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 Enterprises Fees 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 Nonprofit Charity Nonprofit Social Enterprise Hybrids, Combos, New Forms Socially- Responsible Business Business

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? Assets OrganizationOpportunity

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  Amy Kincaid  