Two Thirds

This is a follow-up to my most recent post. I’d suggest that you read that one before this one, but hey – it’s your life…

As I mentioned toward the end of that last post, the notion of the ‘Third Why’ is helpful as a means of constructing and organizing the meaning of lots of things around us. For me, the first thought that came to mind in hearing the quip had to do with that pivotal moment at which I pretty much decided that I was done with the corporate rat race, but there’s another application of the same idea that I’m interested in exploring.

To recap my current venture: I’m in the process of starting a company that could be described as a social enterprise. A social enterprise, at least in the way that I’m using the term, is a business whose most basic motivation is something other than maximizing the financial gain of its owners. From where I sit now, the concept is extremely simple. I do have to concede, though, that it took me a while to achieve this present clarity. Initially, I thought I had invented the concept (relevant link), then started to realize that I was really just looking to start a non-profit organization (relevant link), and have only more recently come to be familiar with this tidy concept of a ‘social enterprise’ – one that very aptly describes what I’ve set out to build (without originally having the words to describe it).

To understand the idea behind the term – ‘social enterprise’ – better, let’s quickly approach the concept from another angle: by way of real-life anecdote. Recently, I have partnered with a local non-profit community group in support of an event that they will be putting on in April. This is a group of modest means; their event (an annual one) consists of organizing a neighborhood ‘spring cleanup’ on a Saturday afternoon. Anyone who wants to volunteer can come out, grab some gloves and a garbage bag and go around helping to pick up litter that the spring melt has exposed. Simple enough.

Last year, this group – ‘SNA’, henceforth – managed to find enough money to offer a meal to the event’s volunteers upon its conclusion. They were also able to get a set of t-shirts made, which were apparently a hit. This year, money is tight on account of government cutbacks so they weren’t sure they were going to have the funds for those two perks of the event. Enter my team.

For not a whole lot of money, we’re able to sponsor the event and provide funding to cover food and t-shirts for the volunteers – a modest gesture, by any measure. But let me tell you: when I confirmed to the organizers our intention to do this, they were equal parts floored and thrilled.

Why this reaction? Well, on the one hand you have a group that does all kinds of things (well beyond the scope of this particular event) for the good of their community, but are constrained in their ability to fund those activities. On the other, you have an organization with the ability to generate funding for community-oriented work, but no infrastructure or experience with respect to actually acting upon the desire to “help”. Naturally, these two groups are a good fit for working together.

A social enterprise, then, represents an entire world of possibility for those whose life’s work goes into pursuing some social/environmental cause. These people have historically been beholden to government funding (and all of its political and budgetary vagaries) or private donations (highly significant, but also tenuous). To introduce a third stream of revenue, more reliable than private donations and less constrained by political forces than public funding – and that doesn’t take away from either – has massive potential.

Of course, I am not and will never be singularly able to unlock the idea’s full potential, but there’s no doubt that it exists to be pursued collectively by whoever are inclined to do so. I believe that the surprise I witnessed in my contact from SNA was a function of having realized to some extent, by virtue of this small but tangible boost to his project, the potential of this ‘social enterprise’ model. Already the term is something of a buzzword, gaining popularity in non-profit circles, but I’m of the view (and hope) that we haven’t even scratched the surface with it yet.

But what does this have to do with the ‘Third Why’?

Well, to this point in my project, I’ve introduced the basic concept and structure of my venture to a fair number of people, in various capacities. And I’ve gotta say… at first, most people simply don’t get it. To explain the dual motives of 1) selling a service that people find valuable, and 2) using the ensuing proceeds to support community objectives, is to elicit, statistically speaking, a blank stare. The reason for this can, I think, be explained in terms of the Third Why.

If the child interrogator featured in last night’s post asked a grownup to explain the concept of “a business”, the grownup might offer something about a product being sold. They might even throw in something about the transaction working because the buyer values the product and the seller earns money from its sale. Any further questions and everyone is off to the ice-cream shop.

The point I’d like to make is that we take for granted this latter idea, that business owners ought to profit from their ventures. In fact, I think that notion is ingrained to the point where many people – the same ones I earlier described as sporting a blank stare – that don’t so much as understand the basic financial mechanics of private enterprise. Not that it’s complicated: a company sells something to earn revenue, uses that revenue to pay salaries and other expenses, and whatever’s left over belongs to its owners… Of course the excess belongs to its owners…

But why does it have to? (And, more importantly, what if it didn’t?)…This is the proverbial ‘Third Why’ and the fact that most people never ask it is, I think, the reason for the blank stares.

(I can’t resist the temptation to summarize my answer to the what if I just posed: I think a business that explicitly turns its customers into teammates in pursuit of some greater good will achieve things that no profit-driven corporation ever could.)

If you boil down the sentiment underlying these last two posts, you might come up with something like “question everything”, which is a bit of a shame because that’s a pretty tired, corny thing to shout from the rooftops. But I’d like to suggest that there’s a sunny flip-side to the same coin…

I believe lots of good things are possible when we ask some very basic questions of the things we would otherwise take for granted.



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