Where profit is the good done with the dough

Holly, Dwayne, and Peggy come from very different worlds.

Holly Crafts is a senior at Stanford University. Peggy Day is an accomplished manager, with a long career in the commercial food business. And Dwayne is a recovering drug addict whose home address has often been the gritty streets of Richmond, Calif.

But their lives have intersected, offering one small example of the broader forces transforming America's approach to helping the needy.

A few years ago, Dwayne would have most likely spent the holiday season shuffling along a food line at a shelter. This year, he's employed in a $1 million enterprise that is both commercially thriving and socially purposeful.

Dwayne works at the nonprofit Rubicon Bakery, whose main goal is to pull ex-cons, recovering addicts, and homeless off Richmond's streets and give them a new start.

Rubicon is succeeding, but not just because of good intentions. It's succeeding because of contributions from Ms. Crafts, an intern last summer, and Ms. Day, who came mid-career. They helped give Rubicon a professional-caliber quality-control system.

The social trends that Day and Crafts represent are bringing innovation and sophistication to the rapidly expanding nonprofit sector.

One of the trends is the growing attractiveness of the social-service field to experienced managers like Day.

They come partly because the increasingly competitive nonprofit world is more eager for their skills. Also, many come in search of more personally satisfying work. "It's a totally different way of working. It's really rewarding," says Day.

The other trend at work is the growing popularity of what is commonly called "social enterprise" on college campuses, particularly within some elite business schools. While some students enter the field directly, more often seeds of interest blossom after graduates pay dues in larger, more conventional for-profit businesses.

"Social enterprise has caught the imagination of a generation of students in business schools," says Donald Haider, a professor at Northwestern University's graduate business school in Evanston, Ill. "They want to do good, and do well, at the same time," he says.

Responding to the demand, Northwestern will offer its first graduate class in social enterprise next spring. At the same time, Stanford University will add an undergraduate class in the field after offering one to graduate students since 1997.

While students are driving some of the new classes, professors are also pushing the concept, says Greg Dees, the professor who will teach the undergraduate course at Stanford in California. "There's a whole generation that is disillusioned with the types of programs we thought would solve the world's problems," he says.

One of the early champions of this budding field is Students for Responsible Business (SRB), a San Francisco-based organization whose mission is to develop socially conscious leaders.

Social-enterprise work is not a runaway freight train. But judged by the number of classes around the United States and the increased popularity of SRB, it's a broad-based movement.

More than 600 students participated in SRB's annual meeting earlier this month at Yale University in New Haven, Conn. That's up from 425 last year, says executive director Nancy Katz. Social enterprise is also enjoying currency in business journals and growing acceptance in academia.

For instance, social-enterprise work is "now central to the Harvard Business School mission" says James Austin, a professor at the school in Boston. "There is a search for meaning, for a values-driven existence, that's more visibly part of what students are looking for today," he says.

Case in point: Second-year Harvard business school student Mei Koon, who says, "More profit won't drive me at the end of the day. I'll make my mark by helping people, not by making money."

Ms. Koon typifies many students interested in social enterprise. While her first step out of school might be into the for-profit sector, that is primarily because she'll get more professional training there. Her goal is to take those skills to an enterprise with a strong social purpose.

After gaining experience in the business world, some people interested in social enterprise are launching off on their own - people like Seth Goldman, one of the founders of the Yale chapter of SRB in early 1993. This year Mr. Goldman started his own business, Honest Teas, which relies largely on organic ingredients and soon will introduce a flavor based on an herb used by Crow Indians. He has worked with tribal elders in Montana and will pay a royalty of 2 percent, some of it dedicated to a foundation for foster children on the reservation.

Goldman's work represents the increased application of social goals even within for-profit businesses. "I went into biz school thinking I'll do national service of some sort. But when I came out, I realized it could be in the for-profit sector and still address public needs," he says.

For some, this field contrasts sharply, but not necessarily unfavorably, with the more overt activism of the 1960s. "We were trying to save the world," says Prof. John Vogel of Dartmouth's business school in Hanover, N.H. "Students today are willing to get involved in grass-roots efforts, even if it's not on such a grand scale," he adds.

And such efforts can have major rewards. Take Dwayne, who has Rubicon Bakery to thank for a job, a car, an apartment, and some self-confidence. Says Dwayne: "It's much better. I can actually take care of myself now."

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