Industry Watch

Jeremy Carroll of Latitude plays Duck, Duck, Gray Duck with children in Addis Ababa, Ethiopia.

Doing good by doing well

The rise of the social enterprise

By Richard Broderick
Monday, February 22, 2016

When a married couple with two children calls home to ask if they can move back in with their parents, it’s usually not a sign of progress.

But for Krista Carroll and her husband Jeremy, the phone call they placed in 2010 didn’t signal a breakdown, mental or financial, but a breakthrough.  A breakthrough that led them to leave behind the apartment they owned on the Upper West Side of Manhattan; found Latitude, a multi-disciplinary brand and experience design agency; and return to Minnesota.

In doing so, they embraced a fast-growing type of business entity — the social enterprise.

It was during a trip to Haiti that the couple decided to make their leap out of the world of for-profit business into the relatively new world of social enterprise. Brought face-to-face with the island nation’s overwhelming poverty, they hatched the idea of founding a new company, Latitude, that would donate 50% of its profits to helping others, in particular women and children in need the world over.

Since its startup, Latitude, whose client list includes Puma, Adidas and coffee machine manufacturer Oxx, has realized profits of nearly $5 million — half of which, or $2.4 million, have been donated to a range of charitable causes and institutions.

The company now has 42 employees, 38 of them headquartered in the Twin Cities, one in San Francisco and three in New York City. Each of Latitude’s employees is eligible to tour locations in Haiti, Columbia, Nicaragua, Ethiopia and India that receive donations from the company. Despite the expense (Latitude pays for transportation) Carroll says the money it spends on these trips is an investment with multiple payoffs, not least of which is to boost employee morale — and productivity.

“Because all of our employees are investing in changing lives, they are also coming at things with that point of view,” she says. “This makes everyone a stakeholder who feels ownership over the company in a way they wouldn’t if it was just about our bottom line and nothing more.”

Latitude is not the only Twin Cities business trailblazing the social enterprise field. In 2012, venerable toy store pioneer, Creative Kidstuff, was acquired by Greater Good. Greater Good is an online charitable retailer created in 1999 by the late Myron Kunin, who previously turned the Regis Corporation into the world’s largest chain of hair salons. Greater Good is now operated by his son, Tim Kunin, and a partner.

In May 2015, Greater Good, in collaboration with Creative Kidstuff, opened its first brick-and-mortar store at the Mall of America. Employees of both Greater Good and Creative Kidstuff are also eligible for expenses-paid tours of organizations funded by the companies in places like Thailand, Haiti and Nepal.

“What is one of the chief benefits of operating a social enterprise as opposed to a standard charity?” observes President and CEO of Creative Kidstuff Roberta Bonoff. “People buy things. They shop. But we allow people to shop — which they would do anyway — while also doing good. We are helping customers to be philanthropic but we are not an NGO, we are not a government agency. We are funded by our customers — and people who shop with us feel like they have an opportunity to help the world.”

As with Latitude, Bonoff also sees internal benefits for Creative Kidstuff and Greater Good from the connection between business and charitable activities.

“Everybody who works here is here for the greater good — more than for themselves,” she says. “Our employees have literally learned they can have a positive impact on the world, that small actions make a big difference. The effect on productivity has been tremendous.”