Social enterprise for nonprofits getting started
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Social Enterprise for Nonprofits - Getting Started. NTEN Webinar, October 8, 2009. Agenda. Overview of Social Enterprise, structures, types Getting started in Social Enterprise Funding sources & options View from the field Available resources Open Q&A. What is Social Enterprise?.

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Agenda
Agenda

  • Overview of Social Enterprise, structures, types

  • Getting started in Social Enterprise

  • Funding sources & options

  • View from the field

  • Available resources

  • Open Q&A


What is social enterprise
What is Social Enterprise?

“An organization or venture that achieves its primary social or environmental mission using business methods”

-Social Enterprise Alliance


Why launch a social enterprise
Why launch a social enterprise?

  • Sustainability

  • Improve social return on investment (SROI)

  • Cultural transformation

  • Leverage new funding sources



Legal structures
Legal Structures

  • Nonprofit

  • For profit

  • Hybrid (i.e., L3C)

    See: Effective Social Enterprise — A Menu of Legal Structures


A new era for social enterprise
A New Era for Social Enterprise

  • Increased Federal investments

    -Office of Social Innovation

    -Office of Entrepreneurship & Innovation

  • Greater foundation interest

  • New models (L3C, B Corp, etc.)

  • Economic crisis causing greater NPO interest


What is Social Enterprise?

Definition: businesses owned and operated by nonprofit organizations

Social Enterprise

Socially

Minded

Revenue

Generating

=

+

© REDF – Please do not distribute without prior permission from REDF


Social enterprises vary depending on an agency s earned income social enterprise strategies

Mission-motivation

Profit-motivation

Social Programs

Enterprise Activities

$

Enterprise Activities

Social Programs

+

Enterprise Activities

Social Programs

Social enterprises vary depending on an agency’s Earned Income/Social Enterprise Strategies

Mission-Centric Social Enterprise

Mission-Related Social Enterprise

Non-MissionRelated Social Enterprise

  • Primary purpose is mission advancement

  • Integration between social programs and business activities

  • Provides revenue for nonprofit operations and mission-related activities

  • Often expands mission to achieve greater social impact

  • Not related or intended to advance mission

  • Profit/funding potential is primary purpose

Source: Virtue Ventures, Social Enterprise Typology, Kim Alter

© REDF – Please do not distribute without prior permission from REDF


Why is planning for a social enterprise different than for a small business
Why is planning for a social enterprise different than for a small business?

The desired outcome of for-profit business is already known: to make a profit

$ Returns

Set up Business

Business Plan

The desired outcomes of a social enterprise are not obvious and so the goals need to be established first

$ Returns

Business Plan

Set up Business

Set social and financial goals

Select business idea based on goals

Social

impact


The entire process from planning to launch requires significant time and agency capacity
The entire process from planning to launch requires significant time and agency capacity

Define goals

Assess organization

Develop venture criteria

Pre-feasibility study

Feasibility study

Business plan

Execution

  • Why is your organization considering social enterprise?

  • Is your agency ready for social enterprise?

  • How will you screen different social enterprise options?

  • Is your social enterprise feasible from a business standpoint?

  • In-depth analysis of social enterprise viability

  • Thorough business planning for social enterprise development

  • Making it happen

Social enterprise pilot

6 months

6 months

3 mo.

1 year

Timing (illustrative)

© REDF – Please do not distribute without prior permission from REDF


Why is it important to set goals
Why is it important to set goals? significant time and agency capacity

  • Ensure agreement between stakeholders

    • Gain agreement from staff with different roles, the board and any other stakeholders on the objectives of the enterprise

  • Select a business idea and guide the business planning

    • Business ideas can be evaluated objectively using the enterprise criteria

  • Guide business operations

    • Clear social and financial goals help the enterprise manager make operational decisions

  • Evaluate whether the enterprise is successful

    • Tracking financial and social metrics against initial goals shows whether the enterprise is fulfilling stakeholders’ expectations


Change agent productions
CHANGE AGENT PRODUCTIONS significant time and agency capacity

“A Youth Led Social Enterprise committed to providing the best products and services in Digital Movie Making, Graphics, Web Design, Technology Set Up, Consulting, and Training, Conference AV, Youth Development Training…….”


Our journey
Our Journey significant time and agency capacity

  • Two Years in operation / born out of the YMCA Youth Institute.

  • Have done over $400,000 in business over the past 2 years.

  • Employed over 140 youth in various projects.

  • Served over 51 clients over the past two years.

  • High Client Satisfaction Rate.

  • High Youth Intern Skill Development

  • Five Fulll Time Staff

  • Positive Growth Strategy / Marketing

  • High Client Recommendation Rates

  • Business Plan Model

  • Plan for Growth


Challenges
Challenges significant time and agency capacity

  • External Economic Forces

  • Sustainability without Grant Funding

  • Defining Social Enterprise Model within an existing non-profit traditional framework

  • Change thinking / monetize services

  • Nurture Growth at All Levels

  • Culture Shift

  • Balance

  • Marketing


The future
The Future significant time and agency capacity

  • Manage Growth without Grant Funding

  • Price Services by Industry Standards

  • Strategic Marketing

  • Staff Growth Potential

  • Replication / Franchising

  • Diverse Funding Streams

  • Long Term Projects

  • Stay Honest to Youth Driven Mission


Types of se funding
Types of SE Funding significant time and agency capacity


Key se funders
Key SE Funders significant time and agency capacity


Attracting investment
Attracting Investment significant time and agency capacity


Resources
Resources significant time and agency capacity

  • Social Enterprise Alliance

  • Rootcause Business Planning Guide for Ses

  • Business Plan Pro Social Enterprise Edition

  • Social Return on Investment (SROI)

  • Effective Social Enterprise — A Menu of Legal Structures

  • ZeroDivide Community Investment Resources

  • Social Enterprise Books


Thanks from
Thanks from… significant time and agency capacity


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