Institutionalizing the (Social) Enterprise

Unintentionally-ironic paper dolls borrowed from the consultants at Akashi.us

I’ll be honest: the idea of social enterprise has always intrigued but perplexed me.  On paper, of course, it sounds great.  We’ll apply the principles of entrepreneurship to solve social problems; we’ll be far more efficient than governments or NGOs and maybe we’ll make some money in the process.  It’s an idea that gives a whole throng of bright, young, business-savvy but corporate-skeptical people a reason to rally.

But there are at least two problems that have kept me lingering on the wary rim of the social enterprise punch bowl.  The first is a logistics issue: it just doesn’t seem like altruistic capitalism is at all scalable, and it’s hard to find an example that proves me wrong.  The second is more of a meta-cynicism problem: even for a guy like me who relishes in contradictions, altruistic capitalism is a big oxymoron to get over.  The firmly acculturated bulkhead that stands between the social roles of charities and corporations marks any attempt at a mashup with a distinct smell of skepticism.

Two discoveries this week have me rethinking this response.  Specifically, I’m learning to live with the first problem and am excited to see someone working on the second… in the mucky thick of tax law, no less.  Grant tipped me off to an interesting development: over the last few years, states like Vermont and Montana have been quietly introducing legislation that defines a new type of tax status for business: the Low-Profit Limited Liability Corporation, or L3C.  This is a purely tactical play that makes it easier for foundations to legally invest (with hopes of a small return) in social causes instead of just donating.  But it’s also a soft step toward institutionalizing the idea of a corporation driven by more than market cap.  An official marker that legitimates an idea which has previously had so much trouble fitting into oppositional categories.  A badge for the metabrand.

I’m still skeptical about scalability.  But case studies like the White Dog Cafe have me toying with the hope that scale can happen at the systemic level if not the organizational level; that the long tail decorporatization that works so well on the internet can spill over into the world of brick, mortar, and better paychecks.  Here’s to hoping.

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thoughts at the collision of business, brand and creativity

I'm Ryan Cunningham. I help companies and culture play nice with each other. At CREATURE we call this Brand Strategy, a term that carries a nice halo of reliability and structure. Here, I'm just another guy who thinks about the world and writes it down from time to time.

The result is a pile of knowledge to be used in, and for, the future. Feel free to sift through the heap for useful connections.

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