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Starting a Nonprofit - Social Enterprise | OPGS | Doing Business 2.0
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Starting a Nonprofit - Social Enterprise | OPGS | Doing Business 2.0

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Community Wealth Partners gave an overview of social enterprise at the Washington, DC Economic Partnership's Doing Business 2.0 seminar on Starting a Nonprofit (7/10/13).

Community Wealth Partners gave an overview of social enterprise at the Washington, DC Economic Partnership's Doing Business 2.0 seminar on Starting a Nonprofit (7/10/13).

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  • 1. Doing Business 2.0 Introduction to Social Enterprise Starting and Sustaining a Nonprofit Organization – July 10, 2013
  • 2. At Community Wealth Partners our goal is to help change agents solve social problems at the magnitude at which they exist. 3
  • 3. Key Question “Can we teach others the importance of being self-sufficient and, at the same time, not be self-sufficient ourselves?” - Mike Burns, Former CEO Pioneer Human Services 4
  • 4. What is social enterprise? A profitable or self-sustaining organization or venture that generates revenue to promote social change 5
  • 5. What is different about social enterprise? A quick fix out of a crisis – Typically takes 3-5 years to break even Traditional fundraising Grant money Gifts/donations For everyone Social Enterprise is Not… Social Enterprise is… Generating sustainable new resources to support mission Engaging market forces to work for the nonprofit sector Devising new ways to leverage existing assets Allowing for greater flexibility by bringing in unrestricted revenue Decreasing dependence on the external funding community 6
  • 6. Field Study of Social Enterprise Source: Community Wealth Ventures Field Study of Social Enterprise, 2008. Survey sent to 5,965 nonprofits, 1,008 responded and 740 completed survey. 1. Workforce Development 2. Housing 3. Community & Economic Development 4. Education 5. Health 1. Education & Training 2. Retail/Thrift Shop 3. Consulting Services 4. Food Services/Catering 5. Art Venture Top 5 Mission Areas of Nonprofits Operating a Social Enterprise Top 5 Social Enterprise Venture Types The Center for the Advancement of Social Entrepreneurship at Duke University, Community Wealth Ventures, and the Social Enterprise Alliance, with support from REDF, conducted the largest national survey to date about Social Enterprise with a diverse set of nonprofit organizations.
  • 7. Understanding the ultimate goal of your venture is vital when getting started Mission Profit A B C Self-Sustainable Focus – A business that generates enough income to make it self-sustaining Profit Focus – A business that generates substantial profits which can be re-invested in the business for growth Mission Focus – A business that will need ongoing philanthropic support but meets key mission objectives 8
  • 8. What factors are necessary to launch a successful social enterprise? 9
  • 9. A wide range of assets can be leveraged in social enterprises Have Do Know Books Culinary Training Best Practices 10
  • 10. Social enterprise is legal for nonprofits 11 Nonprofits can launch community wealth enterprises and maintain 501c3 tax status Consult an attorney to understand the most appropriate legal structure for your organization There is no standard legal structure • Structure often depends on size of the venture and degree of mission alignment
  • 11. Alternate Legal Structures - L3C, Benefit Corporation and B Corporation 12 Attribute L3C Benefit Corporation B Corporation Legal Form Legal corporate structure Legal corporate structure Certification with no legal standing Description State-regulated for- profit LLC with primary social goal and secondary financial goal State-regulated for- profit corporation required to create material positive impact Third party (B Lab) certification of meeting social performance, accountability, and transparency Benefits Simplifies Program Related Investment compliance, encouraging foundation funding Higher standards of accountability and transparency; primarily signaling benefit Seal of approval; likeminded community; discounted services (e.g., Salesforce) Additional Information Currently, 850 L3Cs Legislation passed in 18 states, pending in 10 states. Currently, 778 B Corporations Tax Taxed as LLC Election to be taxed as C or S Corporation No tax implications
  • 12. 13 “Whether or not organizations succeed in creating community wealth depends on their ability to think in new ways about assets they may have previously taken for granted or not initially recognized as such. …It all begins by believing and understanding that you are worth more than you think.” - Bill Shore, Chairman, Community Wealth Partners & Author, The Cathedral Within