Submitted by Growing the Impact Economy Summit
From deep inside a bastion of the American establishment, and armed with a $50,000 “carrot,” 200 delegates from more than 25 states are gathering with a mission to move America’s economic policy from growth for just profits toward growth “for benefit.”
Welcome to the fourth-sector economy – populated by a new class of organizations at the intersection of the three traditional spaces – public, private and non-profit.
“If you have a commercial metabolism and a social purpose, you are in this no-man's land between the sectors,” says Harvard law school student Robert Yoskowitz, a co-chair of the two-day conference at Harvard University on Thursday and Friday.
The organizations under study at Harvard are being referred to as “for-benefit” enterprises. The sponsors and organizers of “Growing the Impact Economy,” (www.ImpactEconomySummit.com) want economic-development officials to start paying more attention to them.
“Outdated legal and market structures assume you have to be either a for-profit or a non-profit," says British entrepreneur Sir Richard Branson, founder of Virgin Group, in remarks of support pre-taped for the summit. "But in fact, much of the innovation we need, whether in health care, finance, education energy or any number of other issues, is in the gray area in between these sectors … we envision a future in which the purpose of business is to drive social, environmental and economic benefit.”
By the end of Friday, funders attending the summit at Harvard Law School plan to award $50,000 in seed grants to catalyze high-potential collaborations and regional economic development initiatives aimed at growing the “for-benefit” sector.
“Everybody is focused on growing the economy, and the assumption is that means growing for-profit firms,” states Yoskowitz. “But there are also for-benefit firms that not only contribute economically, but are also solving social and environmental problems leveraging private capital … and yet they are nowhere on the radar.”
Proponents of the social-venture, or “impact” economy say it is already growing on its own, but that it needs to be featured and emphasized by economic-development officials. Summit goals include better defining, strengthening and forming regional clusters of “for-benefit” businesses, and strengthening the supportive ecosystems that such a new sector needs to survive. These include frameworks for financial support, metrics, policy recognition, accountability, and adequate support organizations and businesses – all of which already sustain the traditional for-profit and nonprofit spaces.
“The for-profit/non-profit architecture that's been built up over the years has created bifurcated structures in which for-benefit entities are forced to operate,” says Yoskowitz. “The form is not fitting the function. We can only bend the walls so much before we need to recognize something else. This recognition lies at the heart of this fourth sector, aligning business and human values that have long been artificially kept isolated. But we must envision what infrastructure this new sector needs to be vibrant in 10, 20, 50 years time, and create those structures here and now.”
The invitation-only summit brings together investors, funders, social entrepreneurs, government officials along with scholars from at least 12 universities for informal discussions aimed accelerating growth of the “impact economy.” It’s the brainchild of several Harvard students at the college and its graduate business, law and public-policy schools.
Among questions under consideration: What distinguishes for-benefit organizations from traditional forms of business or charity? How can they excel at accelerating jobs and enterprise creation? What challenges to they face and how might governments, investors and lenders help with such things as regional support clusters?
“The fourth sector presents a tremendous opportunity for accelerating job creation and economic growth across the United States,” organizers said in conference materials. “There are tens of thousands of socially motivated entrepreneurs, tens of millions of socially conscious consumers, and billions of dollars in impact investment capital that favor for-benefit enterprises.”
Summit public advisors include former White House chief of staff Erskin Bowles, former Harvard President Lawrence H. Summers and a Rockefeller Foundation vice president, Heather Grady. Deutsche Bank, the consulting firm Booz Allen Hamilton are among sponsors of the gathering, and The Huffington Post and CSRwire are media partners.
What is a “for-benefit” corporation? There’s no established definition and that’s one intention of those gathered – to arrive at one. Generally, it refers to a commercial enterprise which affirms some stated social purpose as its primary purpose, and which seek to operate in ways which sustain communities, focus on well being of employees – as well as stockholders – and minimize environmental impacts or use of non-renewal resources.
Besides Deutshe Bank Americas Foundation and Booz Allen, other sponsors are Living Cities and the Fourth Sector Network. Supporters include the Harvard Business Review, MITSloan Sustainbility, and the Surdna Foundation.
More information can be found at www.ImpactEconomySummit.com.
NOTE TO EDITORS: Although “Growing the Impact Economy,” is invitation only, a limited number of media passes are available. For information email Bari Saltmn at email@example.com or call 347-907-5622 / or Robert Yoskowitz, firstname.lastname@example.org / 301-602-8532.
A special leadership gathering of impact investors, government officials,social entrepreneurs, scholars, and economic developers to explore the role of for-benefit enterprise in accelerating job creation, promoting economic and community development, and enhancing regional competitiveness.
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