, based in San Francisco, California
- Social Venture Partners, based in Seattle, Washington, with affiliates worldwide
Our president, Bryan Richards, co-founded one of the most prominent social enterprise gatherings in the world, the Harvard Social Enterprise Conference that occurs in Boston each spring.