2012-07-12

Co.Exist

Will Seattle Become The Capital Of Social Entrepreneurship?

The city has a lot of wealthy tech players with business experience looking to give back, plus a government that is making it easy for social entrepreneurs to flourish.

Nestled away in the Pacific Northwest, Seattle may be known more for software, coffee, and drizzly weather than for startups, but it’s aiming to become the center of entrepreneurship to solve social and environmental issues.

“Seattle is interesting; it’s the number one most charitable city in the nation—meaning that largest number of people who donate money—and it has lots of new tech companies alongside established ones like Microsoft, Amazon and Boeing,” says Lindsey Engh, who works at The Hub Seattle, which rents space to startups and forms connections with investors.

Engh says that a critical mass of people who care about social problems works in combination with a novel legal structure, passed by the state’s house of representatives that accommodates legal structures for “hybrid entities” that blend nonprofit and for-profit principles. Washington would join about 10 other states that give special status to businesses that make a social impact.

In addition, schools around the area have special focus on social enterprise and entrepreneurship. Places like the Bainbridge Graduate Institute integrate sustainability into traditional business practice, and the University of Washington Foster School of Business also has a focus on doing good for the world while still doing business.

Some of the social enterprises to watch out of Seattle, that all have a for-profit arm but socially motivated goals, says Engh, include: Stockbox Grocers (getting local food to food deserts), Microryza (crowdfunding for science research), Island Wood (environmental education), Explorations in Math (education), Equal Opportunity Schools (education), Lumana (combating poverty in Ghana through financial services).

So why are so many companies turning to a hybrid model, and using a profit-making wing to support non-profit activities? Part of it could be the recession, which made reliable funding for charitable organizations difficult, and forced people to think outside the box. “I definitely think that a large part of the turn to hybrid models was driven by the economic downturn,” says Engh. “Typical donors, sponsors became more risk-averse or were just unable to give money in the way they were used to. But there’s also a cultural shift toward hybrid models, especially in Seattle. Social enterprise is a buzz word here.”

Engh’s colleague Brian Howe says that social entrepreneurs think about “leverage, scale and impact”—things that governments and NGOs have a more difficult time considering. "I think there’s every reason to believe that Seattle will be the capital of social entrepreneurship within the next ten years," he says.

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7 Comments

  • Brent

    I think the list of reasons people are turning to hybrid models is a long one.  One of the most important is that everyone wins.  Consumers are happy and producers are better off.  The idea that someone has to sacrifice so that others' situation can improve is no longer good enough.

    Thanks for pointing out Seattle's success.

  • Mike Johnson

    I think another factor in social entrepreneurship is that it is more sustainable than older models of sponsorship and 10-year investment plans.  We need to move beyond dividing up and distributing wealth and start to create wealth for the citizens of the developing world.

  • markhoroszowski

    Great article, here! And great examples of hybrid-models that make ends meet and make impact. Certainly Washington's legislative decision to support Social Purpose Corporations is also contributing to the momentum.

  • ignacio_mobincube

    Nice to see that it is not only Sillicon Valley the only place where startups should go. San Francisco area is too expensive. We foreign companies willing to set an office in the USA would prefer to have more options for our startups in cheaper cities.

  • David Chang Schulman

    Go Microryza! Crowdfunding for scientific research is an amazing idea, it will be exciting to see where they go.

  • Brian

    Vittana is a model that everyone in Seattle and further out can look to. Bright, driven, focused on real impact, and willing to use technology without believing it is a magic pill.