Garrity McOsker is a recent graduate from Notre Dame where he received a Bachelor’s Degree in Management Entrepreneurship. On campus, he was involved with the Notre Dame Men’s Boxing Club and the Notre Dame Men’s Rugby Football Club.
One of the biggest debates in social entrepreneurship is that surrounding the financial viability of social enterprises, particularly non-profit and hybrid organizations. Questions like “does an enterprise need to be financially viable – that is, not reliant on donor dollars – to best serve its social mission?” and, vice versa, “does the push for financial profitability act as an inherent distraction from the social mission the enterprise sets out to accomplish?” surround the social enterprise discussion and are questions I am not ready to definitively answer.
Instead, I will showcase a social enterprise that is succeeding with their social initiatives due in part to their financial sustainability. During my senior year at Loyola High School, we were encouraged to take on a month-long volunteer assignment in lieu of daily class. I was lucky enough to volunteer with the remarkable enterprise, Homeboy Industries, which is based in Los Angeles, California.
Led by Fr. Greg Boyle, S. J., Homeboy Industries is an organization that offers many services and employment to former gang members and the at-risk youth population of Los Angeles. Services offered include counseling, anger management classes, GED classes, job training, and outside job sourcing. The businesses that are part of the Homeboy Industries umbrella include Homeboy Bakery, Homegirl Café, a silk screen printing business, a catering business, and a new Homeboy food truck among other smaller enterprises and revenue streams.
Some of these operations have been very successful, operating sustainably for years. The bakery (where I spent a lot of time) and embroidery business, for example, are the organization’s earliest social enterprises and have longstanding customers and contracts with restaurants and other businesses. The Homegirl Café has become somewhat of a destination for downtown workers, high profile Angelinos, and out-of-town visitors. The success of the Homeboy brand has even lead to the distribution of some Homeboy/Homegirl food products in grocery chains throughout the Southland. These enterprises contribute to meaningful job creation for ex-gang members, and are heavily relied upon by the organization as a whole for their ability to turn a profit.
Looking back at the questions posed in the introduction, there are also examples within the Homeboy umbrella where the second question comes into play – that is, does a goal of profitability distract from achieving the mission? While the social enterprises within Homeboy turn a healthy profit, and in doing so add to its ability to do good, other services within Homeboy Industries are not financially sustainable and do rely on outside funding.
“Of the annual $14,700,000 operating budget, the businesses provide about 25% of the revenue needed to sustain all of the free programs and services.” (www.homeboyindustries.org) These services include the aforementioned counseling, GED classes and tattoo removal, which are supported by the 501(c)3 parent organization, and contribute to the holistic model Fr. Greg Boyle and others within Homeboy Industries subscribe to. If the organization were to cut costs and remove the enterprises that fail to turn a profit, not to mention all the valuable training, counseling, and pastoral services, Homeboy Industries would not be fulfilling its mission, which is “to help former gang members redirect their lives and become contributing members of their families and our community.”
Would Fr. Greg’s ministry be compromised if it subscribed to a strictly financial, profit-driven approach? The fact of the matter is, Homeboy aims to do a lot of good in many areas and the ministry includes a lot more than just the market-driven solutions it uses to employ workers. By way of an additional example, Homegirl Café primarily employs women and offers services directed towards their needs and concerns. Weekly classes assist women through the toils of domestic violence and single parenthood, striving to help them overcome these difficulties. “In doing so, we hope to empower these women to leave dangerous domestic situations, be strong mothers and leaders in their community, and pursue their career goals in all industries.”
According to Catholic Social Teaching, gaining economic participation is one of the key elements for persons in the margins to enter into full participation within the whole of society. This is at the root of an enterprise’s mission that aims to employ the hard-to-employ, though it can be achieved in various ways. Homeboy Industries has chosen to take a more holistic approach, believing that they are increasing the likelihood of an individual’s success by providing counseling and other support services as well as job training programs and ultimately a job.
“Nothing stops a bullet like a job.” – Homeboy Industries
What do you think of Homeboy Industries and Father Boyle’s work as it relates to financial sustainability and social impact? Let Irish Impact know!