Social Enterprises Working to Address Structural Inequities

Although they lack a formal definition, social enterprises are organizations that bridge the gap between traditional for-profit businesses and non-profits. Operating as a for-profit, they embed a specific social objective into their core operation. With organizational revenue focused more heavily on being reinvested into the given social objective than being delivered to owners and stakeholders, the financial structure of these organizations tends to differ from that of a traditional for-profit business. This in-between world of social enterprises is full of ambiguity and unique challenges, yet also opens the door to make progress on social issues in a way that has not yet been made possible by traditional for-profit, non-profits and government entities.

One area in which this progress has manifested is in bridging structural inequalities that affect marginalized communities, particularly BIPOC groups. Structural inequality is a bias built into a system, organization, or institution that actively disadvantages certain groups. Since Canada and the United States were founded on the slave labour of black people and the violent displacement and forced assimilation of indigenous communities, racial inequalities are ingrained into the foundation of these neighbouring nations. As we continue to progress in attempting to reconcile our past and move forward as a more equitable society, the for-profit social impact sector is finding unique ways to propel this progress. The following are three social enterprises working to address structural inequalities:

1. Ground Floor

The housing and rental market is an area within which there exists significant structural inequality. Access to high-quality, affordable rental housing is vital to providing individuals with access to wealth-building opportunities. Housing prices are reaching inaccessible levels, limiting the disposable income of families and individuals, rendering them unable to invest in education, retirement, and build generational wealth. In addition to this, this lack of housing accessibility is forcing many into subpar housing that costs more than they can afford, is overcrowded, and/or requires significant repairs. Although this issue can impact individuals regardless of racial background, with 9.4 million Canadians living in below-standard housing, the Government of Canada has stated that visible minorities are 1.8 times more likely to be affected.

One trend worsening this issue is the gentrification of previously affordable neighbourhoods. Gentrification is when formerly affordable and underinvested areas experience an influx of interest from investors. This interest translates into an increase in investment and a rise in rental prices, but along with this comes the cultural displacement of the existing community. The rising costs caused by gentrification propel the erosion of quality affordable housing, leaving previously housed individuals seeking accommodation in a market that is now even further from attainable.

One social enterprise seeking to bridge this inequality is the Atlanta-based startup Groundfloor. Groundfloor was founded in 2013 by Brian Dally and Nick Bhargava with the original goal of providing short-term real estate loans to aid individuals seeking to build or renovate their homes. Groundfloor earns revenue by charging the borrower an organization free and accruing interest on the loans before distributing them. Their business model has made real estate more accessible as their organization allowed individuals to secure financing without going through a bank.

To address gentrification and the displacement of residents, Groundfloor has launched a new program to help residents finance accessory dwelling units (ADUs) — units on an individual’s personal property in which other people can live. Providing people with the funds to improve and renovate their ADUs allows them to rent out and profit from these spaces. This arrangement will enable homeowners to supplement their rising housing costs and remain in their community as the value of the surrounding areas increase. This arrangement also benefits renters as it expands affordable housing opportunities within communities amid periods of development. This expansion to their platform and a rising interest in alternative investment during the covid-19 pandemic led to 50% year-over-year growth in investor activity on the platform. Having issued over 1730 loans since its start in 2013, their impact within communities has been palpable. Making their way onto Deloitte’s Technology Fast 500 list, it will be interesting to see how they expand and grow in the future.

1. Esri

Government policy plays a heavy hand in shaping how prevalent structural inequality is within their community. Although many governing bodies have set objectives on addressing significant inequalities, their progress can be hindered by implicit biases, alternative agendas, fundamentalist attitudes, and corporate lobbying. These, among infinite other influencing factors, make it difficult for governing bodies to direct decision-making to the areas which require it the most. When seeking to address flawed decision-making models and propel progress forward, it is essential to practice accountability, transparency, and healthy skepticism.

Esri is a social enterprise working to help governments of all levels address flaws in their decision-making models through geographic information systems (GIS). They develop technologies that create, manage, analyze, and map all data types to help various organizations and governing bodies improve their decision-making by identifying data-based patterns, relationships, and geographic context.

Working with government bodies to address racial inequalities has been of particular interest for Esri. They firmly believe that geography is critical to the solution for racial equity. Through their technology, they seek to create “a future where race and place no longer shape experiences and outcomes”. To accomplish this ambitious goal, they have broken this goal down into three key areas:

• Applying a racial equity lens through maps and spatial analysis to reveal inequalities in experiences and outcomes within communities.
• Operationalizing racial justice best practices by using maps, spatial analysis, and data to design, plan, and deliver equitable resource allocations to alleviate burdens on communities of colour.
• Managing performance for racial equity by leveraging decision-making tools to visualize racial inequities at a glance to adapt strategies and operations accordingly.

One city that has experienced progress from the use of GIS technology is Oakland, California. In 2015 when they started their Department of Race & Equity, they utilized GSI technology to organize and analyze their existing data sets to examine racial inequities. The information they were able to gather from this analysis was later used as the basis for the creation of several equity-focused projects that otherwise would not have been highlighted as important areas for improvement, such as the importance of access to quality public transit.

1. GapJumpers

Racism in corporate North America exists on both an individual and a large-scale structural level. On an individual level, the racial inequality in corporate North America is widely accredited to the implicit bias within each of us that propels discriminatory behaviours. Implicit bias is a term used to refer to the subconscious attitudes or stereotypes we have towards others that cause us to act in an inequitable way without conscious intention. On a much larger scale, the history of racism within North America has ingrained values and norms of white supremacy into modern-day corporate culture. Combining these micro and macro factors have resulted in a lack of diversity in top decision-making positions, a racial wage gap, and the mistreatment of visible minorities in the workplace.

GapJumpers is a social enterprise founded in 2012 working to bridge these inequities through its hiring software that encourages more equitable recruitment. They designed a hiring platform that aids in the following:

• Diagnose your current working environment to expose areas in which your organization can improve and shine a light on barriers that stand in the way of the progress you would like to make.
• Develop inclusive job ads that use language and construct a description that ensures you are opening your or job listing to a diverse group of qualified candidates.
• Facilitate blind hiring that eliminates indicators of race and other identifying factors to ensure an equitable hiring process.
• Instill your organization with a growth mindset to work with your selected candidate and ensure they can fulfill their full potential within your organization.

Over the course of their time in operation, they have been able to facilitate over one hundred and eight thousand bias-free decisions and have facilitated a 65% increase in diversity among the companies they serve. As they continue to scale and change the standard practices for hiring in North America it will be interesting to see the impact they have on the standard corporate culture.

Overall, numerous social enterprises are working to address structural inequalities and have identified ways in which they can contribute to this progress, where traditional for-profit and non-profit organizations were previously unable. Although there is still plenty of progress to be made and many questions about the social impact industry yet to be answered, I believe that the work being done shows incredible promise for a brighter future ahead.