By Zach Hillstrom, Colorado Springs Business Journal
The relationship between a business and its customers in a capitalist society has traditionally been a pretty simple one: a business provides a product in exchange for a customer’s money.
But a sweeping movement is redefining that model for both businesses and nonprofits and is becoming increasingly prevalent in Colorado Springs — one in which organizations don’t just provide goods and/or services, but use their businesses to serve their communities in the interest of the public good.
Local entrepreneur James Proby runs one of those businesses: The Men’s Xchange began as a way not only to make money, but to offer affordable professional work attire for disadvantaged men in Colorado Springs.
In coming up with the idea for the downtown clothing store, Proby researched similar resources across the country and found that in virtually every city nationwide, there were organizations that helped women secure professional clothing for little-to-no cost.
But the same resources scarcely existed for men.
“So we saw a need,” Proby said. “And the first thing we asked ourselves was, ‘How do we fill that?’”
When shopping at The Men’s Xchange, customers are able to purchase high-quality, gently used business apparel at about one-tenth of the cost of purchasing the items new.
A full, tailored suit costs $40. Sports jackets are $30, and dress shirts and slacks top out at $10.
But when a customer walks through the doors, Proby doesn’t just picture the profit he stands to gain from the sale of a suit; he envisions how the sale might help him make an impact on his community, as well as the impact the suit itself could have on the life of the man who wears it.
And its social impact isn’t just through affordability. The Men’s Xchange has a policy that for every nine suits sold, a 10th is donated to an individual in need who is referred to the business by one of its local nonprofit partners.
“It allows us to take care of those individuals who can’t afford to take care of themselves,” Proby said. “And to remove clothing as a barrier to their next business or employment opportunity.”
For Proby and others who have incorporated a social impact element into their business model, the overall value of a business doesn’t just come from the revenue it generates.
“The impact we get to have on somebody else’s life when they get a chance to profit, benefit, grow, expand their lives and evolve, because of one small thing that we did for them, that is one of the most invaluable things,” Proby said. “In the social enterprise business model as an umbrella, there really are limitless applications. It allows us to have revenue that’s enough for me to think not only about, ‘How do I pay my bills?’ but also, ‘How do I touch the lives of other people?’”
Just down the road from The Men’s Xchange, in the heart of downtown, is a trio of social impact business all under one roof.
The Carter Payne performance and event venue, owned by husband-and-wife team Jeff Zearfoss and Melissa Howard, who also co-own Local Relic brewery in the same building, is making an impact on multiple fronts.
Local Relic, among other social initiatives, focuses on its environmental impact by offering an on-site recycling program, sources local ingredients to craft its beers, and works to ensure its supply chain is sustainable.
The Carter Payne has partnerships promoting local artists, arts organizations and nonprofits, and lends its basement venue to provide a much-needed community meeting space.
“This community … is better when we spend less time screaming at each other in all caps on social media, and more time actually making real, human, face-to-face connections,” Zearfoss said. “So that has sort of led to this idea for a hub for community gathering and for events and socialization and making real connections. We believe in the power of business to do good, so it was important to us to serve as a sort of home for other businesses to help showcase that idea of social impact.”
Even Immerse Cuisine, which is in The Carter Payne and is owned by Chef Brent Beavers, has a social impact component that provides educational opportunities for culinary workers to help them secure better jobs at high-end restaurants.
Businesses like The Men’s Xchange and those in The Carter Payne represent just a small sample of the innovative social impact business sector, which is growing nationwide and has planted firm roots in Colorado Springs.
And it’s not just for-profit businesses; many local nonprofit organizations are also evaluating the social impact model as a means to secure more consistent funding without having to rely on donor generosity.
The model is gaining so much traction in the Centennial State that just over two years ago, the Colorado Institute for Social Impact (CI4SI) — itself a social enterprise — was launched to provide classes, trainings, consultations and networking opportunities for local entrepreneurs seeking to launch their own social impact enterprises.
Jonathan Liebert is CEO, executive director and co-founder of CI4SI and also serves as CEO and executive director of the Better Business Bureau of Southern Colorado. He said CI4SI was established in response to growing numbers of business professionals inquiring about the social impact model.
“It was really based on the need of the community and a lack of how-to information out there,” Leibert said. “There’s a lot of basic information online [about the social impact sector] and it’s all great stuff. People get really excited about it because they know there’s an opportunity to help make the community better through business. But what they’re lacking, typically, is information about: What kind of organization do I start? How should I incorporate? How do I do the accounting? How do I hire?”
CI4SI seeks to provide answers by offering training and educational opportunities to give aspiring social impact business owners the tools they need to successfully set up their new businesses.
And it’s not just new entrepreneurs the institute seeks to assist, it’s also long-tenured business and nonprofit owners who would like to incorporate parts of the social impact philosophy into their current models.
The economy is seeing more “conscious consumers” who research the brands they buy to ensure the businesses they shop at align with their moral and social values. Incorporating social impact goals can attract fiercely loyal customers who prioritize a business’ social impact over its convenience and even its cost.
“Conscious consumers are on the rise,” Liebert said. “All of us, we go out and we buy products. And you’re essentially voting with your wallet every time you buy something — meaning, every time you buy a product from a company, you’re telling that company, ‘Keep doing what you’re doing.’
“So for some people, they just kind of buy what they want because it’s the best price or whatever, and that’s fine. But … for more and more consumers, specifically Millennials, they are researching a company on the internet before they are buying from them — and they are purchasing from companies that are giving back to nonprofits in their community.”
Outside of industry-focused trainings and education, another goal of CI4SI is to measure the impact and promote awareness about what’s being called the fourth sector of the economy (the other three being extraction of raw materials, manufacturing and services).
Liebert said in measuring social-impact businesses across the country, states such as Colorado, and cities such as Denver, have been identified as hotbeds of activity.
And while Colorado Springs has not specifically been identified as one of those hotbeds, Liebert said the city’s tightknit business and philanthropic communities should position the city for a vibrant social impact scene that could possibly outpace even the much larger Denver market.
“I really think that Colorado Springs can lead the nation on this,” Leibert said. “Because I think what we’re starting to see right now is a shift in business.
“At the end of the day, what I love about this new sector of the economy is that everybody wins. I think people recognize that they can use this business model to create more impact in the community. And they can do it with things that they buy every day by just doing a little more research.”
“I think we’re fortunate that Colorado Springs really is a leader on a national level in regards to this,” he said. “Every dollar that gets spent is a vote. So if those votes are being cast in favor of businesses that are operating responsibility and sustainability across a number of metrics, it’s a way to build the community and build the world that you want to see as a consumer.”