Oftentimes, nonprofit leaders are intrigued by social enterprise because of its potential to diversify funding sources and drive sustainable revenue to their organizations. While both of these outcomes may be true, there can be an even more powerful effect: Social enterprise can impact your mission.
As CEO of Social Enterprise Alliance, the national network of social enterprises, I have seen hundreds of nonprofits leverage the social enterprise model and elevate their missions. By selling a product or service, these nonprofits use a market-driven approach to address basic, unmet needs or solve social and environmental problems.
With over 35 percent of U.S. nonprofits focused on human services, social enterprise can be an innovative way to produce new, life-changing programs that deepen your organization’s impact. For example, a nonprofit working with people experiencing homelessness may take on the mission of ending homelessness in its community. It may deliver on this mission by providing beds in a shelter. While this intervention is crucial, a nonprofit leader may think beyond the shelter and start to explore how to empower those experiencing homelessness to become self-sufficient. To this end, social enterprise can become a powerful complement to the nonprofit’s current operations.
To illustrate this idea, consider Seattle-based FareStart — a member of Social Enterprise Alliance. The organization seeks to transform lives by empowering people who are experiencing homelessness, who are in recovery or who were previously incarcerated to achieve self-sufficiency through life skills, job training and employment in the food service industry. As a nonprofit social enterprise, FareStart provides jobs for people experiencing significant barriers to employment. Through food-service training and on-the-job experience gained at FareStart’s restaurants and cafés, participants gain the skills and stability they need to make progress and begin a career. Through this social enterprise, the organization innovatively tackles the issues of homelessness, poverty and hunger, while achieving even more for its mission.
Think Before You Launch
If you are interested in launching a social enterprise to strengthen the mission of your nonprofit, there are several things you and your staff must consider. First, is your nonprofit committed to strengthening its work through this new endeavor? If so, can the market be leveraged to achieve the desired outcomes?
Once you have validated those two considerations, I encourage you to follow the same path you do with other initiatives your nonprofit has launched. Evaluate the problem, identify the solution through stakeholder engagement, map the resources needed to deliver that solution and build a plan of action to move toward the solution.
Based on my experience, however, there are also a few unique considerations to make when launching a social enterprise:
Culture Change: Be mindful that, quite often, culture change is among the greatest hurdles of introducing social enterprise to an existing nonprofit. Market-driven entities require staff and boards to be comfortable with risk and appreciate the upfront investment of resources (i.e., human and financial capital) that are needed to be successful. Be sure your team is prepared for what’s ahead. Take your time bringing everyone on board with this new idea by inviting open conversations, educating staff and board members about social enterprise, sharing insights from your nonprofit’s stakeholders and celebrating the small wins along the way.