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- BBB and CI4SI’s CEO Jonathan Liebert maps a movement.
Most people have heard of TOMS. The company began with simple canvas shoes, now wildly popular with hipsters, and a promise: For every pair you buy, they will give away a pair to a child in need. Make no mistake, TOMS isn’t a nonprofit, but they aren’t a traditional for-profit either.
This is what is known as a social impact business, one of a growing number of such models that together make up the so-called fourth sector (the other three being public/government, private and nonprofit). A year ago the Better Business Bureau of Southern Colorado launched the Colorado Coalition for Social Impact, an initiative to help these businesses navigate the still-evolving process of establishing and growing. It was so popular, the BBB just replaced that initiative with its own social enterprise, the Colorado Institute for Social Impact (CI4SI), to provide more services to such businesses — the BBB estimates that there are around 50 such organizations in the Springs, with more in the works.
Led by Jonathan Liebert, CEO and executive director of the BBB and CI4SI, the new organization celebrated its opening at a well-attended event at the Ivywild School on Aug. 23. Liebert told the crowd that the economy was changing because more people were choosing brands based on their social impact. While there isn’t a ton of research on the new business model, the BBB points to a 2015 online survey done by Boston public relations and marketing company Cone Communications of 1,003 adults aged 18-34. It found that millennials were more likely to “purchase a product with a social or environmental benefit” (87 percent vs. 83 percent U.S. average), pay more for a product if it impacted an issue they care about (70 percent vs. 66 percent U.S. average), or take a pay cut “to work for a responsible company” (62 percent vs. 56 percent U.S. average). The survey had a margin of error of plus or minus 3 percent.
“This vision is really to create a different definition of what it means to be successful in business,” Liebert said. “Right now, what it means to be successful in business, it’s making money, making profit. And what we’d like to see is that over the next couple of years we’re expanding that definition.”
CI4SI will actually offer support for four types of businesses: social enterprises (exist to solve a social issue, but also have commercial goals), social businesses (in which social and corporate goals are weighed equally), conscious capitalism companies (regular businesses that recognize a need to have a positive social impact), and benefit corporations (for-profit companies that include positive impact on society, workers, the community and the environment). Some social impact business examples locally: Care and Share Food Bank for Southern Colorado’s GoalZero Recycling; Silver Key’s insurance company, Key Benefits; Springs Rescue Mission’s Mission Catering; and Blue Star Recyclers.
“These social entrepreneurs are just doing phenomenal work to really advance the mission of what they’re trying to accomplish, whether it’s solving poverty, whether it’s feeding the homeless, whether it’s putting at-risk youth back to work or employing our military,” Liebert said at the event.
CI4SI plans to measure the new sector’s impact, or social return on investment; bring awareness to the sector; promote and build more such businesses; offer resources, training and education; and connect the sector through networking and other events. A class list is already available, and the organization will present the second year of its PRISM Awards, for leaders in the field, in March.
Liebert says businesses need the help, because many entrepreneurs have to rely on books in order to figure out how to start a social impact business, and they’re left with a lot of questions. In a new sector, he says, it can be tough to understand the legal, financial and social implications of starting off, and whether such a model is even the right fit.
CI4SI is receiving initial startup funds from the BBB but will make its income through classes, training, events and consultation. Its budget is about $150,000. Nationally, BBBs are working to create a certification process for social impact businesses, and are also listing the companies in the hope of mapping the sector.