Should We… or Shouldn’t We… Earned Revenue. earned revenue, earned income ventures, nonprofit business activity, social ventures, social entrepreneurship,

Should We… or Shouldn’t We…

Earned Revenue

earned revenue, earned income ventures, nonprofit business activity, social ventures, social entrepreneurship, community wealth creation, social purpose business, social enterprise, common good enterprise, mission-driven business, socially-responsible small business, double-bottom line; triple-bottom line, benefit corporation

Social Enterprise

“We don’t hire people to grow vegetables. We grow vegetables to hire people.”

—Woody Woodruff, Red Wiggler Farm

Types of Social EnterprisesFees for service Manufacturing and product sales Rent and leases Licensing and cause-related marketing activities

Examples

Keep in Mind

It’s ok. Substantially related No personal, private benefit Fair market value After reasonable expenses,

“profit” goes back into the tax exempt

Charity distribution upon dissolution

Is it ok to operate a venture unrelated to the nonprofit charitable purpose?

Is it okay?

Continuum

We should…We shouldn’t…

Why You Should

Diversifies revenue

Autonomous, predictable revenue

Businesslike discipline

Entrepreneurial habit

Why?

Why You Should Be Careful

Organizational and cultural fit

Legal and tax issues

Implementation expertise

Not easy money

Why Not?

Managing Expectations

“For most nonprofits, it is unrealistic to expect that ventures could ever completely replace traditional funding sources. Even the most successful ventures seldom provide more than one-third to one-half of an organization’s annual budget.” Rolfe Larson

There are exceptions.

Profile of Social Enterprises

How does your organization compare?

By budget By mission By number of employees By location

So, what could be our business?

What does this community need?That someone (customers) will pay for.

Opportunity

1. Extending and monetizing current practice.

2. Starting a business.3. Cause-related marketing

Three Types to Consider

Organizational Assets

Organizational Capacity

Funding

Reserves Customers Clients Funders and

donors Investors Lenders

Social venture capital

Crowdsourcing platforms

Fellowships Social venture

competitions Web-based

intermediaries

Anticipating Impact

If this venture succeeds, what might be the impact on

Mission Organizational capacity Money Community Reputation

And if the venture fails?

ChangeMatters

@changemtrs

@amykincaid

Amy Kincaid www.changematters.com [email protected]