I was dismayed and confused to read an editorial written by Jack Horak on April 7, 2014, which decried Connecticut’s “superficial efforts” to encourage economic growth in our state and his suggestion that legislation in support of social enterprise is somehow anti-business.
As a Connecticut business owner who supports this bill, I see it very differently.
A social enterprise is a business that is structured to solve social or environmental problems. Social enterprise doesn’t look for tax breaks, but sells goods or services to finance its social mission. Think Newman’s Own.
These are viable, scalable businesses creating jobs that solve community problems. This legislation (SB23), which has the support of the Governor, and a long list of bipartisan co-sponsors, will allow people to register their business as this hybrid business type.
If they can’t do it in Connecticut they will do it in one of the 21 other states (including every state contiguous to Connecticut), and that feels anti-business to me.
Horak suggests that becoming a social enterprise imposes “vague obligations on boards of directors not to make too much profit.” Not true.
Becoming a social enterprise merely allows other considerations beside profit to count in the decision-making process. If a social entrepreneur can accomplish his or her social mission while making a huge profit — that’s awesome!
What this new legislation does is to make it OK for a social entrepreneur to measure success by something other than profit alone. It means that I, as a social enterprise business owner, won’t be sued by an investor for choosing to hire local labor rather than outsourcing to the country with the lowest paid workers for the sake of the bottom line.
It gives me a choice. It allows me to balance the need for a financial return to investors with a social return on the investment in people and community.
The editorial states that the legislation might draw a “potentially destructive ideological line between good and bad businesses,” which seems to suggest that only profit driven businesses are good. If there’s anything we’ve learned through the Great Recession, it’s that a single-minded focus on anything can take us to very dangerous places.
The editorial goes on to say that “profit, legally and fairly made, is a morally good thing,” when in fact profits are not morally good or bad any more than is the dollar in your pocket.
It’s what you do with those profits that make a moral statement. Like beauty, profit is as profit does. We as individuals, as investors, as consumers, and as business owners need to think about what we do with and in the name of profits, and not hide behind the fairy tale that profits are in and of themselves good.
Connecticut has a wonderful combination of ethos: We are the Land of Steady Habits and proud of our Yankee ingenuity. We’re practical, but we believe in doing what’s right. Harriet Beecher Stowe, one of Connecticut’s most revolutionary social innovators suggested that “common sense is seeing things as they are; and doing things as they ought to be.”
With a rich history of social innovation; great and progressive educational institutions; influential, creative, resourceful philanthropic organizations and individuals; Connecticut has what it takes to become a hub of social enterprise.
And social enterprise is the future. If we seize the opportunity at hand, and pass this legislation, we can usher in an era of new innovation, attracting those great minds — from students who are demanding classes and programs in social enterprise, to entrepreneurs with fresh ideas, to Baby Boomers looking for a second act for the opportunity to give back.
I don’t want to lose this energy and innovation, along with the impact dollars that will follow them, to another state. I want them to stay here, and to come here from elsewhere because they see what we have to offer. Social enterprise is not simple, or saccharine, or unrealistic — it’s good business, it’s innovative, and it’s just common sense. n
