5 things you should know about social entrepreneurship

Jeffrey A. Robinson, Ph.D. is a Senior Fellow at The Center for Urban Entrepreneurship & Economic Development at Rutgers Business School.

“What is that? Socialism?”

That was the reaction I got one time when I was introduced as a professor of social entrepreneurship.

And my answer was, “No, its not socialism.”

But, social entrepreneurship is different than traditional entrepreneurship.  It is a different approach to addressing social problems in our communities.  Simply put, social entrepreneurship (SE) uses some of the best aspects of capitalism as an approach to address social problems and environmental challenges.

The conversations I often have with people trying to find out more about SE get more complicated after that. And, depending who I am talking to, I try to make it as relevant to their perspective as possible. Here are five things I say when I talk about social entrepreneurship:

1.  SE is social problem solving using a business and enterprise approach.  During this year’s U.S. Presidential election there has been a lot of talk about job creation.  Creating jobs is one of the most important ways that entrepreneurs impact communities and the economy. But, some entrepreneurs have figured out that if they set their companies or organizations up in a certain way, they can increase their social impact.  For example, the Greyston Bakery in Yonkers, New York hires people who most companies would not employ.  Not only do they create jobs, but they send the profits from making the brownies and other products back to the Greyston Foundation, the entity that owns the for-profit bakery  In fact, if you’ve had any of the flavors of Ben & Jerry’s Ice Cream that have brownies in them, you had brownies from the Greyston Bakery.  That leads me to my second point …

2.  SE is double and sometimes triple bottom-line thinking.  Traditional business is only concerned about “the bottom-line” meaning the profits that are left after all of the expenses are paid from the revenue generated through sales.  Social entrepreneurs not only mind the financial impact of their business decisions, but they also are about maximizing the social good they are doing.  That’s double bottom-line thinking.  Therefore, you’ll hear these enterprises called “double bottom-line” companies.  When they also include reducing their carbon footprint or through their action alleviate environmental problems, we call them “triple bottom-line” companies.

A great example of this type of thinking is a company in the Brooklyn (NY) Navy Yard called IceStone.  Ice Stone makes durable surfaces that you might find as a counter top in a kitchen or for bathrooms, tables and bars.  They make the durable surfaces out of a recycled glass and concrete composite that looks amazing. They manufacture this in a retrofitted warehouse where they have implemented many environmentally-friendly practices in their business to reduce their waste and carbon footprint.  They hire locally and provide a living wage to their employees.  It’s this type of thinking that allows for a company to be more than a profit making venture – these types of companies create economic returns, maximize the positive social impact and minimize the negative environmental impact. To achieve these goals, you have to be creative about how you organize your company.

3.  SE uses new organizational forms or old organizational forms in new ways to social change. In order to achieve these multi-part goals, sometimes it is necessary to break with tradition. Traditionally, we have used the non-profit or not-for-profit organization (outside of the U.S. we call these non-governmental organizations or NGOs) as the vehicle for social change.  Think about all of the great organizations that tackle the most intractable social problems in society or the organizations that advocate for those who have no voice in how resources are distributed. These organizations have been at the forefront of change in the local community and nationally for years.

Unfortunately, by relying upon non-profit organizations for social change, we made it easy for traditional for-profit businesses and the business models that sustain them to only be focused on profit maximization. What we’ve learned in recent years, is that these for-profit business models and approaches can be used for social change, too.

So, social entrepreneurs with the double- and triple-bottom line mindset I described above have broken with the idea that you have to be a non-profit organization to be about social change.  They have done so for different reasons. Some of these organizations have diversified their income away from government and foundation grants and begun to raise money via contracted services or selling products that generate an income for the organization.  Others are using for-profit models because they have access to different funding streams than a traditional non-profit.  In these cases, social entrepreneurs are at the forefront of figuring out innovative organizational arrangements and sustainable business models that amplify the social impact of these organizations.  In the Greyston Bakery example, the for-profit bakery is owned by the non-profit Greyston Foundation.

4. SE enables different types of financing to engage social change and sustain effective initiatives.  Social entrepreneurs are great at identifying creative ways to make positive social impacts an foster social change.  If we value these social changes, how do we “invest” in it.  Using investment logic for social change may seem strange to some but this kind of thinking is becoming more prevalent because of the desire to try new approaches or scale up approaches that are working better than the status quo.  In the world of technology entrepreneurs, venture capitalists and other investors seek companies that are going to give them the biggest return on their financial investment.  For the so-called social impact investor or social venture capitalist, the idea is to find the appropriate company or organization that will bring the biggest SOCIAL return on investment.  There may be a modest financial return on investment too but the goal is to invest in solutions that work.

And now social entrepreneurs, especially those that choose the for-profit form or one of the new legal entities are able to harness the funding available from a new class of investors and use these sources of funding to amplify their positive social impact.  In other words, they are now using the vehicle of entrepreneurship and the principles of entrepreneurial finance to effect social change.  And with the advent of social impact bonds, crowd funding and the growth of the social impact investing space, these would-be social  entrepreneurs have more options for funding their approach to making a difference.  However, along with this increased ability for funding comes an increased level of accountability.

5.  SE employs new approaches to accountability.  Social investors and foundations have been changing their approach to funding social change efforts.  The most significant change is the use of investment logic in their funding activities and evaluation requirements. Investors think differently than grantors.  An investor expects a return on the investment.  As such, there must be a way to verify that the expected return on the investment was met or in the language of social entrepreneurship there must be a way to measure the social impact.  Some of these investors are using this social impact measurement as means of evaluation.    And, if you are going to have an investment logic being used for social impact, you are not just talking about counting outputs (the direct results of your organizations activities); you must also measure the outcomes of your efforts (the social or economic result of your efforts).

The take away from these five ideas is that the mechanisms of social change have new concepts that are being integrated into the field and those of us interested in social change should get used to more entrepreneurial approaches to making positive social impact.  Towards this end, Rutgers Business School and the PSEG Foundation developed the New Jersey Social Innovation Institute to train community leaders with new approaches to problem solving how to use social entrepreneurship to make change.  We tell them these five things and much more to prepare them the challenges of the 21st century.  And, no, it isn’t socialism.

Jeffrey A. Robinson is also an assistant professor of management and entrepreneurship and the founding Assistant Director of The Center for Urban Entrepreneurship & Economic Development at Rutgers Business School. His research describes how business practices and entrepreneurship can be used to impact societal issues.  He is particularly concerned about community and economic development issues for urban metropolitan areas in the United States and abroad. He is the author of books and articles on such topics as social entrepreneurship, African American women in entrepreneurship, and patterns of Black employment.

An America visa gap

From A.C. Valdez, Radio Producer, America Abroad
ac-valdez

Before I came to America Abroad, I worked freelance jobs doing radio production work, which meant that I usually had a part-time job going too, usually in an unrelated field, often as a barista.

Serving people coffee and pastries is an easy way to make people happy and learn a little bit about the people in your community. It’s also a good way to make sure people care about you and your business.

But here’s a not-so-big secret about my barista days: I worked for immigrant employers at independent coffeeshops.

That these business owners were immigrants isn’t unusual. As Alexandra Starr explained in her interview for our radio program, a significant percentage of businesses in cities are immigrant owned. In New York, it’s nearly half.

It’s partly for that reason that American politicians are starting to see immigration reform not just as an issue that inflames passions in the Southwest, but as a key to creating jobs for people who live here already. I don’t think anybody would question the value of a person who can gather enough money to create and sustain a business and give jobs to people. But there’s no visa category for people who want to move to the U.S. and start their own business instead of working for someone else.

But there’s legislation designed to fix that (mentioned by Professor Jeffery Robinson of Rutgers University Business School in our roundtable). It’s the Startup Act 2.0. I’ve yet to find a single column written in opposition to it. Members of Congress from both parties are backing it. And even though the U.S. has fallen in international ranking as a place to open a business, we still have the largest consumer market of any country in the world, so making this fix, and fast, is probably a smart move.

Immigrant business owners don’t just provide goods and services, either. They pay taxes, they become part of local business communities, they give to charities and become familiar faces to the people around them. The croissants and cakes of Joseph Poupon, a Frenchman, who with his wife Ruth runs Patisserie Poupon in Baltimore and Washington, have become a staple to people who live in Georgetown. Because of their business, I made a number of important connections with writers, diplomats, and TV producers while I made lattes.

Alexandra Starr made another valuable point in her report for the Council on Foreign Relations. “Immigrants have a history of leading initial waves of inner-city gentrification, drawn by inexpensive rent and armed with a willingness to take on risk. The first businesses to open shop are usually service oriented—cafes or grocery stores—that cater to the immigrants who are moving in.”

There’s a need to temper urban development and gentrification to preserve an inner-city neighborhood’s character and protect long term residents from being pushed out by rising rents and property taxes, of course. But provided city planning is done well, immigrant entrepreneurs can be a major force in revitalizing troubled neighborhoods.

As a barista (and then a frequent patron) of Azeb Desta’s cafe in the Shaw neighborhood of Washington, I saw the neighborhood spring to life over the course of a few years. Azi, as she liked to be called, was from Ethiopia, and regularly engaged with local beat cops, other local business owners, and regular customers to figure out what was going on in the community. The coffeeshop was as much a hub for local meetings as a place to go for a good sandwich, and was one of the first businesses to fill that capacity for a part of town that had long been run down. She’s since sold the business to new management and moved on, but there’s little doubt in my mind that the neighborhood’s better off for having had her and her coffeeshop.

Town hall from Tunisia on the protests and public order

From Greta Ghacibeh, Directrice, Association Tunisie Media

TUNIS – On Monday, September 24, 2012, America Abroad Media’s Tunisian office – Association Tunisie Media (ATM) – hosted its ninth town hall connecting Tunisian citizens for discussion about the critical issues they face during the democratic transition. The event – organized in partnership with and broadcast on Shems FM – connected individuals in  Sidi Bouzid, birthplace of the Arab uprisings, with others in the coastal city of Sfax to discuss the contentious relationship between Tunisia’s security forces and protesters.

The fundamental question posed was whether security forces have been using excess force to disperse protesting crowds, and whether or not this infringes on citizens’ civil rights. Many participants who were either victims of police violence or activists for the right to assemble and protest argued yes. State officials, who sat on the panel, argued no – providing explanations for the use of force against protestors who were breaking the law and posed a threat to public safety. When the recent attack on the US embassy was brought up, state officials said that they believed they “avoided a catastrophe, which was bound to happen if the security forces had intervened in more forceful ways, meaning the death toll of protesters could have been much higher than 4 people killed.”

The heated discussion also included numerous phone calls from listeners, as well as comments and questions submitted via Facebook. There was a strong sense from the tone and focus of the discussion that participants felt government security forces were indeed using excess force in dispersing protests, thereby infringing on civil rights. So it came as quite a surprise when, at the end of the town hall, the host read the results of an online poll from Shems FM’s website. A mere 12.27% said the state uses excess force in dealing with protesters, with a remarkable 87.73% saying the state doesn’t use enough.

Listen to audio interviews with some of the town hall participants below:

Gaith Youssifi, unemployed university graduate

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Khaled Aounia, lawyer and activist

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Lazhar Gharbi, political and union activist

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To see pictures from the event, click here .

Tunisian town hall on women’s rights

From Greta Ghacibeh, Directrice, Association Tunisie Media

TUNIS – The legal rights and freedoms which Tunisian women enjoy are unparalleled in the Arab world, thanks to the vision of former president Habib Bourguiba and his ability to institute sustained, far-reaching reforms. Among the first measures he took after independence was the introduction of the Personal Status Code to improve the social position and treatment of women.

But two weeks ago, Tunisia’s ruling Islamist Ennahda party proposed the controversial “Article 28” in the new constitution. The article has already been voted on by the National Constituent Assembly’s (ANC) Rights and Freedoms committee, but must be approved by all members of the ANC before it can be adopted.

The text outlines that, “The state guarantees to protect women’s rights, as they stand, under the principle of man’s complement within the family and man’s partner in developing the country.” In protest against the article’s use of the word “complement,” demonstrations were held in the capital Tunis as well as a number of other cities in the country.

Given these latest events, the main question that was asked in the most recent next town hall was: Are women’s rights in Tunisia under threat?

Read more »

Mexican court to rule on electoral challenge

Voting in Oaxaca. Photo: Oneworld.nl

Mexico’s electoral court will make their ruling known on Friday to challenges brought by opposition candidate Andres Manuel Lopez Obrador on allegations of vote buying and money laundering by the Institutional Revolutionary Party (PRI) during the recent presidential elections. Peña Nieto won the election by 3.3 million votes.

Mexico’s newly elected president, Enrique Peña Nieto, comes from a party that controlled the government for more than seven decades. The PRI was frequently accused of corruption and vote-rigging during its long rule. Peña Nieto is characterized by Lopez Obrador as a tool of entrenched interests in Mexico.

America Abroad’s Franc Contreras reports from the PRI stronghold of Mexico state on voters’ hopes for the party moving forward.

Enrique Peña Nieto is the new, telegenic face of Mexico’s oldest political party, the PRI, or the Institutional Revolutionary Party. The PRI has been governing several Mexican states non-stop for 83 consecutive years.

“I am a PRI-ista first because I was born into a PRI-ista family and after that because of my convictions. I think it’s been a party that has assumed a new political role at a new time in our history,” says Pena Nieto.

Read more from this report »

What will Mexico look like under new leadership?

AP Images

The teetering economies of Europe and unrest in the Mideast have dominated the headlines of late. But Americans would be unwise to neglect the major developments taking place to the south of us – in Mexico, the third largest US trading power, ahead of Germany and Japan.

Mexico’s significance to the United States reaches far beyond that of drug cartels and cross-border issues. Our relationship with this country could even provide a hedge against oil vulnerability in the Middle East. Mexico just recently returned the presidency to the party that ruled the country for over 70 years, the Institutional Revolutionary Party (PRI), under president-elect Enrique Peña Nieto.

America Abroad discusses Mexico’s future and why it matters to the US with Manuel Suarez-Mier, an economist at American University’s School of International’s Service, and Eric Olson, associate director of the Mexico Institute at the Wilson International Center for Scholars.

Excerpts from the interview. To read the rest, follow this link »

Ray Suarez: What’s the United States Mexico relationship right now, in terms of economics, diplomacy? What’s the state of play at as both the United States and Mexico looks toward the end of the year, and a change in administration?

Manuel Suarez-Mier: It’s a very complicated relationship, a very intertwined relationship in which we have all sorts of things going on all the time. But I would say the levels of cooperation have never been as good as you see them today.

We have glossed over our historical problems and forged ahead into working together in many areas. Mexico is the second largest buyer of US goods, way ahead of China. The US buys more from China than Mexico, but not that much. Mexico buys far more from the US than China does.

Ray Suarez:  Immigration has certainly been an issue between the United states and Mexico. But Mexican immigration to the US has reached the point that people are calling “net zero.” What does “net zero” mean, and why does reaching that point constitute a milestone in the recent history of this issue?

Eric Olson: Well it’s a very interesting phenomena, because I don’t think we’ve seen that before. But “net zero” means [a] roughly equal amount of people returning to Mexico that are going to the United States, either legally or without documentation. So it’s about roughly even.

What does that tell you? Well in part it tells you that there’s been an economic downturn in the United States – a lot of people lost their jobs. But it also tells you that there are reasons for people to be hopeful and want to stay in Mexico.

So the PRI government cannot go back to the good old times in which everything was centralized and all the threads of power went directly to the hands of the president. That Mexico is gone. I think Peña Nieto has, first of all, to define himself as a leader of the party and the government, and then really move on to find an ideology for the PRI.

Disappointment for Copts in new Egyptian government

Photo courtesy of Copts United.

The acting head of the Coptic Church in Egypt is disappointed that the government of newly-elected Islamist President Mohammad Morsi is failing to include adequate representation to the Coptic religious minority. Morsi appointed one cabinet seat to the Copts among the 35 ministerial positions. Archbishop Pachomius says the new government unfairly represents Christians and ignores their rights as citizens.

Coptic Christians make up almost 10% of Egypt’s 82 million people. From VOA:

Coptic Christians in Egypt constitute the largest Christian community in the Middle East, as well as the largest religious minority in the region. In 2011, approximately 94 people – mostly Coptic Christians –died as the result of sectarian violence in Egypt, 70 since the fall of Mubarak.

Should religious minorities be concerned about the rise of Islamist governments?

America Abroad’s Katherine Lanpher discusses the issue with professors Aomar Boum, an assistant professor at the School of Middle Eastern and North African studies at the University of Arizona and Saba Mahmood, an associate professor of Social and Cultural Anthropology at the University of California, Berkeley.

Katherine Lanpher: Let’s start by looking at the current political situation in the Middle East, what the casual observer knows as “Arab Spring” or the series of uprisings that we’ve seen across the region. What has that meant for religious minorities?

Saba Mahmood: I think it differs from country to country. Let’s take the example of Christians in Egypt. The Coptic Christians are the dominant Christian population. They’ve refused European protection historically and said: “We are Muslim by country and only Christian by religion.” They have suffered a series of discriminations which only escalated under the Mubarak regime. Now you have the Muslim Brotherhood that won the presidential election and it’s often touted in the press as being very negative. My studies in the last 20 years shows that the question is really open. We do not know how Coptic Christians will be treated. The Mubarak regime itself was very discriminatory against Copts when sectarian violence began to erupt against them.

Aomar Boum: If you look at Morocco and Tunisia, for instance, the Tunisian case is still uncertain despite the fact that the government has promised to protect the rights of Jews, given the fact that there is the rise of Salafis in Tunisia. If you look at the main religious minority in North Africa, they still are Jews. There are less than a thousand Jews who live in Tunisia. Between 3,000 and 5,000 Jews live in Morocco. Their situation is much better than other minorities in other parts of the Middle East. Algeria is a different case because we really don’t know the exact number of religious minorities. They are not as visible as much as in Morocco and Tunisia.

Read more from this interview »

Fighting in Syria escalates with no end in sight

A major escalation of the bloody civil war in Syria is taking place in Aleppo. In Damascus, state security sources told the AFP news agency: “The army and the terrorist groups have both sent reinforcements for a decisive battle that should last several weeks.”

President Bashar al-Assad released a message today praising government troops and vowing that the uprising against his government would be put down. His whereabouts are unknown since a bomb attack killed four of his closest aids. From CS Monitor:

“Today, as every day, our people look to you as you defend their honor and dignity and give the nation back its stability,” his statement said.

The country’s large Sunni Arab majority is fighting for control of the government after nearly five decades of rule by the Assad family. They are calling for his immediate resignation, and as the fighting escalates, there doesn’t seem to be an end in sight. A new report from the International Crisis Group on Syria states:

“There are more than enough ominous trends, none more alarming than these: a regime seemingly morphing into a formidable militia engaged in a desperate fight for survival; an Alawite community increasingly embattled and persuaded its fate hinges entirely on the regime’s; and an opposition that, despite sometimes heroic efforts to contain them, is threatened by its own forms of radicalisation. Together, this could portend a prolonged, ever more polarised, destructive civil war.”

Syria’s diverse religious population has been torn. Syrian president Bashar al-Assad and most top government officials are Alawis, a Shi’a-affiliated religious group that represents only 20% of the country’s populace. The rest consist of a large Sunni Arab majority. America Abroad’s Katherine Lanpher talks with Jocelyne Cesari of Harvard University about who the minority Alawis are and their role in Syrian society and politics. Read more »

Excerpt from the interview: 

Katherine Lanpher: If they are such a minority, how is it that they have such a strong hold on power?

Jocelyne Cesari: They have a strong hold on power because of the legacy of the French presence in the region. The French faced huge resistance from the Sunni. They were building alliances with other groups including the Alawi. That’s how they became so important in the military apparatus. It became solidified or established with the creation of the Syrian nation-state. Read more »

Photo essay: Coptic Christians in post-revolutionary Egypt

From Marcus Benigno, Cairo, Egypt

Photo by Marcus F. Benigno

CAIRO – The recent election of Egyptian President Mohamed Morsi marks an outward shift from the 30-year rule by his ousted predecessor Hosni Mubarak. But as the Supreme Council of Armed Forces relinquished its transitional power to the Islamist president last week, members of the largest religious minority expressed concern.

See Marcus’s photos now »

Emad Gad, a former member of the dissolved parliament, spoke about the Coptic vote in the recent elections and his mistrust in the Muslim Brotherhood, the influential group supporting Morsi and the Freedom and Justice Party.

“Not only Copts, but also the middle class and moderate people are afraid of the future,” Gad says. “They are afraid that the Muslim Brothers will do anything to change the identity of Egypt.”

Read more »

Searching for political solutions in Syria

Photo: FreedomHouse2 (Flickr)

After more than a year of conflict, the violence in Syria is finally being recognized as a civil war. This weekend, world powers are preparing for a high-level meeting that the US hopes will be a turning point in Syria crisis.

UN Special Envoy Kofi Annan is conducting a meeting this weekend in Geneva that will bring together the five permanent members of the U.N. Security Council to discuss the deepening unrest in Syria. Russia, one of Syria’s staunchest allies, and the US disagree on the way forward. From the Chicago Tribune:

Lavrov, whose government has been the main supporter of Syrian President Bashar al-Assad as he seeks to crush a widening rebellion, told reporters the meeting “must set the conditions for the end of violence and the start of an all-Syria national dialogue, and not predetermine the contents of this dialogue”.

But [US Secretary of State] Clinton, who agreed to attend the meeting on condition that it sets out a framework for Assad to step down, disagreed sharply.

“It was very clear from the invitations that were extended by Special Envoy Kofi Annan that people were coming on the basis of the transition plan that he presented,” Clinton told reporters in Latvia before heading to St Petersburg.

To discuss the international community’s search for solutions and the goals of protesters, AAM sits down with Ammar Abdulhamid, a leading Syrian human rights and pro-democracy activist, and fellow at the Foundation for Defense of Democracies. Watch »

Excerpt from the interview

AAM: We are hearing that the Free Syrian Army gave Assad’s government an ultimatum if they don’t follow the Annan plan. We are also hearing from the UN High Commissioner warning that Syria could descend into full-fledged conflict, especially due to the massacre that just occurred. Can you take us through an overview over what’s happening right now?

AMMAR ABDULHAMID: The reality on the ground is that of defiance. Defiance by civil means for the most part. We don’t hear a lot about it but it’s unarmed protesters taking to the streets. People saw what happened in Houla. They saw what happened in Homs. They know that thousands have died – 15,000 by the way. They know 60,000 are in prison, 200,000 are in exile, and a million people are displaced all over the country because of the fighting. They are not backing down. More and more communities are rising up and joining. It’s becoming a coming-of-age experience for the young population in many parts of Syria to become part of the revolution. Read more »