REDF PowerPoint Template: Basic Text and Tables

1
Social Enterprise 101 Presenter Cynthia Gair,
Director, Portfolio and Field Advancement,
REDF Preparer Jill Zeldin, Farber Intern, REDF
2
Welcome Introductions

• What is REDF?
• Created in 1997 as The Roberts Enterprise
  Development Fund
• A high engagement grantmaker that provides
  guidance, leadership and investment to a
  portfolio of nonprofit social enterprises,
  changing the lives of people who face poverty,
  homelessness, mental illness and other barriers
  to employment.
• Our work accomplishes three things
• We help people move out of poverty
• We increase the organizational ability of
  nonprofit social enterprises to provide
  sustainable, long-term solutions to chronic
  poverty and homelessness and
• We introduce new ideas and innovative methods
  that enrich the
  nonprofit community as a whole.
• In all areas of our work, we are deeply committed
  to measuring the results of our efforts

3
Welcome Introductions

• Our experience with social enterprise
• We have funded and provided assistance to 35
  enterprises that represent the following
  industries
• Professional landscaping
• Production and assembly
• Clerical and office services
• Catering, cafés and restaurants
• Janitorial / Cleaning services
• Bicycle shop
• Apparel screen printing and embroidery
• Ballpark concessions
• Bakery
• Our enterprises have employed
  
  over 3,000
  individuals since 1998
• 75 still employed 2 years after hire

4
Social Enterprise 101 Agenda
This Sessions Plan

• Welcome and Introductions
• What is social enterprise?
• Why are nonprofits considering social enterprise?
• Developing earned income/social enterprise
  strategies to fit your organization
• Applying the lessons REDF has learned
• Social enterprise planning process

5
Social Enterprise 101 Agenda

• Welcome and Introductions
• What is social enterprise?
• Why are nonprofits considering social enterprise?
• Developing earned income/social enterprise
  strategies to fit your organization
• Applying the lessons REDF has learned
• Social enterprise planning process

6
What is Social Enterprise? Evolution of Social
Enterprise
Roots of Social Enterprise Nonprofits employ
income generation to support mission activities
Recent history Nonprofits adopt business-like
approaches to achieve their missions and
sustainability

• Declining support from traditional,
  philanthropic, and government sources
• Increasing competition for available funds
• Disappointment with the ability of large-scale
  government programs to solve social problems

1970s

• Community Development Corporations (CDCs) gained
  popularity in the US
• Fee-income provided 46 of total nonprofit revenue

• Convergence of schools of thought Mixing new and
  proven models and market-driven and social forces
• Momentum around social enterprise and social
  entrepreneurship but still confusion over their
  meaning

Now
1960s
US nonprofits began using enterprises to create
jobs for disadvantaged populations

• Social enterprise / entrepreneurship catch on
  internationally and sector boundaries continue to
  be blurred
• Popularity of cause-related marketing
  partnerships grows

1990s
Girl Guide Cookies first baked and sold
1920s
1980s

• The two main schools of practice of social
  entrepreneurship formed
• Social Innovation School by Bill Drayton who
  founded Ashoka
• Social Enterprise School by Ed Skloot who
  assisted nonprofits in finding new streams of
  revenue

Late 1800s
Shift from idea of charity as giving alms to
means for creating lasting change
In the UK, cooperatives funded socioeconomic
agendas
Mid 1800s
Source Virtue Ventures, Social Enterprise
Typology, Kim Alter, National Center for
Charitable employment, The State of Nonprofit
America, Lester Salamon, 2002, Professor J. Greg
Dees Center for Community Futures, 1999.
7
What is Social Enterprise? The question

• What is social enterprise?

8
What is Social Enterprise? The answer

• And the answer is

9
What is Social Enterprise? The answer

• No single definition of social enterprise is
  uniformly accepted!

10
What is Social Enterprise? Social enterprise
adoption

• As of 2001, nonprofits generated 48 billion in
  commercial revenue
• 47 of nonprofit organizations surveyed in a 2000
  study1 operated an earned income venture, of
  which 5 had since discontinued their ventures
• 53 of nonprofits had never operated an
  earned-income venture
• Still, a significant minority of nonprofits are
  engaged in more developed social enterprise
  management

Source Cynthia W. Massarsky and Samantha L.
Beinhacker, Yale School of Management - The
Goldman Sachs Foundation, Partnership on
Nonprofit Ventures, 2000 Lester Salamon, The
State of Nonprofit America, 2002 1) 512 nonprofit
organizations completed the survey
11
What is Social Enterprise? Evolving definitions
Original definitions
Recent definitions

• A revenue generating venture founded to create
  economic opportunities for very low income
  individuals, while simultaneously operating with
  reference to the financial bottom-line.
• Jed Emerson and Fay Twersky, 1996
• Any earned-income business or strategy undertaken
  by a nonprofit to generate revenue in support of
  its charitable mission.
• Social Enterprise Alliance, before March 2006

• Double bottom-line businesses, social purpose
  enterprises, nonprofit business ventures and
  mission-based for-profit businesses. Social
  Enterprises typically pursue blended value
  returns that may embrace the subjugation of a
  certain amount of financial return or take on
  added risk in pursuit of social and/or
  environmental value creation.
• Jed Emerson, The Blended Value Map, 2004
• An organization or venture that advances its
  social mission through entrepreneurial, earned
  income strategies.
• Social Enterprise Alliance, as of March 2006

12
What is Social Enterprise? Non-U.S. Definitions
Social enterprise definitions not only differ by
time period, but they also vary by region of the
world.

• businesses with primarily social objectives
  whose surpluses are principally reinvested for
  that purpose in the business or in the community,
  rather than being driven by the need to maximise
  profit for shareholders and owners.
• British Government

• The promotion and building of enterprises or
  organizations that create wealth with the
  intention of benefiting not just one person or
  family, but a defined constituency, sector or
  community, usually involving the public at large
  or the marginalized sectors of society.
• Asian Institute of Management (AIM), Philippines

• Business ventures operated by non-profits,
  whether they are societies, charities, or
  co-operatives.
• Enterprising Nonprofit, Canada

• Organisations with an explicit aim to benefit
  the community, initiated by a group of citizens
  and in which the material interest of capital
  investors is subject to limits. They place a high
  value on their independence and on economic
  risk-taking related to ongoing socio-economic
  activity.
• European Research Network

• A social enterprise is simply a market-based
  venture for a social purpose.
• Social Enterprise Partnerships, Australia

13
What is Social Enterprise? Other Definitions

• Any organization, in any sector, that uses
  earned income strategies to pursue a double
  bottom line or a triple bottom line, either alone
  (as a social sector business) or as part of a
  mixed revenue stream that includes charitable
  contributions and public sector subsidies.
• The Institute for Social Entrepreneurs

• The myriad of entrepreneurial or
  'self-financing' methods used by nonprofit
  organizations to generate some of their own
  income in support of their mission."
• Nonprofit Enterprise and Self-sustainability Team
  (NESsT)

• Social enterprise encompasses nonprofit and
  public enterprise management but also business
  leadership in the social sector through direct
  involvement and corporate social responsibility
  cross-sector collaboration and the
  interdependence of the business, government, and
  social sectors for-profit social purpose
  companies socially focused private equity high
  engagement philanthropy and social
  entrepreneurship.
• Harvard Business School, Social Enterprise
  Initiative

14
What is Social Enterprise? Common aspects of
definitions
Key points of agreement among Social Enterprise
definitions
Social Enterprise

15
What is Social Enterprise? Distinguishing
elements
Key points of difference among Social Enterprise
definitions
Tax Status
Not-for-profit
For-profit
Objective
Profit-motive
Mission-motive
To supplement profit-generating activities and to
achieve social returns
As a funding approach
As a programmatic tool
Purpose
E.g., Provide economic opportunities
E.g., Fund social programs
E.g., Diversify revenue streams
Profit distributed to shareholders
Profit cannot be directly
distributed to individuals. Instead, profits are
reinvested in nonprofit
Profit not a primary goal
Distribution of Profits
Notes 1) This slide represents the U.S. social
enterprise landscape, including U.S. tax status
and legalities of return and profit distribution.
16
What is Social Enterprise? Causes of confusion
Numerous approaches to combining social mission
and revenue generation are not exactly synonymous
with social enterprise.
Profit-motive
Mission-motive
Entrepreneurial Nonprofit
Nonprofit with Income Generating Activities
Nonprofit Venture
Terms related to but not synonymous with social
enterprise
Nonprofit Enterprise
Socially Responsible Business
Corporate Social Responsibility (CSR)
Community Interest Company
Social Venture
Social Entrepreneurship
17
What is Social Enterprise? Social enterprise
definition for todays session
In order to keep our discussion focused today, we
will hone in on one particular definition of
social enterprise.
Profit-motive
Mission-motive
Entrepreneurial Nonprofit
Nonprofit with Income Generating Activities
Nonprofit Venture
The social enterprise definition we will use
today Businesses owned and operated by
nonprofit organizations
Terms related to but not synonymous with social
enterprise
Nonprofit Enterprise
Socially Responsible Business
Corporate Social Responsibility (CSR)
Community Interest Company
Social Venture
Social Entrepreneurship
18
What is Social Enterprise? Earned-Income vs.
Social Enterprise
What distinguishes a social enterprise from other
earned-income activities?
Revenue generated through some commercial endeavor
Earned-Income Activities

• Has a long-term vision and is managed for the
  indefinite future
• Growth and revenue targets are set in a business
  or operational plan
• Separate and distinct staff manage and oversee
  the activity

Social Enterprise
Source Virtue Ventures, Social Enterprise
Typology, Kim Alter
19
What is Social Enterprise? Types of social
enterprise activities
As if the definition for social enterprise alone
isnt confusing enough, fee-for-service and
income generating activities can be either social
enterprise or solely earned-income!
Earned-Income Activities
Private sector partnerships
Fee-for-Service activity
Employment development enterprise
Social Enterprise
Source Virtue Ventures, Social Enterprise
Typology, Kim Alter
20
What is Social Enterprise?
Summary of What is Social Enterprise?

• Nonprofits have long used income generation to
  support their mission activities
• More recently, nonprofits have adopted business
  approaches to achieve their missions and achieve
  sustainability through social enterprise
• No single definition of social enterprise exists
• Social enterprise is considered an earned-income
  activity that is planned as a business, with
  distinct resources and a long-term vision

21
Social Enterprise 101 Agenda

• Welcome and Introductions
• What is social enterprise?
• Why are nonprofits considering social enterprise?
• Developing earned income/social enterprise
  strategies to fit your organization
• Applying the lessons REDF has learned
• Social enterprise planning process

22
Why do nonprofits consider social enterprise?
Summary
Why do nonprofits consider social enterprise?
23
Why do nonprofits consider social enterprise?
Summary
Why do nonprofits consider social enterprise?

• To increase the reach of the mission
• To create jobs and training opportunities
• To disseminate information
• To educate the community
• To meet needs that the market does not meet on
  its own

• To create funding opportunities
• To generate revenue/profit
• To diversify revenue streams
• To create new donor interest (e.g.,
  entrepreneurial community)

What risks might an organization operating a
mission-motive social enterprise face?
What risks might an organization operating a
profit-motive social enterprise face?
24
Social Enterprise Success Stories In Their Own
Words

Why do nonprofits consider social enterprise?
Program expansion success stories
They made me more confident about myself.
Helped me to keep a job. - CVE Employee

• I have knowledge of a new field and increased
  earning potential for when I get another job.
  The work environment is very supportive.
• - GGCI Employee

• This was my first job and it lead me to where I
  am now. I have the confidence and motivation to
  go somewhere where I can move up.
• - Juma Employee

• This is the first job I ever had, it keeps me
  out of trouble. Rubicon gave me a chance when no
  one else would.
• - Rubicon Employee

25
Why do nonprofits consider social enterprise?
Myths
Top Ten Myths about Social Enterprise


Myth 1 Starting a social enterprise requires
minimal investment.
Myth 2 Theres nothing better than free retail
space!
Myth 3 Our staff already has all the skills
needed to run a social enterprise.
Myth 4 People will buy from us because we have
such a great cause.
Myth 5 If its not working, well know.
26
Why do nonprofits consider social enterprise?
Myths
Top Ten Myths about Social Enterprise


Myth 6 We can scale this puppy, no problem!
Myth 7 This will solve our financial crisis and
well never have to fundraise again.
Myth 8 Nonprofits cant make a profit.
Myth 9 Our program staff and enterprise staff
will get along just fine.
Myth 10 Our board chair is totally behind us,
that should be enough!
27
Why do nonprofits consider social enterprise?
Summary of Why do nonprofits consider social
enterprise?

• There are two main reasons an organization might
  pursue nonprofit enterprise
• To further its social mission
• To create funding opportunities
• Social enterprises can create successful
  outcomes, significantly improving the lives of
  those affected
• Be aware of the myths of creating a social
  enterprise. Social enterprises require
  significant planning and resources

28
Social Enterprise 101 Agenda

• Welcome and Introductions
• What is social enterprise?
• Why are nonprofits considering social enterprise?
• Developing earned income/social enterprise
  strategies to fit your organization
• Applying the lessons REDF has learned
• Social enterprise planning process

29
Developing earned income/social enterprise
strategies to fit your organization
Assess the organization
Define goals
Social Enterprise Strategy

• Is your primary goal mission or profit?

• Which current assets and capabilities can you
  leverage?

The answers to these key questions will drive
your organizations social enterprise strategy
30
Developing earned income/social enterprise
strategies to fit your organization
Why is your nonprofit considering social
enterprise?
Is your primary goal to expand the mission?
Is your primary goal to generate income?

• To increase the reach of the mission?
• To meet needs that the market does not meet on
  its own?

• To generate revenue/profit?
• To diversify revenue streams?
• To create new donor interest (e.g.,
  entrepreneurial community)?

31
Developing earned income/social enterprise
strategies to fit your organization
Assess the Organization Current assets and
capabilities

• Organization
• Core mission
• History and leadership
• Effectiveness of agency
• Current assets
• Clients? Services? Employees? Intellectual
  capital? Physical assets?
• Outstanding liabilities?
• Capabilities
• Do you already manage earned-income activities?
• Do leaders possess business experience?
• What "value" or competitive advantage could you
  bring to the market place?

Is your organizational culture entrepreneurial
and ready for change?
Do you possess resources that would be relevant
to a business venture?
Does the organization possess experience that
would transfer to managing a business?
32
Developing earned income/social enterprise
strategies to fit your organization
Assess the organization
Define goals
Social Enterprise Strategy

• Is your primary goal mission or profit?

• Which current assets and capabilities can you
  leverage?

• Should you engage in social enterprise or other
  earned income activities?
• How integrated should your social enterprise be?
• Which industries may work?
• Should you expand on your existing operations or
  start something completely new?

The answers to these key questions will drive
your organizations social enterprise strategy
33
Developing earned income/social enterprise
strategies Earned Income vs. Social Enterprise
Should your organization undertake social
enterprise or should it consider other earned
income activities instead?
Are your organization and its key stakeholders
risk averse?
N
Y
Does your organization have the organizational
capacity to start and run an enterprise?
Y
N
Will a separate business provide the best
opportunity to meet your goal? (mission or
profit)
Y
N
Earned-Income Activities
Social Enterprise
34
Developing earned income/social enterprise
strategies Connection to Mission
The goals of your social enterprise can dictate
how integrated the enterprise should be with your
mission and social programs.
Mission-Related Social Enterprise
Mission-Centric Social Enterprise
Mission-Unrelated Social Enterprise
Source Virtue Ventures, Social Enterprise
Typology, Kim Alter
35
Developing earned income/social enterprise
strategies Enterprise Integration
Social Enterprise Integration Options
Mission-Centric Social Enterprise
Mission-Related Social Enterprise
Mission-Unrelated Social Enterprise

• The primary purpose of the enterprise is to
  advance the social mission
• Social programs and business activities have a
  significant effect on each other

• Provides funding for the nonprofit's operations
  and social mission activities
• Can expand the reach of the nonprofits mission
  to achieve greater social impact

• Not related to or intended to advance the social
  mission
• Profit/funding potential is the primary purpose
  of the enterprise

Source Virtue Ventures, Social Enterprise
Typology, Kim Alter
36
Developing earned income/social enterprise
strategies Mission-Related Option
Mission-Centric Social Enterprise
Mission
Organization
Social Enterprise

• Lead the world in creative, effective
  applications of technology for unmet social needs

• A subscription service providing an online
  library of digital books for blind and low vision
  adults
• About 95 of Bookshare.org members are legally
  blind or dyslexic

• World leader in reading machines for the blind
• Affordable tools to individuals with reading
  disabilities
• Benetech was founded in 2000

Source Virtue Ventures, Social Enterprise
Typology, Kim Alter benetech.org
37
Developing earned income/social enterprise
strategies Mission-Related Option
Mission-Related Social Enterprise
Mission
Organization
Social Enterprise

• To create opportunities for groundbreaking new
  art works

• The Whitney Museum operates both an in house and
  online museum store, including such items as
  jewelry, books, CDs, t-shirts and posters
• Proceeds from merchandise sold through the
  Whitney Museum of American Art benefit the Museum
  and its programs

• A New York museum that features a large permanent
  collection and fine changing exhibitions of
  contemporary and modern American Art
• Supports American artists at every stage of their
  careers
• Founded in 1931

Source Virtue Ventures, Social Enterprise
Typology, Kim Alter whitney.org
38
Developing earned income/social enterprise
strategies Mission-Unrelated Option
Mission-Unrelated Social Enterprise
Mission
Organization
Social Enterprise

• To lift the spirits and enhance the quality of
  life of children living with cancer and to do
  whatever we can to make their lives (and their
  smiles) a little brighter!

• HoneyBaked Ham chose Childhood Leukemia
  Foundation to be their national charity partner
• HoneyBaked Ham and CLF introduced the Hope Tote,
  a soft-sided cooler
• For every 15 tote the stores sold, 5 was
  donated to the Childhood Leukemia Foundation

• Make kids feel better about their appearance,
  provide fun camp experiences, help kids keep in
  touch with loved ones, provide gifts for hospital
  stays, and help families get much needed
  financial support.
• Programs are need-driven and free of charge
• CLF was founded in 1992

Source Virtue Ventures, Social Enterprise
Typology, Kim Alter clf4kids.org
www.nonprofitlicensing.com www.causemarketingforu
m.com
39
Developing earned income/social enterprise
strategies Discussion of Options

• Mission-Centric For the first example regarding
  Benetech, the organization that provides
  affordable technology tools to serve unmet social
  needs
• If the organization had been solely focused on
  profit, what service might Benetech have
  commercialized instead?
• What other enterprise might you have suggested to
  reach the mission of Benetech?
• Mission-Related For the second example, the
  Whitney Museum
• How might the museum have created a social
  enterprise that more closely related to the
  mission? That generated more profit?
• Mission-Unrelated For the third example, Save
  the Children which licensed artwork for the
  primary purpose of fundraising
• What risks does Save the Children face in
  licensing artwork?
• Which category might a charitable organizations
  thrift store fall into?
• To think about Based on your organizations
  goals for social enterprise, which social
  enterprise integration option makes the most
  sense for you?

40
Developing earned income/social enterprise
strategies Which Industry?
Which types of industries might work well with
which missions?
Types of Nonprofit Organizations
Types of Industries
Advocacy Alternative Trade and Development Arts,
Culture and Humanities Blindness and Vision
Impairment Children and Youth Community /
Economic Development Counseling Disaster
Relief Education and Research Elderly Employment
Training Environmental and Animals Health
Services
Homelessness Housing Human Services Hunger and
Poverty International Management and Technical
Assistance Mental Health Services Other Social
Services Philanthropy / Grant making Rehabilitat
ive Services Religious Sports/Recreation Substan
ce Abuse Women
Agriculture/Farming  Clerical Services Clerical
Services  Construction  Consulting and
Training Education and Training  Employee
Assistance Program  Heavy Manufacturing  Home
Healthcare  Housing Rehabilitation  Information
Technology  Janitorial/Cleaning Services   
Landscaping/Grounds Maintenance  Light
Manufacturing Packaging/Distribution Print/Copy
Services  Property Management Publishing  Recyclin
g  Restaurant/Café/ Catering  Retail  Sales /
Product Vendor Staffing Service  Strategic
Alliances  Theater / Musical Thrift
Store  Wholesale 
Source Community Wealth Ventures, Social
Enterprise Alliance Directory of Social
Enterprises
41
Developing earned income/social enterprise
strategies Which Industry?
Which industries might leverage the assets of a
Health Services agency?
Types of Nonprofit Organizations
Types of Industries
Advocacy Alternative Trade and Development Arts,
Culture and Humanities Blindness and Vision
Impairment Children and Youth Community /
Economic Development Counseling Disaster
Relief Education and Research Elderly Employment
Training Environmental and Animals Health
Services
Homelessness Housing Human Services Hunger and
Poverty International Management and Technical
Assistance Mental Health Services Other Social
Services Philanthropy / Grant making Rehabilitat
ive Services Religious Sports/Recreation Substan
ce Abuse Women
Agriculture/Farming  Clerical Services Clerical
Services  Construction  Consulting and
Training Education and Training  Employee
Assistance Program  Heavy Manufacturing  Home
Healthcare  Housing Rehabilitation  Information
Technology  Janitorial/Cleaning Services   
Landscaping/Grounds Maintenance  Light
Manufacturing Packaging/Distribution Print/Copy
Services  Property Management Publishing  Recyclin
g  Restaurant/Café/ Catering  Retail  Sales /
Product Vendor Staffing Service  Strategic
Alliances  Theater / Musical Thrift
Store  Wholesale 
Source Community Wealth Ventures, Social
Enterprise Alliance Directory of Social
Enterprises
42
Developing earned income/social enterprise
strategies Which Industry?
Which industries might leverage the assets of a
Community Development agency?
Types of Nonprofit Organizations
Types of Industries
Advocacy Alternative Trade and Development Arts,
Culture and Humanities Blindness and Vision
Impairment Children and Youth Community /
Economic Development Counseling Disaster
Relief Education and Research Elderly Employment
Training Environmental and Animals Health
Services
Homelessness Housing Human Services Hunger and
Poverty International Management and Technical
Assistance Mental Health Services Other Social
Services Philanthropy / Grant making Rehabilitat
ive Services Religious Sports/Recreation Substan
ce Abuse Women
Agriculture/Farming  Clerical Services Clerical
Services  Construction  Consulting and
Training Education and Training  Employee
Assistance Program  Heavy Manufacturing  Home
Healthcare  Housing Rehabilitation  Information
Technology  Janitorial/Cleaning Services   
Landscaping/Grounds Maintenance  Light
Manufacturing Packaging/Distribution Print/Copy
Services  Property Management Publishing  Recyclin
g  Restaurant/Café/ Catering  Retail  Sales /
Product Vendor Staffing Service  Strategic
Alliances  Theater / Musical Thrift
Store  Wholesale 
Source Community Wealth Ventures, Social
Enterprise Alliance Directory of Social
Enterprises
43
Developing earned income/social enterprise
strategies Expand or Start New?
Two options exist for nonprofits starting social
enterprises or earned income ventures
Expand what you already do
Start something new

• Create a new commercial product or service for
  existing customer base
• E.g., Direct beneficiaries (who can afford to)
  pay for new product or service
• Do something totally new a new product or
  service for a new customer base!
• Buy a business
• Start a new business

• Commercialize something your organization already
  does
• E.g., Create a fee for service model with your
  existing programs
• Develop a new aspect of something your
  organization already does
• Leverage existing assets
• Cause related marketing
• Existing service to new population

Source Kellogg School of Management
44
Developing earned income/social enterprise
strategies to fit your organization
Summary of Developing earned income/social
enterprise strategies to fit your organization
Assess the organization
Define goals
Social Enterprise Strategy

• Mission or profit?

• Current assets and capabilities?

• Should you engage in social enterprise or other
  earned income activities?
• How integrated should your social enterprise be?
• Which industries may work?
• Should you expand on your existing operations or
  start something completely new?

45
Social Enterprise 101 Agenda

• Welcome and Introductions
• What is social enterprise?
• Why are nonprofits considering social enterprise?
• Developing earned income/social enterprise
  strategies to fit your organization
• Applying the lessons REDF has learned
• Social enterprise planning process

46
Applying the lessons REDF has learned Critical
Success Factors
REDFs Lessons Learned Critical Social
Enterprise Success Factors

• Strong entrepreneurial team
• Supportive and engaged board of directors
• Fit with overall goals and needs
• Comprehensive planning progress
• Compelling and genuine market opportunity
• Unique competitive edge
• Financial controls and tools for planning
• Long-term and adequate financing
• Commitment to sound business practice
• Metrics to assess economic and social impact

47
Applying the lessons REDF has learned Unique
Challenges (and Rewards!)
REDFs Lessons Learned Unique Challenges (and
Opportunities!) in Social Enterprise

• Need to balance dual (social and financial)
  missions
• Organizational structure complicates
  decision-making/authority
• Enterprise management staff need to possess a
  broader set of skills
• Importance and scope of training
• Additional social costs
• Different funding sources
• Social mission outcomes tracking and reporting

48
Applying the lessons REDF has learned Case Study
1
Organization YouthOrg
Mission To assist youth in developing their
skills and transitioning to college. Description
of organization A small, 30-year-old
youth-focused organization with a well-running
set of programs, including college and career
prep, and a track record of results. Current
situation Agency is seeking ways to expand the
mission. Agency has solid funding. Key
stakeholder viewpoints A board member runs
several electronics plants and believes the
agency should take advantage of some light
assembly work that could be directed toward the
social enterprise. The founder, also a board
member, is skeptical of this idea. You E.D. for
over 8 years. You feel ready to take on something
new. ? What is the appropriate social
enterprise strategy for the agency? ? What
process do you employ to ensure the right
decision is made?
Social Enterprise Strategy

• Should you engage in social enterprise or other
  earned income activities?
• How integrated should your social enterprise be?
• Which industries may work?
• Should you expand on your existing operations or
  start something completely new?

49
Applying the lessons REDF has learned Case Study
2
Organization SeniorOrg
Mission To provide programs for seniors,
including meals, housing and activity center
Description of organization Established in mid
60s. Program quality has improved with
time. Current situation Your largest donor has
just informed you that he/she will be cutting
back funding over the next two years. Key
stakeholder viewpoints A prominent board member
and successful business person recommends social
enterprise to make up for lost revenue. You ED
with MSW. You took the organization from 1M to
15M budget in 15 years. ? What is the
appropriate social enterprise strategy for the
agency? ? What process do you employ to ensure
the right decision is made?
Social Enterprise Strategy

• Should you engage in social enterprise or other
  earned income activities?
• How integrated should your social enterprise be?
• Which industries may work?
• Should you expand on your existing operations or
  start something completely new?

50
Applying the lessons REDF has learned How to
think about social enterprise for YOUR nonprofit
Organization _________________
Mission _________________________________________
_______________________________ Description of
YOUR organization _______________________________
___________________ Current situation
__________________________________________________
_______________ __________________________________
______________________________________________Key
stakeholder viewpoints __________________________
_____________________________ You
__________________________________________________
________________________ ? What is the
appropriate social enterprise strategy for the
agency? ? What process do you employ to ensure
the right decision is made?
Social Enterprise Strategy

• Should you engage in social enterprise or other
  earned income activities?
• How integrated should your social enterprise be?
• Which industries may work?
• Should you expand on your existing operations or
  start something completely new?

51
Social Enterprise 101 Agenda

• Welcome and Introductions
• What is social enterprise?
• Why are nonprofits considering social enterprise?
• Developing earned income/social enterprise
  strategies to fit your organization
• Applying the lessons REDF has learned
• Social enterprise planning process

52
Social enterprise planning process
Execution
Business plan
Feasibility study
Pre-feasibility study
Develop venture criteria
Assess organization
Define goals

• Why is your agency considering social enterprise?

• Is your agency ready for social enterprise?

• How will you screen different social enterprise
  options?

• Is your social enterprise feasible from a
  business standpoint?

• In depth analysis on social enterprise viability

• Thorough business planning for developing your
  social enterprise

• Make it happen

Discussed today

• 1 month

• 1 month

• 1 2 months

• 2 4 months

• 2 4 months

• 3 6 months

• 3 12 months

Source Center for Community Futures, 1999.
53
Social enterprise planning process Plan your
next steps
So what are your next steps?

• What is your view of social enterprise?
• If you are the one spearheading the process,
  determine your own objectives first, then seek
  input from other key stakeholders
• Involve the right people
• Which key stakeholders should be included?
• Educate the key stakeholders on social enterprise
• Determine what stakeholders' goals are and what
  your organizations capacity is
• Follow the social enterprise planning process

54
Appendix Going Deeper
55
Applying the lessons REDF has learned Words of
wisdom

• If you like your staff, board, and clients the
  way they are, then dont do this, because it will
  change everything.
• - REDF Portfolio Executive Director

Caution Consider how Social Enterprise can
affect the rest of your organization
Distraction from mission Donor cannibalization Ina
dequate resources Diversion of resource Staff,
Management, Money, Time
Cultural differences create tension between
program and enterprise staff Conflicting stances
among board Cause of financial losses Risk of
failure Reputation and Morale
56
Why do nonprofits consider social enterprise?
REDF Success stories
Social Enterprise Success Stories REDF Portfolio

• The REDF Portfolio has included 13 organizations.
• The REDF Portfolio has included a cumulative
  total of 3,074 enterprise employees.
• The majority of enterprise employee hires are
  African-American, Latino/a and White. The
  proportion of racial/ethnic minority hires has
  been increasing since 2000.
• Approximately three-fourths of enterprise
  employee hires are younger than age 40.