The rise of the Fourth Sector

AGNC's Economic Development keynote highlights the use of entrepreneurial strategies to solve social challenges

Listen to this post

RBC | Moffat County Commissioner Ray Beck, who has served as the chair of the Associated Governments of Northwest Colorado (AGNC) since 2017, opened the Economic Development Summit at CNCC in Rangely last Friday citing the mission activities of the organization. Beck emphasized AGNC’s desire to advance and educate at the state and federal levels for decisions that will protect the character and development of the region. He further stressed AGNC pursuit of effective, strong governmental relations on key issues by maintaining candid and open connections between AGNC members, state and federal lawmakers and agencies.
The summit was an example of AGNC providing a forum for discussion and focus on regional economic development, emphasizing awareness of available resources, new ideas and shared experiences. AGNC is the northwestern Colorado council of town and county governments covering Garfield, Mesa, Moffat, Rio Blanco and Routt counties.
Jonathan Liebert, founder of the Colorado Institute for Social Impact, a cooperative endeavor with Pikes Peak Community College in Colorado Springs, keynoted the luncheon. His message regarded the importance and power of the emerging “Fourth Sector” involving the use of entrepreneurial strategies to solve social challenges.
Liebert described that our traditional institutions don’t seem to be successfully equipped to thoroughly meet the challenges and opportunities of the 21st Century which include maximizing financial benefits while minimizing harm to people and the planet.
The literature notes that governments are typically under-resourced and constrained by the business interests to which they are beholden for resources. Businesses are largely caught in expectations of maximized profit, often at the expense of society and the environment, even though their leadership might prefer a more responsible, purposeful and sustainable path.
Non-profits, analysis continues, are notoriously under-funded while facing growing demand for their services, especially as business further externalizes social and environmental costs, and governments are forced to reduce the adequacy of any social safety net.
The Fourth Sector is emerging at the nexus of the public, private and social institutions and is described as composed of “for benefit” enterprises that seek to seamlessly integrate public purposes with business means, harnessing entrepreneurial energy in order to shape more sustainable, inclusive and resilient economies. Liebert explained that the existing number of large and diverse for-benefit enterprises share two common characteristics—they advance societal benefit, like the non-profits, but they generate a substantial portion of their income from business activities.
Liebert set forth evidence that companies that are openly pursuing a “purpose-led” mission are generally doing much better financially, both domestically and internationally, than those that aren’t. Employees, for example, Liebert explained, are much more driven to sign on and remain at for purpose organizations. Consumer support has similarly been shown to be much greater in relation to these deliberately socially beneficial companies. Liebert cited data that show consumers who are Boomers are 30 percent motivated by purpose and positive positioning, Gen-Xers 46 percent and Millennials 56 percent.
An example Liebert gave of a recent purpose-driven action by a corporation is new employee policy by Starbucks Corporation that allows workers to spend up to 20 percent of their paid work time volunteering for community causes.
Liebert concluded that the booming trend of this Fourth Sector needs to be at the forefront of economic planning.
Tri-State Generation and Transmission, ANB Bank, Colorado Housing and Finance Authority, Colorado Department of Local Affairs and Colorado Northwestern Community College were sponsors of the Summit. More than 50 individuals from all around the region participated. More coverage to follow next week.