Considering a Social Enterprise? Why Not?

Larry Tucker

For decades now, Goodwill and the Girl Scouts have been using entrepreneurial ventures to create earned income, which is then used to fund the advancement of their mission. Hundreds of nonprofits throughout the world have followed this path to becoming more sustainable and less reliant on outside sources of funds.  

Most (maybe all!) nonprofits have assets, skills, knowledge or talents that can generate earned revenue. Some local nonprofits have created social enterprises: A child day care facility earns income by charging for evening and weekend care. A number of nonprofits use their facilities as event rental space. One organization who works with seniors uses their skills to teach classes for caregivers.  

Nonprofits can operate for profit businesses as long as those ventures are directly related to the pursuit of their social mission. Laws and tax codes vary by state and situation, so legal counsel should always be consulted before serious consideration begins.  

I’d suggest starting like this:   

  • Learn about social enterprises. There are mobilephonescoop many examples among local nonprofits. Go to the website of The Academies of Social Entrepreneurship for many facts and examples.   
  • Socialize the concept with your board and others in your organization. See how they react and if they have any objections or concerns.   
  • Attend training at the Social Enterprise Academies, a program of The Academies of Social Entrepreneurship to learn all the facets of starting a business.   
  • Brainstorm with your board and local business people about what marketable assets, skills, knowledge or talents exist in your organization.   
  • Establish at least one contact who can counsel you on legal and tax implications.   

Nonprofits will need to continue to look for creative ways to be sustainable. Starting a social enterprise may be a good alternative for your organization.

Author: Larry Tucker, Executive Coaches of Orange County, www.ECofOC.org