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#17 |
Social Enterprise:
New Organizational Format for the 21st Century |
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Juma Ventures: Seeking
Solutions to Social Problems with Business Methods |
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# Juma Ventures:
Fusing Businesses and NPOs |
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+ The Social
Entrepreneur's Challenge:
Begin with a single ice cream stand |
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With offices on
San Francisco Bay, where the smell of the sea is always in the air, Juma
Ventures offers job training programs to improve employability and teach
skills to 14 to 29 year-olds from low-income or troubled families. In
addition to the Ben & Jerry's ice cream scoop shop, Juma has developed
five other projects including vendor sales at PacBell Park, the home
of the San Francisco Giants. Currently, over 200 youth are employed by
Juma. Juma's goal is to "create a new paradigm
that seeks to use business enterprise to provide opportunities to youths
who have limited opportunity for employment and to simultaneously provide
education and profit through industry for these youth." Juma has
provided over 1,500 youth with work. The word "Juma" means "work" in
the Akan language of Ghana in West Africa, and is also widely used in
Swahili, Turkish, and Persian. |
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The Juma offices are located in a building primarily housing NPOs. Steuart
Street is home to many NPOs, including the YMCA |
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The establishment
of Juma goes back to 1991. Diane Flannery, who worked at Larkin Street
Youth Center (LSYC), an NPO that provides clothing and food for homeless
youth, believed that there was a more effective means to help youth become
self-reliant. For example, by providing effective
job training, new work skills are learned opening doors to self-reliance.
Ms. Flannery brought this idea to life and launched Juma as an LSYC project.
After trial and error, Ice Cream on Wheels (ICOW) was established in
1994 as the first business, selling ice cream at local festival and events.
During 1995 - 1996, rights to manage three ice cream shops in San Francisco
were purchased and more employment opportunities were created.
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ICOW and the three
ice cream shops were part of the Ben & Jerry's franchise, with 120 shops
all over the US. Ben & Jerry's started as a small hand-made ice cream
shop in Vermont, and has grown to be a corporation worth 160 million
dollars in 20 years. (The Ben & Jerry's brand is sold in Japan through
7-11.) Ben & Jerry's is famous for its corporate philosophy emphasizing
social contributions such as means of community support and environmental
preservation. Juma was formally established as an independent organization
in 1996 with the cooperation of Ben & Jerry's and other like-minded socially
responsible corporations. |
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+ Why manage
the business yourself? |
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Unlike
existing homeless support NPOs that give out food and clothes,
Juma offers practical job training for self-reliance. So, exactly
which youth are targeted and exactly how is job training provided?
First, Juma targets all low income youth living within San Francisco.
The United States federal government sets the poverty line at annual
incomes of 18,000 dollars or less for a family of four. San Francisco
is said to have 250,000 people living in poverty, 50,000 of whom are
youths. |
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All youth meeting
these conditions are interviewed twice. The first interview is conducted
by a case manager, a trained staff member who looks at individual cases
and finds appropriate solutions when necessary. The case manager verifies
the family financial situation and also checks for alcoholism and drug
addiction. In principle, Juma does not employ drug
or alcohol addicted youth but refers them to an appropriate support organization
on a case by case basis. The second interview is conducted by
a business manager, a trained staff member who manages the business aspect.
The business manager talks with the youth to determine what kind of work
would be best, whether at the ice cream parlor or the stadium, and then
places the youth in the most suitable job. |
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At Juma, actual
jobs for the youth, such as at the stadium stands or shops, are called "Juma
Enterprise Jobs." Currently, there are about 207 Juma Enterprise Jobs.
There is a reason that Juma operates its own projects and creates an
employment framework. Because the job market for junior and senior high
school graduates is shrinking every year, 17-18 year old youth have difficulty
finding entry level positions. The job market is even tougher on 15-16
year old youth. Jobs are even harder to find for recent immigrants who
speak little English, minorities, and youth with mental health issues
or a criminal past. So, Juma needed to create the resources to provide
employment opportunities so these youth could gain job experience and
improve themselves. |
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Age Distribution
This chart shows the age distribution of youth working at Juma Enterprise
from 1998 to 2002. The 14 - 17 age group accounts for more than
half. |
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Ethnicity Distribution
This chart shows the ethnicity of youth working at Juma Enterprise
from 1998 to 2002. African-Americans represented 45%, Latinos/Latinas
19% followed by Caucasians at 15%. The general American population
is 69% Caucasian, 13% each for African-Americans and Latinos/Latinas,
and 5% Asian. Minorities are strongly represented. |
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Looking at the
actual data of the youth employed by Juma, you see that 23% have mental
health issues, 31% are at-risk for homelessness, and 22% have a criminal
record. Most of these youth would have little chance of being employed
by another company. "At-risk
for homelessness" refers to a family that has little or no savings and
is in danger of becoming homeless if the primary earner were to lose
his or her job and fail to pay the next month's rent. There are a great
number of youth in extremely instable situations because they have no
savings due to low income. Jim Schorr, Executive Director of Juma, explains "Juma
targets youth because life's course is often decided during this time
and there are many cases that can't be recovered. Support should be coming
from parents, school, and government organizations, but these are not
working. Juma creates employment by operating our businesses and we even
give advice on how to manage assets. This is where we differ from other
NPOs that only offer educational programs and leave the job searching
to the youths themselves." |
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Annette Riccio, the store manager
at the Ben & Jerry's on Castro Street, smiles as she works alongside her
co-workers. |
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| Juma-related
posters and photographs for events and functions adorn the walls
in the shop. |
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Of course, the
road to self-reliance is not even. Juma patiently educates its employees
even in situations that would normally be cause for immediate dismissal
at other companies. Effective employment education occurs at Juma through a
4-tier job training program that was created based on experiences of
working face-to-face with a number of youth. The first tier is
training for newly hired employees, the second tier is training by co-workers,
the third tier is management training, and the final tier is administrative
training. The employees receive the training for their level of growth
with an increase in pay each time they move up a tier. Youth work at
Juma for an average of 1.5 to 2 years and then leave to work for other
companies. During their stay, the youth can receive the 4-tiers of training
and increase both their skills and earning power. The Ben & Jerry's on
Castro Street introduced at the beginning of this article also implements
this 4-tier training. In fact, Annette Riccio, the shop manager, began
at the first tier and gradually learned the management skills that she
needed to advance. |
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+ Evaluation
System and Diversified Programs |
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Juma does a semiannual
follow up interview with current employees to find out whether they are
working, the impact of the job training, and their financial situation.
Based on 2-years of results of this employment evaluation system, most
of the youth work at entry level positions during the first year, but
many of them are in management or positions of responsibility by their
second year of employment. In addition, many of the youth found
better jobs within two years of leaving Juma. For example, youth who
made 7.82 dollars per hour while working at Juma were earning 8.07 dollars
if they still worked at Juma or 9.72 dollars if they worked at another
company 17 - 28 months later. This illustrates the effectiveness of the
training. |
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Follow-up Survey of
youth working at Juma Ventures.
Hourly wages greatly increased 17 - 28 months after hire. |
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At Juma, two years
is considered a major turning point and educational programs are provided
to help youth find better jobs or to continue on to college. For example, FutureFundz
is a large-scale, nationally recognized asset building program for youth. With
support from Citibank, the program allows youth to save money by establishing
bank accounts with no or low maintenance fees. The youth can create accounts
to save for certain categories such as education or to purchase a computer.
FutureFundz provides matching funds at 3:1 for educational categories
and 2:1 for other categories. In addition, in cooperation with Merrill
Lynch, workshops are held to teach the basics of money management from
how to effectively use money to basic asset management. These workshops
provide the opportunity to learn how to effectively build and manage
financial assets. FutureFundz has gained considerable notice and is currently
providing service to OpNet that
works to bridge the digital divide and GirlSource,
a support NPO for young women. |
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Many of the youth
feel that college is an unreachable goal. Juma's College Tours takes
youth to college campuses to experience campus life and foster the confidence
and hope that they could study at college. College Tours visits UCLA,
Santa Clara University, and other colleges. Juma alum and students with
similar backgrounds speak to Juma participants about their majors and
campus life. Damien Beasley, a Campus Tours participant, had this to
say about his experience. "College Tours has decided my life direction.
I'm convinced that going to college is the smartest choice." According
to Juma, 40% of participants in the College Tours
program have continued on to college. |
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At first, skeptics
doubted that Juma could succeed. But Juma has become successful and now manages
a total budget of 4 million dollars: 2 million through sales by Juma-managed
businesses, such as the Ben & Jerry's and PacBell projects, and an additional
2 million through funding and donations. Juma uses the 2 million
from sales to pay staff salaries and fund project expenditures including
job training. The remaining 2 million is used for operating expenses,
office space, utility fees, and other expenses as well as for the asset
management program and the matching funds program for education or computer
purchase. |
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Juma Ventures Financial
Overview
This graph shows Juma's financial record for 1995 - 2002. The top
of the bar graph shows donations and grants while the bottom represents
revenues. Juma's finances have been growing steadily and in 2004
both contributions and revenue totaled about 2 million dollars each.
(The graph includes only data until 2002.) |
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Juma Ventures Number
Served
This graph shows the transition of the number of youth Juma Ventures
served from 1995 to 2002. The upper portion of the bar represents
the number of youth served by Juma's service programs such as FutureFundz
and the bottom portion represents the number employed at Juma's business
such as the ice cream parlor. There were 207 workers in Juma's business
in 2004. (The graph includes only data until 2002.) |
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In 2001, Juma
started a new experiment in honor of its tenth year. The
Juma Enterprise Center is a business incubator targeting young social
entrepreneurs. The Enterprise Center conveys the 10 years of know-how
collected by Juma on social enterprises to the next generation of social
entrepreneurs and includes capital assistance for creating new businesses. The
executive director of Juma comments, "The Juma Enterprise Center is a
completely new type of incubator. Incubators themselves are not rare,
but there have not been any incubators that focused exclusively on social
enterprises and social entrepreneurs." |
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The Youth Employment
and Development Program at the
Evergreen Lodge located next to Yosemite National Park is offered
as an example of a current business that received investment from Juma
Enterprise Center. The Evergreen project was started by three social
entrepreneurs who received funding from Juma. The lodge is staffed by
Juma youth. Jim Schorr explains "We had the capital, business model,
and staff based on collaboration with Juma. This not only gives social
entrepreneurs a chance to start businesses, but also gives more employment
opportunity for the youth. This business is a prime
example of a non-profit, Juma, and a for-profit industry joining in a
partnership." |
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We have looked
at Juma's job training program, asset management program, College Tours,
and the incubator enterprise. Each of these was carefully constructed
to aid in helping youth gain social and economic independence. However, Juma
is most unique because they provide work to youth as a means to a self-reliant
lifestyle. |
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# Growing number
of Social Entrepreneurs and Social Enterprises |
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+ From Golf
Company Executive to Social Entrepreneur |
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Social enterprises
and social entrepreneurs have rapidly increased over the last few years
in the United States. Jim Schorr is one of those who came to social enterprises
from the business world. Jim had previously worked at a major golf company
and made several trips to Japan to develop new products and services
for the Japanese market. He worked at several different companies after
that but felt there was more meaningful and fulfilling work to do in
life other than making money. One day, he heard about social enterprises,
organizations that work toward solving social problems using business
methods and became interested. While studying at the School of Business
at Northwestern University, Jim participated in establishing "Students
for Responsible Business" to provide support for MBA students emphasizing
social responsibility. With this background, Jim felt that social enterprise
was close to his own interests. As an aside, "Students for Responsible
Business" still operate under the name "Net
Impact." |
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Jim Schorr has been Juma's Executive Director since 2000. |
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"I
am a businessman by nature. I think that's why I was interested in
the possibilities of social enterprise. We have always thought
of solving social problems and business as two separate fields and
I had some doubt that the two could truly be integrated. So, as a businessman,
this idea captivated me." |
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However, in 2000,
there were few NPOs other than Juma that had successfully started defined
business models. Jim's family's reaction to his career change was varied.
His mother happily supported him while his father could not understand
why he would quit a high-paying respectable position. |
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Jim's father probably
represents the majority. With the understanding that his salary would
be 1/3 of his previous income, Jim's decision meant that his life would
change dramatically. But Jim says that when he
considers what he has gained from his experience at Juma, he is happy
that he jumped into the world of social enterprise. "There are
a lot of differences from when I worked at a corporation. First, the
people are different. The American corporate world centers on the white
male, but here at Juma we really have a wide variety of ethnicities and
backgrounds. Everyone has pride in what they are doing and that really
shines through. We can overcome our differences and feel that we are
changing each other for the better." |
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+ Research
in the growing academic field |
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It is estimated
that a few hundred social enterprises currently exist in the United States.
Academic research on these enterprises has become popular in the past
few years. Ten years ago, there were no business schools in the United
States offering classes on social enterprise and no students considering
careers as social entrepreneurs. But, several business
schools are now researching the themes of social responsibility and management
of sustainable NPOs. Over 80 universities, including Stanford and Harvard,
have established social enterprise departments. Kriss Deiglmeier,
Juma's former chief operating officer, is the executive director of operations
for Stanford University's Center for Social Innovation. |
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In the United
Kingdom, social enterprise has been developing since the 1980s based
on the cooperative relationship between the British government and universities.
However, in the United States, there is more of a grassroots feel and
operations exist through public contribution and funding. Social enterprise
did not enter the public eye until the 1990s. One cause of this growth
in interest is said to be the efforts of internet billionaire entrepreneurs
trying to return some of their wealth to society. But when the internet
bubble burst, rather than losing interest in social entrepreneurship,
interest grew. The capital from the bubble was important to keep the
trend going, but this was not the element that helped the increase of
social enterprise in the United States. |
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So, what was the "element?" According
to Jim, the main reason was the change in consciousness
of NPO managers that even NPOs needed to implement business methods,
clarify goals, and have efficient management to realize sustainable operations. Because
operations were sustainable, NPOs could focus on their missions. Currently,
most NPOs rely on contributions, and if there is a drop in contributions,
primary operations can stall. On the other hand, by creating a model
where profits come from the operations themselves, activities can continue
without relying on donations and contributions. In addition, profits
can be used to invest in new projects. A synergy is born by creating
strong organizations to attract talented personnel to the NPO world. |
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# Creating
a 21st Century Organization |
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+ Horizontal
Connections and Government Appeal |
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Juma has gradually
increased its number of workers and types of programs, but there are
still some problems remaining. In particular, the homeless problem is
a major social problem in many major cities in the United States. The
problem is so serious that it cannot be solved by individual NPOs providing
homeless relief. Jim Schorr states, "The homeless problem is relatively
new, having been brought on by the new economic policies during the Reaganomics
era. NPOs and government must work together to
create policy to solve this problem." The cities of Philadelphia
and New York have made great progress toward solving the homeless problem
over the last several years by having city government cooperate with
community-based NPOs at the policy level. Government is an essential
partner because it can decide policies, but NPOs bring the knowledge
of how to mobilize community resources toward those goals. Cooperation
between city government and community-based organizations and sharing
work between the two sectors is bringing the solution to the problem
closer. |
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To work toward
solving the fundamental homeless problem, Juma has approached the city
government and taken a cooperative approach. Currently, Juma and other
NPOs rooted in the community are gathering to create plans and proposals
for effective regulations and policy to present to city government. In
addition, to influence state government policy as well as city government,
strategizing similar to lobby organizations is taking place. Although
this type of cooperation and collaboration among NPOs has not historically
been successful, Juma is focusing on connecting
businesses and NPOs that have independent specialties to work toward
solving the problem. This type of horizontal cooperation will
probably increase. |
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Another problem
facing Juma is tracking Juma graduates that have moved on to other jobs
or gone to college. Costs for follow up surveys to find out where these
graduates are and what they are doing are prohibitive. The only connections
are the summer barbeque party and the Christmas party where Juma graduates
may drop in and talk about what they are doing. To improve this situation,
a mentoring program is being planned so current Juma staff can hear about
the experiences of Juma graduates. This program has three focuses: Juma
graduate mentors can relate their experiences to the next generation
of young people, a follow-up survey can be taken, and advice can be given
to Juma graduates who may be having difficulties. Graduates can also
work together by coming up with new ideas for projects or as a social
entrepreneur in which Juma Enterprise Center can invest. |
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Juma also plans
to increase programs to improve social consciousness such as registering
voters (voters in the United States must be registered in order to vote),
encouraging voters to vote, and providing workshops on public policy. More
than simply providing jobs, Juma is working to create a system that positively
involves people in society and fosters the strength to control their
own lives. |
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+ Social Enterprise:
the Future of Corporations |
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If verification
can be made that the employment opportunities and lifestyle programs
offered by Juma function to develop financial independence, then the
Juma programs may expand to other regions. Jim Schorr explains, "Although
the Bay Area is one of the world's most expensive places to live, the
income gap and the poverty level continue to grow. Even in Oakland, which
is isolated from San Francisco by the Bay Bridge, many young people are
suffering from poverty. Our first goal is to provide
employment opportunity to Bay Area youth by expanding Juma's job training
programs to neighboring regions. I think if we can succeed in
this, then it may be possible to spread Juma programs throughout the
United States in cooperation with regional NPOs." |
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But the fact that
there are 250,000 people living in poverty in San Francisco alone means
that the challenge facing Juma will be a large one. Social enterprises
such as Juma that work to solve social problems by operating its own
businesses and collaborating with business such as Citibank and Merrill
Lynch are still a minority among the numerous NPOs. But, in this era
where corporate social responsibility is emphasized and improved NPO
management is called for, it is possible that the
new organizational model for the 21st century will not be models that
simply pursue profits nor NPOs that refuse to consider profits, but rather
a Juma-type hybrid organization. Business and NPOs are already
working toward a compromise with businesses stressing social responsibility
and NPOs studying business management methods. With the walls between
corporation and NPO disappearing, will the future corporate model be
similar to the social enterprise model? Jim Schorr summed up the answer
to this question as follows. "For social enterprise, the current change
is just the beginning a long transition period. The
corporate and NPO sectors will intensify integration and after how many
decades, I don't know, organizations will experience a major shift toward
a social enterprise-like nature." |
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Hiroko
Nagano@digi-squad.com
Journalist/Translator
Ms. Nagano moved to the US in 1994 and worked at a New York publisher.
She returned to Japan in July 2001. She has worked as a researcher at Impress
Internet Lifestyle Research and contributed to a number of publications
including Hotwired Japan. She has also authored and co-authored books on
technology, translated sub-titles for television, and worked as a radio
personality. |
| Report/Photographs: Hiroko Nagano |
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