Taking a Systems Approach to Social Impact

By Rebecca Lurie

In a recent paper on the Pinkerton Foundation website, Steve Dawson describes how social purposes business can accomplish business growth and social impact:

In a burst of entrepreneurial spirit, the workforce development field is showing new enthusiasm for an old idea: creating “social enterprises” to employ low-income jobseekers.

The theory is enormously appealing. We can create good jobs for constituents who have a hard time finding work elsewhere and the profits will help fund our nonprofit organizations. The reality, however, is far more complicated.

He then draws out a series of recommendations for business. I would punctuate one aspect of what he recommends to draw together the best practices of workforce development and business development for a social purpose:

Even more powerful is a ‘systems strategy’ that leverages change, beyond the walls of the enterprise, into the broader labor market.

When we go into the business of a social enterprise for social impact, we are aiming to improve the lives of the workers and the people in the community where the business exists. By systems thinking, we think yet broader than the labor market strategy and pay attention to the community where the industry exists. Having the ability to influence policy from the vantage point of a business will ultimately enlarge your capacity to have greater impact socially. Historically, unions understood this when they formed industry associations with all the competitors in their market to help set standards and policies that included and went beyond the workers’ contracts.

An old friend of mine, who, like Dawson, worked with Cooperative Home Care Associates and PHI over 30 years ago, has gone on to be a small business consultant. Christine Rico of CFO on Speed Dial suggested recently on her blog that there are 4 things a business needs to consider to be profitable and effective. Her fourth recommendation is to join others: to pick a social impact business group and declare shared impact.

The larger impact of a social enterprise is that it is social and not about any individual business. Yes, there is the “no money, no mission” aspect of making it work. And there is the way we make it work by shooting for broader social impact. We can do it all. But we must be vigilant and thorough in our approaches. Dawson’s paper provides an excellent checklist.

There is so much in this article I want to underscore. If you’re considering a social purpose business, or currently run one, read it again — and share broadly!

To download the full paper and add your comments, visit the Pinkerton Foundation website.

Rebecca Lurie is the Program Director for the Community and Worker Ownership Project at the Murphy Institute.

Photo by Ram Joshi via flickr (CC-BY-NC-ND)