Tuesday, May 31, 2011

California Association of Nonprofits Needs to Advocate for Social Enterprise Corporate Structures

I find it frustrating when business and non-profit leaders cling to the misconception that the American economy is a zero-sum game. For each winner in the economy there must be a corresponding loser according to this line of thinking. Unfortunately, this view misses that a growing economy with expanding efficiencies arising from new innovations allows for a growing pie of opportunity. One reason I've been such a fan of social enterprise over the last 12 years is because this sector disproves each day the idea of a zero-sum economy with its innovative activities.

But then interest group politics trots out the tired argument of the zero-sum pie once again. This time, the California Association of Nonprofits worries about legislative efforts to create new hybrid corporate structures that combine what social enterprise has always been about: social good with profitable enterprise. The nonprofit and for-profit sectors are already blending and a new corporate form would help government catch up and benefit from the social enterprise innovations.

The California Association Nonprofits fears that a new corporate structure might cause a decline in donations to nonprofits as individuals reroute their resources to these new entities. But this overlooks the fact that a new blended corporate form will grow the economic pie increasing social good beyond what the nonprofit sector can offer alone.

In my experience, social enterprise inspires a new segment of investors not engaged in traditional nonprofits. Because of their new-found involvement in social good, they are likely to also start donating to nonprofits. And those investors that are already donating to nonprofits do not stop supporting the nonprofit because of their new involvement in social enterprise.

It would be far better for the California Association of Nonprofits to recognize the shared benefits of innovation and become an advocate for new social enterprise corporate structures.

Caution must not be an excuse for inaction.

Thursday, May 26, 2011

New Ideas for the Economy: Christ-Followers Broadening the Purpose of Business

Traditional economic theory argues that the chief aim of business is to maximize value for its investors. A capitalist economy achieves the best use of its resources when businesses increase their economic value. In the era of Wal Mart and the outsourcing of jobs it’s easy to see this idea at work in our economy. But I believe there is a quiet revolution occurring in the background that is challenging how we think of economic value and providing tremendous ministry opportunities for innovative followers-of-Christ.

On the one hand, non-profit organizations are discovering the value of earned-income ventures to support mission. Instead of relying totally on financial donations, these non-profits are entering the world of income earning businesses discovering that in many ways these ventures increase the effectiveness of their mission activity. Some non-profits are exploring purchasing franchises and others are developing new ways to access capital through their own investment securities. At a time when many non-profits were curtailing activities during the recession, many of these organizations were able to continue to expand mission. Social Entrepreneurship is probably the biggest development in non-profit funding in decades.

At the same time, some for-profit businesses are discovering that social values have a positive impact on profits. Companies like Stonyfield Farms understand that promoting environmentally and socially conscious products provides economic value. Consumers are willing to pay a premium to purchase organic yogurt produced by small family farmers without the use of growth hormones. The lowest cost doesn’t always drive consumer behavior.

Finally, capital markets are discovering that social values can produce economic rates of returns on investments. Churches and philanthropic foundations are beginning to grow uncomfortable with investments that support values that run counter to their own. Other funds like CalPers are discovering that promoting corporate values through their investment philosophy provides investment return benefits while positively impacting the business community at large by forcing change.

What is occurring is a blending of the economic sectors around the idea that value is more than just economic. Jed Emerson, in an exciting report called the Blended Value Map, argues that value includes indivisible economic, social, and environmental components. I like his argument because I have always felt that real positive change for disadvantaged communities will come not from non-profit initiatives but only when for-profit businesses blend mission with their inherent superior ability to develop community capital. Though my economic background makes me sometimes uncomfortable with the idea of value being more than the profitable use of resources, it’s hard to overlook the evidence that social values have a positive impact on economic value.

And I believe that followers of Christ should be at the forefront of this movement. But in many ways Christians have ceded the development of this philosophy to secular organizations. It is time for us to reassert our moral leadership in the economic arena by starting innovative businesses that initiate economic opportunity for disadvantaged communities while sharing our values. Creating businesses with moral voices should be a natural process for spirit-led business leaders following Jesus.

Wednesday, May 25, 2011

Colorado Needs to Emphasize Tracking Recidivism Rates as Argued in Pew Charitable Trust Report

The Pew Charitable Trust released an interesting report on prison recidivism in the United States. State of Recidivism: The Revolving Door of America's Prisons explores how more than 4 of 10 ex-offenders return to prison in 3 years even though states have dramatically increased the budget for prisons.

For some reason, Colorado was one of 9 states that didn't provide recidivism rates for the study. This is disappointing because I believe, as the report argues, that defining and measuring recidivism success is extremely important for measuring prison performance and saving tax dollars.

200 years ago when prisons were started in the United States rehabilitation was the primary aim. In recent years, it has changed from rehabilitation to "command and control" where "setting up inmates for success when they leave has not been part of the job description." (State of Recidivism, page 27) Tracking recidivism rates is the first step towards government performance that recognizes the importance of safely decreasing the expense of costly returns to prison.

The report emphasizes that if states decrease prison return rates by just 10 percent, they could save $635 million dollars each year. In the past, I've argued how much employment contributes to ex-offender success and state budget savings. Pew's study offers a few more big picture aims that impact recidivism rates such as preparing for inmate release at the time of admission, optimizing supervision resources, imposing swift and certain sanctions, and creating incentives for inmates to succeed.

I especially agree with the last point. One of my biggest frustrations over the years is the system's over-reliance on negative-reinforcement instead of offering rewards for successful outcomes. I've written before how disappointing it is to see ex-offenders return to prison because they are unable to find a job instead of being provided incentives and support in finding a job.

All in all, the report is a great resource for individuals interested in ex-offender issues. Read it in full here.

Thursday, May 19, 2011

Seattle’s Street Bean Espresso Employs Young People Leaving Homelessness

Homelessness and joblessness are synonymous.

It is very difficult for a homeless person to find employment without an address, phone number, email address, and identification.

But employment becomes even more challenging for young people living on the streets, which sadly is becoming a bigger problem throughout the United States. Creating employment opportunities for homeless youth is a challenge ripe for the attention of Christ-following business people. There is a big need for urban faith ventures to employ young people seeking to leave the streets.

In Seattle, Washington, New Horizons Ministries runs Street Bean Espresso, a coffee shop that provides employment and job training for young adults working to exit the street life.

As the Street Bean's web site explains on its story page:

One of the keys to getting off the street is steady employment. We had always dreamed of opening a business that would provide supportive employment for the young adults we serve—a place with the grace to work with them as they work on themselves. They need more than just a job. They need a community to replace their community on the street, and a place to discover a new identity apart from the street.

Street Bean Espresso is located at 2702 Third Ave in Seattle. The store was recently voted the number one coffee shop on Yelp. They are open 6 am to 7 pm Monday through Friday. For more information, call 206-708-6803 or visit their website.

Thursday, May 5, 2011

Hiring the "Best" Person in a Faithventure

How odd is it to lead an organization where we often don’t hire the “best” person for the job but people with potential in the eyes of Jesus.

That is definitely not what a human resource 101 class would teach. But it’s the whole point of what we are attempting in a faith venture. We seek to run a business as mission that employs individuals rebuilding lives from situations like addiction, homelessness, and prison that would normally make such persons unemployable in society’s eyes. Inevitably, every faith venture organization attempting such a mission is going to wrestle with the hiring decision.

The tricky part comes down to walking the fine line between achieving the redemptive employment goals with the need to have employees capable of serving the customer. As a result, hiring is not a science, but an art with an eye firmly on Jesus seeking his guidance every step of the way. To navigate the hiring decision, we look for the following four items when choosing program participants at Belay and Bud’s Warehouse:

  • Evidence of Grace- Can we see some indication, no matter how slight, that God is working in the potential program participant’s life? This doesn’t mean that the individual needs to be a follower of Christ—in fact, we like it when they aren’t--, but that you can see that God is pursuing this person. To keep my senses finely tuned in this area, I return often to the gospels for stories of Jesus’ love for the outcast and forgotten.
  • A Turning- Does the person show some evidence that they have turned away from their old lifestyle choices and now want to move forward in a new direction? Even if it is very tentative, it is still so necessary for an individual to want a different life. Without it, the person will not succeed in our program.
  • Brokeness- Be wary of the individual who presents himself as having it all together. Every person in a faith venture organization, especially the leadership, needs to have an understanding that their life is inherently broken. Sometimes you have to pry during the interview process, but everyone needs to be comfortable presenting themselves as not having it all together. Because people who have it all together are not in a place to rely on God, the necessary ingredient for healing and wholeness.
  • Partnerships- Is the candidate enrolled in another program such as a faith based transitional living program? As I discussed here, the potential for rebuilding lives from addiction, homelessness and prison go up with the involvement of more than one program and/or a faith community.
  • Listening to God- And finally and most importantly, what is God saying? I’ve had times when against my judgment and the prior four points, I sensed very clearly that God wanted us to hire a particular individual. The whole process needs to be bathed in prayer with ears attentive to God for each hiring decision.


At the various businesses of Belay, our hiring decisions don’t always work out. But when they do, it’s something of true beauty. After all, God is in the business of restoring that which has been broken. And what a joy it is to have a seat front and center watching God’s grace in action.

Tuesday, May 3, 2011

Out of Prison and Out of Employment Options

I’ve shared before about how some of our biggest “failures” have become some of our biggest successes at Bud’s Warehouse over the years. And often, these disappointments involve one of our program participants being sent back to prison.

Last week, two former program employees returned to Bud’s after two years away in prison. Both were valued members of our team who ran into difficulties escaping the past while attempting to satisfy the requirements of the parole system. And both were finding it impossible to find the employment they needed in order to avoid being sent back to prison.

I laughed with them about how they had picked a great two years to take a vacation because of the recession. But then I shared their discouragement about the catch 22 of needing to find a job to stay out of prison when few employers want to hire ex-offenders in this economy.

This reality points to the continuing Faithventure Forum argument about the need for Christ-following business people to use their skills to create employment opportunities for ex-offenders. Finding a job is the number one factor that prevents ex-offenders from returning to prison.

And this experience also shows that the prison system still doesn’t understand how to hold ex-offenders accountable to finding jobs in an environment where almost all low-skilled workers are finding it difficult to find work. The state needs to come up with a new accountability matrix that evaluates effort towards finding a job, provides a network of employers willing to hire, and partners with non-profit service providers who offer transitional employment opportunities. A new comprehensive approach will actually save Colorado the $40,000 a year it costs to incarcerate an individual by preventing returns to prison.

As for our two friends back from prison, we are sad that we don’t have any program openings right now. But we’re praying that someone in our network will be able to provide an opportunity until we do.

Belay Venture Partners Program Selects First Founder

I’m excited to announce that Belay Enterprises has chosen Brittany Marlett as our first participant in the Venture Partners Program. B...