There are new realities in the post-recession economy. Businesses and corporations are expected to do more with less. There are far fewer jobs and it’s still tough to land a business loan or start-up capital.
But even with this backdrop, there’s another seemingly contradictory trend afoot. Mission-minded businesses, sometimes called “social enterprises,” are on the rise in Middle Tennessee.
A social enterprise is an organization — for profit or nonprofit — that applies capitalistic and entrepreneurial principles to address a social or environmental problem. Social enterprises differ from traditional commercial businesses in that they don’t focus exclusively on profit for shareholders or investors. In a social venture, the social mission is expected to be at least as important as the moneymaking mission of the business.
“I believe capitalism is in the midst of an evolution,” said Jim Schorr, a professor at Vanderbilt University’s Owen School of Management and a leading national expert on social enterprise and entrepreneurship. “Social enterprises are happening globally, nationally and here in Nashville. I think it represents a 21st-century version of capitalism that’s more conscious of social and environmental responsibilities. “
Locally, mission-minded businesses are tackling everything from efficient waste recycling to creating jobs and education for at-risk populations — locally and internationally. Like traditional businesses, they bring in revenue by marketing products and services to the mass-market consumer as well as to other businesses. Sometimes they sell an educational or technical product such as environmental consulting. Many focus heavily on creating retail products such as custom-designed T-shirts, children’s books, natural bath and body products — even fresh vegetable and groceries.
“The fundamental idea behind the concept is that business can be about much more than profits for shareholders,” Schorr said.” It can be a vehicle for social and environmental impact. From what I’ve seen in the past two years, Nashville is on the verge of exploding with social enterprise. The important pieces of the puzzle are in place to support it.”
According to Jeff Gowdy, founder and lead sustainability consultant at Nashville-based J. Gowdy Consulting, the economic tailspin of 2007-2009 caused many businesses to look more closely at environmental issues — from the finite availability of resources to excessive energy use. He said there’s been a significant attitude shift in the commercial sector regarding conservation and sustainability.
Because of that shift, Gowdy’s purpose-driven consulting firm is bustling. He’s worked on environmentally related projects with large companies such as Bridgestone Americas, Ingram Barge and Gaylord Entertainment and with well-known nonprofits such as the World Wildlife Fund. Those companies and others, he said, may come at the issue from different points of view but the idea of doing good as well as saving money is gaining a lot of traction.
“Limited supply is a business issue that has a social and environmental impact,” Gowdy said. “You now have CEOs with a good general knowledge and understanding of sustainability. It’s a win-win for business and the environment. We still have a long way to go as a society, but I’m optimistic about what’s happening.”
Gowdy, who also teaches in the Executive MBA program at Vanderbilt’s Owen Graduate School of Management, said the current crop of young college students are more keyed into the concept of social enterprise than previous generations.
“There’s a surge of interest, much higher than we’ve seen before,” he said.
Dan Surface, a social enterprise consultant and founder and president of the Nashville Social Enterprise Alliance, agrees. He's impressed with social enterprise education programs at Vanderbilt, Belmont and Lipscomb universities.
“They are turning out very fresh and innovative students and graduates,” Surface said. “There are a lot of great ideas coming from very bright young people at the college level.”
Students leading the way
Some of Nashville’s newest social enterprises were launched by students. Examples include Triple Thread Apparel, a custom T-shirt company that employs former criminal offenders — the photo above depicts printer William Williams at work there — and Nashville Mobile Market, a grocery store on wheels that serves Nashville’s “food deserts,” areas lacking access to well-stocked grocery stores.
Triple Thread is the brainchild of Vanderbilt student Kyle McCollum. He approached Bill Coleman, executive director of Nashville’s Dismas House, with the idea and Coleman quickly embraced it. Open a year, the social enterprise has provided over 20 former offenders with job training and work and brought in revenue of about $120,000, Coleman said.
Triple Thread has also been boosted by national awards and grants, including a Clinton Global Initiative University Outstanding Commitment Award, a $15,000 grant from the Corrections Corp. of America and a $30,000 grant from the Frist Foundation.
The grant monies have enabled the business to buy more equipment and begin designing an efficient online ordering system that will enable it to reach out to thousands of new customers. Customers have included local universities such as Vanderbilt, Boston-based Tufts University and country music superstar Blake Shelton.
“We’re just at the tip of the iceberg when it comes to what we can really do with Triple Thread,” Coleman said.
Nashville Mobile Market was founded in February 2010 by Ravi Patel, a second-year medical student at Vanderbilt. Patel was inspired by research conducted by Carmen Adams, another VU medical student who identified areas in Nashville with poor access to nutritious food and groceries.
Neil Issar, a Canadian who moved to Nashville to attend Vanderbilt Medical School, is heavily involved in Nashville Mobile Market. “In the one year I have lived in Nashville, I have seen both students and organizations eschew profits in favor of social value and community impact,” Issar said. “I do think Nashville is a hotspot for social entrepreneurship opportunities.”
One of the newest student-run social enterprise startups is Teach Twice, a venture that that educates children and their communities through children’s storybooks and the exchange of culture. The 11-student group won a business plan competition at Vanderbilt, a $5,000 grant from the Dell Social Innovation Competition and raised over $7,000 via a Kickstarter campaign. They incorporated in June and have applied for 501(c)(3) status.
“We’re creating children’s books from stories told in tribal communities and countries,” said Trevor Burbank, a Vanderbilt student and CEO of Teach Twice. “We’ll sell the books in the U.S. and cycle the revenues back into community-focused educational development in those countries.”
Teach Twice has established relationships with communities in Uganda and Haiti and is getting help and advice from publishers, professors, writers, entrepreneurs and business leaders. Its backers plan to publish their first story this summer.
“Our reason for beginning this social business is because we believe there is a need for our culture to rethink giving,” Burbank said. “With our model, we are empowering individuals to share their cultures. Our hope it to really transfer the mindset from a ‘handout’ to more of a relational exchange. You won’t just be reading a book; you’ll be building a relationship with another culture.”