Entrepreneurism with social values

Story from the magazine by Patricia Edmonds / July 12, 2002

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New York's Bryant Park was restored and managed by a private, nonprofit organization (Bryant Park Restoration Corp.)

In Schenley Park—456 acres of wooded rolling hills, botanical gardens, and athletic facilities in central Pittsburgh—a conservancy transformed a rotting, century-old building into a light-filled visitors center last winter. It was sweetened with a gourmet snack bar, and traffic increased for appealing new programs such as jazz concerts and "tyke hikes." Along the way, says Meg Cheever, president of the Pittsburgh Parks Conservancy, "we discovered that we seem to be part of a movement"—public projects that retain their nonprofit, social values while operating like for-profit, entrepreneurial businesses.

This so-called social entrepreneurship movement underlies the rediscovery of a growing number of old urban parks. The formula: Install concessions and other amenities that attract people while generating revenue; then use the revenue for park improvements that will lure even more visitors.

Until recently, "these were two different worlds, the private sector and the world of preservation and parks," says Daniel Biederman, who as executive director of the Bryant Park Restoration Corp. in Manhattan led one of the best-known park projects to use this model. "Gradually, that’s changing. There are more people coming up who’ve had to hustle for every dollar and figure out how to fund parks in an innovative way."

Social entrepreneurship, as defined by the National Center for Social Entrepreneurs in Minneapolis, "combines the passion of a social mission with a businesslike approach to the marketplace. It enables nonprofits to find—and keep—a productive balance between doing good (mission) and paying for it (money)." Nonprofit organizations that have successfully struck this balance range from Girl Scout councils and food banks to seniors centers and arts associations, says Jim Thalhuber, the center’s president. Among historic sites following the model: the Gaylord Building, a National Trust historic site in Lockport, Ill. The limestone warehouse was used in the mid-1800s to store construction materials for the I & M Canal linking the Mississippi River and Lake Michigan. Today, half the restored building houses historical exhibits, and the other half is rented to a fine-dining restaurant.

In 1980, when the Rockefeller brothers wanted to rescue Bryant Park, then eight decaying, drug-ridden acres next to the New York Public Library, they hired Biederman. He was "not your typical parks person," by his own admission, but a Harvard-trained business- and public-administration expert. A 10-year physical overhaul eliminated hedges that restricted access to the park, restored c. 1910 park houses into restrooms and office space, and bordered the football-field-length lawn with perennial gardens. In tandem with the physical overhaul, Biederman’s nonprofit corporation plotted a new way to manage Bryant Park, dotting it with choice concessions and booking it full of events. Today, Biederman says, the park has no city funding in its $4 million annual budget and has banked $1 million in recent surpluses.

Another park Biederman commends as "cleverly financed" is Post Office Square, in the heart of Boston’s financial district. Where an unsightly four-story garage once stood, there’s now a 1.7-acre park. Below the park lies a parking structure with a car wash, a shoeshine stand, and other amenities that have gained it the nickname Garage Mahal. The garage generates $13 million a year, which helps pay off its $50 million construction loan while funding park operations. After the debt is paid, the nonprofit group that runs Post Office Square plans to share garage profits with other city parks. Entrepreneurial park-funding schemes are still relatively rare, says Peter Harnik, who has analyzed the funding and accessibility of park systems in 55 U.S. cities. Harnik, director of the Trust for Public Land’s Green Cities Initiative, says most parks still rely on a fairly traditional mix of philanthropy, public funds, and volunteer aid.

Commercial uses of public space can "get way over the line," warns Fred Kent, president of Project for Public Spaces, the nonprofit planning and design company that helped conceive the Bryant Park redesign. He approves of economic activities that keep to "the edges" of parks and enrich local businesses as well as park operators. But he calls it "truly a shame" when Bryant uses its public space for such moneymaking events as circuses and fashion shows held in closed tents beyond the reach of many people.

Biederman acknowledges that Bryant Park’s economic activities have their critics, but he believes most detractors have been won over as they’ve seen the event revenues underwrite "good park things."

Lisa Kuzma, a consultant who helps nonprofit groups formulate business plans, calls social entrepreneurship "a trend for which most people are suggesting caution when planning around. In its purest form, it’s entrepreneurism that would have the exact same risk as you or me going into business—except with more downside, because it’s community assets at risk instead of just personal assets." Although Kuzma says the approach "is not the one solution for nonprofits for long-term viability," she believes it can make solid contributions to projects such as the Schenley Park visitors center, for which she’s a consultant.

From a 1998 survey, the Pittsburgh Parks Conservancy learned that patrons would visit parks more frequently if the sites had better basic amenities—clean restrooms, informative trail maps, somewhere to buy drinks and snacks. In Schenley Park, the solution lay in a c. 1910 arts and crafts building that had been shuttered since city budget cuts a decade ago. With $1.9 million raised from foundations, the conservancy restored the building, equipped it with climate-control systems, and introduced a snack bar, an information kiosk with a touch-screen park-trip planner, and other features.

The center opened last December, and its first warm-weather season began auspiciously in the spring. The snack bar served peanut noodles, veggie sandwiches, and espresso brownies. The gift shop sold finger puppets of park animals, a "Strolling Through the Park" CD of historic music, and a map of park trails drawn with the help of volunteer hikers. The center recruited local guides to lead canoeing classes and salamander hunts for kids and bird-watching and photography seminars for adults.

With that moneymaking mix of concessions, merchandise, and programming, says conservancy president Cheever, the center expects $250,000 in revenues and a $60,000 operating loss in its first year. Within three years, she says, it hopes to break even.

"We’re trying very hard to reconcile good business principles with park-related mission," Cheever says. "And I think we’re succeeding so far."

Patricia Edmonds is a writer based in northern Virginia.

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