Profits for Justice

Now that the religious right dominates all three branches of the federal government, one of the few avenues still open for creative progressive initiative is business. To get an inkling of what's possible, drop by the Used Book Cafe in the SoHo district of New York City. There you'll find an independent bookstore that lacks the selection of a Borders but enjoys regular visits from leading agents and publishers in the city and boasts a fabulous events calendar that reads like a Who's Who of contemporary writers and musicians. What's truly revolutionary about the cafe, however, is that last year the business, along with sister thrift shops, provided more than $2 million to its parent nonprofit, Housing Works, one of the nation's largest advocacy groups for homeless people with HIV/AIDS. Housing Works runs clinics, conducts public-policy research, lobbies federal and state officials, even leads sit-ins. It is fearless, aggressive and stunningly effective--and its $30 million of annual work would be impossible were it not for a vast range of realty, food service, retail and rental companies that help pay the bills.

"What we are about," says Housing Works president and CEO Charles King, "is the business of changing the entire paradigm by which not-for-profits operate and generate the capital they need to carry out their mission--a new paradigm based on sustainability and social entrepreneurship." King is helping other nonprofits adopt these ideas through the Social Enterprise Alliance, which recently held its fifth annual conference, involving 600 social entrepreneurs from thirty-nine states and seven countries.

This new paradigm increasingly defines our own jobs. One of us, after raising some $15 million for various progressive nonprofits, decided six years ago to start creating socially responsible enterprises, including community-friendly poultry production, small-business venture capital and buy-local purchasing clubs [see box on page 18]. The other has run a network of progressive independent businesses in Philadelphia, an effort based at the White Dog Cafe, one of the city's top restaurants, which serves food from local farmers.

We believe that the spread of social entrepreneurship, and the positive alternative to conventional fundraising it provides for raising resources, offers a fundamentally new and powerful strategy for progressives to expand their power and their voice in the United States.

Entrepreneurial Nonprofits

Mainstream nonprofits actually have been entrepreneurial for years. Every year the Chronicle of Philanthropy publishes a list of the top 400 nonprofits in the United States, ranked by their fundraising. Re-rank the October 2003 list on the basis of revenues not derived from private sources such as donations and foundation grants, and the top performers, unsurprisingly, are universities and medical centers. Remove these heavyweights, and one finds a fascinating assortment of do-gooders. Lutheran Services, number one, serves as an umbrella for 300 organizations that supplement their many contracts, grants and donations with a wide range of fee-for-service programs to help, among others, the poor, the elderly, the sick, at-risk youth and refugees. Number two is the YMCA, which supports its youth outreach programs with a vast network of health clubs. The American Red Cross, number three, draws blood and sells it to hospitals and health centers. Fourth is Good Will Industries, which raises more than a billion dollars through the collection, refurbishment and sale of secondhand clothing and household items, and nearly another half a billion from fees for contracts and services. In eighth place is the Girl Scouts, which generates millions of dollars through the sale of cookies.

For the most part, these charities are engaged in work lacking the kind of coherent vision of systemic change that progressives embrace. But there is no good reason why a progressive organization with business sense and imagination could not create its own universities, healthcare systems, secondhand stores and cookie operations that provided substantial revenue for more serious political work.

Some, in fact, do. Antioch College and the New School University, among other schools, have designed social-change-oriented curriculums that have graduated several generations of activists. Planned Parenthood's 850 clinics, in some communities the only places where contraception and safe abortion are available, generated more than $306 million last year, a financial base that has helped insulate it against various retaliatory strategies by anti-choice groups. For several decades, Green's Restaurant in Fort Mason Center in San Francisco has sold not cookies but high-end vegetarian meals to help finance the Zen Center, which has numerous programs for peace, the homeless and prisoners.

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