Along the way, The Mission-Driven Venture also recounts the life stories of modern-day heroes, people who, for very personal reasons, took on a social challenge as their own and vowed to overcome it through the prudent application of sound business principles. The lessons they learned and the successes they won translate into models worth replicating and adapting. My hope is that their thought leadership will help inform your decisions and inspire your actions.
Acknowledgments
I gratefully acknowledge the hard work and extraordinary contributions of Thomas Day, Alexander Konetzki, Mohammad Khaleelulah, Elizabeth Prendergast, and Joshua Kreitzer, without whose thorough research and careful scholarship this work would be a far less useful resource for those who will rely on it.
Of course, any errors or omissions are mine and mine alone.
About the Author
Marc J. Lane, a business and tax attorney and financial advisor, practices law at The Law Offices of Marc J. Lane, P.C. (www.MarcJLane.com). He is an expert on entrepreneurship and entrepreneurial finance and an influential advocate of best corporate governance practices. Twice a recipient of the Illinois State Bar Association's Lincoln Award, Marc, a “Leading Illinois Attorney” and “Illinois Super Lawyer,” has consistently earned an “AV PreeminentTM” rating in the Martindale-Hubbell Law Directory, the highest ranking awarded. Martindale-Hubbell also includes him in its Bar Register of Preeminent Attorneys.
An innovator in helping social enterprises, impact investors, foundations, and philanthropists leverage capital to maximize financial results while driving positive social change, he is the pioneer behind the Advocacy Investing approach to socially responsible and mission-related investing (www.AdvocacyInvesting.com).
Marc spearheaded the launch of Social Enterprise Alliance's Chicago chapter, which he serves as president and a board chair. He also chairs Illinois Governor Pat Quinn's Task Force on Social Innovation, Entrepreneurship, and Enterprise.
Marc is an in-demand keynote speaker for philanthropic, non-profit, impact investing, and corporate audiences. For more on speaking, and to access some of the resources Marc has featured in The Mission-Driven Venture, visit www.MarcJLane.com.
This is Marc's thirty-fifth book.
About the Website
Marc Lane has made a treasure trove of useful information about mission-driven ventures available to readers. He invites you to visit www.MarcJLane.com, where you will find a growing number of articles he's written for business, investment, legal, and tax publications on all aspects of the mission-driven venture.
The social entrepreneur's entity choice (as discussed in Chapter 2 of The Mission-Driven Venture), the features of the Benefit Corporation (Chapter 3) and the Low-Profit Limited Liability Company (Chapter 4), and the power of the Social Impact Bond (Chapter 8), among many other topics, are presented in detail.
In addition, you'll find audios and videos of recent talks he's given all over the United States, including his friendly debate with Nobel Laureate Muhammad Yunus (featured in Chapters 5 and 6). Professor Yunus insists that “social businesses” ought not afford their investors any opportunity to profit from their investment, a position at odds with the author's view that mission-driven ventures are well advised to offer their financial investors commercially reasonable value propositions.
Chapter 1
Nothing Stops a Bullet Like a Job
In the aftermath of the Great Recession, too many of us are living on the outskirts of hope. As public companies boast about record profits and the Dow sets all-time highs, the U.S. Census Bureau reports that more than one out of seven Americans lives in poverty. More than seventeen million American children – 23.5 percent of all the nation's children – live in families with incomes below the federal poverty line, $23,550 a year for a family of four. The National Center for Children in Poverty reports that, on average, families need an income of about twice that amount just to cover the necessities of life.
No less alarming, a survey commissioned by the Associated Press in 2013 found that four out of five American adults struggle with joblessness, near-poverty, or reliance on welfare for at least some of their lives. They are collateral damage in any increasingly global economy that rewards the rich at the expense of the poor and no longer supports a robust manufacturing sector.
The tragedy of impoverished “sacrifice zones” – the post-industrial cities of Detroit, Michigan, and Camden, New Jersey, southern West Virginia's coal fields, and those native American reservations where the twin evils of unfettered expansion and unchecked exploitation keep old wounds unhealed – is spreading at an alarming pace throughout the nation.
But those who are born poor or fall into poverty needn't stay poor.
Breaking the cycle of poverty was once the exclusive domain of governments and charities. But, in recent years, “mission-driven ventures,” those organized specifically to do good work, have taken it upon themselves to rescue the poor, the sick, and the undereducated. Occupying the intersection of money and meaning, they use the power of the marketplace to advance their agendas without forcing their managers to make decisions solely to maximize profits, opting instead to be transparently accountable to all the ventures' stakeholders, society first among them. On an ever-greater scale, mission-driven ventures are helping to restore our fraying social fabric and to repair the world.
Take Juma Ventures, a model for entrepreneurial non-profits everywhere, whose visionary CEO, Dr. Marc Spencer, was selected in 2012 by the San Francisco Business Times as the Bay Area's most admired non-profit chief executive.
Juma's approach is elegant in its simplicity. The organization provides life-changing employment and educational opportunities to local youth who might otherwise remain forever disadvantaged. They grew up in the inner city, surrounded by violence, drugs, and dysfunction, and they see little reason for optimism. Eighteen percent of Juma's students have been arrested, 30 percent have a family member in jail, 20 percent are foster youth, and 61 percent are from single-parent households. The deck is heavily stacked against them in a society in which competition is everything and birthright too often dictates destiny.
Juma runs for-profit enterprises, not only to help fund its activities but also to improve the lives of the young people it serves. They are on the front lines of Juma's businesses. They work concessions selling hot dogs and ice cream at major sports arenas and ball parks in San Francisco, Oakland, San Diego, New Orleans, and Seattle. And, along the way, they gain a work ethic and see that all things are possible.
Juma's mission is to empower those they serve and to encourage their pursuit of a college education and the ticket it represents. In 2013, according to Juma, 685 young people who participated in Juma's programs worked shifts at 464 events, collectively earning $1,000,000 in wages and saving $238,000 for college, while learning money management, sales techniques, and communications skills. Through its Individual Development Account program, the first of its kind in the nation, Juma multiplies every dollar its beneficiaries save for college by a factor of two, three, or four, using funds from government grants and private donations. Those funds can be used only for college-related costs and are usually paid directly to colleges. Since the program was established in 1999, its participants have saved more than $783,000 in their Individual Development Accounts and earned nearly $960,000 in matching funds. What's more, Juma gives them critical financial literacy training, including budgeting and credit building. Without this knowledge, knowledge they might never have gained without Juma, they might never escape the cycle of poverty into which they were born.
Beyond helping young