May 22, 2018 / 3:20 PM / 3 months ago

A defining moment: when will business for good start counting in the US?

LONDON, May 22 (Thomson Reuters Foundation) - As the daughter of Jamaican and Cuban immigrants growing up in New York City’s Bronx, Rasheda Weaver dreamed of starting a business with a social purpose - one that offered opportunities to recent arrivals like her parents.

As a student, she discovered companies seeking to make a profit and achieve a social goal existed but it was hard to know where or how. So she created the first national directory that connects social enterprises and scholars in the United States.

“Research suggests we have the highest number of social enterprises in the world,” Weaver, now an award-winning expert in community entrepreneurship at Vermont University told the Thomson Reuters Foundation.

“But we don’t really know much about them.”

Businesses with a mission to deliver environmental and social benefits - from breaking the cycle of re-offending and reducing isolation amongst elderly - while also making a profit, are proving popular worldwide.

But there is little data in the United States on this increasingly important means of funding social initiatives and their potential has been stymied by a lack of understanding and government support, experts say.

Despite topping a 2016 Thomson Reuters Foundation poll to find the best country for social entrepreneurs, less than half of U.S. respondents thought the public had a clear idea of what a social enterprise is.

When she began the first large-scale study of social enterprises in the United States, Weaver identified about 2,400 businesses, but she only included 1,000 firms with publicly listed email addresses in the directory.

In comparison, Britain, which is seen as a global leader in the innovative sector, has about 70,000 businesses employing nearly 1 million people last year, according to membership organisation Social Enterprise UK.

Weaver’s Social Enterprise Directory, launched in April, aims to make more information available to the public, and facilitate collaboration between social enterprises, policymakers, investors and legal firms.

“It’s really important for us to highlight and celebrate the people that are making a life choice to address the issues that our country is facing,” Weaver said.

“It’s a way of showing my patriotism.”

SUPPORT

One of the main challenges facing the sector in the United States is that no one can agree what a social enterprises actually is, making them hard to count.

“Maybe if we all come to agreement on a generic definition that gets to aggregate what is going on in the country that would help,” said Carrie McKellogg, programme officer at social enterprise development agency REDF.

“If government knew the volume of tax or sales revenue, or people employed by this sector, it would have more voice, more leverage ... than just being seen as these little disparate companies.”

REDF has more than 700 members, all of which are social enterprises that provide work for people with barriers to employment, such as autism or physical disabilities.

A bill was introduced to Congress in 2016 to create a commission to identify and promote social enterprises, including recommending ways for the federal government to support them.

But it remains in limbo, having been referred to the House of Representatives Committee on Oversight and Government Reform, which has broad investigative powers, in September 2016.

The committee did not immediately respond to a request for information about the status of the bill.

Weaver defines social enterprises as for profit or non-profit businesses, sometimes a combination of both, that aim to combat social issues.

“They have a social problem that is driving the work they do and that is driving their decision-making,” she said.

Major names include Greyston Bakery, which hires ex-offenders and the homeless while giving profits to community projects, and Warby Parker, which gives spectacles to people in developing countries for every pair sold in the United States.

Social enterprises in the United States take several legal forms, depending whether the organisation wants to trade or rely on donations, and if it wishes to accept investments like loans.

“If a government body was to create the definition, offer some information or some kind of support for social enterprises, then it may be easier for Americans to develop a common understanding of what they do,” Weaver said.

“They may support their work by becoming their consumers, demanding socially conscious activities from all kinds of businesses, or even starting social enterprises themselves.”

Reporting by Lee Mannion @leemannion. Editing by Katy Migiro. Please credit the Thomson Reuters Foundation, the charitable arm of Thomson Reuters, that covers humanitarian news, women's rights, trafficking, property rights, climate change and resilience. Visit news.trust.org

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