The Second Phase: Social Enterprise in The Black Community
“It’s not just that traditional methods have failed. Businesses possess unique characteristics that are ideally suited to the task of innovating new approaches — and taking them to scale”
-Paul Polak & Mal Marwick
T o be poor and Black in America, is to be politically invisible twice over. Lacking both the population to create a voting majority and the the wealth to effective lobby politicians, poor Blacks have survived on the margins of American electoral politics. This explains why Blacks historically embrace non-legislative means of advocacy such as the protest marches and uprisings of the Civil Rights and #BlackLivesMatter Movements. In our political system, where money and majority rule, poor minorities possess very little agency.
This is where social enterprise is particularly promising for the Black community. A social enterprise “is a revenue-generating business with primarily social objectives whose surpluses are reinvested for that purpose in the business or in the community, rather than being driven by the need to deliver profit to shareholders and owners.” Social enterprise offers a new, more responsive avenue to achieve social impact. This is because, unlike politics, business is not a winner take all system.
In the private sector, every dollar counts. So, even if a service or product only matters to a small minority of the population (ie. providing fresh food or affordable, quality housing for inner city Blacks) if there is enough demand (and we know there is), then a business can craft personal solutions for that niche population.
This means social enterprise can be more targeted and less stigmatized than legislative politics. For example, if a grocer designs an affordable produce market in Southeast Washington DC to meet the tastes and needs of urban Black working mothers between the age of 21–36, who make between $15,000 -$25,000, that business will seen innovator leveraging consumer data and market segmentation to achieve growth. But, if a government program with similar goal was adopted in the public sector, it be seen as an wasteful partisan entitlement program that gives out “free stuff”. Unlike government programs that require universal appeal, businesses thrive off of specificity. And for a population that is constantly neglected in politics, the prospect of intimate, responsive service is huge.
Social enterprise also offers an scale. While there have been tons of great government programs and nonprofits in Black inner city that have made residents safer, smarter, and healthier, these initiative’s reliance on donations and public dollars have restricted their growth. Contrastingly, social enterprise utilizes a more sustainable profit motive to grow expand its impact, and because positive social impact is a part of their inherent design, communities improve as business scale.
All in all, social enterprise offers poor Blacks a form of new form of economic development that is privately funded, efficient, personal, and scalable. This is not to say social enterprise is a replacement for government — it’s not. There are many inequities that can only be addressed by government. However, social enterprise, along with the consumers and investors who support them, offer a new way to address the economic oppression of the Black community.
This blog is the second in a series of three that will explore how the private sector can address the racial wealth gap in the U.S. Part Three is linked below.If you enjoyed reading, please hit the heart button below!
