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When a nonprofit selects a social enterprise to create, it must have, or be able to access the funding needed to launch, grow and sustain the model. If the npo also needs to augment its staffing, management or infrastructure resources to support the model, a strategic alliance or outsourcing may provide cost-effective solutions.

How much money and other resources will it take?

As is true for any new enterprise, a business plan needs to be developed to state social and financial goals, among others, and to describe how these will be reached (e.g. marketing strategy, sales process etc). The plan will identify infrastructure and staffing needs for the social enterprise as well as start-up costs and operating expenses, and how these will change to support growth projections. This will give you a reasonable estimate of what resources may be needed beyond those your nonprofit already has.

I will be dedicating a future post in this series to business planning, along with a list of funding sources that also support social enterprises.

Culture Shift

• Beyond the resources mentioned above, a social enterprise’s success also depends on
• Good leadership
• Having an entrepreneurial spirit
• Strategic thinking
• Financial accountability and attention to ROI (return on investment)
• Efficient operating processes and use of resources
• Clear, consistent and timely communications among all stakeholders

Successful nonprofits owe their success, in large part, to having most or all of these attributes. so they have been equally successful in launching a social enterprise. Most were probably not born that way but chose to adapt over time to insure that they could continue to deliver on their mission promise in greater and sustainable ways.

For those organizations, getting there required a cultural shift, not at the expense of mission but to better fulfill mission.

Impetus for change

Impetus for this kind of change must start at the top of an organization and win buy-in from leadership at every level of the organization. That’s no easy task, but the long term benefits are huge, and go beyond just insuring the social enterprise’s success.

Adapting the attributes identified above will

• Contribute significantly to your nonprofit’s social impacts and sustainability
• Position your nonprofit more favorably with funders and other stakeholders
• Contribute significantly to the success of your social enterprise, which can generate a manageable and predictable revenue stream to support mission, and decrease dependency on traditional funding sources (which continue to shrink)

Quick note:

We covered a lot of important topics in this post, so please feel free to e-mail me at jstoynoff@Synthesis.Biz with any questions you may have – and I’ll reply ASAP.

And stay tuned for our next blog, where we’ll take a closer look at the fifth critical success factor for a social enterprise.