Think sustainable earning income for your health and human services agency

April 26, 2011 Manonamission.biz - @plamb - facebook.com/pauljlamb

Agenda
Overview of Social Enterprise Sector
Readiness Exercise
Q&A
Venture Ideas Brainstorming & Troubleshooting

Thinking outside of the Escalator

What is a Social Enterprise
“ An organization or venture that achieves its primary social or environmental mission using business methods”
-Social Enterprise Alliance

Social Enterprise is not…

Why Launch A Social Enterprise?
Sustainability
Increase social return on investment (SROI)
Cultural transformation
Diversify & Leverage new funding sources
Honoring your social mission

Legal Structures
For profit
Nonprofit
Hybrid (i.e., L3C)
Benefit Corp
Flexible Purpose Corp
See: Effective Social Enterprise — A Menu of Legal Structures

Sample nonprofit Social Enterprises

Social Enterprise Quiz (T or F)
Nonprofits can’t make a profit
Nonprofits can’t (or shouldn’t) pay taxes
It’s a quick financial fix
If we earn money, we will lose our nonprofit status
Our staff already has all the skills needed to run a social enterprise

A new era for Social Enterprise
Increased Federal investments
-Office of Social Innovation
-Office of Entrepreneurship & Innovation
Greater foundation interest
New models (L3C, B Corp, etc.)
Economic motivators

Social enterprises vary depending on Enterprise Strategies
Primary purpose is mission advancement
Integration between social programs and business activities
Mission-Centric Social Enterprise Mission-Related Social Enterprise
Provides revenue for nonprofit operations and mission-related activities
Often expands mission to achieve greater social impact
Non-MissionRelated Social Enterprise
Not related or intended to advance mission
Profit/funding potential is primary purpose
Source: Virtue Ventures, Social Enterprise Typology, Kim Alter © REDF – Please do not distribute without prior permission from REDF Profit-motivation Mission-motivation Social Programs + Enterprise Activities Social Programs Enterprise Activities Social Programs Enterprise Activities $

Planning for a social enterprise versus a small business Business Plan Set up Business $ Returns $ Returns Set social and financial goals Social impact Select business idea based on goals Business Plan Set up Business The desired outcome of for-profit business is already known: to make a profit The desired outcomes of a social enterprise are not obvious and so the goals need to be established first © REDF – Please do not distribute without prior permission from REDF

Development Timeline

Why is it important to set goals?
Ensure agreement between stakeholders
Gain agreement from staff with different roles, the board and any other stakeholders on the objectives of the enterprise
Select a business idea and guide the business planning
Business ideas can be evaluated objectively using the enterprise criteria
Guide business operations
Clear social and financial goals help the enterprise manager make operational decisions
Evaluate whether the enterprise is successful
Tracking financial and social metrics against initial goals shows whether the enterprise is fulfilling stakeholders’ expectations
© REDF – Please do not distribute without prior permission from REDF

Sample Social Enterprise Metrics Dashboard Used with prmission from ZeroDivide

Advanced Measurement Tools

Stride Center/ReliaTech
Founded in 2004 through $100K grant
3 Stores around Bay Area
$400K in gross income 2011 (expected)
62% Earned income, 38% Grant income
Covers 15% of nonprofit budget
Currently profitable
If factor in grant funding…and/or SROI

Used with permission from ZeroDivide

Start With Some Basics
What are your core values?
Are your values compatible with a venture approach?
What are your motivators for exploring a venture?
Who are your stakeholders (internally & externally)?
What are your long term social & financial goals?

Key Steps
Assess readiness
Build an inventory of assets
Brainstorm ideas
Conduct market research
Business planning
Piloting
Launch

The Readiness Challenge Readiness Questions Points Is your Executive Team & Board able to get fully behind an earned income strategy? 10 Is your organization open to a totally new way of doing business, both culturally AND operationally? 10 Are you willing to invest 6-9 months doing feasibility work, market research, business planning before going operational? 10 Do you have or are you able to raise startup and operational capital? 10 Is your staff and other stakeholders open to an earned income venture in house? 5 Are you prepared to organize an outside advisory team of experts? 5 Are you willing to hire outside operational staffing? 5 Will your venture align fully with your social mission? 5 Are you open to revising your business model, if needed? 5 Are you in it for the long haul? 5 Total

Do’s…
Identify clear goals & plan
Get full stakeholder buy-in
Set up an advisory group of experts
Conduct market research
Write a business plan
Let the venture type determine the legal structure
Be clear on your business model, but open to revisions
Align your business model with your capabilities
Hire the right people

Don’ts…
Expect immediate results
Just target nonprofit clients
Give short shrift to marketing
Neglect financial planning for VENTURE
Forget to track & measure results
Ignore long term & growth planning

Resources
Social Enterprise Alliance
Rootcause Business Planning Guide for SEs
Business Plan Pro Social Enterprise Edition
Social Return on Investment (SROI) from REDF
Effective Social Enterprise — A Menu of Legal Structures
ZeroDivide Community Investment Resources
Social Enterprise Books

Don’t wait for the escalator to get fixed – it may never happen!

Social Enterprise Concept Brainstorming
What ideas do you have for starting a venture(s)?
What relevant physical, financial capital, and social capital to you have available(s)?
What kind of investment would you need to launch this venture(s)?
Where would you get the seed money to start your venture?
Do you know of anyone else who is doing a similar venture in the nonprofit space?
Any idea who your competitors are?
What might your unique value proposition or differentiator be?
Who would your main customers be?
How would you market the venture (both offline and online)?
What would be your process to get the venture off the ground?

Thanks from…
Paul Lamb
[email_address]
www.manonamission.biz
@plamb (on Twitter)
NOW GO OUT AND CHANGE THE FACE OF NONPROFITS
AND HOW THEY IMPACT THE WORLD!!!

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Think sustainable earning income for your health and human services agency

by plamb on Apr 26, 2011

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Think sustainable earning income for your health and human services agency — Presentation Transcript