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Generous Helping: Social Entrepreneurs
by Michael McCarthy
Karen Barnaby, executive chef at the Fish House in Vancouver, is cooking up a storm before an appreciative audience at the Trade and Convention Centre. At the Summerhill Estate Wineries booth, marketing director Michael Bigattini is pouring samples. Seattle's Best Coffee account manager Wes Dirksen is working the crowd with his coffee pot, and through the cast of thousands moves Gail Whitney-Peters, cell phone in hand, handling some 200 volunteers and coordinating the production. At the annual Taste of the Nation food festival and charity fundraiser, business is brisk.
Taste of the Nation, a special event for local charities and hunger relief, represents a radically new approach towards fundraising -- a "community wealth enterprise." Instead of appealing to people's charitable instincts, it focuses on selling people products they actually want. Moreover, enterprises like Taste of the Nation don't split the charitable pie into smaller and smaller pieces.

Community wealth enterprises growing in prominence here
"Community wealth enterprises," while fairly new to Vancouver, have been popping up all over North America at a time when non-profit societies, are suffering from compassion fatigue and government funding cutbacks.
Products like actor Paul Newman's "Newman's Own" salad dressings and pasta sauces compete successfully on the open market, while at the same time raising $85 million for sick and dying children. "I feel it's a little like selling apple pie and motherhood when I go out and raise money for this event," says Whitney-Peters. "I find that corporations are looking for ways to get involved in the community, and I always get 'yes' answers. They need the public exposure and the opportunity to be good corporate citizens. We raised more than $80,000 for nine charities from this event, and that's money that is going to stay in this community."
Over lunch in the downtown financial district, the high-energy Whitney-Peters bubbles with enthusiasm about Taste of the Nation. Regional director of a busy private sector medical services company, she also finds time to share her management expertise with more than 200 volunteers, 40 restaurants and 16 beverage houses in the food and hospitality industry. "We are all volunteers," she says. "This is my fourth year. If you professionalize what we do, some of the spirit and intent goes out of it. My fear is that if we create an infrastructure, we would be unable to give as much to the community. This year there was a Taste event in Calgary, Winnipeg, Montreal, Quebec City and Edmonton. Of the money we raise, 80 per cent stays in the community, and 20 per cent went to Oxfam Canada." This year's Vancouver recipients included KidSafe, A Loving Spoonful, Kiwassa Neighbourhood House, and several hot lunch programs.
Taste customers pay $49.95 for the rights to unlimited food, entertainment and schmoozing. Restaurants, in turn, get the opportunity to promote themselves to new customers. Although charitable in intent, Taste is also a commercial risk-taking venture that competes with other special events. Whitney-Peters is also Canadian president of SOS (Share Our Strength), the Washington, D.C.-based international hunger relief agency that originated and organizes Taste of the Nation. This year, Taste events in Canada and the U.S. will raise $10 million for SOS, which in turn will fund more than 800 community-based charities.
SOS is the brainchild of former political campaign strategist Bill Shore, whose fundraising strategies emphasize social entrepreneurship. To that end, SOS has created a wide variety of products from books to cross-marketing partnerships with major sponsors like American Express. "The current approach to welfare perpetuates one of our most enduring and enabling myths-that the key to fighting poverty effectively is in finding the right formula and ratio for government expenditures," writes Shore in his book Revolution of the Heart. "If that were the case, we would have solved poverty by now with all the money that has been directed towards it." "I agree with Bill Shore," says Whitney-Peters. "What we do [at SOS] allows people to give what they want, when they want. If they don't want to give it through their tax base, that's their prerogative. I don't think that encouraging social welfare through the government does anything to end the poverty cycle. You just have to look at the numbers to see that's the case."

Not everyone is in favour of social entrepreneurship
Because of its commercial nature, however, social entrepreneurship has attracted strong opposition. At Vancouver's End Legislated Poverty headquarters at Broadway and Main, organizer Michelle DesLauriers says charity is a band-aid solution. "Our slogan here at ELP is 'Justice, not Charity,'" she says. "We think it's government's responsibility to care for people. With these charitable initiatives, there's clearly no long-term strategy in place.
"[B.C. Human Resources] Minister Jan Pullinger is in favour of social entrepreneurship programs, some of which have been set up in rural areas with structural unemployment. She calls them 'co-ops' that teach people to set up cottage industries. If it can provide a living wage for people, obviously it's better than the dole, but it all depends on the wages and working conditions," she says. "Obviously it's good for business because it creates a ready supply of workers desperate to get a job.
"The problem is that if there are no guarantees that workers will continue to be employed, you have a revolving-door syndrome.
"I think that there should be taxes set aside for certain social services instead of the government pulling the plug. I'd hate to see Canada become a mirror of the United States where health and schooling are privatized, because it's intrinsic to our identity as a country. We have a government-funded social safety net in this country and it's worth saving."
Seth Klein, director of the left-leaning Canadian Centre for Policy Alternatives acknowledges the growing prominance of the third sector, but cautions that it can't fill the void of a retreating welfare state. "I think quite clearly that there is data showing that the level of charity contributions just doesn't match the cuts in transfer payments for health, education and social assistance. The idea that a charity or philanthopy model replaces government is a bit of a myth because in most cases [the model] still represents a tax expenditure, because of the tax receipt that's claimed. There's definitely a shortfall because the dollars are not equivalent.
"The final cautionary tale is that when things are done publicly there's democratic control over the process; there's accountability," he says. "When you move towards a philanthropy model, instead of deciding what's important collectively through our government institutions, we let those with money decide what merits support."

Dishing it out: The Picasso Café
The Picasso Café, at 1630 West Broadway, is one of Vancouver's longest running social entrepreneurship ventures. Founded 10 years ago by the Option Youth Society as a training facility for at-risk youth, Picasso is operated as a typical restaurant, but as customers munch on chicken quesadillas or Pacific oyster stew, they're probably unaware that it's also a training facility. Youths study in the back room, or have whispered conversations in the kitchen, as they pick up the fine points of fine dining.
With its tablecloths and formal service, Picasso looks like any other high-end restaurant in the West Broadway corridor, but the $5 lunch entrées are more reasonably priced than the competition, a sign that the Picasso must be competitive.
"We have a famous chef, Soren Fakstorp, who was most recently with C and Seasons in the Park," says marketing director Catherine Ewing. "We're high-end, yes, but we also have to be affordable." Option Youth Society earns about $250,000 of its annual $800,000 operating budget from the Picasso. With nine full time staff, including lifeskills counsellors, the Picasso must also look to government and foundations for support.
One third of annual revenues come from various government programs, one third from grants and foundations and one third from catering and meals service. The cost per student works out to approximately $6,000 to $8,000, including uniforms, footwear, meals, bus fare, tools (knives, etc), and student wages. About a dozen youth aged 16 to 24 are in the program at any one time. Despite a proven track record over a decade in assisting difficult to place youth find stable employment, Option Youth has also fallen victim to government cutbacks and must increase the amount it earns from its commercial operation.
"We're open for special events and banquets," says Ewing. "We're increasing the amount of catering we do, and we just finished catering the Children's Miracle Network Telethon." In an average year, Option Youth will take in between 60 to 80 students. 42 per cent will graduate with a full certificate, 34 per cent will gain employment before graduation, 17 per cent will leave for higher education, and seven per cent will drop out or re-enter the program.
Graduates earn a diploma from Vancouver Community College and go on to work in fine dining establishments throughout the province. The emphasis on the menu is fresh and local, with participating sponsors defraying food costs by having their names on the menu. Commercial partners include Starbucks, B.C. Hothouse Foods, Yen Brothers and Windsor Packing. The Picasso success story has launched similar ventures in Seattle and Edmonton.
- Michael McCarthy
West along Broadway at The Picasso Café, low-income kids are working hard to get off the dole. Operated by the Option Youth Society, Picasso is one of a handful of community wealth enterprises operating in Vancouver. The Café, a training centre for the hospitality trade, also operates as a high-end, full-scale restaurant. Further west on Broadway, Bridgehead operates a retail store that sells a variety of imported products for Oxfam Canada. Over on Commercial Drive, immigrant services society MOSAIC is now raising money by selling its translation services to businesses.

Potential for conflicts between mission and profits
"The definition of entrepreneurship puts some people off," says Larry Trunkey, who teaches a new course in social entrepreneurship at SFU's continuing studies department. "The public perception has been that entrepreneurs are aggressive and individualistic. Social entrepreneurs tend to get into problems if they put profit ahead of their mission. Some societies feel there's a conflict about earning money; others think of it as an opportunity. Locally, Abbotsford Community Services is running a restaurant, a recycling plant, and a thrift shop, and the Affiliation of Multi-Cultural Societies made $8,000 last year selling its calendar." Various local hospital foundations have ventured into "run-a-thons," raffle ticket sales and bingos, but these don't necessarily meet the true definition of social entrepreneurship; that is, to provide a product that people want to buy irrespective of its charitable nature.
Centenary Health Centre in Toronto does. In 1991, it began a sizable entrepreneurial venture by operating a 75,000-square foot medical/retail mall. With more than 30 physicians and several optometrists, opticians and dentists, The Court also offers a drug store, private lab, hearing aid dispensary, gift shop, hair transplant service, restaurant and donut shop. Built at a cost of $14.2 million, the Court is 97 per cent leased and generates a healthy cash flow for the hospital.

U.S. offers pleny to case studies
The vast majority of flourishing community wealth enterprises are found in the United States, however, where cuts in government funding are long established. The City Store in San Francisco is similar to the Picasso Café, except that it's much more profitable. A non-profit partnership between the city, county and Golden Gate Community, Inc., the City Store is the exclusive retailer for local government products, selling "salvage" items like old parking meters, fire hydrants, street signs, T-shirts, and the work of local artists.
The City Store employs and trains street youths and single mothers in retailing, computers, and the Internet. Profits go towards homeless and AIDS programs in the community, and a portion of the revenue goes back to the city department that supplies them. Pathmark Stores, a $3.6 billion supermarket chain of 132 stores based in New Jersey, is in partnership with with eastern U.S. communities to provide joint ownership and job opportunities with local agencies.
Two of Pathmark's most profitable stores are found in low-income Newark, N.J., and Brooklyn's Bedford-Stuyvesant district. In Newark, New Community Corporation runs one of the largest social entrepreneurship ventures in the country. Incorporated as a "community development corporation," the business ventures started with a Pathmark store. NCC now owns and operates a shopping centre, local restaurants and food franchises including a Dunkin' Donuts, a Mail Boxes Etc. franchise, a Print 'n' Copy center, a sewing company, a construction company, a modular manufacturing company, a business development centre, a loans operation, and an automotive training centre. NCC now employs 1500 people and grosses more than $200 million per year. With total assets exceeding $300 million, NCC has grown into an umbrella group for real esate planning and development, construction, finance, asset management, housing, day care, job training, health care and community arts programs.

Greater opportunities to collaborate with for-profits
On West Georgia, high above the madding crowd, Roger Chilton of Go Direct Marketing, a data-based marketing company, says the future of social entrepreneurship in Vancouver looks bright. "I think everybody is moving in that direction a little bit at a time," he says. "Third-sector organizations are starting to look at improving their ability to generate the kind of funding they need to pursue their mandate. It's becoming an imperative for many. They need to find more imaginative ways to achieve their outcome rather than by relying on the largesse of the public and the philanthropy of corporations.
"For 'for-profit' enterprises, it is going to be increasingly important to demonstrate that they are 'giving back' to the community. This will be increasingly important as consumers have a wider choice of who they do business with. Those same people will tend to be more loyal with the organizations they do business with, because these organizations are operating beyond dollars-and-cents issues. The opportunity for both non-profit and for-profit is not in competition, but in collaboration, to earn the support and loyalty of customers."
This article appeared previously in the Vancouver Courier. Visit Michael McCarthy's e-zine at www.changemagazine.com.