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Economy & Business

Social enterprises try to generate profit plus change

This article first appeared in the St. Louis Beacon: September 3, 2008 - As they worked to fill the day's orders, the women of the One World Cafe punched out pita wheels and rolled coconut macaroons. The cafe is one of St. Louis' "social enterprises" -- businesses run by or through social service agencies and non-profits to further their mission while making money. In this case, the One World Cafe does catering jobs while teaching job skills to immigrant women and female ex-offenders.

St. Louis is home to a number of social enterprises from the well-known McMurphy's Grill to LiveFeed, which joins artists and concert-goers in fighting hunger, to the Blessing Basket Project, which pays living wages to basket weavers in a number of Third World countries. Because social enterprises take so many forms, it is difficult to know how many are operating in the St. Louis region. 

A business and a helping hand

Social enterprises, such as the One World Cafe, face the same economic pressures as regular businesses -- but they also have to deal with the social or cultural circumstances of their employees. It can be tough meshing the two.

But it is possible. McMurphy's Grill, a St. Louis mainstay since 1990, is a case in point. The restaurant, run by the St. Patrick's Center downtown, trains 30 to 40 people a year and is staffed entirely by homeless or mentally ill people from St. Patrick's. The goal? Giving clients skills that can lead to a job in the restaurant field. St. Patrick's Center has worked with such companies as the Pasta House, Anheuser-Busch and Boeing to underwrite the costs of  the restaurant, according to the McMurphy's Grill website.

A blossoming Perennial

When Jenny Murphy talked about her idea for an art business giving away fixed-up items from dumpsters that would employ ex-offenders, reactions were mixed.

"It's really shocking to me how uncomfortable with the idea people are," Murphy said. "Whenever I've talked to somebody about it, they're like 'Wow, that's a lot of levels here.'"

The 21-year-old art student at Washington University thought she could combine art, sustainable living and teaching job skills in one social enterprise. Now working with Lisa Harper-Chang and the Pulitzer Foundation, Murphy's plan will be part of the annual Skandalaris Center competition to find funding. Perennial, as she calls the project, will also be looking for a partner social service agency as the source of participants.

The idea behind Perennial has three parts. The first focuses on creating artistic items for the home out of found objects. The second is to teach ex-offenders how to refurbish. The third is to set up a "free sale" or eventual storefront where people can pick up items, free of charge.

Murphy's idea came out of an annual competition held by University City for public art proposals. Her $500 proposal  wasn't funded, but Harper-Chang heard about it when she visited Murphy's sculpture class. Harper-Chang is the Pulitzer's manager of community engagement. She and Murphy worked together on other Pulitzer programs this past summer. After a brief break, they are once again working on getting Perennial up and running.

"I probably scared Jenny," Harper-Chang said of her excitement. "It was just classic: working with the community, building skills in the community. We're very ambitious, but we're very excited."

Murphy has been researching similar programs around the country from "free sales" to how to rehab folding chairs and other items. The pair acknowledges that some aspects still need to be worked out. For example, how would the ex-offenders doing the rehabbing be paid?

The pair hopes to expand to include the public and other programs, Murphy said. These would have fees and could help fund Perennial in the future.

Staying true to the ideals of art, sustainability and social action will be key, Murphy and Chang stressed. "I think the more we talk about it, we're about to get rolling," Murphy said. "I think at this point it's more fluid. I think about spreading the ideals in a bigger space than a gallery."

Social enterprises try to attract buyers who are concerned about where their money is going. Many may want their purchases to support a social cause but don't think beyond that, said Ken Harrington, the managing director of the Skandalaris Center for Entrepreneurial Studies at Washington University.

"It all gets kind of muddled together in the consumer's mind," Harrington said. Because of competition and confusion, social enterprises must be clear about their goals and the quality of their products.

Although the U.S. economy has been turbulent recently, Harrington believes that can help new social enterprises. "You have to have a better plan, you have to have a better team, and you have to get to market quicker," Harrington said. "I'm a firm believer that the best time to start a commercial business is when the economy is down."

Skeptics say that is very difficult to reconcile the social mission with the economic demands. Elizabeth George is vice president of the Deaconess Foundation, which funds health-related initiatives, primarily aimed at children's health. It has funded social enterprise projects in the past. The projects, however, were less about creating a sustainable business than about teaching or accomplishing a social goal.

George, citing a lack of evidence about their success, questions whether agencies known for working with ex-offenders, refugees and teenagers, among others, can handle the demands of business. "I do not believe every organization has some kind of social enterprise lying just below the surface waiting to be harvested," she said.

Even agencies with good track records of delivering services may not be able to adapt to the demands of a business. They may wind up diverting money and staff to keeping the business afloat instead of paying for their core programs, she said. Many new businesses also fail within their first five years as well.

"You have to be really, really careful," George said.

Harrington acknowledges that some social enterprises fail. Research indicates that businesses that don't closely follow an agency's mission are the most likely to go under, he said.

The Skandalaris Center began hosting a contest for social enterprises last year. Last year, One World Cafe, the brainchild of the Center for Women in Transition in south St. Louis, won the top prize of $30,000 to help with its start-up and running. Last year's contest had eight finalists.

Inside the One World Cafe

Nancy Kelly, the head of the women's center, and Katie Boyne, the head chef of One World, say the venture hasn't been easy. Neither Kelly, who has a background in non-profit work, nor Boyne, a graduate of the Culinary Institute of America, had experience running a social enterprise.

"We social work people don't necessarily think in that business way," Kelly said. "It's a learning experience. You have to be strong on both the social part and the enterprise."

The One World Cafe, which serves food from around the world, provides immigrant and ex-offender women culinary and communication skills. Four women work in the kitchen. Each woman is paid $10 an hour, a wage higher than typically found in a working kitchen. Since the business started last year, everyone involved has been getting a crash course in making a catering business work.

"It was [hard] in the beginning," Vanessa Fuller, 44, of St. Louis said. Fuller came to One World through the Center for Women in Transition. She had never cooked on that scale before. "When you cook at home, it's food, it's basic. When you come into the kitchen, it's completely different."

Abiyot Takele is a 31-year-old mother from Ethiopia. She has been in this country since 2005. She appreciates working at One World, she said, because of its diversity. "I love to cook," she said. "It's good you work with different people. You have to speak English good. I love working with people."

Eventually, the program would hope its women would leave One World for other jobs although they have the option of staying on.

Jenar Mohammed came to the United States with her baby in 1998. The 28-year-old Kurdish immigrant had cooked for her extended family and mosque but had never worked in a catering kitchen. She has now worked in One World's kitchen since it opened, but she is planning, along with her husband, to open a Kurdish restaurant and catering business using the skills she has learned.

Mohammed's co-worker, Brenda Whitfield, also plans to leave One World some day. The 59-year-old St. Louisan graduated from the center's program before starting work in the kitchen. She'd been a waitress but found few differences working in the back of the house. "It's all about the people," Whitfield said. She hopes to become a sous chef.

Running the kitchen has taught Boyne to be prepared. She and Kelly have found that the business itself works - the cooking and preparation necessary to cater parties and lunches - but getting word out about it has been difficult. A slow economy has also meant that the cafe has needed to cut its staff to part-time hours because of the cost of wages and food. Kelly said that initially, less thought was given to how a business runs than to what their cafe could achieve socially.

"It appeared to everyone to be this exciting, interesting idea," Kelly said. "But what happens when you can't get in the door for a taste?"

Amelia Flood is a freelance writer in St. Louis. 

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