- Rhonda Van Pelt
- James Proby’s Men’s Xchange supplies affordable, professional work attire.
Business can no longer be divided into the private sector (for-profit), the public sector (government) and the plural sector (nonprofits). Now, there’s a fourth sector that encompasses “conscious capitalism.”
Growing numbers of Colorado Springs entrepreneurs are discovering they can do business in that fourth sector and make a good living, while also helping the community. Local examples include Blue Star Recyclers, which employs people with “disAbilities” to recycle discarded electronics; the Men’s Xchange, which offers a fresh start through gently used business attire; and Who Gives a SCRAP, which sells unwanted craft supplies and keeps them out of landfills.
Jonathan Liebert, CEO and executive director of the Better Business Bureau of Southern Colorado, continues to witness this business movement in action through the services offered by the local BBB and its offshoot, the Colorado Institute for Social Impact (CI4SI). CI4SI launched in 2016 as a BBB initiative and grew so quickly that it was transformed into its own social enterprise in 2017.
“Part of what we believe here at the institute is expanding the definition of success, which is not just about measuring the bottom line. It goes beyond the bottom line now,” he says. “We live in a capitalist society; business is the economic engine of how things get done. But you can make money and provide higher purpose, not only for your employees, but also for the community.”
As a baseline comparison, he says, Standard & Poor’s 500 companies conducting business the traditional way are showing an average 118 percent rate of return over 15 years. But the group of firms profiled in a 2007 book, Firms of Endearment: How World-Class Companies Profit from Passion and Purpose, had astonishing 15-year returns.
“Look how conscious capitalists are doing: 1,681 percent. It’s unbelievable. What I find fascinating is that these companies are all disrupters in their respective industries, but they’re also kind of breaking the traditional rules of business; they’re redefining them,” he says.
The companies profiled in the book include Starbuck’s, TOMS shoes, Stonyfield Farms and Trader Joe’s. (Locally, the BBB honors select social entrepreneurs in the region via its annual PRISM Awards; this year’s ceremony is March 2.)
Liebert says Firms of Endearment had a huge influence on how people think about what success really means.
Society is demanding that companies, both public and private, serve a social purpose. click to tweet
He also credits the philosophies of Larry Fink, CEO of Blackrock Investments. Quoting from Fink’s recent annual letter to CEOs: “Society is demanding that companies, both public and private, serve a social purpose. To prosper over time, every company must not only deliver financial performance, but also show how it makes a positive contribution to society.”
What does all this mean to the consumer?
“This is the example I’ll use with people,” Liebert says. “I’ll say, ‘You have a choice to buy a cup of coffee. There are two companies: A and B. Let’s assume it’s exactly the same coffee, exactly the same price.’
“‘If you go to Company A, which is purely there to make a profit, you’re going to pay $3 for your coffee, or you have the option to choose from Company B, same cup, same roaster, same price, but they’re trying to solve or alleviate the homeless issue in Colorado Springs. Which one are you going to buy?’ It’s B, every time. And then I’ll ask, ‘What if it’s a dollar more?’ And they’ll say, ‘I don’t care, I’ll pay more.’”
Liebert shares this message through the BBB and CI4SI, classes he teaches at the University of Colorado at Colorado Springs, and the local nonprofit boards on which he serves. He’s excited about how the tide is turning.
“Seventy percent of Americans believe that companies have an obligation to take actions to improve issues that may not be relevant to their everyday business. That’s incredible. Seventy-eight percent of Americans believe that it’s important for companies to stand up for important social justice issues,” he says, quoting from corporate social responsibility surveys Boston-based marketing firm Cone Communications conducted in 2016 and 2017.
The areas they think businesses should address are: economic development, poverty, hunger, environment, human rights, education, health and disease.
CI4SI partners with local institutions including the Small Business Development Center and Pikes Peak Community College. It offers training, networking events and consulting to help budding entrepreneurs learn, among other things, how to increase their SROI — social return on investment.
“I think we have an opportunity here to be one of the first cities in the U.S. to say, ‘This is an economic development strategy. We have figured out the social impact thing, so if you are a social entrepreneur and you want to come start your business, or you are a larger company and you want to move your headquarters, come to Colorado Springs, where we have an ecosystem,’” Liebert says.
Colorado Springs can “be a catalyst for the nation,” Liebert says. Besides the unique nature of CI4SI, the city is among conscious capitalism leaders for a couple of reasons, he thinks: First, it was founded and nurtured by visionaries including William Jackson Palmer, Spencer Penrose and Winfield Scott Stratton; their legacies continue to positively impact the region.
Second, it’s the right size. Liebert says he could, in just two weeks, organize a meeting with Mayor John Suthers, Dirk Draper of the Colorado Springs Chamber and EDC, a few City Council members and a couple of business CEOs.
“Denver is way too big, and everybody’s just kind of doing their own thing.”
In fact, Liebert says, CI4SI classes are drawing wannabe entrepreneurs from the Denver area.
Add in Colorado College’s Innovation at CC program, which presents the annual Big Idea Competition; the Quad Innovation Partnership between CC, the University of Colorado at Colorado Springs, Pikes Peak Community College and the U.S. Air Force Academy; and Indy Give!, which just helped raise more than $1,508,427 for 75 nonprofits, and it’s no wonder the city is positioned to lead the way.
“As we’re delivering this message to a Republican or a Democrat, they are both equally excited. Sometimes for different reasons, sometimes they’re the same,” Liebert says. “In this day and age, when there’s a lot of difficulty in reaching across the aisle, for me, that’s my litmus test. If Republicans and Democrats think this is a really good idea, we are on to something here. This is phenomenal. Because when you do this right, everybody wins.”
PRISM Award FinalistsSocial Impact Business of the Year:
Mission Catering, Pikes Peak Habitat for Humanity ReStore and Mountain Equipment Recyclers
Social Impact Startup of the Year:
The Pedal Station by Kids on Bikes, MilHousing Network and The Men’s Xchange
Social Entrepreneur of the Year:
Tina Schwaner, Frayla Boutique; Steve Wood, Concrete Couch; and Lindsey Litton, MilHousing Network
Q&A on leading the way
Bill Morris is the founder and CEO of Blue Star Recyclers, and serves on the CI4SI board; James Proby is the founder of The Men’s Xchange; and Jayne Blewitt and Lorrie Myers co-founded Who Gives a SCRAP. Blue Star Recyclers and Who Gives a SCRAP both won PRISM awards in 2017.
Why is this work important in this time and place?
Morris: The opportunity before us is phenomenal because of a perfect storm. The quality of government leadership and resources are at an all-time low, the business
sector must create social impact or risk losing younger customers who demand it, and the traditional nonprofit sector is inefficient and often underfunded.
Proby: We would like to believe that we are driven by something greater than money, but in reality the economic drivers are the things that constantly make things move. It becomes imperative for businesses that want to do some good to generate their own revenue.
Blewitt: We all need to be a part of the positive change that needs to happen in this community. We are a business driven by a social and environmental mission which benefits our community — a hybrid, so to speak, between a for-profit and nonprofit organization.
What advice would you give others thinking of doing something similar?
Morris: Don’t wait until you have all the answers to get started. I had no background in electronics recycling or employing people with disabilities before we opened. I just wanted to help them experience what it was like to have a real job.
Proby: If you think about the needs of your community first, then starting your own business makes a lot of sense because you’re filling a void that is currently not being met in your community. If you are filling a void that is not currently being met in your community, then there is also space for conscious capitalism.
Blewitt: We advise that you have the support of your family and friends and that you can live without a paycheck for two years. We self-invested so we did not have to take out any loans or borrow any money. We recommend that you take as many classes as you can from the BBB and the Pikes Peak Library District.