Interested in Social Entrepreneurship? Considering contributing, volunteering, or starting a project of your own? Already in deep and wouldn’t mind a fresh kick in the pants? Here is but one of over a hundred very intelligent, human videos from ionpoverty.tv that can’t but energize you!
by Bob Perry
I’m fond of saying that it takes ten thousand rivers to fill an ocean of need. And goodness knows we are all swimming in that ocean!
A delightful piece published last week in Toque, an online magazine on the food business, highlights a few of those rivers flowing into that ocean. It’s entitled “Café of the Second Chance,” and we’re honored to be included!
by Bob Perry, Project Founder
Many people – and many of those have represented nonprofits – have asked how we/I chose our beneficiaries. I just wrote about that process, and where it’s headed. It’s neither simple, mechanical, nor all that scientific…. But data matters, now more than ever.
- by Bob Perry
I’ve been fielding more questions lately about my plans for The Benefit Restaurant® Project. This post is a brief update on my experience thus far, my intentions for guiding its development, and the outcomes I expect for this new model of philanthropy.
First, and most importantly, I want to state emphatically that it is my goal to grow The Benefit Restaurant® Project into a national Association of Benefit Restaurants, with member restaurants numbering at least a thousand. I don’t expect this to be a simple process and nor do I expect it to happen quickly. But it is a job well worth undertaking because it is a clear win for all involved: participating restaurants, their employees and purveyors, nonprofits and all their stakeholders, and the dining public.
The Elephant Walk in Waltham became the first Benefit Restaurant® in September 2009. My plan was to pilot the Project in a single location and monitor how the restaurant’s performance changed over time.
Since becoming a Benefit Restaurant®, The Elephant Walk in Waltham’s sales have increased steadily and, after two consecutive record years in 2011 and 2012, annual sales are now more than 30% higher than any year prior to joining the Project. These trends are well ahead of our industry and local market. And, since joining the Project, the restaurant donated more than $180,000 in cash to its nonprofit beneficiaries.
Why nonprofits would welcome a large association of Benefit Restaurants is obvious: Their funding pool would grow much deeper and wider. So, too, would their ability to reach out to new and existing stakeholders be greatly enhanced.
The benefit of a large national Association of Benefit Restaurants to participating restaurants is more complex, but no less compelling. First the low hanging fruit: On the revenue side, our experience shows that Benefit Restaurants’ sales will be significantly higher than non-Benefit Restaurants, all other features and factors being equal.
Beyond the sales bump induced by the direct outreach to their stakeholders by beneficiary nonprofits, I believe that growing awareness of the community value added by Benefit Restaurants will lead a great many people to BEGIN their decision-making process as to where to eat out with consulting the list of Benefit Restaurants in their area.
This habit will form in much the same way OpenTable has become the daily starting point for untold thousands choosing their next dining destination. The relatively new Social Impact App – available on the web now, not just on iPhones – is a great example of a way you can constrain your search for merchants (including some restaurants) that are socially responsible.
On the cost side… As a matter of principle I’ve never asked a single purveyor I do business with at The Elephant Walk in Waltham to discount their goods or services since we became a Benefit Restaurant®. However, as the number of Benefit Restaurants grows, I can certainly imagine vendors OFFERING discounts to Benefit restaurants in order to win the business of a large number of potential customers. The Elephant Walk in Waltham has already enjoyed contributions from suppliers inspired by our firm commitment to giving.
On the financing side, I will work hard to establish a stable of impact investors committed to helping fund the growth and development of Benefit Restaurants. The availability of friendly capital to restaurateurs who choose to join an association of Benefit Restaurants will be a compelling incentive to join the movement.
Lastly, growing a large family of like-minded social entrepreneurs from a single industry creates a vast funds of knowledge in concentrations including culinary, beverage, service, human resources, marketing, accounting, legal, and business management best practices that each member might draw from as needed.
As for the immediate future of The Benefit Restaurant® Project? Presently the lion’s share of my time and attention is devoted to the immediate needs of my restaurant, which will be expanding this year from 85 to 150 seats. I have, however, begun developing my “pitch” to my fellow independent restaurateurs to encourage them to join me on this path that I have learned strengthens one’s business while strengthening nonprofits. I will begin my formal outreach later this year.
In the meantime, I encourage any independent restaurateur in any restaurant market segment interested in joining – or in simply learning more about The Benefit Restaurant® Project to reach out to me via email – bob at benefitrestaurants dot org. I look forward to working with you on growing the pool of funding for nonprofits while strengthening your restaurant in the process!
by Bob Perry
Founder – The Benefit Restaurant® Project
Founder & Proprietor – The Elephant Walk in Waltham
I had the great honor and privilege of attending The White House Forum on Social Business and Innovation last Thursday, September 27, 2012 in Washington, D.C. in the Eisenhower Executive Office Building, adjacent to the West Wing.
The purpose of this post is to share what I heard at this stimulating and valuable event. I endeavored to take representative notes from all the sessions I attended, which I summarize here for the benefit of those absent, and for those in attendance whose note-taking is less obsessive than my own!
In advance, I apologize for any errors of omission or commission in my transcribed record. I also hereby fully acknowledge my biases as those of an owner/operator of a for-profit business with a social mission, and founder of a new model of philanthropy that strengthens restaurants by transforming them into social enterprises. Thus, what I “heard” is predicated on those filters.
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The meeting of 150+ in attendance was chaired by Jonathan Greenblatt, Deputy Assistant to the President and Director of the White House Office of Social Innovation and Civic Participation. In his brief opening remarks he stated that the purpose for the day’s meeting was to assemble a diverse field of responsible businesses and discuss how the government might help us do our work. He expected to end the day with a clear sense of new policy and legislative agenda items to support us.
In addition to Mr. Greenblatt, those representing the federal government, with speaking roles, included:
- Michael Strautmanis, Deputy Assistant to the President and Counselor to the Senior Advisor for Strategic Engagement,
- Cecilia Muñoz, Director, White House Domestic Policy Council,
- Karen Mills, Administrator of the Small Business Administration
- Sean Greene, Associate Administrator for Investment and Special Advisor for Innovation, Small Business Administration
- Don Graves, Treasury Department, and Deputy Assistant Secretary, Small Business, Housing, and Community Development Policy, and Executive Director of the President’s Council on Jobs and Competitiveness
- Nancy Gillis, U.S. General Services Administration,
- Tricia Keller, White House National Economic Council,
- Greg Nelson, White House National Economic Council
- Elizabeth Littlefield, President and CEO of the Overseas Private Investment Corporation [OPIC], the U.S. Government’s development finance institution
A very small sampling of those included in unquestionably diverse field of private and nonprofit sector social enterprise leaders – most of whom were founders and CEOs – were Dansko, Etsy, Indiegogo, The Unreasonable Institute, B Labs, the Social Venture Network, Good, Tesla, and the eight panelists that follow. – I’m pleased to say that at least 5 food service entities were present: The CEOs of Ben & Jerry’s, Honest Tea, Happy Baby Food, Shake Shack, and yours truly. And it was wonderful to be able sit with Anne Wunderli, Director of Facilities and Social Enterprise at Pine Street Inn, The Elephant Walk in Waltham’s February beneficiary as part of its Benefit Restaurant commitment!
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There were two panel discussions, each lasting about 50 minutes. Each of four panelists was given 7 minutes for personal remarks, which was followed by a panel discussion with questions from the moderator, Mr. Greenblatt, and the audience.
- Erika Karp, a Managing Director and Head of Global Sector Research for UBS Investment Bank,
- Steve Case, co-founder and former CEO of AOL, former Chairman of AOL Time Warner, and now investor/philanthropist, Cahir of the Startup America Partnership and member of the President’s Council on Jobs and Competitiveness,
- Shazi Vizram – Founder & CEO of Nurture, Inc. and Happy Family – formerly Happy Baby, the leading brand of premium baby, toddler, and kids food in the U.S., and
- Seth Goldman, founder and CEO of HonestTea [now part of Coca Cola]
- Karp: Social Enterprises are more complex than [conventional] enterprises that do not have a strong socially responsible component – and that “complexity demands collaboration.”
- Karp: We should revel in ignorance [as we work] for it drives questions, and learning
- Case: Impact Investing [investment is Social Enterprises]… where is it? Meaning, why is there not more of it? Because there is a problem defining it. And that leads to much skepticism.
- Case: LEED [ecological building standards] has set a good example of initiatives coalescing and building momentum once there are clear standards. He thinks there should be “SEED” standards – Social Enterprise Economic Development. Yes, he made this up. But it is his effort to illuminate a path to moving investor capital “off the sidelines” in into more Social Enterprises
- Case: Warren Buffett still doesn’t buy into the idea that a business can serve two masters [its shareholders and society]
- Case: Marc Andreessen [founder of Netscape and now venture capitalist] likened impact investing to a houseboat – not a great house, and not a great boat!
- Case: BUT, impact investors invest in ideas that can change the world [for the better]
- Case: Still not enough evidence to earn support of or commitment to impact investment at the highest level [of the investor community]
- Case: There remain “complicated definitional issues.” – I can attest to this! I am grappling with this as I work to raise money to expand The Elephant Walk in Waltham, and as I polish my “elevator pitch” about my business’s social commitment and the Benefit Restaurant Project’s mission and method
- Visram – Baby food trains palates to crave processed foods. The three-year shelf life of the classic American jarred baby food partly drives this
- Visram – It’s important in the new economy for people to feel proud of what they do
- Visram – Social enterprises are fragile and need nurturing
- Goldman: HonestTea was built on two DNA strands: Mission and Innovation
- Government could help by providing infrastructure that supports socially responsible investing
- Jeff Immelt of GE: “Standards drive innovation.” – I’ve heard this, and experienced this before: Having absolutely NO constraints, absolutely complete freedom paralyzes me. Give me some basic guidelines and boundaries and I can get right to work!
- What is the APPROPRIATE level of government involvement is the challenge. Government will always be involved!
- Teach creativity in addition to technical/clerical skills
- How much is good enough? Are good products enough? Or give a percentage of profits too?
- A set of classifications is needed to allow investors to align with a range of business models, in terms of their social commitments and impact
- We need industry based standards to tell me what I should care about, that will allow me to make investment decisions
- There are subsidies for inorganic food but not for organic!
- Organic produce is about 20% more expensive than inorganic – Visram
- 40% of Target’s food sales are organic. Mom’s care! – Visram
- Organic honey is about 3x the cost of high-fructose corn syrup – Goldman
- The law of unintended consequences: HonestTea’s standard size is 500ml, which is 16.9 oz., so HonestTea will be banned in NYC
- Make people understand that these businesses can be MORE profitable because what they do diffentiates them and resonates with a group of people. – Case
- Underserved sectors and regions will really benefit when crowd funding rules are ironed out. – Case
- Selleck: Respect for 5 things: Customers, shareholders, employees, the environment, and facts.
- Selleck: South Carolina prison capacity forecasts are based on the % of the population that fails to achieve a 3rd Grade reading level. Education matters!!
- Selleck: Tire rolling resistance consumes 30% of fuel used by cars, 30% in trucks
- Replogle: Seventh Generation goes well beyond industry standards to decide what ingredients to use
- Replogle: Seek a sustainable competitive advantage
- Replogle: Seventh Generation rewards people on Growth, Profit, and Values
- Swartz: Path of Service – 40 hours of paid time for each employee to invest in communities in which they work.
- Swartz: Sustainable social change should be part of the effort to build corporate culture
- Swartz: Service should be part of the effort to build a corporate culture
- Swartz: Service is about a curriculum, built around leadership
- Swartz: Stress [adversity] doesn’t build character, it reveals it.
- Swartz: Measurement and metrics – Demonstrate a legit business strategy that gives you a competitive advantage.
- Swartz: Your business must be about consumer connection; link citizen service to the product, let it drive the enterprise you believe in
- Solheim: Ben & Jerry’s has three missions: a Product Mission, an Economic Mission, and a Social Mission
- Solheim: Sustainable corporate-linked prosperity depends on: – The community we buy ingredients from, the that we live in and work in, and that we sell our products to
- Solheim: We put our values on display, e.g. Chubby Hubby > Hubby Hubby as the gay civil union law in Vermont was enacted
- Solheim: How to make it fun?!
- Solheim: Get people to pay the price premium because of its benefits.
- Solheim: A sustainable, values-led economy has to be built with brains. Engage with the heart first, but think it through.
- Values-led purchasing
- Values-driven companies engender tremendous longevity and loyalty. People want to be sociable with good things
- Keeping your job and pleasing your shareholders is in your DNA
- Business is more powerful than government in driving social change
- Don’t forget partnering with NGOs
- Unlocking Institutional Capital for Investment with Don Graves from the U.S. Department of the Treasury
- Investing in Community and Small Business with Sean Greene from the U.S. Small Business Administration – I attended this Workshop as it seemed the most natural fit, but took very limited notes, which included the following:
- Social Enterprise could be helped via the tax code, incentives
- It would be valuable to find ways to assist social businesses to become more sustainable
- Small business needs better IP protection against big business; fast-tracking Patent and Trademark Office work for small business would help; too many times a patent takes too long and a big busines copies a small business product in the meantime, effectively snuffing out the new venture
- we’re moving toward a freelance economy
- Friction is a problem [in regulation/deregulation, patents, licensing, funding, approvals]
- What about a Community Gains Tax rate to stimulate impact investment?
- There are government barriers to bringing capital to market [one example was bringing offshore capital back onshore - this can be very difficult]
- Can SBA coursework lead to accreditation, or certification? A credential could be a useful competitive advantage.
- Administrator/Advisor Greene would like to hear from us, and gave us his email address; he requested submitting suggested solutions, not just problems!
- Slava Rubin of Indiegogo stated more than once his belief that over time all the diverse funding models will integrate.
- Supporting Sustainable Supply Chains with Nancy Gillis of the U.S. General Services Agency
- Investing in Measuring Impact with Tricia Keller of the White House National Economic Council, and
- Exploring New Corporate Forms with Greg Nelson of the White House National Economic Council
- CEOs today have a life expectancy of 4 years, versus 8 in the 80s. The world – and business – have sped up! There’s a lot more urgency to act effectively; we’ve a lot less time to get things done!
- There was agreement that we need to collect and share “ESG” [Environmental, Social, and Governance] and Social Enterprise data more usefully
- Audit fatigue – a smaller number of more widely used standards could help here
- We need to embrace crowdfunding as a valid and promising platform
- Community Gains Tax!
- We need a more common reporting structure – markets thrive when you have clarity
- We [everyone in the room, and our many absent colleagues] operate in a broad space, from Social Enterprise to Mainstream but Mission-Driven – adding to the challenge.
- We need to clarify the range of corporate forms that can and do support Social Enterprise
- We have a problem with common language
- We have a problem with common metrics
- We have a problem with common judgment… Best we leave this to the market.
- Social Enterprise is a way we can invest in America and for America
- She hopes we end up where this is the way that a majority of business gets done!
- On the international side there is a tool to stimulate private capital into development, but not on the domestic side.
- OPIC – the Overseas Private Investment Corporation – uses super-long-term loans and risk mitigants, incentives, targets commercially viable projects, and is socially responsible and an impact investor in everything they do
- Patience, capital, stories, and policies are needed to move Social Enterprise forward
- The Mission should be long-term, sustainable financial returns
- The length of time [Wall Street] investments are held has dropped from 8 years in 1960 to 4 months today
- CSR disclosure requirements?
In closing, here are some memorable quotes from various speakers, beginning with two out-takes from conversations I had with attendees that resonated with me:
- “The greatest rewards come from making and keeping long term commitments.” – Jim McClelland, Indianapolis Goodwill
- “It’s hard to tell stories when you don’t focus on one vertical” – Rebecca Masisak, TechSoupGlobal – A “vertical” in bureaucracy-speak is one agency or department. What she means is that if you don’t fit neatly into a single organized paradigm, you have a hard time making your point, getting heard, getting helped. I mention this because I’m in a similar position; by doing something complex – business, philanthropy, etc. – what I’m up to is more challenging to understand and therefore to back.
- “Your work [that of social enterprises, socially responsible businesses] leads to better jobs, better companies, and healthier communities” – Michael Strautmanis
- “Complexity demands collaboration.” – Erika Karp
- Channeling Margaret Mead: “Never doubt that a small group of thoughtful, committed entrepreneurs can change the world.” and, “Never doubt that a large group of thoughtful, commmitted consumers can change the American economy. Indeed, it is the only thing that ever has.” – Seth Goldman
- “Most people who think differently don’t feel there is a place for them in the American educational system.” – Seth Goldman
- “Ideas take time and iterations. AOL took ten years to develop.” – Steve Case
- “We [Social Enterprises?] have a language problem: Some of the language we use is exclusionary, divisive, judging, it turns people off!” – Erika Karp
- “Be virtuous and virulent.” – John Replogle
- “Successful business is about relationships founded on trust.” - John Replogle
- Debunking Andreessen’s houseboat analogy of impact investing, and social enterprise – “This isn’t a houseboat, it’s a sailboat, powered by nature, and with it we can circumnavigate the world.” – Jostein Solheim
- “If you don’t like business, change what business is.” – Jostein Solheim
- “We don’t try to make everybody happy; if no one gets angry [about our product/message], no one’s really going to love it either.” – Jostein Solheim
- “How can we get the engine of business involved [in operating socially responsibly], and not just the fumes? Most CSR [corporate social responsibility] is about what we are NOT doing!” – Unattributed, brilliant question from the audience in Panel 2
- “…the passion of values in action…” – Jeff Swartz
- “I hope we end up where this [Social Enterprise] is the way that a majority of business gets done.” – Elizabeth Littlefield
- “The Dow Jones Sustainability Index has outperformed the Dow Jones Industrial Average since 1999!” – Elizabeth Littlefield
After Ms. Littlefield completed her remarks, shortly after 6:00pm, Mr. Greenblatt thanked the group and our day’s work was done.
Next Thursday’s White House Forum on Business Innovation was preceded by a related Forum on Philanthropy Innovation this past Thursday. One prominent attendee, Jean Case of the Case Foundation wrote an eloquent post about her take-away from the event and the profound follow-on commitment the Foundation will be making to study and promote Impact Investing.
As Ms. Case concisely defined it, “impact investing is generally seen as a new form of capital, where investors seek both social and financial returns.” Operators of social enterprises, which include Benefit Restaurants, will welcome growth in the social investment market class, straightening and smoothing the path to launching their mission-driven businesses and bringing them to scale. Those who are doing profound social good with their businesses will put new funding sources to good use!
Benefit restaurants will earn a close look from impact investors for an array of reasons, which of course include the essential strong and easily quantifiable financial and social returns, but also for their multilateral, cross-sector relationships with the beneficiary nonprofit, as well as strong, inherently local presence and invaluable, uniquely personal outreach capabilities.