photo of Larry Snyder, President of Catholic Charities USA

Let's Go Start a Social Business

In his encyclical Caritas in Veritate Pope Benedict XVI argues that there is great opportunity for new types of businesses that are created specifically to meet the needs of the poor.  “Social business“ is one of the new models that are evolving to fill the gap between profit-based companies and nonprofit organizations. Social businesses are created for the primary purpose of meeting a social need, but they face the same pressure to achieve sustainability as all small businesses.  When they succeed, however, we celebrate and view them as evidence that thinking and acting anew about poverty can produce ideas with real impact.

One example of meeting a pressing need with innovation comes to us from Jakarta, Indonesia, where there is little access to fresh, nutritious food.  In the very poorest neighborhoods of Jakarta, where a majority of families live in one room with no kitchen, people eat the cheapest meals they can find: food from street vendors, which typically is fatty and full of sugar.

Taking its cue from this local custom, in 2009 Mercy Corps started a healthy street food café that focuses on children. Nutritionists created the menu, which includes a chicken, rice and vegetable porridge; fruit pops made with real mango, strawberry, melon or other fruits; meatballs; macaroni and cheese; and shu mai dumplings, all sold for 10 or 20 cents.  But children must first want the food before they will eat, so the food carts are painted with bright colors, play music, and have built-in toys the children can play with while they wait.  In December 2010, Mercy Corps spun off the café as a for-profit company named KeBal.

In her New York Times Opinionator blog, In ‘Food Deserts,’ Oases of Nutrition, Tina Rosenberg reports that until recently, “‘let’s go start a social business’ is not one that would be at the front of your mind,” according to one nonprofit executive.   She notes the success of this venture:

KeBal is about to open a second cooking center, and is planning to have six by the end of the year, each providing food to at least eight vendors.  Next year, as soon as Indonesian franchise law allows, KeBal will also start selling cooking center franchises.  By 2013, the company hopes to own 21 cooking centers and have 10 more owned by franchisees.  That will allow it to feed 6,000 children daily and take in projected revenue of at least $2 million a year.

It is worth reading the whole article and brainstorming about how we can bring the same innovative spirit to addressing the issues of poverty in America.  Let’s go start some social businesses.