Social Enterprise

November 18, 2015November 18, 2015 jmmcclelland

As CEO of Goodwill in central Indiana, I frequently described our overall objective in general terms as “maximizing mission-related impact while maintaining a financial position that’s good for the organization’s long term viability.”

Taking this approach has required us to define “impact” as well as possible. This has always been a work-in-progress, with improvements in definition and performance over time. Placing substantial importance on mission-related as well as financial metrics is a key feature of a social enterprise. And while “social enterprise” is a relatively recent term, Goodwill has always been one.

From its inception, Goodwill has used a commercial means (selling used goods in a competitive marketplace) to accomplish a social mission. The scope of that mission, originally to provide work for people with limited options, has broadened and now often encompasses other ways of enabling individuals and families to increase their economic self-sufficiency. Still, since its founding, Goodwill has earned and continues to earn the vast majority of its revenue from the sale of products and services. This is unusual for a community-based not-for-profit, and I have always viewed the way and the extent to which the organization blends business and mission as one of Goodwill’s most unique characteristics.

Until recently, it was often difficult for for-profit corporations to include social goals as primary objectives – especially if there was a desire to emphasize the social goals much as the financial goals. Now, however, new corporate options such as the benefit corporation make it possible to do so. Benefit corporations must balance financial and non-financial objectives when making decisions – much as Goodwill always has. Companies that want to go a step further can apply to become Certified B Corps, thus adding more rigor to measuring their social and environmental performance, as well as to monitoring their adherence to high standards in several other areas as well.

Along with the rise in benefit corporations is the notion of “impact investing.” Impact investors make investments in companies that are designed not only to make a profit, but also to achieve a well-defined, measurable social good. Some, though not all, impact investors are willing to take less than a market rate of return in order to help accomplish what they view as important social goals.

These and other innovations are attractive to a lot of millennials who, while interested in having successful careers, are also interested in helping make the world a better place. I’ve met quite a number of them on college campuses where, increasingly, students can take courses – often taught in business schools – on social entrepreneurship. I’ve also served as a judge in a major social venture competition and seen some of the ideas of some very bright young social entrepreneurs. They give me hope!

Benefit corporations, Certified B Corps, impact investing – all of these are new tools for addressing social problems. None represents the solution anymore than does the not-for-profit sector as presently constituted. But in the U.S., the inability of the not-for-profit and public sectors to substantially reduce a lot of major social problems in recent decades makes the addition of some new tools particularly welcome. Perhaps we can all learn from each other and, who knows, even leverage our respective assets and capabilities and come up with some new approaches that will be more effective in improving lives and strengthening communities.

Reducing Generational Poverty – Some Thoughts

September 8, 2015 jmmcclelland

During the last decade of my career we learned a lot about generational poverty and the various social problems that are associated with it. As a result of our hands-on experiences and what we have learned from others – including a lot of people in low income households, here are some of my conclusions:

We must greatly increase access to affordable, high quality early childhood development opportunities for children in low income households. Because of the way the brain develops, the years 0-3 are even more important than ages 3-5. Society will get an enormous return on its investments in such services.

We must remember that no child chooses the circumstances he/she was born into. And nearly every mom – regardless of income level – wants what is best for her children. Where there’s a lack of knowledge among young parents about ways to prevent problems and help young children develop, we need to try to help close the gap.

Where there’s enough good data, we should increase the use of pay-for-success financing mechanisms to scale high impact services and make more effective use of public resources. While few programs or services have enough solid data of long term impact and a high return on investment, Nurse-Family Partnership and a few other high quality early childhood development programs do.

We must continue working to improve education attainment levels, but we must do a lot more to ensure that at every step of the way we are doing a good job preparing students for the next step. In other words, every child who completes 3rd grade should be ready for 4th, etc. And there is simply no excuse for students who receive a high school diploma to require remedial work when they enroll in a community college.

We must do as much as possible to ensure that everyone earns some credential beyond a high school diploma that will enable them to be employable. It could be an industry-recognized certificate, an associate’s degree, or a four-year college degree. A high school diploma is not enough.

Young people in high poverty situations need to be exposed at an early age to career opportunities they might not even know exist. We need to broaden their horizons and help them raise their aspirations.

The non-cognitive is just as important as the cognitive. The more we do to help children develop good character, habits of persistence, social and emotional strengths, etc., the greater their likelihood of being successful in school, work, and life. The earlier we start, the better.

Every child needs a positive, long term relationship with at least one responsible adult.

There is sometimes a big disconnect between the ideas of many “thought leaders,” including some policy makers, and the realities of individuals living in high poverty situations. Too many well-meaning people do not have enough direct hands-on exposure to really understand the problems they are trying to solve. This is one reason a lot of their solutions don’t work as intended.

Fragmented and “silo” approaches will never solve our most serious social problems. Poverty, low education levels, crime rates, births to young unwed mothers in low income households, and a host of health issues are all inter-related. They reinforce and compound each other. But we don’t tend to treat them as if they were. The public sector operates through large bureaucratic silos, and the not-for-profit sector is incredibly fragmented. There are a lot of organizations doing a good job addressing some of the pieces, but we are not connecting the pieces well enough to solve the big problems. We must do much more to bring some of the good services and resources together – within and across the various sectors – in complementary, holistic, two-generation approaches that can be sustained over multiple years. This will work.

More evidence of the importance of non-cognitive skill development in young children

August 17, 2015 jmmcclelland

In a July 24, 2015 Opinionator piece published by the New York Times, David Borenstein reported on the findings of a major study by researchers from Penn State and Duke University that had been designed to understand how children develop healthy social skills.

The study tracked 753 children whose social and communication skills had been assessed by 50 kindergarten teachers across three geographic areas in the early 1990s to see what had happened to the students 13 to 19 years later.

As it turns out, the assessments in kindergarten predicted the likelihood of “whether the children would graduate from high school on time, get college degrees, have stable or full-time employment as young adults; whether they would live in public housing or receive public assistance; whether they would be held in juvenile detention or be arrested as adults. The kindergarten teacher’s scores also correlated with the number of arrests a young adult would have for severe offenses by age 25.”

“One major result: Children who scored high on social skills were four times as likely to graduate from college as those who scored low.”

Borenstein points out that “These studies suggest that if we want many more children to lead fulfilling and productive lives, it’s not enough for schools to focus exclusively on academics. Indeed, one of the most powerful and cost-effective interventions is to help children develop core social and emotional strengths like self-management, self-awareness and social awareness – strengths that are necessary for students to fully benefit from their education and succeed in many other areas of life.”

The findings of this study are consistent with those mentioned in a 2012 essay titled “Promoting Social Mobility” by James J. Heckman, published in the Sept./Oct. 2012 issue of Boston Review. Heckman writes, “An emerging literature confirms the common sense idea that success in life depends on much more than smarts. Non-cognitive abilities – including strength of motivation, an ability to act on long range plans, and the socio-emotional regulation needed to work with others – also have a large impact on earnings, employment, labor force experience, college attendance, teen pregnancy…and participation in crime.”

“….both cognitive and socio-emotional skills develop in early childhood, and their development depends on the family environment…..A growing fraction of our children are being born into disadvantaged families…..and that disadvantage tends to accumulate across generations.”

“…Early interventions can improve cognitive as well as socio-emotional skills. They promote schooling, reduce crime, foster workforce productivity, and reduce teenage pregnancy…”

Heckman notes that programs that target the early years seem to have the greatest promise. These include Nurse-Family Partnership (which Goodwill is implementing in parts of Indiana). “Programs with home visits (like NFP) affect the lives of the parents and create a permanent change in the home environment that supports the child after center-based interventions end.”

One randomized controlled trial of families that participated in Nurse-Family Partnership showed that NFP children had 67% fewer behavioral and cognitive problems at age 6 than children in a control group.

The two-generation approach practiced by Nurse-Family Partnership benefits the entire family in numerous demonstrable ways. For example, Goodwill’s implementation of NFP is resulting in an increase in earned income in 33% of participating households. In addition, among parents with less than 12 years of education at enrollment, 59% have increased their education attainment level as measured one year post-enrollment in NFP.

There’s a growing amount of solid evidence that investments in high quality early childhood development programs generate substantial benefits to society as well as to the participating children. Those programs, such as NFP, that also include wraparound services for other family members yield even greater benefits and, if scaled sufficiently, can go a long way toward reducing generational poverty and a lot of the social problems that accompany it.

Thoughts on Success – in a career and in life

June 30, 2015June 30, 2015 jmmcclelland2 Comments

There are a lot of definitions of success and formulas for achieving it. For example, J. Paul Getty is said to have recommended, “Rise early, work hard, strike oil.”

Elbert Hubbard is credited as the author of an often quoted description of a person who has achieved success as one “who has worked well, laughed often, and loved much.” This has some similarities with Andrew Carnegie’s statement that “There is little success where there is little laughter.”

There are also similarities in the way people as different as George Patton and Booker T. Washington said they measured success:

“I don’t measure a person’s success by how high he climbs, but by how high he bounces when he hits bottom.” George S. Patton

“Success is to be measured not so much by the position that one has reached in life as by the obstacles which he has overcome.” Booker T. Washington

Noting that most successful careers are not planned, Peter Drucker put it this way: Most successful careers result from understanding what your values are, what you’re good at, what you’re not good at, the kinds of situations you work well in and the kinds of situations you don’t work so well in. Then you try to find a fit with all of that.

When a student in one of Goodwill’s Excel Centers asked me what the keys to my success have been, I put it in pretty simple terms, “I got a good education; I’ve worked hard all my life; and I’ve never stopped learning.”

Another approach: The best way to succeed is simply to exceed the expectations others have of you. If you exceed the expectations of your customers, they’ll probably keep buying from you. If you exceed the expectations of your boss, you’ll probably get to keep your job. Of course, after a time of exceeding expectations, the way you are performing becomes what others expect. Then, if you are to continue to exceed their expectations, you have to improve. And the cycle never stops.

During my career I have met countless people who get no enjoyment or satisfaction from what they do for a living and who want to make a career change in hopes of getting more satisfaction from the work they do going forward. I give them the same advice I frequently give young people who have no specific career goals or aspirations. I tell them to look for a place where:

There’s a good values fit. Your values and those of an employer don’t have to be identical, but they had better be compatible. Otherwise, you’re going to have problems.
You can use your abilities to a substantial degree. Otherwise, you’re going to be frustrated.
You can learn and grow. That’s more important today than ever.
You think you are likely to enjoy the people you work with. After all, you might be spending half your waking hours with them.

If you get all four of those, you’re probably better off than 95% of the population. I’m extraordinarily fortunate to have had all four in abundance my entire career.

My favorite description of a successful life, though, has developed in part as a result of having known through my work literally thousands of people who have had significant disabilities limiting their occupational choices, but who have not let their circumstances prevent them from making the most of their abilities and opportunities. Many of them have been people who “worked well, laughed often, and loved much.” I wrote about a few of those individuals in a December 2013 post to this blog I titled, “The Magnificence of the Ordinary.”

Their examples, along with those of many others, have strongly influenced my idea of a successful life:

When you get to the end of your life, you compare what you did with what you might have done, and you compare the kind of person you were with the kind of person you might have been. It’s a relative measure, not an absolute. It’s really about how close you came to developing your potential.

Excerpt from a high school graduation speech

June 2, 2015 jmmcclelland3 Comments

In 2011, I was privileged to speak to graduating students of Indianapolis Metropolitan High School. Following is the main content of that speech:

I’m going to tell you two stories. They’re related, and each of them will illustrate a point. I’ll then close my remarks by making a request of you graduates.

Here’s the first story. After they won the state Class A championship, Indy Met’s basketball team was invited to Washington D.C. They visited a lot of the places tourists usually visit – the U.S. Capitol, Lincoln Memorial, part of the Smithsonian. They also visited Ben’s Chili Bowl and learned of its history and the history of that part of the city.

Ben’s is a little restaurant near the intersection of 12th & U streets. It was started by Ben and Virginia Ali in 1958 – an exciting time on U Street, which was then known as “Black Broadway.” A lot of famous people frequented the area and many of them ate at Ben’s from time to time: people like Duke Ellington, Miles Davis, Ella Fitzgerald, Martin Luther King Jr, Nat King Cole, Bill Cosby. Times were good.

Ben's Chili Bowl in 1958 from their website, http://benschilibowl.com/ — Ben’s Chili Bowl in 1958 from their website, http://benschilibowl.com/

Then came 1968 and the assassination of Dr. King. Riots broke out in many cities, and U Street was in the middle of the riots in our nation’s capital. Businesses closed down or were burned down. That part of Washington was a war zone, and it looked like it. I know. I moved to Washington in the fall of 1968 and drove through that area – once. That area – in fact, much of Washington – was no longer safe. I found that out the hard way when, a few months after moving there, I was held up at gunpoint about a mile from where Ben’s is located.

Obviously, I survived. And so did Ben’s. It stayed open. But then in the 1970s that part of Washington was taken over by drug dealers and the entire area suffered. Still – Ben’s survived. Business began to improve, but then in the 1980s construction began on the Green Line of the D.C. subway system, the Metro. That part of U Street became a big hole – the construction went on for five years. Still – Ben’s survived.

Gradually, the area came back. Business improved, and Ben’s became increasingly well known. Barack Obama ate lunch there a few days before his inauguration. Ben died in 2009, but two of his sons continue to operate the business, which has expanded and is thriving.

Many times it would have been easy for Ben to quit or move to another part of town. But he what he started has become a Washington institution. And that leads me to the second story.

There’s another institution in Washington D.C. that started four years after Ben started his restaurant. It’s called the Community Club, and it operates in the basement of the New York Avenue Presbyterian Church in downtown Washington. Volunteers come there every Thursday evening to tutor young people. During its first 40 years, the Community Club had only two directors. They, too, were volunteers who made long term commitments to try to make a difference in people’s lives, and thousands of young people benefited.

I attended that church, and shortly after I moved to Washington I started volunteering in the Community Club, where I tutored two boys one-on-one for over a year. They seemed to benefit, but so did I. In fact, it changed the course of my life. I got so much personal satisfaction from that experience I started searching for a place where I could use my educational background, get a similar kind of satisfaction, and get paid at least enough to live on. That search led me to Goodwill Industries and started me on a career that lasted more than 40 years, during which I helped start a school – Indianapolis Metropolitan High School – that educates a lot of students very much like those I tutored in Washington D.C. in the late 1960s.

Here’s my point. The greatest accomplishments and life’s greatest rewards come from making and keeping long term commitments. It might be a commitment to go further with your education or to start and grow a business; it might be a commitment to a job or a career or some cause you deeply believe in. Or it might be a commitment to another person – a spouse, for example, or a kid you mentor or tutor. Nothing really worthwhile in life comes quickly or is easy, and no job is fun all the time. But if you make the commitment and stick with it – like Ben Ali did – through the inevitable ups and downs, you’ll be amazed at what you can accomplish and how full your life can be.

So here’s my request of you graduates. As you enter adulthood, and if you really appreciate the people who have helped you get to this point in your life, make it a point – and a priority – to do something good for someone else. It might be a kid you tutor or mentor or an elderly person who needs some help. Regardless, do something good for someone else – not just once, but over an extended period of time – at least a year – and don’t expect anything in return. You’ll make someone else’s life a bit better, you’ll get a lot of satisfaction from the experience, and you just never know where it might lead you in life.

Jim McClelland | PERSPECTIVES

Author: jmmcclelland

More evidence of the importance of non-cognitive skill development in young children

Thoughts on Success – in a career and in life