By: Kathy Karageorge, Ph.D., Senior Manager, Research Scientist
The views expressed In Focus are exclusively those of the individual authors and do not necessarily reflect official positions of their employers or clients. References to materials or services in the public domain do not imply endorsement from those entities.
Social Enterprise Organizations (SEOs) use a business model and market-based approach to address social issues. A primary benefit of SEOs is their ability to create jobs and hire the hard-to-employ, particularly individuals with low skills and other barriers to work. In March of 2018, a listening session was convened between SEOs, government staff, and thought leaders to explore the SEO model as an approach to connect Temporary Assistance for Needy Families (TANF) participants and TANF-eligible populations to pathways for employment and self-sufficiency. During the two-day convening, a wide-range of topics were discussed, including the elements of successful SEOs, programmatic and organizational challenges to operating an SEO, and the role of the government in social enterprise. The following themes emerged on the elements of successful SEOs, including:
- Focus on upskilling. Several SEOs noted the importance of job training or upskilling, which may include providing easily consumable content, pathways in technology, free access to training programs, and on-the-job training.
- Meet people where they are. To be successful, SEOs mentioned that they must meet people where they are and consider the barriers individuals may have to employment.
- Engage the local community. SEOs stressed the importance of understanding the communities in which they operate and how they can transform the communities to meet the needs of individuals and families.
- Use a market-driven approach to sustainability. SEOs stated they use a market-driven approach for sustainability by defining what is needed and valuable in the community and translating that into action.
- Commit to a data-driven approach. Similar to a market-driven approach, multiple SEOs mentioned the importance of understanding the type of business you are working with (industry, etc.) and where to garner efficiencies.
Although social enterprise is experiencing healthy growth in the United States, there are challenges facing these organizations, including increased competition for funds and losing sight of the social purpose. Unless a non-profit is financially stable, they should not pursue a social enterprise, as it requires access to capital and talented people. At times, there is not enough capital or capacity for companies, while other times companies struggle to implement programs with government funds as they fear failure with taxpayer money. Additionally, SEOs mentioned many of their clients do not have a high school diploma or General Equivalency Degree, and face challenges with drug tests, historical trauma, homelessness, and child care – all of which can affect their ability to stay in their training programs and on their jobs. Finally, approximately 50 percent of non-profits are engaged in social enterprise, with a growth rate higher than small businesses. Saturation makes for strong competition, and there is limited funding, including philanthropic support.
After the two-day session, participants agreed that collaboration is key to advancing policy and practice for low-income populations, and that the government, SEO leaders, and practitioners can work together to improve employment outcomes and self-sufficiency for TANF and TANF-eligible, low-income populations.