Given the sluggish economic conditions that continue to exist as a consequence of the Great Recession of 2009, there are still fewer job opportunities available than are needed in order to achieve robust growth. This situation has been particularly challenging for the range of public and nonprofit agencies that are actively involved in the promotion of workforce development for communities located throughout our state and nation.
There is, however a growing trend that seeks to move beyond the traditional workforce model of first offering skills training to job-seekers and then attempting to place these individuals into whatever jobs might be available. This new practice is known as the social enterprise movement.
‘The Common Good’
According to the Social Enterprise Alliance, a national organization for practitioners of this new approach, “social enterprises are businesses whose primary purpose is the common good.”
More specifically, social enterprise organizations seek to utilize well-established and proven business practices, coupled with the power of their local marketplaces, to advance clearly defined social, environmental and human justice agendas.
Generally speaking, there are three characteristics that distinguish a social enterprise from other types of businesses, nonprofits or government agencies.
- A social enterprise directly addresses an intractable social need and serves the common good, either directly through its products and services or through the number of disadvantaged people it employs.
- For a social enterprise, its commercial activity serves as a strong revenue driver, whether a significant earned income stream within a nonprofit’s mixed revenue portfolio or a for-profit enterprise.
- At the core of any social enterprise, the common good is the organization’s primary purpose.
At present, the Social Enterprise Alliance has more than 900 members and 13 chapters covering 11 states. The origins of the movement began as early as the late 1970s, but the broad emergence of this model was not fully realized until much later.
Here in Maryland, the local nonprofit organization Humanim has been actively involved in the creation of social enterprises since 1983.
Humanim provides workforce development and human services to individuals facing disabilities and barriers to employment. Presently, the organization serves more than 4,500 people a year throughout Maryland.
Since its inception in 1971, the organization has consistently sought out ways to improve its capacity to find gainful employment for the large and diverse population of individuals seeking job opportunities. One of the most frequent challenges to successfully placing persons facing barriers to employment into jobs is their frequent lack of prior work experience.
The social enterprise concept has proven to be an effective means of surmounting this obstacle. Currently, Humanim has a portfolio of varied social enterprise operations that offer job-seekers more than just a job — they offer the employee a career ladder while simultaneously helping to solve societal and environmental problems through market-based solutions.
The organization’s social enterprises include the following.
- iScan, a document imaging and records management business that employs approximately 70 people. iScan’s clients include large public-sector entities like the Maryland Motor Vehicle Administration, the Maryland State Department of Assessment and Taxation and also private clients such as the George Washington University.
- DETAILS, a precision deconstruction service that allows for the reuse of materials harvested from buildings slated for demolition. As a labor-intensive operation, DETAILS creates jobs while diverting thousands of tons of debris from landfills.
- Humanim’s Harbor City Services division offers document management, document and furniture storage, shredding and moving services to 300 diverse customers.
- Humanim also operates a unit dedicated to property turnover services. This new social enterprise provides commercial cleaning, trash removal and property turnovers in central Maryland.
Humanim has found that this array of social enterprise businesses not only create jobs, but also foster economic opportunity for ancillary business development for community residents.
Like all social enterprises, Humanim adheres to the business approach that an organization addresses social and environmental challenges with a true value proposition that provides the consumer with a competitive advantage. If a company can provide consumers with what they need at the right value and allow them to contribute to solving social and environmental challenges, such a venture will have strong market appeal.
The result is a sustainable approach for creating a reliable revenue stream of unrestricted funds, thereby extending the efficacy of the nonprofit in meeting tomorrow’s challenges.
Beyond Humanim, there are a host of other Maryland-based nonprofit organizations that have discovered the potential for social enterprises to simultaneously create job opportunities for individuals in need of employment while also contributing positively to both the organization’s bottom line as well as to broader social objectives.
The Maryland chapter of the Social Enterprise Alliance is available to organizations interested in learning about this innovative approach. The chapter can be contacted through its president, Cindy Plavier-Truitt, at firstname.lastname@example.org.
Jeffrey Smith is Director of Public Affairs and Resource Enhancement for Humanim. He can be reached at 410-381-7171, ext. 5529.
This article written by our very own Jeffrey Smith first appeared The Business Monthly on February 1, 2013.