OpEd: Why Detroit needs social entrepreneurs

Elizabeth Garlow is the former executive director of Michigan Corps, where she launched the country's first state-wide Social Entrepreneurship Competition. The Michigan Social Entrepreneurship Challenge has advanced hundreds of social entrepreneurs and attracted new investment to Detroit from philanthropic and business leaders nationally. Elizabeth is now a graduate student at Princeton University, where she studies economics and public policy.

Romy Gingras is President of Gingras Global, LLC and Gingras Global Groups, L3C based out of Auburn Hills, MI. Romy is also chairman of the newly launched Detroit Regional Social Enterprise Alliance Social Enterprise Alliance. Romy has been involved with social enterprise for most of her 26-year career in financial and investment planning with an emphasis on small business sustainability.


Why Detroit Needs Social Entrepreneurs

There's a lot of buzz in Michigan and particularly Detroit these days about social entrepreneurship. If you've dabbled in it at all, you may feel that the social entrepreneur movement is characterized by confusing and often-contradictory definitions. After years of poking around in social venture competitions, incubators and conferences, it was clear to us that attempts to define social entrepreneurship were often filled with jargon inaccessible to the very communities where cutting-edge innovation is likely to come. We needed clarity.

When Michigan became the nation's first state to hold a statewide social entrepreneurship contest (a result of a partnership between Michigan Corps and the Michigan Economic Development Corporation (MEDC), we sought to describe social entrepreneurship in a way that would invite broad grassroots participation from entrepreneurs and community partners. As part of the team designing and leading the Michigan Social Entrepreneurship Challenge, Elizabeth helped to draft a simple five-point checklist to describe a social entrepreneur. You can read about it in the Stanford Social Innovation Review. In summary, we see that great social entrepreneurs address social problems with financially sustainable, systems-changing solutions. 

Re-evaluating how we define social entrepreneurship was step one for creating an inclusive and welcoming environment for a growing movement of social entrepreneurs, business coaches and investors. Gaining greater clarity and agreement around social enterprise in our region has begun to shed light on the emergence of a new and exciting ecosystem.
Examining why we should care about social entrepreneurship in our region quickly became step two. The importance of social enterprise is magnified in areas where resources are limited. In today's environment of shrinking government finances and a growing gap between the wealthy and poor, many people are seeking strategies to move the needle on poverty. In our own backyard, we've watched Detroit file bankruptcy amidst stubbornly high rates of poverty, unemployment and illiteracy. 

The reality of cities like Detroit, where there are both massive social challenges and a distinct blurring between the public and private sectors' roles in improving quality of life, means there is a call for out-of-the-box strategies to solve complex problems. Social enterprises present the ultimate promise to solve social issues and gain financial sustainability. Stated differently, a social enterprise can credibly become part of the supply of resources to a community versus part of the need. Effectively, the social entrepreneur solves a social issue while often only requiring some start-up capital instead of continued financial support. The organization "does much with less." If Detroit is an under-resourced region with a large social need, social enterprise becomes an important part of the ecosystem.

The local social entrepreneur movement is gaining ground simply because it is working. Social entrepreneurship has been a good story and theory long considered by thought leaders across the globe. The practice of efficiently combining social impact and positive cash flow, however, is newly emerging. We do not have 100,000 working examples to point to as working models. Rather, we might have 100. Consequently, social entrepreneurship has been interesting but dismissed as a long term strategy to effect change. Yet today we have more tools to build the systems and credibility of social entrepreneurs, leading to greater sharing of best practices and overall growth across the sector. 

The social enterprise, Rebel Nell, L3C, is a great example of a working business model. Rebel Nell employs women out of the homeless shelter to make beautiful jewelry from the fallen graffiti off the walls of Detroit. Rebel Nell is serving the community with social impact and producing a high-quality, in demand product that has the ability to not only sustain the business but grow it.

We also have a burgeoning community of investors looking to bring their business expertise alongside financial capital to move the needle on pressing community issues with accountability for outcomes. Impact T3 is a leading example in our region. Founders Jeff Petherick and Don Lee decided to gather their friends and colleagues, ask them to put in some capital, and serve with their skills and network. They began with Impact T3 Management Co. and have now expanded to Impact C3 Group One to fund social enterprise in Detroit and Pontiac. The three C's are explained as "coach, capitalize, and connect."  Impact made a recent investment in a hydroponics social enterprise in the community of Brightmoor. This began with two individuals deciding to make a difference by starting with a $4,000 request to each of their friends.

Social entrepreneurship currently lives in the gap between purely mission-driven organizations and purely profit-driven organizations. The intentional effort to consider both the financial viability as well as the environmental and community impact of an organization's activities proves increasingly important. It is attracting and retaining talent in our region, and as far we can tell, we're just scratching the surface.