Friday, September 4, 2009

Growing the Funding Pie through Faith-Based Social Enterprise

Later this fall, Bud’s Warehouse celebrates its 15th Anniversary as a faith venture business as ministry. Over the years, a strength of the Bud's Warehouse model has been its ability to attract resources for a community cause that often struggles to find private financial donors.

Research studies show that potential donors are less likely to give money to organizations that support individuals with felony convictions or addictions. Donors tend to be attracted to causes that help mothers & children, individuals in need, educational institutions and religious organizations. Other studies have shown that employment and job training is the top factor leading to a decrease in recidivism for ex-offenders. But this is a need less popular with public donors. That reality makes it more difficult to find funding for a program that offers society a big return on its investment.

Bud’s Warehouse and Belay Enterprises have been able to expand the resource base by moving beyond the traditional model of nonprofit support by operating self-sustaining businesses. Most nonprofits have to recapitalize themselves on an annual basis by seeking out individual donors and foundations. But with a business making earned income for the organization, there is no longer a need to recapitalize every year. The business expands the funding pie for the organization, increasing the impact of the charity in an area that is less popular with donors.

I am a big advocate of creating businesses that employ people rebuilding lives from addiction, homelessness and prison. A self-sustaining business provides real opportunity for individuals with significant barriers to employability while establishing a sustainable resource base for a less-popular cause with significant cost-savings for society.

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