Spotlight: Rob Lalka

Rob long

What drives you?

My faith, which teaches me to work on behalf of the common good.

How do you define social entrepreneurship?

Entrepreneurship is problem solving; social entrepreneurship is solving problems that matter most to society.

Biggest SocEnt trend you have seen in the last 5 years?

“The recognition by mainstream investors (Morgan Stanley Investing with Impact Initiative, BlackRock Impact, Goldman Sachs’ Impact Capital) that there is an opportunity  to invest in social business while gaining gaining returns. Some major players globally think that social entrepreneurship is something worth paying attention to. Younger generations switch their money from philanthropy to social entrepreneurship.

Background

In the New Orleans community: Rob Lalka is a partner at Medora Ventures and Director of Strategy and Partnerships at Propeller, a startup incubator in New Orleans, Louisiana, where he oversees all of Propeller’s partnership development, strategic initiatives, and external relations. He is also a lecturer at Loyola University, where he teaches an MBA course on venture capital and another on the use of NASA intellectual property in commercial applications.

In philanthropy and impact investing: Lalka previously worked at Village Capital, where he led partnership development for the firm and supported the creation of a $13.2 million globally diversified investment vehicle, which is backed by a $2.6 million partnership with USAID.  He has also been a senior advisor at the Howard G. Buffett Foundation, where he coordinated their philanthropic-private partnerships and designed a demand-based approach for smallholder farmers in Africa to purchase conservation-based equipment and cropping systems.    

In global affairs and international development:  Lalka helped to create the Secretary of State’s Office of Global Partnerships, as one of two civil servants and the first Presidential Management Fellow in that office. From 2009 to 2012, the office leveraged $829 million in public and private resources for diplomacy and development, working with over 1,600 partners from around the world. During the 2011 Arab revolutions, Lalka led the U.S. Government’s efforts on the Secretary’s flagship alliance to promote entrepreneurship across the Middle East and North Africa. Coordinated efforts across 12 U.S. Embassies, 15 Executive Branch agencies, and 180 new partnerships, which created 20,000 new jobs and trained 40,000 youth.

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@RobLalka

Propeller

In December, I took a trip to New Orleans to learn more about Propeller – an accelerator I had heard much about in as far as Richmond. A friend in D.C. made the connection with Rob Lalka – head of Strategy at Propeller. That very morning, Propeller was hosting Innovate New Orleans – a two-day training program in design thinking and social innovation run by Civic Accelerator. So I first saw Rob in action when he introduced Propeller to the twenty or so workshop participants.

Rob Lalka welcoming participants of Innovate New Orleans

Rob Lalka welcoming participants of Innovate New Orleans

Leveraging the spirit of renaissance

Propeller was originally founded as Social Entrepreneurs New Orleans just after Hurricane Katrina and later became Propeller. “Right after the storm, a lot of people simply wanted to help rebuild. Some people said that we should not rebuild, but that was not an option. Where you are sitting right now was supposed to become a park. Instead it is New Orleans’ hub for social innovation and entrepreneurship.” Propeller works with ventures primarily in sectors of food security, education, healthcare and water. Since 2011, Propeller has supported the launch of over 90 ventures, which in turn have created over 250 full- and part time positions and generated over $60 million in revenues and follow-up funding (website). Looking at the bigger picture, Propeller ventures have increased the amount of healthy meals for school children in New Orleans by over 40 percent, rehabilitated over 1,300 acres of wetlands, improved healthcare access for families from low-income communities, and with disabled children, and have worked with over 1,100 educators to support student learning outcomes and prevent youth violence (website).

Propeller runs an accelerator for early-stage ventures in the fall and one in spring for those that are looking to scale their activities. Besides, it functions as an incubator that offers 10,000 square feet of co-working and event space. Having worked with Village Capital in D.C., I ask Rob how the social enterprise landscape in New Orleans is distinct from the capital. He explains: ”You can’t talk about New Orleans without talking about community. You cannot solve a problem in this city without engaging the people around you. Rebuilding the Ninth Ward and developing Propeller would not have been possible without the support from the community. Most entrepreneurs we work with – when faced with a shortage of some kind – will respond with ‘I have a guy, I know someone who can help me with this.’ And that makes New Orleans different.” I was intrigued.

Social entrepreneurship in smaller communities

By Rob Lalka

Having mainly spoken with support organizations in large cities I was curious to hear more about the role of community in a smaller city like New Orleans; how do you engage locals in social ventures? What does that look like?

Rob tells me: “Amidst all of the good indicators in New Orleans – and there are many from the last decade – it is clear that all businesses across the city have not benefited equally.  Racial inequities are particularly alarming: while minorities represent 43% of the population citywide, they own 27% of all firms, and their businesses receive less than 2% of receipts.

“Surveys completed for the Data Center’s New Orleans Index at 10 show that these business owners do not feel supported by the ecosystem and that they are either unaware of or excluded from available resources. Despite being generally positive about the services to support small businesses, only 39% of respondents agreed with the statement: “Generally speaking, I feel that New Orleans is friendly to minority small business owners.” The uneven playing field is more than an opinion; this is the reality of an incomplete recovery.

Propeller work space

Propeller work space

“At Propeller, we believe that it is our responsibility – to our board, our funders, and to fulfilling our mission – that we address these issues directly, honestly, and meaningfully. The citywide statistics, and the stories our neighbors share each day, make it clear that our entrepreneurial community must come together to support our entire community.

“Thus far, our efforts have yielded results. To date, minorities have represented 42% of our entrepreneurs (exceeding the 27% of firms that are minority-owned in New Orleans). Similarly, 7 of our 14 staff members are minorities and 4 of our 9 board members are minorities. Nationwide, 29% of firms are women-led; at Propeller, 57% of our businesses are led by women, 12 of our 14 staff are women, and 6 of our 9 board members are women.  But there is far more work to do, and our work in the community — organizing from the suites to the streets — on a day-in, day-out basis will continually be important in the coming months.”

Wrapping up

On my way to the airport a few days later, cab driver Cliff confirmed this mentality. He spoke about how all the cabbies stick together and help each other out. According to Cliff, Uber was currently being sued in New Orleans for over-charging a lady in Jefferson Parish “She told the sheriff, who was her uncle, or her cousin, or somehow related to her, and the sheriff told Uber they weren’t welcome in his Parish. That’s why folks like it – everyone in the community looks out for each other.” Whether Cliff got all the details of the case I don’t know, but he – as much as Rob Lalka at Propeller – feels strongly about the importance of community in New Orleans.

 

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gopropeller.org

Field Study: United States

In late July 2015, after seven months of research and discovery of the European social enterprise landscape, and its supporters, I was headed for the US. Located in Virginia, I built up a solid home base to work as a freelancer (I recently launched my professional website anikahorn.com!) and take research trips to social enterprise hubs along the East Coast.

Before we dive into the field visits that – so far – have taken me to Washington, D.C. , New York City and New Orleans, I was curious to find out what academia and practitioners had to say about social entrepreneurship in the States.

What the academics say

I love reading up on academic findings in this field. The peer-review process and emphasis on scientifically sound methods shields findings from subjectivity; there is some neutrality and quality to the findings. With that said, I was surprised to find very little published work on social entrepreneurship in the US. The main papers I am referring to stem from 2010 and 2006.

Doeringer (2010) argues that social enterprise in the US “reflects a focus on generating income for organizations that provide services typically thought of as being provided by the nonprofit sector” (p. 292), while the European concept focuses more on tackling the issue of chronic structural unemployment. Doeringer’s work very much discusses social entrepreneurship through the lens of law; he highlights the role and distinction of the nonprofit sector so if you are interested in learning more about that, I recommend his work!

Similarly, Kerlin (2006) focuses on the distinction between social enterprise in the US versus Europe and claims that “much of the practice of social enterprise in the United States, termed as social enterprise, remains focused on revenue generation by nonprofit organizations” resulting in nonprofit social enterprise, nonprofit enterprise, nonprofit ventures, and enterprising nonprofits (p. 248).  According to Kerlin, the European understanding is rooted in the for-profit sector through “firms who seek to enhance the social impact of their productive activities.” (p. 249). The author sheds light on the role of cooperatives and the work of EMES – a research network of universities with a focus on social enterprise, social entrepreneurship, social economy, solidarity economy and social innovation. They are a good resource if you are interested in learning more about social entrepreneurship in Europe – which – however – is not the purpose of this introduction to social enterprise in the United States. But hey, knock yourselves out!

All in all, academic research of social enterprise in the U.S. very much relies on a comparison to Europe. The sources I consulted had me sort through pages and more pages of historic developments. If that’s what you’re into, that’s great but a word of warning: having interviewed more than 25 support organizations in Europe, I just don’t see any of these findings reflected in the current world of social enterprise in Europe, which makes me doubt the validity of U.S. findings. I don’t  mean to discredit anyone’s research, but let’s say I have my reservations.

Practitioner Insights

Similarly to the academic universe, I had a hard time digging up any up-to-date research on social enterprise in the U.S. in practitioners circles. The most extensive resource I could find is Social Enterprise: A Portrait of the Field by Community Wealth Ventures, Social Enterprise Alliance and Case at Duke from 2010. Here are the delicious bits from their report that surveyed 400 social entrepreneurs in 2009:

  • Main sectors social entrepreneurs are active in:
    1. workforce development
    2. housing
    3. community & economic development
    4. education, and
    5. health
  • Workforce:
    1. 41.7% of social enterprise have one to five employees
    2. 12% have more than 100.
  • Most common social enterprise types:
    1. education & training institutions
    2. retail & thrift shops
    3. consulting
    4. food service & catering
    5. arts-oriented ventures
Social Enterprise: A Portrait of the Field, p. 10

Social Enterprise: A Portrait of the Field, p. 10

  • Income:
    1. 34% of social enterprises in the US reported an earned income of more than one million dollars
    2. 25% quoted less than $100,000
  • Biggest challenges social entrepreneurs in the US face:
    1. sales & marketing (27%)
    2. financial issues (23%)
    3. human resources (13.8%)
    4. operations (11.9%)
  • Greatest support needs were rooted in a lack of technical assistance and training in
    1. business plan development (51%)
    2. introductory training to social entrepreneurship (48%)
    3. market research and analysis (45%)
    4. accessing capital (42%)

The authors argue that the biggest challenges in growing the sectors lie in the areas of funding and finances, lack of seminars and training, as well as changes in legislation. All in all, it seems to require a cross-sector effort from the investment community, support organizations and advocacy groups/legislators. It is not the most current report, but I really recommend it if you want to dig a little deeper into U.S.-American social enterprises!

Social Enterprise: A Portrait of the Field, p. 7

Social Enterprise: A Portrait of the Field, p. 7

If you are looking for more recent data, check out Ben Thomley’s The Facts on Social Enterprise in the US in Huffington Post Impact from 2012. Be aware that the links don’t direct to the data source he mentions but the general website of Social Enterprise Alliance.

In 2014, Michael Belinsky argued in Stanford Social Innovation Review that three developments had influenced the sector in the previous year. Foundations were able to make a new type of investment well suited to social entrepreneurs: Program-related investments are similar to grants with the difference of having to be repaid. Corporate forms such as Benefit Corporation (adopted by 31 States as of February 2016) and L3Cs – low-profit limited liability companies. Thirdly, in 2013 Social Impact Bonds made an entry to the US. Often referred to as a Pay For Success model, which offers a more output-oriented financing models to social entrepreneurs. I asked Michael for an update but haven’t heard back yet.

Even though not a detailed insight, I hope this got your mouth watering! As I am based in the united States for now, this section will not be as consistent as the European field visits. I will throw learnings and insights from trips to other countries in, so make sure to use the tags in the right sidebar to navigate!
Let’s dive in and see what social enterprise support looks like in the United States!