Social enterprise seen as key to anti-poverty programs

By Vicki Hyatt | May 14, 2014

A new approach to fighting poverty in Haywood County has begun, and it's based on a model that may ultimately be able to work without government funds or endless fundraising.

Those who are part of Haywood Helps — a cross-section of individuals in the faith, nonprofit, education and government communities — think that a new form of business known as social enterprise will ultimately lift the community out of poverty.

Social enterprise is simply defined as business for the common good. The mission can be something as ambitious as curing malaria in third-world countries, providing a back-up power source in an underdeveloped country or offering employment to those who may otherwise encounter barriers to getting a job.

A social enterprise is a business that strives to be profitable as well as serve its mission of improving society in some way.

In Haywood County, Haywood Vocational Opportunities is the premiere example of social enterprise. HVO's mission is to provide world-class quality medical products while providing the local community with vocational training and employment opportunities to adults with disadvantages and disabilities.

From its roots as a sheltered workshop in 1972, HVO grew to providing full-time employment for nearly 300 while serving 200 or so clients who manufactured products distributed worldwide.

Other social enterprises include several nonprofit organizations that have opened retail operations to generate funds for operations. The Haywood Christian Ministry Second Blessings Thrift Store or Habitat for Humanity’s Restore are just two examples in the county.

At the national conference of the Social Enterprise Alliance held last month in Nashville, Tennessee, dozens of social enterprise leaders shared their stories, including the following.

Creating jobs; feeding kids

At the Pittsburgh Community Kitchen, Jennifer Flanagan is leading the effort to “change the face of institutional feeding, particularly school food, to transform the regional food economy and open it up to opportunities.

Food access gaps, ex-offenders in need of career options and a strong community interest in supporting regional growers has helped the social enterprise that started with 80 school contract meals a day multiply its business to 1.6 million contract meals in just eight months.

“We identified places that were unhappy with their meal services and went after them hard,” Flanagan said. “We mapped out a plan based on two years of operational losses, raised $600,000 to cover them, and with our last contract, we’re already breaking even.”

Now that meals are being prepared with fresh food and everything is made from scratch using “kid-tested” recipes, the kids love it, Flanagan said. The “testing” was courtesy of several students from each grade who were considered leaders.

Flanagan credits the organization’s success to using a proven business model available through Catalyst Kitchens, a network of organizations that operate food-based social enterprises.

Not having a central kitchen that could be used as a training, food service area didn’t stop the group.

At the April conference, Flanagan said the organization had just learned they landed a contract to provide meals for a summer school program for 62,000 kids. For that to be possible, she needed to round up a church or community kitchen where the meals could be prepared.

“We found there were commercial kitchens all around us,” Flanagan told the group. “We have a ‘hub and spoke production’ with plans for a green technology kitchen. We’re using the community spokes for now.”

The organization’s most recent contract, $1.3 million, is with a large behavioral health company that was seeking to show the impact good nutrition can have on how well clients respond to treatment.

Part of the key to the program’s success is the use of fresh food, and part of the way it can be prepared more inexpensively is by using “rescue food,” items that are nearing the end of their shelf life.

Job training funding covers much of the costs of the 16-week program for those who would typically face employment barriers — individuals with criminal records, addictions or homelessness. While the meals were prepared by this group, cafeteria workers still served the food.

A healthy drink

Honest Tea uses whole, fair-trade tea leaves to create organic beverages that are thirst-quenching and not too sweet.

At the national Social Enterprise Alliance conference, Seth Goldman described how he and a fellow Yale School of Management graduate quit their jobs and spent the first five weeks developing a product that would taste good and offer a low-calorie option that is healthier than soft drinks.

In 1998, five varieties of freshly brewed and barely sweetened tea hit the market in midi-year. Sales hit $250,000 and grew to $1.1 million the following year.

Tea bags were added the following year, and the company partnered with another company that provides young people with a year of community service.

Within five years, sales were at $5.5 million. As new flavors were added and sales grew, the company caught the eye of Coca-Cola, which invested in the company and pushed the product into national markets.

After passing the $75 million sales mark, Honest Tea became an independent operating unit of Coca-Cola in 2011 and has continued to rack up national awards for its commitment to being a green, socially responsible company. The most recent company passion is addressing the obesity issue by providing healthier drinks in many forms.

“We strive to grow our business with the same honesty and integrity we use to craft our products, with sustainability and great taste for all,” the company’s website states. “A commitment to social responsibility is central to Honest Tea's identity and purpose. The company strives for authenticity, integrity and purity, in our products and in the way we do business. In addition to creating a healthy alternative beverage with a lot less sugar than most bottled drinks, Honest Tea seeks to create honest relationships with our employees, suppliers, customers and with the communities in which we do business."

Cooking lessons

• At Café Momentum in Dallas, Texas, youthful offenders learn to cook from a top chef in a 12-week program that incorporates life and social skills into the program.

A “pop up dinner model,” where a gourmet meal is prepared and served at a popular restaurant by the trainees, has been highly successful.

Tickets sell for $100 a seat and have been known to sell out in 8 seconds. The program helped young men ages 13 to 17 who were deemed unsalvageable by society and trapped in a cycle of crime and punishment turn their lives around. The next step is to open a full-service restaurant.

A new purpose for parachutes

•Heavendropt, based in St. Petersburg, Florida, buys used military parachutes and hires disabled veterans and others with disabilities to make bracelets and bandannas for cats and dogs.

The job provides wounded warriors and potentially their family members, with specific but transferable job training and employment opportunities in several areas.

Heavendropt focuses on what’s known in social enterprise circles as a “triple bottom line.”

It provides competitive-wage jobs for veterans and others with disabilities, turns items that would otherwise be discarded into unique products and returns the profits to both those with disabilities and veteran assistance organizations.


Harvesting clean energy

At Hydrobee, the Seattle-based company has developed a handheld, water-powered rechargeable 5-volt battery to provide energy for those without immediate access to electricity.

The device that’s the size of a soda drink can will create enough energy to charge multiple cell phones, a tablet or lamp for use all night long.

Company President Burt Hamner said the whole world needs the clean energy harvested from nature, whether it is people in the U.S. who are camping for the weekend of those living in the under-developed countries with an unreliable power source.

The device is charged by placing it in running water for 2-4 hours.

A patent is pending on the product, which Hamner hopes will revolutionize the lives of 1.5 billion people living in areas where the power grid works sporadically or doesn't exist.

Growing, serving meals

At Aspen Pointe in Colorado Springs, growing food vertically and aeroponically, as well as turning the fresh produce into mouth-watering meals, has proved to not only enhance the bottom line, but provide better nutrition for many served by the agency.

What started out as an empty lot on the property has morphed into an indoor-growing facility that offers fresh produce in the harsh winters, said Jonathan Liebert, a leader in the organization that provides innovative healthcare company funded partly through social enterprise.

The innovative growing procedure where food-grade plastic towers are used to grow plants vertically and without soil has turned out to be an efficient way to produce fresh root crops, and the unique job-training skills are good for clients to have as they move into the marketplace. There's an additional educational component of letting people know where their food comes from that helps keep the community interested in the project.

"A lot of diseases are coming from the food we eat," he said, so enhancing food quality fits perfectly within the Aspen Pointe mission. "The profit from selling fresh produce is pretty decent."