A double bottom line
Social entrepreneurship gaining steam in Virginia
Published
These days, doing well and doing good don’t have to be mutually exclusive concepts in the world of social entrepreneurship.
In the mid-2000s, Michael Pirron was a well-paid, but unhappy IT professional. “I was good at what I did, but I really didn’t like the clients or the people I was working for. Our values didn’t align. I also wasn’t independently wealthy, and I couldn’t afford to go work for the nonprofit world because I still had to pay my mortgage.”
So eight years ago Pirron founded Richmond-based Impact Makers, a company he calls “the Newman’s Own of IT consulting.” Like the food company founded by late movie star Paul Newman, Impact Makers’ ultimate goal is to give away all of its proceeds to nonprofit charities.
What started out as a kitchen-table enterprise now employs more than 100 workers. Pirron serves as CEO for the company, which is governed by a nonprofit board of directors. This year Impact Makers made the unusual move of giving away ownership of the business to two nonprofits: The Community Foundation Serving Richmond & Central Virginia and Virginia Community Capital. When the company eventually liquidates its assets, the two charities will reap the proceeds.
Also as of this year, Impact Makers has given away more than $1 million in cash contributions and pro bono work to local charities and has plans to give away more than $100 million in cash and in-kind contributions by 2024.
Like Pirron, a growing number of entrepreneurs are entering the burgeoning field of social enterprise or social entrepreneurship, eschewing more familiar models for startups.
Distilled to its simplest concept, “A social entrepreneur is someone who is committed to make a difference in the community and to be the difference in someone’s life. They’re people who lead by example,” says Bob Mooney, interim chair for the newly formed Virginia chapter of the Social Enterprise Alliance.
Make no mistake, though, Pirron says: “We are a business first. We are an IT consulting business — period. We are a for-profit business in every way.” Impact Makers has made the Inc. 500 list of the nation’s fastest-growing companies for the last three years. The company’s workers are paid at attractive, competitive market rates. “By sheer capitalist metrics, we’ve been a successful business,” he says. “Our clients do not buy our services because of our social impact mission. They buy our work because of our capabilities.”
However, Pirron says Impact Makers’ mission might influence a prospective client to choose to give its business to Impact Makers over a comparable IT company. And that also proves true for attracting workers to Impact Makers, who appreciate being able to simultaneously make a good living and support their community.
“A lot of social entrepreneurs do draw salaries, and they are for-profit organizations,” Mooney says. However, they also “do something that is meaningful for the betterment of society, whether it’s a product or a service.”
“I love the idea of using business as a force for good,” Pirron says. “I often say it was a selfish decision because I wanted to go work in the nonprofit world, but I couldn’t afford to make a living. I wanted to do well and do good at the same time.”
Teri Lovelace, senior vice president of community investments and impact manager for Christiansburg-based Virginia Community Capital, says her organization is “very fortunate to have been one of the two recipients of [Impact Makers’] truly transformational gift.” Like Impact Makers, VCC is also a social enterprise. The nonprofit foundation runs a for-profit commercial lending bank that makes loans only “to entities that are promoting social good and community projects … Everything we do is mission-related.”
Not all social enterprise ventures are for-profit, though. Some are nonprofit or even government ventures, says Christine Mahoney, who directs the Social [email protected] Initiative at the University of Virginia’s Frank Batten School of Leadership and Public Policy.
What matters, Mahoney says, is that “social entrepreneurs are committed to solving a problem. They’re kind of agnostic as to the form that takes. So it could be a nonprofit with a really innovative earned income stream or it could be a for-profit social business or a hybrid in between. And just like all good entrepreneurs, they pivot along the way.”
U.Va., which is launching a minor in social entrepreneurship this fall, has several students and recent graduates who are working on social enterprise startups. Last year, for example, a group of student Peace Corps volunteers won the university’s Entrepreneurship Cup competition with a concept for eco-friendly, reusable sanitary pads to be distributed in Africa, where girls miss significant school time during menstruation. John Kluge Jr., son of the late Albemarle County billionaire, is a visiting fellow at the school, talking to students about his New York City-based nonprofit, Toilet Hackers, which promotes improved sanitation in third-world nations.
Like Impact Makers and VCC, there are 33 companies in Virginia that are classified as benefit corporations, those with a social mission in addition to the business mission. In addition to starting the Virginia chapter of the Social Enterprise Alliance, Mooney is one of the leaders of New Richmond Ventures, a venture capital company supporting innovative, social enterprise startups such as these. One such company is the for-profit Evatran, which has developed a wireless battery-charging system for electric cars in order to reduce fossil-fuel emissions and dependence on gasoline-powered cars.
Companies with a double bottom line (meaning profit isn’t the only motivator) are more attractive to the millennial workforce, Mooney says. “They’re seeking a balance between success and significance. Right from the start, they’re committed to doing something more meaningful that makes a greater difference to the community than many people of my generation did when we first got out of college.”
Other board members of the new state chapter of the Social Enterprise Alliance include former state Secretary of Commerce and Trade Jim Cheng and former state Delegate Larry Wilder, who also serves as Gov. Terry McAuliffe’s adviser for social entrepreneurism. The group will be holding educational events about social entrepreneurship and innovation at college campuses and corporations and will also be promoting opportunities for synergy between social enterprise ventures.
Says Mooney, “We’re committed to companies that are making a difference in the community as well as helping the businesses they’ve created.”