Well, All the Cool Kids are Doing it: Social Entrepreneurship in the Public Sector

A little more than a year ago, Governor Terry McAuliffe signed off on an Executive Order detailing a strategic economic plan that would, in part, work to encourage social entrepreneurship in Virginia. Governors around the country, both Democratic and Republican, have been taking similar actions to “encourage” social entrepreneurship. So, what does that even really mean?

“Social entrepreneurship” sounds like two buzzwords thrown together by three white guys in thick-rimmed glasses and skinny ties, so If you don’t know what I mean when I say “social entrepreneurship,” that’s understandable. “Social entrepreneurship,” or SE as I am going to abbreviate, stems from the basic idea that businesses can be structured at their inception with a focus on creating a social good, with profit being a secondary consideration. This new type of industry has been growing rapidly as of late, and “the man” is starting to take notice, man.

Speaking of such, let us get back to Terry McAuliffe. By reshaping some business regulations, making more types of expenditures tax deductible, and providing some of that sweet, sweet grant money, Governor McAuliffe and the Virginia government could do a nice job of allowing SE to work in the Commonwealth. These actions, taken in Virginia and in states across the US, would allow more innovators to see a social problem and work on their own individual prerogative to find a solution.

Yet, this all reeks of similarity. My sweet little liberal eyes have seen this same game being played for some time now. The non-profit and charitable sectors have been the teacher’s pet to the government for some time now, and, though these industries help countless individuals, we have yet to see a grand social turnover for the impoverished. “But, SE is different,” the white boy in the skinny tie would lecture me if I were willing to get that close to him. The argument goes that SE will incentivize more innovative thinkers, who would normally go to the private sector, to fight for a social good because of that delicious profit. But, the social good is more important than the profit, of course. Of course.

In fact, conservatives have continually demonstrated their willingness to push charitable giving and non-profit work as a free market solution to poverty, in lieu of increased government welfare. Almost twenty-years after AFDC was replaced with TANF, the same arguments are still being used to denounce welfare. This nations impoverished are going to be dependent on that government check and will refuse to work, even with the employment requirements to receive TANF benefits that are in place. Instead of SNAP benefits, poor individuals should hope they are lucky enough to be one of the few that understaffed and underfunded food banks can provide basic sustenance to, even as government contributions to food banks are being drastically cut in thousands of localities. Our society cannot continue to rely on the kindness of charitable individuals as the final solution to the rampant poverty that has become inherent to American capitalism.

Accordingly, with the addition of profit, SE is sure to become the new conservative darling. No longer must we just rely on compassion to ameliorate poverty. This profit creates a capitalist incentive for individuals to fight these social ills. This is economics! This is science! SE has little risk of stroking the dependency complex of the impoverished. SE creates customers out of beggars. SE doesn’t cost the taxpayer a dime. SE is smart. SE is responsive. SE is where conservatives see themselves in five years.

Like charities and non-profits, SE still relies on the vigor and the expertise of a single individual or a small group to alleviate systemic social ills, instead of on the government’s concerted power of every member of society. The meager profits produced by SE are not substantial enough to attract a consequential amount of additional talent to this cause. Even if these profit were large enough, governing bodies cannot continue to pass the baton of responsibility for the livelihood of this country’s poor to private individuals and expect a different result. Men and women will continue to wallow below the poverty line until conservative legislators at all levels of government take a hard look in the mirror and realize they have been presented with the opportunity to make lasting change.

Still, the principles of SE have demonstrated their effectiveness in alleviating hunger, homelessness, and many of the other horrid effects of poverty. Though not socially comprehensive, as may be theorized, this new industry is producing real benefits for Americans. This success is not completely unlike that of countless non-profits and charities. The central difference, the defining difference, is that wonderful profit.

Through private-public partnership, governments can make use of their clout to enlist existing corporations in SE projects with far more impact than simple Corporate Social Responsibility. Private-public partnerships are nothing new, having been attempted in limited capacities at all levels of government, but these new proposals, with the potential for turning a profit, could attract far larger private investments than ever before with the potential to increase the scope and, overall, the social impact.

Admittedly, the federal government and, even, state governments are not a preferable option to implement this proposal. Instead, the governments of medium-sized cities, such as Richmond or Baltimore, could create small divisions tasked with creating these partnerships and enticing corporate expertise. Imagine if Whole Foods and the City of Baltimore paired together to open up several small, inexpensive grocery stores that would bring affordable meats and produce to the food desert conditions of West Baltimore. Google and the City of Richmond could work together to provide low-cost wireless internet access to the impoverished neighborhoods of Virginia’s capital. If executives at Whole Foods or Google are reading this, you can have those ideas. Free of charge.

Social entrepreneurship, as I switch out of the abbreviation because this is the concluding paragraph, is a concept that will continue to attract socially minded individuals as the industry continues to develop over the coming decades. Yet, like charities and non-profits, these businesses are not sufficient placeholders for our government’s responsibility to the impoverished. However, local governments could employ their perceived clout and the potential of social entrepreneurship to attract experienced private partners who are willing to invest in shovel-ready, society-benefitting, and, most importantly, profit-producing proposals. Take that one to the bank, Terry McAuliffe.

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