PROVIDENCE — After leaving the company he started in 1997, Jason Salfi was wondering how on earth the world was going to “get out of the jam” it got itself into with climate change. He took what he learned building Bristol-based Comet Skateboards, a socially responsible brand, to attempt tackling America’s reliance on fossil fuels and co-founded Dimensional Energy.
Dimensional Energy uses carbon dioxide emissions as a replacement for fossil carbon to make the fuels and products people use every day. His new company has a philosophy similar to the one Salfi left behind at the hip, consumer facing, and eco-friendly Comet Skateboards — a certified B Corporation, which is a designation that a business is meeting high standards of performance, accountability, and transparency. That philosophy includes putting “people and the planet” over “just making a profit.”
Social enterprises, he said, go beyond just doing good in the products or services they sell. They also strive to be a more equitable organization for employees.
“Paying livable wages, [having discussions] around employee-ownership, benefits, stakeholder engagement... Now try to retain an employee and not do those things. Good luck,” said Salfi, who is building a home in Little Compton. He explained that plant operators at his new company start earning about $50,000 annually, and quickly move to $70,000, with opportunities to earn overtime and move up.
In recent years, particularly after the country’s cultural reckoning on topics of racial injustice triggered by the murder of George Floyd, and a global pandemic that placed a spotlight on inequities, many younger consumers are seeking out cause-oriented brands and pushing for companies to be socially responsible. Many consumer-facing brands have proven there’s a successful model — such as Ben & Jerry’s, Patagonia, TOMS, and Athleta — and that’s prompting more Ocean State entrepreneurs to tap into a market more focused on social responsibility than ever before.
The rise in social entrepreneurs in the state has been fueled partially by small business accelerator programs, like those at Providence’s Social Enterprise Greenhouse, known to entrepreneurs as SEG. Founded in 2009, SEG provides support and networks for “businesses committed to positive societal and economic change.”
Thirteen years later, SEG’s programs and services, which range from advising and talent matchmaking to loan funding and providing micro-grants, have served more than 1,800 ventures that now employ about 5,500 people. They also received national recognition after Vice President Kamala Harris paid SEG a visit in May 2021 with Commerce Secretary Gina Raimondo, Rhode Island’s former governor.
“Keep doing what you are doing because you are models of the best of what we are doing in the country,” the vice president told local business owners at SEG. “It’s about helping people see the possibilities.”
Constance Ferber, who is in charge of strategic initiatives and development, said SEG has received “more applications than ever before” for each of their traditional incubator and accelerator programs, including those designed for Spanish-speaking entrepreneurs, this year. Many of these new startups are related to finding solutions within the Blue Economy, said Ferber.
Salfi recently spoke on a panel led by Ben Anderson, the former CEO of B Lab, in front of a packed room of local entrepreneurs at SEG’s main hub in the city’s Jewelry District. They focused most of the conversation on the motivations and results at businesses that commit to making a social impact, but Anderson said he remembered the beginning years of B Lab (a nonprofit headquartered in Pennsylvania known for certifying B Corporations through strict standards) and how their ideas around shifting a corporation’s governance from a traditional shareholder-driven model to a stakeholder-driven model was “very foreign.”
“People thought we were crazy,” said Anderson in an interview with the Globe after the panel. “Investors did not like this. [They were] used to investing in [their] Delaware C-Corp.”
But that resistance declined, particularly among investors and banks who see social impact brands and certified B Corporations as “more resilient companies,” explained Anderson. There are 167 B Corps in New England, including 69 in Massachusetts and two in Rhode Island — Comet Skateboards and Providence-based architecture firm Signal Works.
Capgemini, a multinational information technology company, conducted research on purpose-driven organizations and found that 78 percent of global consumers think companies have a larger role to play in society. Many of these consumers are younger, meaning Millennials or from Gen Z, according to consumer data experts.
“My advice to other business leaders: Ignore this at your own peril,” wrote Jim Bailey, CEO Americas of Capgemini, in a March 2022 Forbes article in which he dubbed 2022 “the year of responsible business.”
Thirteen years after its founding, SEG has opened hubs at The Rail on the Pawtucket-Central Falls line and in Innovate Newport — both collaborative work environments — while offering support services out of a center on Manton Avenue in Providence. Well-known graduates of its incubator program, which guides entrepreneurs through the basics, and its impact accelerator curriculum, which provides business coaching and resources for fundraising, include the founders behind Kerly Girl, 15 Minute Field Trips, Roots 2 Empower, and the Steel Yard, among others.
On Oct. 7, SEG announced the creation of The Kelly Fund, named after co-founder and former CEO Kelly Ramirez. The fund awarded a $20,000 grant to Dr. Eugenio Fernandez Jr., the founder of Asthenis, a health care provider that combines public health with a pharmacy, located in an affordable-housing complex.
According to industry experts, this type of annual grant to new social enterprises is a meaningful step toward making Rhode Island more business friendly. Access to capital and diversifying the landscape has always been among the biggest business challenges in the state. Nationally, women founders secured only about 2 percent of all venture capital investments in 2020; Black and Latin-led ventures secured only about 2.6 percent of all venture funding in the first three quarters of that year.
In Rhode Island, about 7 percent of all businesses with employees are owned by people of color, despite the population of white residents decreasing by 4 percent and all other ethnic groups combined increasing by 27 percent in the last decade.
New social enterprises are trying to tackle this very issue, such as the newly-founded New Majority Capital, a Providence-based search fund. Havell Rodrigues, founding partner and CEO, said the mission of New Majority Capital is to help close the racial and gender wealth gap using the model of “entrepreneurship through acquisition.” The fund provides entrepreneurs of color and women with technical resources and access to capital to acquire and run existing small businesses as owners retire.
“Our belief is yes, you could have a job [working for someone else] and make $100,000 a year. Or you can also own an asset,” said Rodrigues, who explained that owning a small business “asset” is a path for inter-generational wealth creation.
Local universities are also fueling this explosion of social enterprise with incubator programs that reach students outside of traditional business colleges. For example, Ramirez stepped down from SEG earlier this year to become the inaugural director of Providence College’s new Donald Ryan Incubator for Entrepreneurship in the Arts & Sciences.
Every freshman at Bryant University takes part in the school’s Innovation and Design Experience for All, or IDEA, a program led by psychology professor Allison Butler. It’s an intense design boot camp, now in its tenth year, and it aims to replicate a “Silicon Valley start-up environment” by taking on real-world challenges.
The Brown University Nelson Center for Entrepreneurship has overseen several startups launched by students and local residents in the six years since it opened. Some of the businesses launched by Brown students include MediCircle, which redistributes unopened oncology medication to financially burdened patients; EmpowerU, which addresses education disparities among low-income students; and Omena, which looks to break the cycle of emotional abuse in Madagascar.
These entrepreneurs are figuring “they can have their cake and eat it too,” said Ferber at SEG. “Small business owners are engaged with their community every day, whether that be serving food or selling environmentally sustainable clothing.”