Social Enterprise: Can Entrepreneurship Solve Our Funding Problems?

by Michele Martin on April 18, 2012

Throughout April, we’ve been exploring various funding models and strategies that CILs may want to consider as government purse strings get tighter. Today we want to talk about a funding model that is offering sustainable options for many nonprofits–social enterprise or social entrepreneurship.

What Is Social Entrepreneurship?

In its broadest sense, social enterprise is about using entrepreneurial principles to address large-scale social problems. For our purposes, though, we will use a narrower definition. When we discuss social entrepreneurship in the context of CILs, we are talking about earned income ventures–selling products or services that provide unrestricted income to the CIL that can then be used for programming and other purposes.

The best social enterprises in this definition capitalize on their strengths and assets, looking for products and services that tie in with their mission AND address a need or gap in the marketplace. The goal is to develop earned income streams that support the CIL’s mission and that can be profitable.

Examples of Social Enterprise

Social enterprises can be as varied as the organizations that start them. One strategy might be to have a sort of “artist’s collective,” selling arts and crafts through on-site sales, flea markets and through sites like Etsy. A related idea comes from Hogar de Christo in Chile, which sells greeting cards through a variety of channels. Other product ideas include gift baskets, food products, soap and bath salts–even “birthdays in a box”–customized birthday kits that allow busy parents to throw themed birthday parties. The possibilities are limitless. Southeast Kansas IL Resource Center, Inc. (SKIL) owns and operates commercial radio stations KLKC and KSEK, generating significant revenue and providing opportunities for community-building and resource sharing.

Services can be another way to earn income. Many centers operate personal assistance and similar service programs with Medicaid and private pay funding. Other organizations go well beyond the typical nonprofit model. Some examples from outside the IL field include Hudson Community Enterprises, for example, provides digital mail management, document imaging and document shredding, while GoodTemps provides temporary staffing solutions.

Resources on Social Enterprise

You’ll want to review the video resources and planning guides of the ILRU training on entrepreneurism at Hi-Impact CILs. And, here are some other excellent resources on social enterprise that may be helpful.

Social Enterprise Businesses: A Strategy for Creating Good Jobs for People with Disabilities–this recent paper from Kessler Foundation explores social enterprise as a job-creation strategy and provides case studies of four disability-related social enterprises.

Does Your Organization Have What it Takes to Start a Social Business Venture-a good checklist for looking at your capacity for developing a social enterprise.

Business Planning Resources from the Nonprofit Management Library–a collection of helpful links and resources.

Social Enterprise Resources from the Nonprofit Management Library–more helpful information.

Social enterprise isn’t for everyone, but for some CILs, it may be worth exploring.

What do you think of social entrepreneurship? Does it seem like a viable option for CILs?

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