Washington, DC: Where Mission and Profit Meet

Washington, DC is a city of transplants, global trotters, change seekers, international policy leaders, university student-turned-startup-founder, and former small towners.

Regardless of background, most DC residents will tell you they came here to create impact, make change, or transform the world. This has led DC to the top as a city for impact businesses, non-profits, and associations.

As DC’s public and private sectors invest in impact growth, DC-based business leaders shed insight onto how the nation’s capital has become one of the top cities for social entrepreneurs.

A Culture of Change

“Citizens of DC are a… dedicated group interested in thinking about the impact that they can have in a larger way.” – Liz Rose Chmela

“The citizens of DC are a really passionate and dedicated group of people interested in thinking about the impact that they can have in a larger way,” says Liz Rose Chmela, founder of Made by We, a full-service design studio that supports social impact companies and organizations. “No matter what your cause or calling, there’s a community to support it.”

The notion of social enterprises – the foundation of the impact economy – may be more than a century old, but its recent growth is due mostly in thanks to the readiness and resourcefulness of the startup community. The Huffington Post reported that 89 percent of U.S. social enterprises were created between 2006 and 2012, and the number continues to rise.

Washington, DC’s social enterprise system is among the nation’s strongest, ranking as a top city for social impact companies according to a report published by social enterprise titan Halcyon House and Capital One. As the headquarter-city for associations and not-for-profits, it should come as no surprise that the social enterprise industry thrives in the District.

When Ryan Ross first moved to DC for the politics, he soon realized that there was a better way to accomplish the change he sought to create and he quickly shifted into the entrepreneurial space. After two stints in the startup world, he was presented with the opportunity to manage an incubator program with a mission to equip early-stage social entrepreneurs with resources and support.

At the Georgetown-based Halcyon Incubator, Ryan saw a great opportunity to catalyze the ventures that could change the world. Its unique residential model meant providing entrepreneurs with a place to live and an immersive community. Since helping to launch the program with Dr. Sachiko Kuno and Kate Goodall in 2014 as its Program Director, Ryan has seen an incredible amount of progress not limited to Halcyon’s support of social good startups, but in the DC impact economy community as a whole.

“When you talk about social enterprise or impact investing, those are the people who know about and are working on these issues,” says Ryan. “The goal of a social enterprise is to solve a problem, and a lot of times, it’s a larger problem, like food waste or water access”.

Another big plus for a DC-based company focused on impact? Social enterprises can tap into the wealth of “experts at the World Bank or the USADF,” says Ryan. “[DC is home to] so many unique organizations and the people in them can share expert knowledge of these issues with entrepreneurs who have the flexibility and talent to help fix them.”

With its concentration of social enterprises and nearly 446 non-profit organizations based in a city 1/20 the size of Rhode Island, the smallest US state, DC is fertile feeding ground for spreading social good. “You know when something important is happening immediately,” says Liz Rose. “You hear the news rattling around in a local restaurant or bar, everyone’s talking about it, you can physically see the movement of people around the city, reflecting their values and ideals.”

Inclusive Social Impact

At the start of the tech-boom, inclusion was a factor considered long after the fact. In the social impact space, inclusivity is a key initiative, with women leading the charge. According to research by Social Enterprise UK, 40% of social companies have female leaders and 11% have minority leaders – almost double the tech industry. Diverse foundations of these startups mean more voices, better standards, and messaging that resonates with a wider audience.

“DC is well staged to take a lead on diversity and inclusion.” – Ryan Ross

“DC is well staged to take a lead on diversity and inclusion,” concludes Ryan. “The social enterprise field is best poised to incorporate inclusion quickly because our community is more open to the idea that financial bottom lines are as important to look at for the health and success of a venture as metrics around diversity and inclusion.”

Howard University’s In3 and Halcyon House, among others in the city, make a concentrated effort to building a wholly inclusive social impact space at the entrepreneur level. At Halcyon, 50% of ventures in the program are female-founded and 51% of total fellows are minorities. “When you have diversity, you have  more diverse solutions and more diverse ways of thinking through problems,” says Ryan. “People in DC get it and have been emphasizing inclusion in their initiatives.”

Liz Rose launched Made by We in 2013 to provide in-house communications support solely for non-profits and social enterprises without in-house creative teams. To bolster their service capabilities and keep costs low, Made by We brings on creative individuals from the DC community to support specific projects. These opportunities create a pipeline for creatives to support causes they love with their talent and get paid for it.

“After getting involved with our projects, many of our contractors can easily make the switch, either by freelancing with a focus on social impact, working for a nonprofit organization, or incorporating their social impact values into their current companies,” she explains.

A Socially Conscious Workforce

There are more than twenty colleges and universities in the DC area, marking it the highest educated workforce in the country. The students who come here to learn are not only talented but also motivated to make an impact. Working on behalf of issues central to the work of social entrepreneurs is a driving factor for people exiting colleges. One of the top five factors of employee happiness, according to Forbes magazine, is a sense of purpose. University programming has expanded to reflect that growing interest.

Between 2003 and 2009, the number of social entrepreneurship courses at top MBA programs across the United States increased by 110 percent. At the George Washington University’s Office of Innovation and Entrepreneurship (GWOIE), the social venture track of their New Venture Competition, now entering its tenth year, was a new addition in 2014 in response to the student body’s growing interest in social entrepreneurship. During the 2017 competition, 32 out of 116 student teams applied to the social venture track alone.

“Students love the idea of a business venture that does good by doing good.”- Lex McCusker

“Students love the idea of a business venture that does good by doing good,” says Lex McCusker, Director of Student Entrepreneurship Programs in the GWOIE, “a lot of students who would have aspired to work at an NGO, or in the foreign service, or an IMF-type company, have seen that a socially oriented startup is a great career path for them.”

The buck doesn’t stop on university campuses, though. In fact, it’s the communities around the schools that help fuel the fires of change.

DC, A Model For Cities

Last year, Ryan and his team, along with other leaders in impact, worked with the Office of the Deputy Mayor for Planning and Economic Development (DMPED) on the city’s economic strategy to develop an impact economy pillar. This work promoted the unification of the impact community and aims to drive more impact investment in DC. Other projects in DC are indirectly supporting the social enterprise space, such as DMPED’s Project 500 which will support 500 disadvantaged small businesses in the District grow in revenue and size over the next three years. By enabling funding to be made available through the city to more of these entrepreneurs, their businesses have a better chance of not only surviving, but thriving.

Corporate companies and tech giants are riding the wave, too, incorporating corporate social responsibility initiatives (CSR). Microsoft and Google, two companies with offices in DC, have led the charge over the past several years. “I believe that most if not all companies should be social impact driven businesses,” says Liz Rose. “I don’t think you can just run a business and act like it doesn’t have an impact on anything else.”

“As they say, a rising tide lifts all boats: the more organizations that are thinking about the social impact their work has, the better for all society,” says Ryan.