How the Social Enterprise Movement is Taking Hold in Philadelphia

Part 2 in our series with TEDxPhiladelphia explores the many ways the region is leading the way in social enterprise and experimenting with mission-first businesses. 

When Philadelphia was considered the “Workshop of the World,” heavy industry powered the city. Workers from nearby neighborhoods filed into bustling, productive factories, and every year the city’s population and economy grew.

At the same time, noxious smoke poured into the air and unsafe working conditions plagued the lives of the average worker.

Today, the “New Workshop of the World” is attempting to be both economically productive and good for the environment, the community and labor. Social enterprises are leading the charge in this direction.

“Social enterprise” is just the latest name for a business that takes into account its social and environmental impact. This can mean having a social mission, like developing affordable housing or feeding the poor, or a regular business that attempts to operate in a way that is sustainable and socially beneficial to society, such as a construction business that uses reclaimed wood.

In Philadelphia, a number of trends are driving social enterprises into the mainstream. Among these are 3rd party certifiers, mixed for-profit/charitable models and a number of business accelerator programs targeted at social enterprises.

Third Party Certification 

With so many companies claiming to be local, organic, sustainable, etc., the need for vetting these claims has become increasingly important to informed consumers. Philadelphia’s social enterprises, like others across the country, have turned to local and national third party certifiers for legitimacy and guidelines.

B Lab is the largest of these certifiers, and it’s based in Wayne, about 20 miles outside of Philadelphia. Using its Impact Assessment, which measures operational practices, services and products, B Lab has certified 26 companies in Philadelphia. These include retail, healthcare, architecture and food companies, to name just a few.

There are also local networks, such as the Sustainable Business Network, that use their own standards – in addition to B Lab’s vetting system – to measure the quality of sustainable businesses and bring them together under one umbrella.

(B Lab founder Jay Coen Gilbert spoke at TEDxPhiladelphia 2011).

[youtube https://www.youtube.com/watch?v=mGnz-w9p5FU&w=560&h=315]

Using Profit for Charity 

Gap’s (RED) campaign and TOMS Shoes have popularized a model where a set portion of revenue is directed into charity. Gap donates revenue from a special product line to fighting AIDS, and TOMS donates a pair of shoes for every pair sold.

Locally, the clothing retailer United by Blue is using a similar strategy, but its donating services rather than revenue. The United by Blue staff organizes clean up days to remove one pound of trash from the ocean for every product sold.

Another local company, KNO Clothing, is closer to the TOMS Shoes model. It uses revenue from its clothing line to buy clothes and other supplies for the homeless.

Incubators and Accelerators

What good is a brilliant social enterprise if it never gets off the ground? Philadelphia startup accelerators and incubators are making sure this doesn’t happen by providing targeted business support such as strategy development, tech support and preparation for investor pitches.

GoodCompany Ventures does exactly that through its summer accelerator program. The latest graduating class of social enterprises addressed a range of issues, including sustainability, education and community engagement.

In what is perhaps the highest profile accelerator, GoodCompany Ventures is collaborating with the City of Philadelphia and the Wharton School of Business on FastFWD, an initiative to develop startups focused on public safety.

There are other accelerators that focus on specific issues. In Center City, for example, Independence Blue cross recently opened an incubator for health-based startups. It contains both a business accelerator and a collaborative research facility. Project Liberty is a tech-based incubator located in the headquarters of The Daily News, Philadelphia Inquirer and Philly.com. The startups will test their projects in the newsroom.

FastFWD’s original proposal video for the Bloomberg Mayor’s Challenge:[youtube https://www.youtube.com/watch?v=0UsDYD2louY&w=560&h=315]