Tuesday, October 4, 2011

Social Enterprise to the Rescue?

Over the last few weeks, I've learned of several non-profit organizations where donations have been significantly down for the last few months. It seems that uncertainty in the economy is starting to negatively impact giving from individuals and foundations.

The reason that this has come to my attention is that these same non-profits are attempting a pro-active approach to their financial health by exploring social enterprise to supplement their sources of income.

While I am always exciting to learn about faith-based organizations exploring social enterprise as a revenue source, I must counsel that organizations approach earned income ventures with realistic assumptions.

A social enterprise will not save your organization's finances.

At least not in the short run.

Any new business venture will require significant start-up money and will take many months (years) to generate profits. Belay started Bud's Warehouse in 1994 with a large amount of start-up funding. . It still took several years before the organization began generating profits to reinvest into its mission of starting new ventures

I think there is great energy in approaching new ventures primarily as vehicles for transitional employment. A faith venture starts with the goal of employing disadvantaged communities in a well run business, understanding that it will take many months before they will realize income out of profits.

I'm a big believer that if you aim for both business and mission, you increase your odds of accomplishing both. If your goal is primarily money to fund an existing mission, you will find it extremely difficult and miss an opportunity to increase your organization's overall mission output.

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