Social Enterprise

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.

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Reducing Generational Poverty – Some Thoughts

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.

Excerpt from a high school graduation speech

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. Bens Chili Bowl

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.

1974

1974

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.

1987

1987

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.

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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.

Some thoughts upon retiring from a long career

The “farewell” tour I’ve made during the months leading up to my retirement has been one of the highlights of my entire career. Listening to the stories and hearing the comments of hundreds of employees and students, I’ve never felt better about the organization – our people, our culture, and what we are doing.

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There’s no doubt that the impact Goodwill is having is far greater than ever. The way we are linking services internally and with other organizations in a holistic, multi-generational approach is, I’m confident, going to have lasting impact and help begin to reduce some major social problems. And yet, there’s so much more that needs to be done.

My career has been a constant learning and growing process, but the learning really began accelerating in 2004 when we became directly involved in public education by opening the Indianapolis Metropolitan High School.

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Since then, Goodwill has evolved at a rapid rate that has further accelerated the learning throughout the organization. And while we don’t claim to have all the answers, based on our experiences as well as what we’ve learned from others during the past decade, I’m convinced that if we are ever going to substantially reduce a lot of the social problems that are plaguing U.S. society today, we must:

  • Continue working vigorously to raise education attainment levels, and we must ensure that at every step along the way we’re preparing students well for what comes next.
  • Greatly increase the number of affordable, accessible, 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. The earlier we start, the better.

In addition, to break a cycle of poverty, we need to take a long-term, holistic, multi-generational approach that leverages the resources and capabilities of multiple organizations within and across the sectors in focused ways designed to prevent problems, help kids develop, strengthen families, and make much more effective use of existing resources.

Goodwill in central Indiana is taking such an approach with a growing number of families and organizations, and that approach is attracting a growing amount of national attention. But while others can learn from our experiences, we must also continue to learn from others.

And while Goodwill’s board of directors and new CEO, Kent Kramer, will determine the organization’s direction going forward, there’s a strong base of knowledge and experience to build on and a lot of resources that can be deployed to further increase impact.

I don’t know what the organization we’ve built will look like ten years from now, but I know it will be different. Goodwill must continue trying new ways to grow its businesses and accomplish its mission; it must continue to learn; and it must continue to adapt as the world around it changes. Yet while I can’t predict what the organization will look like a decade from now, I do hope to be around watching from the sidelines, and I fully expect to be amazed!

The Magnificence of the Ordinary

(Note: This piece was first posted in December 2013).

While solutions to major social problems must be macro in scale, in the final analysis we must see results in the lives of individual people. As Peter Drucker reminded us, the purpose of any not-for-profit organization is to change lives.

As we offer opportunities to help others improve their lives, the changes can often be in ways that on the surface might seem unremarkable.  As we look deeper, though, we discover that often they are really much more.  Here are some brief sketches of a few people I’ve been fortunate to know during my career.

Cheryl dropped out of high school. She came to Goodwill, learned keyboard skills, got a GED, got a driver’s license, and got a job. A few years later she got married, then had a son.  She’s now been married for over 30 years, and their son has graduated from college.  Cheryl has worked nearly all her adult life.

Sounds pretty ordinary until you learn that Cheryl was born with no arms.  When you know this, you begin to realize that there is nothing ordinary about Cheryl’s life and that, in fact, what she has done with her life is truly magnificent.

Bobby worked at Goodwill. When he was 36 years old one of our staff helped him learn how to write his name and tell time.  For weeks, every time he would see me he would ask me if I knew what time it was. Then he would tell me. For most people, learning how to write your name and tell time are pretty ordinary accomplishments. For Bobby, though, they were magnificent achievements.

Steve was severely limited by cerebral palsy. He used a motorized wheelchair and communicated by using a keyboard with a voice synthesizer. He worked for several years on a contract Goodwill has to do janitorial work in a large federal building in Indianapolis. With a broom attached to his wheelchair, Steve swept 1-1/2 miles of corridors every day. He absolutely loved his job and his co-workers.

One day, Steve was in his motorized wheelchair crossing a street. While he was in a marked crosswalk, a car hit him, killing him instantly.

Many people would not have considered a person doing such an ordinary – and to some, a menial – task to be a success. But Steve exceeded everyone’s expectations – except possibly his own – and worked at a level many would never have thought possible. And he was happy doing it. For Steve, what to most people might have seemed so ordinary was truly magnificent.

When I started working for Goodwill, a member of our board of directors told me he thought Goodwill was amazing. The way he saw it, we took goods people no longer wanted and people no one else wanted to hire and combined them to create self-sustaining employment for a lot of people who otherwise would have been sitting at home surviving on public assistance. To him, ordinary household goods and ordinary people combined to produce something extraordinary and magnificent.

As we get caught up in the busyness of day-to-day work and life, it can be easy to take for granted a lot of what we as an organization and many of our people do so well day in and day out. Fortunately, though, when I see examples such as those I’ve mentioned and many others, I am reminded that much of what we tend to think of as pretty ordinary is much more than that. In fact, much of it is truly magnificent.