Provocative as it may sound, many nonprofits successfully leverage monies received from their revenue-generating initiatives to enhance mission impact, increase their organization’s performance and sustainability, and also create new opportunities to help their clients/beneficiaries become more self-reliant. This amounts to —as Elizabeth Isele, Senior Program Director at Great Bay Foundation is fond of saying— "profit for a purpose.”

For years, many nonprofit directors, social activists, and academic theoreticians have looked askance at social enterprise. It appears that money – in particular the pursuit of money – is the object of their discontent. Some fear that “business” efforts will supersede social mission strategies. Others believe a focus on making money (especially worrisome when it is successful) will detract from creating social change. Still others are wary lest nonprofit revenue-generating activities cause a breach in public trust.

Each of these concerns is valid if one views social enterprise from the perspective that its only purpose is to generate revenue.

The Great Bay Foundation for Social Entrepreneurship contends that those who focus solely on the money-making aspect fail to recognize the potential value of the larger sphere of social enterprise, that is, to strengthen the organization and increase the overall impact of its mission.

Like those who saw beyond the fear that 19th-century dime novels and the “Penny Dreadfuls” would lead to the demise of “literature,” so too must we look beyond these primarily negative reactions to nonprofit revenue generation to see the greater good and dynamic social byproducts created by these efforts.

Great Bay believes that profit for the sake of profit should not be a goal of nonprofits. But profit for a purpose — mission impact — does make a lot of sense.

To begin our discussion, we offer the following five questions:

• Do you believe a nonprofit can run a revenue-generating initiative without compromising its social mission?

• How should nonprofits strike the appropriate balance between social and business goals?

• Where can nonprofit execs without MBA’s learn how to run a profitable venture?

• How should a nonprofit measure public trust?

• What legitimizing assets does a nonprofit have to leverage in the revenue-generating arena?

Jump in the conversation!

Laurinda – Sep 19, 2006 2:08 pm (#1 Total: 34)

"Profit for a purpose! … why not full integration?"

I have spent the past 20 years fluctuating between for-profit and not-for-profit endeavors, always on the look out for the perfect fit that answers my internal core values. "Doing well … whislt doing good"

The facts are that as a result of the modern economic frameworks ruling the world … economic sustainability is a must! … if we are serious about doing good … and to facilitate a positive impact on the social and environmental arenas.

Unfortunetelly our entire global economy is run on "promisary notes" without any real or substantive value … and the real value is now measured against this  tool (i.e. money … or syphers on a computer program … how did we as mankind alowed this state of affairs to control us … I will never understand) … but be that as it may be … we can’t easily change this situation … all we can do is extract what we need from it so that we continue to do good on behalf of mankind and the planet …

Having said that, the economic tools and frameworks do control the way that we manage our lives and its impact on everything else.

Personaly I am averse to being part of the "donor, grant begging brigade .. as you often tend to loose your independence and are prevented from really fulfilling your dream and vision … as a result the alternative is to follow the self-economic route.

Agree … this may bring chalenges … and for many years I was unsure how to address them all … but fortunetelly the world is changing … values are becoming a more important factor, technology today enables us to communicated faster … and our networks grow …

this in turn has enabled us to create and implement different models … and now as a result we have opted for a blend of "profit and not for profit methodologies, we have blended all our values at the foundation level and have integrated them at the top.

Have we found the solution?

Only time will tell … we believe that we are on the right path …

A blending of the for-profit and for-benefit methodologies is probrably the way to go.

I know that I havent’ addressed all your questions in detail …

… will do so at a later stage.

Laurinda

 

 

george.polisner – Sep 19, 2006 2:51 pm (#2 Total: 34)

Profit for a Purpose

To begin our discussion, we offer the following five questions:

• Do you believe a nonprofit can run a revenue-generating initiative without compromising its social mission?

I’d like to change the question -we are a for-profit with a very strong social mission (informing and educating consumers with regard to corporate behavior -or more commonly and incorrectly -Corporate Social Responsibility). A high level of care and attention is necessary as I believe as we are for profit we are held to a higher standard of scrutiny. It is very possible.

• How should nonprofits strike the appropriate balance between social and business goals?

For us, we must guard our own viability or else there is no social mission (and no venture). We are privately funded by passionate investors that believe in our mission. This is critical as investors that are simply looking at a high ROI may as well invest in entities such as WalMart and ExxonMobil. We strongly believe that the oil-based economy, and the business practices of driving equity value through externalization of costs are enjoying their last gasp. The innovation of a free-market economy driven by intelligent demand for products and services of businesses that are balancing people, planet and profit will prevail -which will be good news for visionaries such as Jeffrey Hollender of Seventh Generation, Ray Anderson of Interface and others that are leaders of Capitalism 2.0.

• Where can nonprofit execs without MBA’s learn how to run a profitable venture? Hire MBA’s and Green MBA’s. Non-profit and Hybrid (for profit, strong social mission) entrepreneurs should concentrate on vision and strategy and bring the financial and operational expertise during different phases of growth. I’d love to see an incubator for Hybrid companies like alonovo.com that can help grow similar companies while allocating the cost of infrastructure, financial, legal and operational expertise across all of the entities. It would lower the transactional cost of placements too.

• How should a nonprofit measure public trust? It should first concentrate on the areas that build trust -strong governance, diverse boards, transparency and efficacy.

• What legitimizing assets does a nonprofit have to leverage in the revenue-generating arena? The most significant non profit asset tends to be their constituency. They can leverage their constituents (carefully) in relationships with select Hybrid and for profit ventures that are important to their specific community.

isele – Sep 19, 2006 3:52 pm (#3 Total: 34)
Senior Program Director – Great Bay Foundation

Full integration

Hi Laurinda,

Thanks for your comprehensive perspective: I could not agree more about "the donor grant begging brigade." When people say revenue generation is a distraction, I cannot understand why they do not see chasing the grant money as an equal distraction. People spend a great deal of time researching grants that might be even slightly appropriate and then write a grant that addresses the funder’s need rather than those of their own mission. So they tend to simultaneously mitigate mission focus and deplete valuable time.

I think that the trend to blend (in a very public way) mission and values into a new definition of success began when the new-to-wealth dot.com millionaires decided the accumulation of profit for the sake of profit quickly grew vacuous. It became legitimate to analyze ways in which one could blend for profit business skills with nonprofit mission values. You had successful business minds attacking social programs in ways that would help to insure long-term success. It was a catalyst and set an example for traditional nonprofit directors, who had the skills or were prepared to acquire them, to model.

We are on the edge of a new era where (for some) focus has shifted from individual self-satisfaction to the need to address larger social issues realted to the community in which the individual belongs – both local and global. Not an overwhelming number of people have made the transition, but the few who have provide a glimmer of hope.

Elizabeth

Kim Breas – Sep 19, 2006 5:25 pm (#4 Total: 34)
DoughNation Services LLC

‘Open Source’ Social Enterprise – Moving Beyond Boundaries

Although I may be a minority in my point of view, I believe social enterprise extends beyond nonprofit earned-income ventures to include wholly for-profit enterprises that demonstrate commitment to social benefit – like mine, DoughNation Services LLC.

I do believe though, that nonprofits can successfully run earned income ventures without compromising their social mission.

Like Laurinda, I have always been driven by ‘doing well by doing good’ and that is the motto of DoughNation Services LLC – the first service in the nation to provide homeowners with tax deduction documentation and delivery for donations of quality belongings – and of the Prosperity Project.

Since 2002, DoughNation has proven the donation services business model – we have had repeat business and referrals, and have been paid as much as $2000 (in full, upfront) for our expanded Gentle Disposition service that clears the entire home through donation, recycle and disposal.

On July 17, we introduced the Prosperity Project as the first ‘open source’ social enterprise that expands DoughNation’s proven model into four donation service enterprises. The Prosperity Project is freely licensed to individuals and nonprofits that commit to ‘doing well by doing good’, and those who build donation enterprises with the Prosperity Project model own the businesses they build outright.

The first story appeared on HappyNews.com: http://www.happynews.com/news/7152006/The-Prosperity-Project-An-Open-Source-Social-Enterprise.htm

Coincidentally, just one month later on August 17 a major change in the charitable giving law came into effect when President Bush signed the Pension Protection Act of 2006. As of this enactment date, this Act restricts claiming tax deductions for donations of personal belongings only to items in ‘good used condition or better’.

With the charitable giving law changes, donation services became an even more important new industry. Key elements of donation services include photographs of each donated item along with a itemized list of tax deduction values – documentation that is now essential for anyone wishing to claim tax deductions above $500 for donations of personal belongings.

Since introducing the Prosperity Project we have been reaching out to nonprofits engaged in social and economic justice, economic localization, community development, etc. and encouraging them to build donation enterprises locally, as well as making the Prosperity Project available to individuals who commit to ‘doing well by doing good.’

I encourage everyone reading this to learn more about the Prosperity Project at www.doughnationservices.com!

Kind regards,

Kim Breas

isele – Sep 19, 2006 6:15 pm (#5 Total: 34)
Senior Program Director – Great Bay Foundation

Higher standard

Hi George,

I am not convinced that for-profits are held to a higher standard. Perhaps, that is because you have not defined "standard." Are you talking about financial or social accountability? I think they are held to a higher fiduciary standard because of their responsibility to shareholders, but less for social accountability. Too many people give for-profits gratuitous bonus points for any socially directed initiatives.

I certainly hope you are right about: "We strongly believe that the oil-based economy, and the business practices of driving equity value through externalization of costs are enjoying their last gasp. The innovation of a free-market economy driven by intelligent demand for products and services of businesses that are balancing people, planet and profit will prevail…" But the pragmatic side of me says we have a long way to go. Any one else feel more optimistic about this?

Re your suggestion, "Hire MBA’s and Green MBA’s. Non-profit and Hybrid (for profit, strong social mission) entrepreneurs should concentrate on vision and strategy and bring the financial and operational expertise during different phases of growth."

In a perfect world this might happen, but, until we arrive there how can small nonprofits afford to hire MBA’s – green or seasoned?

Re your, "The most significant non profit asset tends to be their constituency. They can leverage their constituents (carefully) in relationships with select Hybrid and for profit ventures that are important to their specific community."

I would say it is not so much the actual constituents but rather the nonprofit’s relationship with its client/constituents and its success in helping them become more self-reliant.

How do others feel about this last point?

Elizabeth

Mark Lewis – Sep 19, 2006 10:05 pm (#6 Total: 34)
CEO/Executive Director; Strategic Business Intelligence Group

IRS tax status alone does not compromise the mission

These are questions the Strategic Business Intelligence Group is dealing with on a regular basis here in Dallas, where the NPO sector has not a very limited social enterprise component to it at this point.  We hope to help change that.

Do you believe a nonprofit can run a revenue-generating initiative without compromising its social mission?

This is a curious question given that we’re on a forum based on the idea they can do exactly that.  I repeatedly see this question being asked by many people that speak about it within the context of social entrepreneurship as opposed to NPO’s more generally.  To me, the whole idea of generating revenue within the NPO or social benefit business is what SE is all about in the first place…changing the busness model.  As I see it, a 501(c)3 is simply an IRS tax designation, and that needn’t effect the organizational mission unless it’s allowed to.

I’m solidly in the Jerre Boschee camp of social venture entrepreneurs that believe not only CAN non profits generate their own revenue and remain true to social mission, but for NPO’s to move to the next generation business model…social enterprise organizations rather than doner funded ones…they MUST generate their own revenue.  We need a clear, concise and agreed upon standard about what constitutes a social entrepreneur, and I think the NPO label is rapidly loosing it’s distinction in the face of social entrepreneurship, CSR and even the rise of SRI vehicles.  

Personally I think that definition has to include the creation of self generated or internal revenue.  I’m firmly of the view that social mission aside, organizations that do not generate their own revenue, or are at least in the process of moving strategically toward that model, are not only going to find it increasingly difficult to survive in the new economy, and in fact many are already compromising their social mission by not doing so.  One only need look at the large amounts of time spent by ED’s, the expense of hiring grant writers, and the way many NPO missions get morphed into what the funding agents want, to recognize that mission is compromised, or at the very least slowed down…not by your IRS tax status but by how you spend your time and who or what you are beholden to.

How should nonprofits strike the appropriate balance between social and business goals?

Boards of Directors make the decision in the NPO world, which is another reason I favor a pure SE model for social benefit businesses.  There are many ways to structure for profit businesses that create a much better connection to social mission in my opinion.

In social enterprise business models, I think this is a question that probably can’t be answered in the form of a one-size-fits-all formula.  At the Townview Symposium on Social Entrepreneurship in Dallas this week, I stressed to the students at the Ynonne A. Ewell Townview Magnet Center’s School of Business and Management that when you become an entrepreneur, YOU get to decide these questions…nobody else.  In other words, I think the answer to the question is rightfully, "whatever the social entrepreneur thinks is appropriate".  In the perfect world somebody mentioned earlier, one would get amazing ROI for both social benefit and financial sustainability from day one, but in realilty, I think most social venture entrepreneurs struggle with answering this question and gradually refine and sharpen their skills and build their organization’s capacity, networks and vision in a process that increases the quality of impact they have over time.  Where an organization is on this timeline of movement and progress at any one time is dependent on so many factors, it’s sometimes hard to decide if progress is even being made.  What counts most IMO is that the committment is in place to see social impact rooted in the business model’s foundational structure as opposed to it existing in the form of a value added proposition.  Here is where I feel SE is a more assertive and engaged business model than CSR.

Where can nonprofit execs without MBA’s learn how to run a profitable venture?

I value the skills MBA’s bring to the table, but I don’t think it’s neccessary to have an MBA to run a profitable business, nor do I think you have to hire MBA’s.  For one thing, there are many busnesses where experiential knowledge is superior to academic, and second; there are huge amounts of information, advice, and strategic planning available for free on the web that weren’t available until very recently.  A Google junkie with a solild network can often exceed an MBA’s understanding of a problem.  Finally, MBA’s can be weaved into a business network and their counsel sought when you establish those relationships.  One way to do this is through the use of what I call "microwaveable companies"…small groups of project focused people coming together temporarily around a common goal…which often results in lasting relationships.  Net Impact has a national presence for MBA’s wishing to volunteer their time, and here in Dallas I’ve established links with other MBA heavy organizations like the Dallas Black MBA Association and others looking to bridge outside their sector through collaboration. 

How should a nonprofit measure public trust?

The question might better be asked, "WHY should a non profit measure public trust?"  If the answer is to attract doners, I fear that the changing economic model will by-pass the organizational leadership because I think that answer is to entrenched in external funding to move towards social entrepreneurship.  On the other hand, if the answer is because the organization is committed to it’s mission and holds quality and client satisfaction in the highest regard…well that’s just the basis for good marketing and customer service.  All busiensses, whether NPOs or for profits…are obviously interested in maximizing public trust and good will.  I think NPO’s and social entrepreneurs should simply produce great products and services at fair prices that reach people where they live and serve their markets with professionalism and high ethical standards, and public trust will follow.  Of course NPOs need to be aware of certain issues related to transparency and tax reporting, etc…and in the age of the web where a potential doner or client can simply click into www.charitynavigator.org to find an organization’s credibility in seconds or pull their 990 off the web, that makes complete business sense on more than one level.

What legitimizing assets does a nonprofit have to leverage in the revenue-generating arena?

Information…actually the wise application of information…is power; and in my view NPO’s and social venture entrepreneurs should make an extraordinary effort to make sure they look at the big picture when networking their relationships.  What information do you hold that is strategic in value to different kinds of companies, segments of the client base, doners, the public or selected change agents?  The value of relational networks is huge as well.  Certainly the opportunity to leverage relationships with for profit businesses is there.  I’m constantly amazed at how many CEO’s and board members of sizeable companies are interested in social entrepreneurs…and here in Dallas that means beginning with explaining what a social entrepreneur is, because the footprint here is so small and so new that few executives here have even heard of social entrepreneurship at all.

These are some great questions…and this forum is so valuable for learning how people from around the country or outside the US see these issues.

Mark

Jeff.Mowatt – Sep 20, 2006 1:09 am (#7 Total: 34)
P-CED

Absolutely, Mark!

Though in the case of our organisation, P-CED, it started with a theoretical model which was pitched at President Clinton:-

http://www.p-ced.com/index2.asp

For us, and I was not part of it at the time, proof was delivered in 1999 with the commencement of activities in Siberia. Nowadays our business drives a social mission by simply directing revenue toward the social mission by agreement between those involved.

In many ways what was proposed back then can be seen in the model of a community interest company which has existed as a legal form in the UK for the past 2 years.

MBAs we don’t have, I doubt if we could afford one and I’m often a little amused by the fact that none of our customers have any idea of our social purpose. This includes a publishing group with its own social fund and another, a school for MBA’s at Cambridge.

I couldn’t agree more with your statement about nonprofits measuring public trust. We don’t have to, they buy into a product and it’s up to us where the profits go.

And information access, well that’s what we’re about in essence, recognising that it’s fundamental to establishing new enterprise, though we’re more oriented toward delivering at the grassroots level.

Current activity is directed at Ukraine where we’ve delivered a proposal to deploy competitive revenue generating Wimax technology to fund a major childcare reform initiative. Now we’re lobbying to convey to the rest of the world just how much it’s needed.

http://eng.maidanua.org/node/581

Regards,

Jeff

Mark Lewis – Sep 20, 2006 10:34 am (#8 Total: 34)
CEO/Executive Director; Strategic Business Intelligence Group

Good Stuff Jeff…

Good stuff Jeff…sorry for the twisted English above…LOL…I checked out your site and found it interesting. 

I like the emphasis on bottom up management approaches and empowerment emphasis.  I’ve always felt the finer points of the capital market free enterprise system were neglected and these markets represent an underserved segment that so far just a few (CK Prahalad for example…) have caught on to yet.  This is a great example of a strategic data set that I think flies beneath the radar of a lot of Fortune 1000 companies when you get down to the level of mico-enterprise for example; but there’s definitely a market there and what’s exciting from a social venture entrepreneurs point of view is that these markets are wide open for even the smallest operations to be able to compete in.  These niche markets opened by globalization, technology and the converging and paradigm shifting emergence of women and minorities, new business models and proliferating cheap technology has left us an opportunity to empower social vision like never before. 

I think young people are key in this also.  They can move more naturally in the information age and the next wave economic shift; creative right-brain management style, design and innovation through collaboration/innovation…a phase that’s rapidly gaining strength…are what they’re best equipped for.  Why we aren’t recognizing this in our schools right now is a mystery.  We’re still training our high school graduates to compete for jobs in low paying service economy positions, which IMO is defeating us on the global market.  India’s graduating 80,000 MBA’s a year and by 2009 will constitute the world’s largest group of English speaking people, and of course everyone knows what China’s doing, so while we can’t compete like we used to, we can change how we compete and still retain an extraordinary US presence in the global theater.  I don’t buy the idea that the US economy is done, but we have to get much smarter, faster, more mobile and flexible in a big hurray.  We have to move across sectors, cultures and other boundaries to create the most competitive base of entrepreneurial talent in the world.

Last week I got to hear Syracuse University President Dr. Nancy Cantor speak here in Dallas and her emphasis tracks this idea closely…namely that we are facing a survival situation that offers opportunity at the same time, but we have to find the talent to drive the economy in the next generation everywhere it grows.  This means deliberately targeting underserved populations of both potential entrepreneurs as well as consumers.  That’s something that I think Wall Street hasn’t quite caught up to yet, but it’s legitimate without doubt.  Women are creating new businesses twice as fast and minority women eight times as fast as the market as a whole, and that entrepreneurial initiative and synergy is coming out of places where social consciousness and a desire for change are things that literally define some of these communities.  We must tap into that talent, which was the thrust of Dr. Cantor’s presentation.  Since her university is producing the top entrepreneurial MBA program in the US and an undergraduate program ranked right behind it, I think her words are seriously worth holding onto.

Into the middle of all this we introduce the question of whether it’s a good idea for social benefits and NPO’s to go into business…I think the answer is that it’s never been a better time or a time where it’s more appropriate and necessary.

I applaud what you’re organization is doing…and it looks like we share some common reference points. 

Mark

 

Grantwriting Guru – Sep 20, 2006 10:53 am (#9 Total: 34)

From a grantwriter’s perspective

Hello Elizabeth –

I am responding to the 5 questions from a different point of view. I am a successful grant writer with extensive experience with nonprofits. Prior to this I worked in profit-based venues (the Stock Market, oil and oil futures, etc). So I have seen both sides.

Maintaining financial viability is a primary responsibility of all businesses. Nonprofits can and do regularly initiate revenue-generating ventures that not only do not compromise their social missions, but in fact enhance and support these missions. Examples are umbrella companies under which you might find a mix of nonprofit and limited for profit initiatives. While the finances of each entity are never intermixed, intrinsic benefits from a profit-generating venture can accrue to consumers in the nonprofit ventures.

My long held belief is that nonprofit status should be initially ‘chartered’ for a period of 3 years, after which the nonprofit must show financial viability to be granted permanent 501C3 status. What makes Great Bay Foundation such an interesting funder is that it requires nonprofits to submit a business plan rather than simply a project budget. As a result, funding from Great Bay is perceived as being more like venture capital than a gift. Applying for a Great Bay grant feels inherently different from applying for a grant from a more traditional foundation. Great Bay applicants are required to bring something different – something more – to the table than just the best of intentions.

Social and business goals should not be separated. You cannot meet your social goals if your finances are in disarray. By the way, not all 501C3 organizations provide social or educational or even intrinsically worthy services. We shouldn’t hold an organization’s nonprofit status up as a mark of goodness or worth. I have seen nonprofits founded solely to access grant funds (which are only accessible to 501C3 organizations) for something – when in the long run a for-profit model would have made much more sense. I suspect we all know organizations like this.

As a grant writer I have dealt with numerous executives in the nonprofit arena who have little or no experience with budget development (which I continue to find astonishing). The importance of having a business plan is completely lost on them. I would say that the majority of this group has never worked in the for-profit world, and in fact a good percentage of them hold the for-profit world in disdain. Additionally, the concept of consumerism (giving people what they actually want and need, not what you believe they want or need … or worse, what you believe they should want or need) is foreign to them. Such executives and the organizations that reflect their backwards attitudes are legion. I advocate partnering non-profit executives with successful for-profit companies in mentoring relationships. As an aside – one example of the importance of understanding consumerism follows: As the healthcare delivery paradigm changes (as it now doing) from one in which consumers receive primary care in a nonprofit setting to one in which they receive primary care in a retail setting (the minute-clinics that are blossoming – and booming – in pharmacies and stores), the need to understand consumerism will be critical to the survival of many traditional nonprofit health providers.

Nonprofits should measure public trust in the same way that for-profits measure it – through customer satisfaction (customers being those you serve as well as those who serve you, like funders). Financial stability and growth are also excellent measures of public trust, though if you are a provider of something like services to the poor, the ultimate measure of your success would be to find that your organization is no longer needed.

What legitimizing assets does a nonprofit have to leverage in the revenue-generating arena? This is an interesting question, because the legitimizing assets for a nonprofit and a for-profit can actually be the same, such as the donation of services or goods free of charge. A supermarket chain might dispense free food to the local food pantry on a daily basis, dispense grants to local nonprofits through a company-based foundation, and dispense health or social service information as part of its normal public relations efforts. Consumers see the impact of this philanthropy on their communities and they choose to shop at that supermarket, thus generating more revenue for the supermarket. The food pantry, on the other hand, dispenses all of its services free of charge. The supermarket has a business model that enables it to sustain a level of profitability that in turn allows it to be philanthropic into the future. The food bank relies solely on philanthropy. The supermarket understands the concept of ‘generating revenue’ in a far different way than does the food bank, which understands it as “generating philanthropy”. To me this is the tale of the ant and the grasshopper.

isele – Sep 20, 2006 3:18 pm (#10 Total: 34)
Senior Program Director – Great Bay Foundation

Definition needed

Hi Mark,

I could not agree more that it is time for a “clear, concise and agreed upon standard about what constitutes a social entrepreneur,” however I think we must create a definition that bridges both the NPO and For Profit arenas. Would you like to take a stab at it?

You say that Boards of Directors make the decision in the NPO world but that does not need to be as restrictive as you infer. I know, for example, many ED’s who are members of the board and sometimes even Chairman of the Board for their NPO. Isn’t the greater distinction that NPO board members, in contrast to the For Profit board members, have no fiduciary ownership in the organizations.

In your blog entry #8, you emphasize that “young people are key.” This is a bias that needs to be put down. See for example the recent new Purpose Prize from www.civicventures.org which was designed to recognize social entrepreneurs aged 60+. They emphasize how much experience we are wasting by relegating seniors to the back burner.

Appreciate your stimulating insights,

Elizabeth

Mark Lewis – Sep 20, 2006 6:24 pm (#11 Total: 34)
CEO/Executive Director; Strategic Business Intelligence Group

Elizabeth…thanks for your comments.

First let me address the last point you made.  I don’t discount the value of experience nor the critical role that older leadership plays in the future direction of NPO’s and social enterprise business, and I certainly don’t advocate relegating older leadership "to the back burner".  To the contrary, we need to equip this segment of the NPO leadership ladder more than ever.  The reality of the current US population shift in age demographics is not something we can ignore however.  Generation X is half the size of the now aging and soon to be retiring baby boomers.  We face the same issues here that we face in the rest of our economy; a crying need for emerging leadership for the next 30 years.  To ensure that social entrepreneurship reaches its potential we must engage young leadership with vision and train them to take the movement into the next generation.

A 2004 research study by the Annie E. Casey Foundation of over 2,200 NPO’s found that over half of organizational senior leadership is planning to leave within 5 years, and the average age of these leaders is in their mid-fifties right now.

In Up Next: Generation Change and the Leadership of Non Profit Organizations, (http://www.aecf.org/publications/data/up_next.pdf) Francis Kunreatheuther, a Senior Fellow at the Hauser Center at Harvard University offers 6 recommendations for planning in the midst of leadership transition that respect the values and contributions of senior leadership while planning for inevitable change.

Second; while I agree that NPO board member’s having no financial stake in the organization may produce a different value set, my comments were intended more to convey the advantages of smaller, faster and more market adaptive business models that are not encumbered with the duties of board management and the time frames constituted by such.  Individual social venture entrepreneurs connected to value similiar networks and creating capacity through shared information and resources, social networking and complimentary missions can frequently identify and target opportunities faster and more efficiently in this rapidly changing market.

Finally, regarding the definition of social entrepreneurship, I like the way it’s been defined by people like Stanford’s J. Gregory Dees(http://www.fuqua.duke.edu/centers/case/documents/Dees_SEdef.pdf) and Jerre Boschee from the Institute for Social Entrepreneurs (http://www.socialent.org/) who have combined to create a profile that includes innovation, creativity, recognition of opportunities presented by change, ability to manage risk, develop vision apart from capital resources and of course, creating value through earned income strategies as opposed to traditional funding mechanisms.

 

Katherine Freund – Sep 21, 2006 5:47 am (#12 Total: 34)
Founder & Executive Director,ITNAmerica

Form Follows Function in Business Solutions

Hello Elizabeth,

 

I’d like to add a few words from the field, maybe even from the edge, where I believe innovation lives.  My chosen field is senior transportation.  My organization, ITNAmerica, is building the first national network of sustainable transportation for the aging population.  www.ITNAmerica.org

 

When I began this work, in late 1989, the term social entrepreneur had not been coined, as far as I know.  I can honestly say that it never even occurred to me to provide a transportation service for which I would NOT charge a fare.  There is dignity and independence in paying for oneself.  To me, that answers the question of whether a solution to a social problem should generate income.  Why not?  It helps to fund the solution.  Moreover, at the Independent Transportation Network, the sustainable model ITNAmerica helps communities replicate, we have used market incentives in pricing transportation services to help build a more efficient solution.  For example, seniors who plan rides in advance or share rides with others pay a lower fare.  It works like magic, with 98 percent of our rides voluntarily scheduled in advance and more than half of our members happy to share rides.  None of our seniors ever complain, because they are saving money.  So, not only have we embraced the use of revenue to help fund the social purpose service, we have eagerly embraced every lesson of the market and its elegant efficiencies that we can find.  I think of the market as a democratic source of power, and I seek ways to hitch our little wagon to that power through free consumer choice.  The market is like an endless natural resource, as available to non-profits as it is to for-profits.  The opportunities to be creative open before us, and its fun.

 

The larger questions are whether the revenue generated by providing a service, such as senior transportation, is sufficient to cover the costs, and whether there is a way to fund the mobility needs of older people who cannot afford to pay.  I learned that the cost to provide the kind of transportation services that older people need is so great, that we would only serve the very wealthy if charged the true cost of the ride.  So, we could solve the problem as a for-profit business, but we could not solve the larger social problem unless we created a business model that supplemented fares.  So the non-profit form of our business solution followed the demands of the social need.  It was pretty logical, and I didn’t need an MBA to figure it out. 

 

I did need an MBA to help me build a good business plan to roll it out, and I can honestly say, I could not have achieved the necessary growth without this expert advice.  So, to answer your question about the skills of an MBA, I think they are very helpful for planning and advice, but such skills are no substitute for creative solutions, common sense, and most of all, deep and profound subject area expertise. 

 

I have never felt a conflict between social and business goals.  Indeed, they are entirely congruent for us.  Our business achieves our social purpose.  In the very early days of this endeavor, I realized that the same group of people who seem to be a population in need to sociologists are a market to business people and a constituency to policy makers.  The business programs of a well designed social purpose enterprise should fall into place with policy, research and practice like a multidimentional sculpture, whole, balanced and logical from any perspective.

 

As for public trust, I think we all earn trust by doing good work and being as honest as we know how to be.  It seems pretty simple to me. 

 

My best regards,

 

Kathy

isele – Sep 21, 2006 11:27 am (#13 Total: 34)
Senior Program Director – Great Bay Foundation

Mark,

Thanks again for your comments.

We especially appreciate links such as yours to the Hauser Center document on Leadership Change that we can post in the Learning Center on our website.

We are very familiar with Greg Dees’ and Jerre Boschee’s work in the Social Enterprise arena and feel they are often at opposite ends of the revenue generating debate: Greg Dees leaning more towards innovation and Jerre Boschee insisting on revenue generation. It would be interesting to hear what each might say in this online forum.

Elizabeth

isele – Sep 21, 2006 11:42 am (#14 Total: 34)
Senior Program Director – Great Bay Foundation

DoughNation

Dear Kim,

I laud your enterprise! It certainly fills a need and demonstrates a unique way in which a for profit can "Do Well By Doing Good."

Elizabeth

Laurinda – Sep 21, 2006 1:09 pm (#15 Total: 34)

Why are we still stuck in the same old silos? Isns’t time for a change?

 

I read all of your comments with interest …

… and will now throw into the discussion something different and even controversial.

It is clear! So much has been written and debated about the “not-for-profit”and the “for-profit” sectors and this situation is continuing “ad nauseaum” … even here in this forum!

My question, is:

Isn’t time for us to be looking outside of our silos and old paradigms … I.e. “The for profit” … “not for profit” silos”?

… and shouldn’t we ask ourselves what it is we REALLY want?

… the on-off debates that have sprung-up in the past 2 years have been about renaming the same old silos … but very little debate has taken place on the creation of a new framework … although if one reads in between the lines that is precisely what we are all striving for!

… Yet! We continue to explain what we want, using the same old frameworks, terminologies and paradigms.!

Isn’t it time to “CHANGE”? ….

Most of us are stuck on the same sinking ferries … and we are all looking at the shore on the other side of the river. Maybe a few engineers are required to build a bridge across this river … to reach “the shore of integrated success”!

We are in the process of designing this bridge! … however! … we are in the minority.

There are still too few organisations at the forefront of this innovative process … our organisation is but one of them, we are at the forefront and one of the leaders in this design team (Empowerment Gateway in South Africa) another is ManyOne in the USA, but we are looking for others to join in with us.

There is no doubt that being at the start of a new century we should be looking at innovation and creativity in the design.

We should be creating a new model of doing business, one that integrates at all levels; the economic, social and environmental commitments into the design and not just artificially blending current thinking or current practices.

I know people are creatures of habit … we don’t really want to break from our comfort zones … but at the same time, we want to motivate change using those same old paradigms while operating within own known silos and boxes.

Are we really then, achieving our goal?

We not talking about redesigning the wheel, but … about redefining the function of the wheel! …

These could lead to a number of points to ponder …

Look forward to your comments!

Laurinda

Kim Breas – Sep 21, 2006 2:07 pm (#16 Total: 34)
DoughNation Services LLC

Reply to Elizabeth

Dear Elizabeth,

Thank you so much! 

After I founded DoughNation, I was dumbfounded to discover I had created something new – I fully expected to find others across the nation engaged in similar enterprise.  And I did not.

Early this year. after reading of yet another layoff by the auto manufacturerers (and more have been announced recently) I made the decision to turn the business model ‘open source’ and freely license it to any individual or organization who commits to ‘doing well by doing good’. 

In a better econmic climate, I would have grown DoughNation in the usual manner and eventually franchised.  

I believe America needs new industry more than ever before.  I also believe the donation services industry is the most socially positive and economically promising industry to emerge in decades. 

That is why I made the extraordinary decision to go ‘open source’ and allow any individual or organization who commits to ‘doing well by doing good’ to build donation services enterprises using the Prosperity Project business models and to own outright the businesses they build.

In prosperity,

Kim Breas

 

 

 

Mark Lewis – Sep 21, 2006 4:34 pm (#17 Total: 34)
CEO/Executive Director; Strategic Business Intelligence Group

Dees vs Boschee and new biz models

Elizabeth…you’re right on Dees vs Boschee…LOL…hence the NPO/FPO bridge you spoke of earlier…I like to combine their thinking.  I see no reason innovation and earned income strategies can’t co-exist.  In the area of innovative thinking I like what Roger Martin is doing at The U of Toronoto’s Rotman School of Business.  They have an awesome program up there.

Laurinda…I couldn’t agree more with your take on this.  I use the language of NPO’s because here in Dallas virtually everything in the social benefit sector is NPO so you have to start somewhere.  Social enterprise IS the new model you’re speaking of but few here have ever heard of SE.  We have to start thinking not in terms of NP and FP but rather in terms of questions about what we want our businesses to do.  Building new busienss models is what SBIG is designed to do.  We use SE and the associated concepts, information, innovation, etc…to leverage bridge building relationships between sectors that don’t usually interconnect and bring divergent streams of thinking together to accomplish this.

This is why I suggested we need a clear definition of social entrepreneurship…because I think much of what often passes for SE is really just the same kind of business model with window dressing.  These business models are powerful, adaptive and hold crazy promise among underserved populations and neglected parts of the economy.  Thanks for your thoughts.

Sutia Kim Alter – Sep 21, 2006 9:14 pm (#18 Total: 34)
Founding Partner, Virtue Ventures, Visiting Fellow, Skoll Centre for Social Entrepreneurship at Saïd Business School, University of Oxford

What Business Are We In?!?!

Forgive me in advance for my long windedness… this is a topic near and dear to my heart.

 

I pursued an MBA in 1993 because I believed that nonprofits needed to get smarter about money and management and tools to these ends could be found in business. At the time I was running a 100% self-funded volunteer-sending organization operating in five African countries—I was running a social enterprise (but at the time we didn’t have the terminology)—and felt I was lacking financial, management, and business skills required to successfully execute our mission.

 

Ironically, I think to some extent our infatuation with business has led us astray. When I was in business school the mantra was “what business are you in?” When I was working in the private sector the mantra was “stick to the knitting.” Not so long ago, it was acceptable to operate at 100% deficit now we are talking about profit? How did the pendulum swing so far? Folks, may I remind you that the business that nonprofit organizations is in is the business of solving social problems and creating social value. The “knitting” is social change and social justice, not profit making. This is not to say that we can’t make change sustainably—for goodness sake, sustainability is part of our moral obligation to serve our clients or at least until the social problem is solved. This is not to say, that fundraising can be as distracting and mission creeping as revenue-generating ventures unrelated to mission, or that the nonprofit capital markets is not is need of reforms.  However, I adamantly believe that the social enterprise is a first and foremost a mission accomplishment strategy, followed by an organizational strengthening strategy (capacity building and entrepreneurial culture) and financial strategy.

 

A tool is just that—you can use it to build a home or to kill your neighbor. Commuting the tools of business into the social sector is a way to help us do what we do better: meaning very simply, creating greater social value and impact.  In the nearly 20 years that I have worked in the nonprofit field, I have come to believe that social impact is nonprofit practitioners’ motivation for doing their work, and obtaining money is motivating only in that money is the necessary means to finance their mission. Frankly, otherwise the passion is just not there, and if it where these people would work in the private sector.  One hundred percent of nonprofit organizations I have helped to start social enterprises chose a business opportunity the fits with their mission and benefits their clients over another more lucrative option. This brings me back to a job interview I had at 3M when I was finishing business school, the marketing manager said, “You have been saving the world, so why do you want to market Post-It Notes?”  You know what, I didn’t have an answer.

 

 

Some thoughts on Profit

The notion of profit can be grossly misleading, just ask all those shareholders of Enron stock.  I think it is also telling that in three recent surveys conducted on social enterprise performance and benefits, (CWV 2003, Bridgespan 2004, and Pew Charitable Trust 2000) in all nonprofits purported a more entrepreneurial culture, increased social performance, stronger leadership, ability to attract more funding, and improved reputation, whereas profit figures ranged between 24% – 43%, and losses ranged from 13% – 74%. How is it possible to have so much disparity?  Furthermore, the average across the surveys show that 78% of social enterprises are central to the organization’s mission, and 19% are directly related and only 3% are unrelated. 

 

Of late there is a strong bias toward funding approach; most nonprofits and stakeholders perceive social enterprise as a funding strategy, rather than as a program, organizational development or change strategy.  The majority of the literature and public forums speak to helping nonprofits start commercial ventures. This is likely more of a PR issue than a practice issue—nonprofits need funding, grants or otherwise, and the promise of earned-income is the allure that leads nonprofits down the garden path. The Social Enterprise Alliance, a national nonprofit membership organization, went as far as to change its definition of social enterprise from one that embodies both its programmatic and financial attributes, "social enterprise is any revenue-generating business, activity, or project, founded for the dual purpose of earning income and contributing to a social cause,(2002)” in favor of a definition that promotes its financial benefit, “social enterprise is any earned-income business or strategy undertaken by a nonprofit organization for the purpose of generating revenue in support of the nonprofit’s social mission (2004)”  According to Greg Dees, This is a dangerously narrow view. It shifts attention away from the ultimate goal of any self-respecting social entrepreneur, namely social impact, and focuses it on one particular method of generating resources.” (Dees 2003) Though unrestricted revenue is a sexy proposition for practitioners, the reality is that social enterprise as a funding mechanism has not paid off for many who have hungrily followed its promise.  Today the Social Enterprise Alliance has come full cycle once again leading with mission in its new definition of social enterprise, “an organization or venture that advances its social mission through entrepreneurial, earned income strategies.”

 

Resource management not “profit” – The perception that social enterprise is about earned-income or profit is grossly misleading. No amount of profit makes up for failure on the social impact side of the equation. Any social entrepreneur who generates profits, but then fails to convert them into meaningful social impact in a cost effective way has wasted valuable resources. (Dees 2002). Social enterprise requires effective resource management, which must go beyond the narrow view that financial resources are the only resources. Typically, nonprofits most valuable resources are their people, networks or members, and intangible assets such as methodologies, content, reputation and social impact.  An institutional approach to social enterprise recognizes the financial as well as non-financial capital (human, social, environmental and physical) and imbues practitioners to productively employ and manage the assets available to them.

The problem of accounting – The wildly disparate results of the three surveys on the issue of profitability raises the question about financial management and accounting. There are also huge misnomers about the financial side of the social enterprise: profit versus program/organizational financing. REDF has done quite a bit on this subject with articles on true cost accounting and quantifying social costs. (NFF is also going quite a bit in this area). Still accounting for cost savings, increased capacity/efficiency, embedded social subsidies, hidden costs, as well as mixed up revenue flows between grants and revenue, misappropriation of expenses, failure to account for professional time paid by grants, properly track waste (material and time), and inaccurate unit costs calculations are just some of the accounting and financial management problems that plague social enterprises. No wonder the profit figures are all over the map for social enterprises. Anyway, why do we even want to make profit?  The point of social enterprise revenue is to cover social costs or in the case of the enterprise subsidize social programs, the more we earn the more social expenditures we can make—voila no profit yet bigger social impact.

 

The concept of sustainability is simplistic- The word sustainability in nonprofit vernacular often refers to “financial sustainability,” portrayed as a static nonprofit nirvana where practitioners no longer have to worry about money. If the social entrepreneurship field is truly about commuting practices, ethos and spirit from the private sector into the social sector, then we should apply the concept of sustainability as it exists in business. The private sector uses the term “going concern” which implies an active, dynamic, tap-dancing state as known as survival. Sustainability is the outcome of a holistic business model which must address organizational development and culture, financial viability, product innovation, agility and customer response, efficiency, etc. in order to achieve objectives and compete in the marketplace. For-profit business models are led by their mission and driven by their markets; they have the ability to leverage multiple resources, and plan for their exit. The same should be true for social enterprise business models.

 

Missing an opportunity to do more mission – This emphasis on funding means that opportunities are being missed to realize other benefits that social enterprise offers. Practitioners rarely embark on a social enterprise with a mind to vision or strategy. Few recognize social enterprise as a deliberate method to accomplish social mission, achieve social impact, create a stronger organizations and affect a more entrepreneurial culture. Dees states, “the only form of social entrepreneurship that is worth promoting broadly must be about establishing new and better ways to improve the world. Social entrepreneurs implement innovative programs, organizational structures, or resource strategies that increase their chances of achieving deep, broad, lasting, and cost-effective impact.”  Sadly though, innovative practitioners that have the wherewithal to implement social enterprise as a mission accomplishment and/or capacity building strategy have neither the forum nor support to educate their peers and stakeholders on their approaches.  Financial aspects of resource management are an integral part of the social enterprise paradigm, hence the issue is less of perpetuating a money myth than missing a mission opportunity.

 

In my opinion, the point of social enterprise being a sustainable program strategy is being missed.  Now to quote myself, “From a program perspective, social enterprise addresses one of the most pressing issues not-for-profit organizations face – how to achieve sustainable impact. In organizations where high compatibility between business and social mission exists, social enterprise is a natural programme fit. For example, programme activities of economic development organizations revolve around work and wealth creation, an obvious business-social interrelationship. The missions and objectives of social welfare organizations focused on employment development or welfare-to-work transitioning also mesh neatly with a social enterprise programme methodology. Agricultural organizations offer ample opportunities to marry sustainable crop cultivation programmes with social enterprises that process food and sell Fair Trade coffee and cocoa. In these cases, the social enterprises are central to the organization’s mission and function as a self-funding programme strategy, accomplishing mission goals while simultaneously increasing financial self-sufficiency.” (Alter 2006, Oxford University Press).

 

More importantly, no one is addressing using social enterprise as a strategy (business modalities) to leverage social impact—social maximization—in their organizations. To me this seems obvious since “capacity building” (organizational development) sprung from the business discipline. All this is to say that I have come to see the importance of making mission the cornerstone of social enterprise all the more urgent.

 

 

Quotes

I would like to pass on some quotes by a few people who I credit as thought leaders and architects of the field of social enterprise:

 

Rick Aubrey, Executive Director of Rubicon Programs and Schwab Foundation Social Entrepreneur of the year (2001), says of his organization’s social enterprises, “we are not in the business of baking cakes; we are in the business of transforming lives. We see business is the primary vehicle for achieving this change, but social enterprise is comprehensive and must be integrated into the whole [organizational] package. (Aubrey 2005)”

 

Melinda Tuan, Rockefeller Philanthropy Advisors Fellow and Former President of REDF stated, “At REDF we never intended social purpose enterprises to be anything but vehicles for nonprofit organizations to achieve their missions.” (Tuan 2006)

 

Lee Davis and Nicole Etchart (et al), Co-CEOs of NESsT, in their recent book Risky Business, which studies the impact of social enterprise on 45 civil society organizations state, “If the premise of social enterprise is to strengthen nonprofit organizations in order to advance social change, then it is imperative that the effect of these activities on the development and long-term sustainability of the organization be managed and measured. Such a framework will enable [nonprofits] not only to measure these impacts after they have occurred, but more importantly, to anticipate them ahead of time and design their enterprise activities accordingly in order to successfully merge the philosophies and practices of the mission and market.” Additionally, “the findings from this study also clearly pointed to the need to develop better tools for measuring performance that can allow CSO to more accurately assess—and, in turn respond to and improve upon—the various cost and benefits associated with [social enterprise].” (2003)

Beth Anderson, Lecturer and Managing Director, Duke University’s Fuqua School of Business Center for the Advancement of Social Entrepreneurship (CASE), claims, “now is the time for a research agenda that explores in depth both successes and failures and seeks to understand the practice of social enterprise not as a fundraising tool, or even as a path to ‘self-sufficiency’ or ‘sustainability,’ but rather as a strategic, organizational approach to maximizing social impact.” (2005)

 

Jed Emerson in Five Challenges of Social Purpose Enterprise Development[1] claims, “An organization’s ability to successfully manage a social purpose enterprise depends significantly on the strength of its board and staff, its ability to manage potential mission dissonance, the manner in which its enterprise activities are linked to its social programs and the effectiveness of its MIS/Operating systems.” (1999)

 

Yma Gordon, Program Officer, Economic Development Ms. Foundation for Women, says that, “social enterprise is a tool for achieving mission has come to the fore. It’s more than a revenue strategy. People are beginning to look at it as a tool of economic empowerment for the communities they serve. It’s not just another fund-raising tool—it’s a mission fulfillment tool.” (2005)

Greg Dees, Professor of Social Entrepreneurship at Duke University’s Fuqua School of Business, writes, “The only form of social entrepreneurship that is worth promoting broadly must be about establishing new and better ways to improve the world. Social entrepreneurs implement innovative programs, organizational structures, or resource strategies that increase their chances of achieving deep, broad, lasting, and cost-effective impact. (so good its worth a repeat!)

 

Attached please see an article published in SER April 2006

 

 

Attachments:

AlterPromo_v3.pdf (335 KB)

isele – Sep 22, 2006 7:01 pm (#19 Total: 34)
Senior Program Director – Great Bay Foundation

Lucid and erudite

Kim,

Your analysis of today’s Social Enterprise arena is dazzling. The scope and depth of your thoughts is impressive, as is the clarity with which you have articulated the complexities. I look forward to reading more of your work.

Many thanks,

Elizabeth

isele – Sep 22, 2006 7:08 pm (#20 Total: 34)
Senior Program Director – Great Bay Foundation

More on the leadership deficit

Hi Mark,

Pursuant to our earlier discussion re new leaders to be found among youth and seniors, I think you will be interested to read the Summer 2006 Stanford Social Innovation Review article, "The Leadership Deficit," by Thomas J. Tierney.

The focus of the SSIR article is a future leadership gap and it provides some useful background information : "To understand the magnitude of the leadership deficit and why it will intensify, we need to examine what shapes the supply of, and demand for, nonprofit leaders. The supply side of the story begins with the baby boom generation. Because of the boom, the pool of American men and women of prime executive age (34 to 54 years) swelled to 35 million between 1980 and 2000. But the first wave of this nearly 80 million-strong generation is now turning 60, and because the boomers did not have as many offspring as did their parents, the cohort that follows them has a lot fewer people. From 2000 to 2020, the number of people in the prime leadership age bracket of 34 to 54 will grow by only 3 million (author cites a study by the Committee for Economic Development, May 2005)."

SSIR continues, "Farsighted businesses have been preparing for this dramatic shift since the end of the 1990s, but nonprofits are only beginning to mount a response to this demographic threat. Their responses to date have not matched the scale of the problem."

Tierney, along with his colleagues at the Bridgespan Group, projects that "nonprofits will require 78,000 new senior managers in 2016 alone, up from 56,000 in 2006 and more than a fourfold increase since 1996. When the leadership needs of each of the coming 10 years are added together, the total comes to 640,000 new senior managers – a 140 percent increase in the current population of nonprofit executives." So, the question is, where will these executives come from?

The SSIR article argues that nonprofits need to explore new talent pools. "Up to now," states Tierney, "nonprofits have tended to draw their leadership from a relatively small circle of friends and acquaintances. Although personal networking is an essential element of any recruiting process, it will not produce all the leaders needed in the coming decade."

Tierney then suggests that "three significant pools of new leadership talent are already available": (1) the baby boom generation (a recent study by the MetLife Foundation and Civic Ventures found that baby boomers want to continue to work after retirement age; (2) many people at the midpoint of their professional lives (article calls these people "midlife career-changers"); and (3) young managers in training (according to the article: "In 1990 there were 17 graduate programs in nonprofit management in the U.S. Today, there are well over 90, and more than 240 programs offer courses. Source for these statistics is H. Joslyn, from the Chronicle of Philanthropy, Jan. 8, 2004).

Elizabeth

tutormentor – Sep 24, 2006 5:24 am (#21 Total: 34)
Cabrini Connections Tutor/Mentor Connection

Thinking of Social Enterprise in three diminsions, not two

Sutia,

You had many inspiring ideas in your message. One that made me chuckle in agreement was "The private sector uses the term “going concern” which implies an active, dynamic, tap-dancing state as known as survival."

I’ve led a donor-funded(non profit) organization in Chicago for 14 years and when donors ask for a report on accomplishments I always say my first accomplishment is that I’m still in business and able to continue the process of growing from good to great in the coming year. I rely on a wide range of volunteers to supplement an inconsistent flow of dollars.

When I read about the various social enterprise leaders and activities, I see innovative people finding ways to support their own vision for saving the world. The funds they raise from their enterprise support one or a few organizations that do the work they are interested in. The more successful they are, the greater their ability becomes to host forums like this, bringing others together to share ideas.

While this is good, what about the others in the world who do similar work, maybe in differnet places, and who have not found a way to create a revenue producing enterprise to sustain their vision? What would it take to expand the support generated by one entrepreneur for a single charity, to multiple charities doing the same work, or to multiple charities needed to solve the same problem?

Here’s my example. I maintain a database listing 200-300 organizations in the Chicago region that offer various forms of volunteer-based tutoring and/or mentoring. Each is constantly seeking dollars. Mentoring is a long term process, so each needs to find ways to keep kids and volunteers connected for many years.

Most are not running food pantries to pay the bills, and few parents have the funds to pay for services. Thus, most operate in a level of relative poverty, struggling to do good work, and still be in business at the end of each year (survival).

By providing my list of organizations via the Program Locator at http://www.tutormentorconnection.org, I make it possible for any business, college, law association, etc. who wants to make the world better by helping inner city kids connect with mentors, and move to jobs, to create a social enterprise that draws dollars, volunteers and other resources to all tutor/mentor programs throughout Chicago on a consistent basis, or to fund just one or a few programs in a single zip code, if the choose. (The Lend A Hand Program at the Chicago Bar Association is an early adopter of this strategy – http://www.lend-a-hand.net )

If a few people from every industry who have been successful in making profit, point their profit and their employees and customers, to tutor/mentor programs throughout the city, there will be a better distribution of resources to all programs doing this work, and more programs will have the ability to constantly get better at what they do.

Since tutoring/mentoring alone will not solve the problems facing kids in poverty, I suggest a "blueprint" be created that shows all of the services that are needed at any time in order for a youth to reach adulthood. All of these need to be funded, just as all sub contractors on a building blueprint need to be funded. If that does not happen, the program is not succeesful. By only funding a few of the needed services in a neighborhood, city or country, we only address part of a comlex problem, and may not really solve the problem at all. Thus funding, or social entreprise, needs to focus at multiple service providers, not just one or a few.

This is a three diminsional approach, where a) for profits choose a cause to support, and stick with it for decades; b) social entrepreners who have succceeded in creating a money flow point their resources at multiple organizations, not just their own non profit; and c) where non profits are able to attract and retain a higher quality of leadership who use the resources more effectively for social benefit, while also learn to collaborate with others, and market there efforts more successfuly to compete for resources for the entire community, not just their own agency.

The result would be that more places where tutoring/mentoring is needed would begin to have good programs that not only survive from year to year, but begin to accelerate the rate of youth finishing school with a network of adults helping them to the next level in their lives. While my example focuses on tutoring/mentoring, I feel it could apply to any other social endeavor.

In the past couple of years I’ve sent invitations to the Said Business School, and to others in the US, encouraging teams of graduate students to adopt this approach, creating an international competition of business school teams who compete with each other to see which can raise the most money, visibility and volunteers, for tutor/mentor programs in their community. If such a competition repeated from year to year, its visibility, and impact would grow and young people would learn lessions they could apply the rest of their lives. You can read this invitation in the discussion section of http://www.tutormentorconnection.org

If some of you reading this would like to take a role of making this idea a reality, I hope you’ll contact me.

isele – Sep 25, 2006 7:29 am (#22 Total: 34)
Senior Program Director – Great Bay Foundation

From a charity recipient’s perspective

The following comments illuminate an important – but often overlooked – aspect of Social Enterprise. The author wishes to remain anonymous:

"I have never believed that a mission of social justice/social good and nonprofit status automatically go hand in hand, since I’ve seen plenty of social justice and good coming from the for-profit sector, and plenty of waste and self-justifying blather coming from the nonprofit sector. It follows, then, that I obviously don’t believe that they always should go hand in hand.

I (gratefully) received charity care throughout my childhood, and it always came from big business (Parker Brothers), the profits of big business (the Lydia Pinkham charity clinics), or directly from wealthy individuals some of whose names, I still remember after 50 years. I vividly remember the first time a representative from a non-profit social welfare agency came to our house in the late 50s, before everyone jumped on the non-profit bandwagon and started treating poor people like pets. My mother sent her away with the very wise comment that she wanted her children to make their own ways in the world by emulating the successful individuals and businesses who had helped us. Which, in all sorts of creative ways, we did.

As an aside, universities and colleges talk of providing social justice but are dim on actual application of social justice. If the university endowment is … let us say … one billion dollars or more and not paying its fair share of taxes, then it is using the system against those who it purports to be helping."

Jeff.Mowatt – Sep 26, 2006 1:23 am (#23 Total: 34)
P-CED

I’m inclined to agree, but…

Agreed Isele, that the nonprofit/charity bandwagon doesn’t seem to making a lot of headway and public donations probably never will meet the level of funding required to address major inequity.

However, as you know, the world of big business is often an unpleasant battleground and my own efforts have a war on two fronts at the moment, at home and abroad. Here in the UK I’m trying to tackle one of our ministries with evidence that that a major corporation has misrepresented us managing to block communcations with a customer, a goverment department.

On the overseas front, it’s a little more serious, picking up on your word anonyomous. A persistent smear campaign has been launched by someone known to us who has gone as far as using what I’ve posted on Social Edge as evidence that our human rights efforts are motivated by profit. It’s now reached a point at which childcare nonprofits which we’ve supported are getting dragged into it too.

Truly, there are benign and benevolent businesses but there are also those who protect their vested interest at any cost, prepared to stoop to any level in pursuit of their objectives.

sikuluj – Sep 26, 2006 10:44 pm (#24 Total: 34)
SIMA Community Based Org

Partners

I am very happy with your suggestion and the work that you are doing. Elizabeth your work is very nicely for partnership with our community at grassroots. I am baed in Kenya doing some activities and we hope we can be in touch through sending us more information how we can collaborating with Sima Community Based Organization. Also i wish those who have contribute a very important information and we hope let us be remain on the line. I am also welcome you to send more information. 

geogias – Sep 27, 2006 5:48 am (#25 Total: 34)

Profit for a Purpose

Hi Elizabeth,

I think this is a very important topic for those working in the nonprofit sector. I am a deputy Director with a youth serving organization in Kenya. My organization was founded by a group of young people living in the slums of Nairobi.

Our greatest challenge has been how to continue providing services to the poor, while at the same time remaining sustainable. The problem with most of the donors is that they don’t encourage organizations to be sustainable such that even after they are long gone, the organizations they supported will continue providing the services they were funding these organizations to do. As a youth organization, we would like to sustain our programs beyond donor funding. We don’t want to fold just because we can not carry on with our activities, neither do we want to start up other activities because that is what the donors are funding. We are looking for donors to fund our sustainability initiative so that we continue doing what we have been doing in the slums. I believe that this forum will be able to provide me with the like-minded donors who are willing to fund youth social entrepreneurship program.

isele – Sep 27, 2006 7:20 am (#26 Total: 34)
Senior Program Director – Great Bay Foundation

Possible collaboration among funders

Hello Geogias,

You raise a valid point in that nonprofits should not have to launch new initiatives just “because that is what the donors are funding.” We call that “chasing the money.” Moreover, those same donors may decide to fund an entirely different set of criteria in the next year, and the program you launched to meet their earlier guidelines will be left high and dry. One solution is to establish collaboration among funders: for example, one funder might support the launch of a revenue-generating effort and then another funder could lend support as the initiative expanded. This is an opportunity that needs to be addressed.

To help address your specific situation, you may be interested to read some of the success strategies employed by our grantee Safe Passage (Camino Seguro) Their website is http://www.safepassage.org

Are you doing any work with Sikuluj in posting #24 above?

Elizabeth

tutormentor – Sep 27, 2006 5:03 pm (#27 Total: 34)
Cabrini Connections Tutor/Mentor Connection

Collaborations among service providers

I think that when charities doing similar work, but in different locations, begin to collaborate on strategies that build visibility for their type of work, and then draw donors to the sector, can lead to more sustained funding for everyone involved.  This is the goal of the Tutor/Mentor Connection and we use a web based database and links library to connect possible donors to ourselves and others that we link to.

This is not a strategy that works with just one organization doing outreach. It has to be a strategy with many organizations doing outreach and creating links and networks that connect who they know to who everyone else knows.

Mark Lewis – Sep 28, 2006 11:54 am (#28 Total: 34)
CEO/Executive Director; Strategic Business Intelligence Group

Responding to Sutia

Hi Sutia…interesting comments…and a lot to review but let me address a few points you made:

 

"Not so long ago, it was acceptable to operate at 100% deficit now we are talking about profit? How did the pendulum swing so far? Folks, may I remind you that the business that nonprofit organizations is in is the business of solving social problems and creating social value."

 

Sutia, I think we may be talking about apples and oranges here.  I think we all tend to use the label "non profit" to discuss any organization doing social benefit work because that’s the business model we all grew up with and cut our teeth on.  However in the current theater we’re not looking primarily at non profits as the default instruments of change.

 

First, I question the assumption that it was ever "acceptable to operate at a 100% deficit".  501c3 organizations have operated on this model of dependence for a long time, but what has been the result?  Nearly every non profit I’ve ever been around was constantly struggling for funds, often unable to meet obligations, using valuable time and talent chasing grant money and in many cases seeing their mission morph into whatever the funding agencies said it should be, resulting in an organizational model that shifts over time away from the very thing you’re wanting to sustain (mission integrity) towards a role where mission becomes subject to the philanthropic parent supporting the enterprise or the fiscal concerns of BOD’s to far removed from the realities of the work itself.  I think it’s clear that operating at a 100% deficit did not result in either organizational efficiency or autonomy.

 

Second, while operating at a deficit may have been necessary in the non profit model since we formerly lacked any other reasonable template, we are not talking only about non profit business models in the current environment.  As I noted earlier, social venture businesses have been linked to the non profit model in the past, but I do not believe the model is sustainable over time.  The rapidly expanding need, coupled with the retirement of the baby boomers and the subsequent expected effects of a shrinking labor pool, globalization and the economic transition wrought by technology that is happening in the middle class do not bode well for the available philanthropic resource pool over the next 30 years.  Coupled with increased competition for funds, it is doubtful that small innovative organizations can survive based on the model of 100% deficits and dependence upon external revenue that you are referring to.

 

These macro economic trends demands a shift in strategic thinking that offers social benefit businesses the opportunity to channel talent more efficiently towards mission rather than the pursuit of grant funding, holds the promise of empowerment and autonomy, and answers the question of how small organizations can compete in a world where branding rules the minds of those who often control the purse strings.

 

In my view, we absolutely SHOULD be talking about profit, but "profit", as you noted…is merely a tool.  Tools can be used for good or evil.  You are right to suggest that we use the words "resource management" instead of profit…since "profit" sometimes carries with it undesirable connotations to many in the social services arena.  In the end however, if social mission is present as the driving force, profit and resources amount to the same thing.  Personally I have no problem with the word.  I intend to make a profit…a large profit…but the direction of that resource is what is key here, not the terminology used.  We should be talking about profit because profit is the life blood of ANY social business model, including a 501c3.  That profit may be generated in corporations that fund philanthropic organizations or endowments that are managed by people 1000 miles from our operations, but it is still critical to the social venture’s ultimate survival.  If profits (resources) decrease, support decreases for philanthropy and the result is increased deterioration in the vitality of mission, decreased efficiency and the destruction of small organizations where innovation often lives.

 

"In the nearly 20 years that I have worked in the nonprofit field, I have come to believe that social impact is nonprofit practitioners’ motivation for doing their work, and obtaining money is motivating only in that money is the necessary means to finance their mission. Frankly, otherwise the passion is just not there, and if it where these people would work in the private sector." 

 

The problem with this view is that many people in the current social venture environment DO work in the private sector.  Having spent roughly the same amount of time in and around NPO’s as you, I agree completely if we are talking about the people who are rooted in that business model.  Passion for mission is definitely what drives them.  However, we are now seeing a different breed of people entering the field, and hence, we should not be discussing this only in terms of what matters to people familiar with NPOs.  Older workers moving out of the private sector, middle class managers who were downsized or got sick of corporate America, young people pursuing MBA’s but interested in more than driving a BMW and having a beach house on the side…these ARE the new social venture visionaries that are now coming online.  Younger business people did not grow up in the material ’80′s but their parents did and so they’ve had an opportunity to watch the result of their value systems, with the result that many openly say they believe in the things that we who grew up in the non profit arena also believe in…social justice, environmental responsibility, human rights, empowering people to change their lives…my point is that we are on the same team even if we speak a slightly different language.  We need a business model that allows these talented people to pursue both financial dignity and mission oriented passion at the same time.  NPO’s do not offer that but for profit social venture models do.

 

"The notion of profit can be grossly misleading, just ask all those shareholders of Enron stock."

 

I don’t understand the analogy you’re making.  There have always been unscrupulous business practices, graft and corruption in corporate America but the same holds true for the NPO world.  I’ve seen organizations that grossly mismanaged their funds, abused their mission objectives, served as little more than cash cows for executive managers and cocktail party resumes for board members.  But this has little to do with whether the business model itself is valid or vital.  Neither do the abuses of Enron or World Com have anything to do with whether profit is crucial to social mission.  As I noted earlier, profit is ALWAYS important, regardless of whether it’s generated from within the social venture itself or from the supporters of philanthropic funding organizations.  One way or another, we all do business in the capitalistic free enterprise system whether we wish to think so or not.  

 

"I think it is also telling that in three recent surveys conducted on social enterprise performance and benefits, (CWV 2003, Bridgespan 2004, and Pew Charitable Trust 2000) in all nonprofits purported a more entrepreneurial culture, increased social performance, stronger leadership, ability to attract more funding, and improved reputation, whereas profit figures ranged between 24% – 43%, and losses ranged from 13% – 74%. How is it possible to have so much disparity?"

 

It’s possible because business is subject to the forces of market competition and other factors that make one group competitive and another not.  I think what we’re seeing right now though in terms of how these studies define the organizations working in this space is a period where organizations are just beginning to get comfortable with a business model that generates internal revenue.  You have to remember that this field is very new and much of what is being done is pioneering work.  There will be wild swings in success and failure, spectacular advances and depressing flops on a large scale as social venture mission couples with for profit business.  On top of this we have all the normal stressors that bend the larger economy as well.  NPO’s or social venture for profit businesses that generate their own revenue have to play in the same arena everyone else does so they are also subject to the same problems.  In many ways those problems are tougher since we’re struggling to incorporate not one but two bottom lines.

 

"Furthermore, the average across the surveys show that 78% of social enterprises are central to the organization’s mission, and 19% are directly related and only 3% are unrelated." 

 

That makes sense since we’re talking about NPO’s, and since most NPO managers hold their experience mostly in the non profit arena.  Fewer possess broad based business background with the ability to launch an initial venture successfully outside their domain on a scale needed to fund larger operations.  However, this does little to prove that creating a business outside the related mission objectives is ill advised.  It only suggests that people usually need to stick with what they know to be successful; neither do these surveys address the issue of what the coming wave of MBA’s and other business oriented people with social vision and passion should do to support that passion and vision.  Personally, I think a few of the better questions are these;

 

1) What kind of business meets the needs of the mission I’m interested in financing?

2) How much time and expertise is available to divert from the mission towards funding it?

3) Can this business be sustained without direct executive level involvement?

4) What kind of business model offers the right mix of engagement vs. autonomy?

5) What are the market opportunities in terms of funding future growth of the mission?

6) Can revenue be created apart from time/labor intensive business strategies?

7) Can earned income be designed within a passive and residual cash flow stream?

8) Do we have the people, networks and business plan to be successful?

 

"Of late there is a strong bias toward funding approach; most nonprofits and stakeholders perceive social enterprise as a funding strategy, rather than as a program, organizational development or change strategy.  The majority of the literature and public forums speak to helping nonprofits start commercial ventures. This is likely more of a PR issue than a practice issue—nonprofits need funding, grants or otherwise, and the promise of earned-income is the allure that leads nonprofits down the garden path."

 

I must respectfully but strongly disagree with this.  How NPO managers perceive social venture business and earned income strategies is likely to result from their own bias as it is anything else.  I’ve had conversations with people here in Dallas in the NPO sector who frankly admit that the system is broken, but they are predisposed against an earned income strategy, often based on incorrect assumptions.  I’ve spoken to a great many others who are simply unaware the issue of earned income has even been stratified around a cohesive strategy called social entrepreneurship.  If earned income strategies are merely designed as "PR issues", I doubt that you’d see the proliferation of top shelf MBA programs in the field that we now find.  Again…NON PROFITS may "need funding, grants or otherwise", but we are not talking about a world now where the 501c3 model is the defacto standard any longer.  I doubt the MBA’s at the University of Toronto’s Rotman Nexus Project, a consortium of MBA students and professors advising Ontario’s NPO sector on earned income strategies feel that way either.

 

"The wildly disparate results of the three surveys on the issue of profitability raises the question about financial management and accounting. There are also huge misnomers about the financial side of the social enterprise: profit versus program/organizational financing…No wonder the profit figures are all over the map for social enterprises."

 

These things are JUST BUSINESS.  All business that are responsible for their own economic survival face these issues.  I don’t see it as surprising that these issues are prevalent in the social enterprise business model.  If anything, it’s obvious that we should expect MORE problems rather than fewer.  "Normal" businesses aren’t concerned about a social bottom line, and SE businesses are probably more often run by people without prior business experience.  It goes without saying we will see a lot of failures.  That doesn’t mean the concept is flawed.  It only means we’re in the midst of a transition where people are still trying to figure out how to do things, what they need in the way of expertise and strategic planning, talented people, etc…

 

"The concept of sustainability is simplistic- The word sustainability in nonprofit vernacular often refers to “financial sustainability,” portrayed as a static nonprofit nirvana where practitioners no longer have to worry about money. If the social entrepreneurship field is truly about commuting practices, ethos and spirit from the private sector into the social sector, then we should apply the concept of sustainability as it exists in business. The private sector uses the term “going concern” which implies an active, dynamic, tap-dancing state as known as survival. Sustainability is the outcome of a holistic business model which must address organizational development and culture, financial viability, product innovation, agility and customer response, efficiency, etc. in order to achieve objectives and compete in the marketplace. For-profit business models are led by their mission and driven by their markets; they have the ability to leverage multiple resources, and plan for their exit. The same should be true for social enterprise business models."

I agree with this completely.  Social venture business models MUST achieve the same level of BUSINESS viability that regular for profit business do.  In Dallas, where I’m at, this is especially critical in view of the fact that unlike San Francisco or Boston, we have virtually no footprint in the SE sector here.  SBIG was built to establish that footprint but we know we can do so only with maximum credibility in corporate sector that offers local NPOs a blueprint for more than survival.

I think "profitable" is the word most appropriate to describe that business model.

Missing an opportunity to do more mission – This emphasis on funding means that opportunities are being missed to realize other benefits that social enterprise offers. Practitioners rarely embark on a social enterprise with a mind to vision or strategy. Few recognize social enterprise as a deliberate method to accomplish social mission, achieve social impact, create a stronger organizations and affect a more entrepreneurial culture. Dees states, “the only form of social entrepreneurship that is worth promoting broadly must be about establishing new and better ways to improve the world. Social entrepreneurs implement innovative programs, organizational structures, or resource strategies that increase their chances of achieving deep, broad, lasting, and cost-effective impact.”  

 

I don’t know that I agree with the overall assessment of the social enterprise sector as entirely so uninformed or impotent.  The level of education and the ability to collaborate has been maximized by technology.  This forum is proof of that…people from around the world coming together to exchange views.  If we’re seeing an inadequate level of understanding, preparation or engagement among SE business practitioners, it may be because people are simply not aware of all the resources, tools and networks that are now coming online.  Again…consider how new this field truly is.  I’ve found numerous social entrepreneurs in Dallas who are using earned income venture to fund social mission, and have never even heard of social entrepreneurship.  Are they any the less social entrepreneurs because they’ve not yet caught on to the fact that the word "entrepreneur" connotes innovation and the ability to springboard change to profit?  I don’t think so.  We might call them "social entrepreneurs in training" but they are still part of the sector and I think it’s reasonable to expect these people will continue to grow and learn and become a more robust part of the movement as time goes on.  People driven by passion inevitably find their niche and learn what they need to know.  It may not happen as fast as we’d like it to, but that doesn’t mean it won’t happen.

 

Sadly though, innovative practitioners that have the wherewithal to implement social enterprise as a mission accomplishment and/or capacity building strategy have neither the forum nor support to educate their peers and stakeholders on their approaches.  Financial aspects of resource management are an integral part of the social enterprise paradigm, hence the issue is less of perpetuating a money myth than missing a mission opportunity.

 

Again, I respectfully but strongly disagree.  As the founder and ED of my own social venture organization that focuses on masterminding and networking around the idea of leveraging thought leadership in social entrepreneurship, not only have I created my own forum and support system to educate my stakeholders and peers about social enterprise as a business model, but I’ve done it here in Dallas, where to the best of my knowledge, there is almost nobody else doing this.  I’ve also done it on a budget that operates effectively on under $2000 a year.  SBIG used sheer networking elbow grease to create strategic partners of like mind here in Dallas and in only 18 months we’ve expanded into networks, partnerships and collaborative agreements that now encompass 6 states and Canada and run the gambit from university connections to solo practitioners who don’t know who Bill Strickland is and have never heard of Ashoka.  I’ve engaged business organizations ranging from Chambers of Commerce and networking organizations of CEOs to lone individuals wanting to make a difference with the vision we have.  In many cases we find there is not the recognition on the part of those we speak with to move forward, but progress has been made slowly but surely because we also find people who are intrigued with this way of making a difference.  We look for leaders and self starters with passion who are teachable and hungry to create change.

 

"More importantly, no one is addressing using social enterprise as a strategy (business modalities) to leverage social impact—social maximization—in their organizations. To me this seems obvious since “capacity building” (organizational development) sprung from the business discipline. All this is to say that I have come to see the importance of making mission the cornerstone of social enterprise all the more urgent."

 

Sutia…this is EXACTLY what we are doing.  On the face of my business card it reads: "Leveraging social entrepreneurship in the Southwest".  We use the principles embodied in doing well while doing good and the credibility of some of the best MBA programs in the world to open doors to corporate board rooms and CEO’s offices that we could never accomplish with a traditional NPO business model.

 

I appreciate your thoughts and the time and attention to detail with this subject.  This kind of engagement only serves to strengthen debate and initiate more positive dialogue capable of making this board’s participants more aware of what is out there and where it’s heading. 

 

Mark

 

Jeff.Mowatt – Sep 30, 2006 10:43 am (#29 Total: 34)
P-CED

For-Profit Charity?

On topic, I hope, perhaps yet another redefinition of what we’re talking about here:

The ambitious founders of Google, the popular search engine company, have set up a philanthropy, giving it seed money of about $1 billion and a mandate to tackle poverty, disease and global warming. But unlike most charities, this one will be for-profit, allowing it to fund start-up companies, form partnerships with venture capitalists and even lobby Congress. It will also pay taxes….

http://taxprof.typepad.com/taxprof_blog/2006/09/googles_forprof.html

A misleading spin perhaps, which may explain the hostile reader comment below.

Mark Lewis – Sep 30, 2006 5:08 pm (#30 Total: 34)
CEO/Executive Director; Strategic Business Intelligence Group

No such thing as a for profit "charity"?

Interesting find Jeff…Google getting in is exciting.  I could see them really doing something amazing.  Check out this quote from one of the responders:

"There is no such thing as a for-profit charity. If its profitable, its not a charity, its a business"

We obviously have a long way to go before SE shows up on the radar of the general public. 

Mark

Cgasca – Oct 2, 2006 11:51 am (#31 Total: 34)
Social Entreprenuer

The Flip Side

The field of philanthropy is very diverse. It can’t be said the SE is a solution for all community needs or if it undermines existing charity. This discussion is complex if we only view it from an organizational or field perespective. The opportunity of social enterprise is to meet needs that the for profit sector ignores or serves poorly and at high cost and where nonprofits lack the capital or skill set to make a significant impact. Meeting the needs of underserved markets or creating competitive products that challenge poor business practices is where SE innovation needs to happen.

In social enterprise corporate form is tool to organize resources to deliver products or services that improve a community’s well being. The metrics of success is the same as business how many satified consumers do you have?

Jeff.Mowatt – Oct 3, 2006 12:06 am (#32 Total: 34)
P-CED

A role including charity

Cgasca, agreed. To duplicate and possibly undermine what existing charities do well should be avoided, the same goes for other social enterprise. For example Google, rather than declaring an intention to fund the development of for-profit legal structures, should aquaint themselves with what’s already been established. We need to eliminate the corporate ego that’s apparent in such moves. Otherwise we may find the social enterprise corporation, squeezing out smaller, leaner operations in the same way that small business gets squeezed today.

Here in the UK we have rules binding charities, for instance should there be a revenue generating opportunity which could deliver to their social object, they cannot be seen to promote or lobby for it otherwise they risk being disqualified from being selected to deploy it. Yet, they are the experts best suited to advise on deployment having the skills to do the hands-on job, but they cannot participate in any business plan. The social purpose business has the ability to act independently, lobby and promote such that the charity can ultimately benefit, as the recipient of funds to do what they know best.

tutormentor – Oct 3, 2006 6:29 am (#33 Total: 34)
Cabrini Connections Tutor/Mentor Connection

Potential to do good

Jeff wrote that Google should "aquaint themselves with what’s already been established".

My vision is to make this statement a reality.  In 1993 I started building a database of organizations that offer various forms of volunteer-based tutoring/mentoring in the Chicago region. My goal was to identify existing programs already working to help kids, then create a marketing/advertising effort that would help each of these organizations get a more consistent flow of the resources each needs to grow to be great programs. I’ve plotted this information on maps, and created a searchable database that can be  used to learn what programs, if any, are in specific zip codes. With this information Google, or any other business or professional group, can search out existing programs to offer their support, or identifiy zip codes with no programs, and offer support to create new programs. You can see this information in the Program Locator at http://www.tutormentorconnection.org

With this information, any business person or SE who wants to help kids to careers, and believes that tutor/mentor programs are an important part of the process, can develop strategies to use his profit, leadership, corporate resources and personal charisma, on an on-going basis, to help existing programs grow, or new programs start where they are needed. 

While this makes sense to me, as you’ve all pointed out, it does not happen. I can’t tell you the number of times people have said "good idea" then gone on to say, but I want something with my identity on it.

Thus as we talk about profit with a purpose, or about SE in general, I feel we need to talk more about how we motivate those who do make profit to apply it in a way that it adds to the momentum of work already being done, or fills voids in services, or service delivery, where there is a need.

Google and others could have a huge impact as intermediaries, as well as by being direct supporters, of many causes that need the spotlight shined on them every day, and for many years.

isele – Oct 3, 2006 11:16 am (#34 Total: 34)
Senior Program Director – Great Bay Foundation

Many thanks to all of you!

for your insightful, dynamic – even sometimes volatile – opinions. We wanted to provoke interesting, in-depth dialgoue from a variety of theoreticians and practitioners, and we have succeeded beyond our expectations.

There’s much work to be done and opportunities to be realized in the Social Enterprise arena. If we continue to work together, we will find many ways to create and sustain social change.

And thanks to Social Edge for hosting this exciting "virtual network."