Angela Barbash is the CEO and founder of Reconsider
in Ypsilanti. She has spent 10 years as a financial advisor in Michigan after serving entrepreneurs through the Michigan Small Business & Technology Development Centers (MI-SBTDC) while studying anthropology and history at Eastern Michigan University. Angela is passionate about catalyzing the local investing movement, promoting transparency, fee-only models, and independence in financial services, and helping to weave a community fabric that is resilient and prosperous. She is proud to have the honor of working with incredible talent at Reconsider and its sister company Revalue, a fee-only investment advisory firm dedicated to helping people understand and feel good about where their money is.
Non-profits and For-profits, Move Over -- The For-Benefits are Coming
The for-whats? For-benefits? For whose benefit? For the community's benefit. And by community we mean the owners, the employees, the suppliers, the customers, and the neighborhood as well. Imagine that – members of the community that look out for everyone, not just their bottom line.
But wait, what are we even talking about here? We're talking about businesses, specifically those that take the concepts of making money and doing good and cross them over to create a hybrid creature that has a social mission baked into its foundation. This new hybrid sector goes by many names – the Fourth Sector, the Social Impact Sector, and the For-Benefit Sector. And this new generation of entrepreneurs enjoy new incorporation options in many states, including here in Michigan where we now have the L3C, or the low profit limited liability company.
In May the first national convening of those engaged in this new sector was called, bringing entrepreneurs, big businesses, foundations, universities, economic development agencies, and people from government together by invitation only at Harvard University in Cambridge, Mass. There I represented Ypsilanti-based new economy architects Reconsider.
A half dozen others from Michigan including the MEDC, Eastern Market, Michigan Corps, Local First and Cascade Engineering made up one of the largest state contingencies at the conference of nearly 150 people -- further evidence that Michigan has a story to tell, a darn good one at that.
What was fascinating about this experience, which for me has been one of many like it over the last few years, was to see so clearly how the lines between different sectors have begun to blur into this weird gray area that's causing everyone still stuck in their original defined sector to start thinking that perhaps they ought to start paying attention to the noise around them.
The non-profits are beginning to operate more like for-profit businesses, incorporating more social enterprise revenue lines into their business models and reducing their dependency upon foundation funding. The for-profits are responding to trends among younger consumers who don't just want to get a great latte from them, but want to know where the beans came from, how they were procured, and what local programs they're supporting with their profits. And the public sector (government), known as the third traditional sector, is beginning to look at the actual impact of their subsidies and spending (especially on a local level) and whether they couldn't be leveraging our tax dollars in more effective ways.
These three sectors are blending into that hybrid creature sometimes called the Fourth Sector. Evidence of this trend can be found at every turn. In July the state of Delaware, home to 50% of all publicly traded companies and 2/3 of the Fortune 500 companies, signed Benefit Corporation (B Corp) status into law – an epic win for advocates of this new sector.
Local examples of for-benefit hybrids can be found in the winners of the Pure Michigan Social Entrepreneurship Competition. For example, Fresh Corner Café
is a for-profit company that delivers fresh food to Detroiters through the existing infrastructure of corner party stores, and Digital Inclusion
is an Ypsilanti-based non-profit company that teaches teens how to rebuild computers and sell them into the community, effectively helping them start their own business in the process.
This higher consciousness is pervading every corner of our world. A question for you, the reader – how have you changed since the rug was pulled out from under us in the last few years? What new businesses have you seen sprout in the last year that might put themselves in the category, if they knew there was a name for it? And how does this outlook change your plans for the next five years?
We at Reconsider are doing our part to build the ecosystem. We're made up of renegade financial professionals who reject the status quo; we're systems thinkers and serial entrepreneurs. We saw the handwriting of change on the wall, so we launched Reconsider last year to serve as an information and connectivity hub. We like to share fun facts like this: 2/3 of all new jobs these days are coming from small businesses with less than 10 employees, but less than 1% of our long-term investment dollars (401ks, IRAs, things like that) are actually invested in these small businesses. Wonder how it came to be that over 99% of our money got diverted to the global financial system over the last 30 years?
In response to our experience at Harvard we began planning a way to kick start this revolution toward positive grassroots change and prosperity in Michigan. We have community, we have capital, we have businesses, and we have positive momentum – let's bring it all together for collaboration, opportunity-building, community and oh yeah, some fun! Keep your ears out for this awesome event to be held in Detroit next spring. The time is now, the new social impact economy is here, and Michigan is leading the charge. What other choice do we have but to innovate for a better future? It's what we do here in Michigan – innovate and reinvent ourselves.