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![Is social enterprise a strategic fit for your organization?
Christine Egger
cdegger.com
christine.egger@gmail.com
Social Enterprise Alliance Nashville Chapter
nashvillesocialenterprise.org
Center for Nonprofit Management
cnm.org
credits
Hats http://www.oceangroupcompany.com/wp-content/uploads/2012/12/stack-of-hats1.jpg
Networked: Noah Sussman, http://www.flickr.com/photos/thefangmonster/352461415/in/set-72157615109132005/
Ladder: http://www.pawelkuczynski.com/index.php
Pressure cooker: bloomingdales.com
Oars: UpkesGroup.com
Crowd: Môsieur J. [version 3.0b], http://www.flickr.com/photos/11445550@N00/45539374
River and rocks: Christine Egger
Structures: Flickr.com – Darwin Bell
Funding: yogabhava.com
Investing: Ken McCown, http://www.flickr.com/photos/63216345@N00/196862911
Strategies: http://b.aking.ca/post/4184643426/our-lives-are-spent-trying-to-pixellate-a-fractal
Stream: http://www.123rf.com/photo_595954_close-up-of-clear-water-running-over-colourful-rocks-and-pebbles-in-a-stream.html
One size: teradatamagazine.com](https://image.slidesharecdn.com/issocialenterpriseastrategicfitforyourorganization-150513213501-lva1-app6891/75/Is-social-enterprise-a-strategic-fit-for-your-nonprofit-18-2048.jpg)
Uploaded byChristine Egger
Is social enterprise a strategic fit for your nonprofit?
The document discusses the integration of social enterprises into nonprofits, emphasizing their role in utilizing business models to generate income for social or environmental purposes. It poses critical questions about strategic alignment with social enterprises, encouraging nonprofits to consider their mission and vision in this context. The content includes reflections on strategy, capacity, and resources required for successful implementation of social enterprise within nonprofit organizations.
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Is social enterprise a strategic fit for your nonprofit?
- 1. is social enterprise astrategic fit for your organization? by Christine Egger, Social Enterprise Alliance Nashville Chapter for Center for Nonprofit Management 8th Annual Bridge to Excellence Nonprofit Conference Tuesday, May 12, 2015 | Belmont University | Nashville TN
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- 4. nonprofits using business models andearned income strategies for profits whose driving purpose is social or environmental Source: http://se-alliance.org social enterprises businesses whose primary purpose is the common good, using methods and disciplines of business and the power of the marketplace
- 5. why this isquestion important?
- 6. why this isquestion important?
- 7. “We need allhands on deck, all oars in the water.” Case Foundation
- 8. what does thisquestion make possible?
- 9. our vision is of acommunity where ____ to bring that into reality, our mission is to do _____ for _____
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- 11.
- 12.
- 13. a few wordsabout investing
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- 16. strategy is “a pattern ina stream of decisions.” Henry Mintyberg
- 17. whether for ourprograms, our partners, or those who are aligned with our mission, what does a strategic embrace of social enterprise make possible?
- 18. Is social enterprisea strategic fit for your organization? Christine Egger cdegger.com christine.egger@gmail.com Social Enterprise Alliance Nashville Chapter nashvillesocialenterprise.org Center for Nonprofit Management cnm.org credits Hats http://www.oceangroupcompany.com/wp-content/uploads/2012/12/stack-of-hats1.jpg Networked: Noah Sussman, http://www.flickr.com/photos/thefangmonster/352461415/in/set-72157615109132005/ Ladder: http://www.pawelkuczynski.com/index.php Pressure cooker: bloomingdales.com Oars: UpkesGroup.com Crowd: Môsieur J. [version 3.0b], http://www.flickr.com/photos/11445550@N00/45539374 River and rocks: Christine Egger Structures: Flickr.com – Darwin Bell Funding: yogabhava.com Investing: Ken McCown, http://www.flickr.com/photos/63216345@N00/196862911 Strategies: http://b.aking.ca/post/4184643426/our-lives-are-spent-trying-to-pixellate-a-fractal Stream: http://www.123rf.com/photo_595954_close-up-of-clear-water-running-over-colourful-rocks-and-pebbles-in-a-stream.html One size: teradatamagazine.com
Editor's Notes
- #2 Welcome! The resource document referenced in this slide deck is available at: http://tinyurl.com/NSEA-CNM2015
- #3 A quick note about the hats I’m wearing today. I’ve worked with nonprofits for years, as a wishgranter, big sister, fundraiser, grantwriter, and board member. – and also with for profits, primarily helping to build small businesses from the ground up. For the past 5 years or so, I’ve been working with and on behalf of social enterprises. I currently serve as project coordinator for NeighborhoodEconomics.org, which accelerates the flow of capital through our neighborhoods, across a network of small towns and cities. About a year ago, I moved to Tennessee and was thrilled to discover a Social Enterprise Alliance chapter here. It’s led by Chairman Don Leyrer, who invited me to join the board last fall, and was established in 2011 thanks to the efforts of Don and Dan Surface, a current board member and Executive Director of Dismas.org. The Social Enterprise Alliance (se-alliance.org) was founded in 2000. Earlier this year, the SEA national headquarters moved to Nashville. It’s led by CEO Jim Schorr, and is housed in the Nashville Enterpreneur Center. The purpose of the Social Enterprise Alliance is to help social enterprise reach its full potential as a force for positive social change. Which is where today's session, and all of you come in
- #4 Let’s get a sense of who is in the room – a show of hands for how many are here on the staff or boards of nonprofits (nearly everyone). And to get an indication of our familiarity with the language and practice of social enterprise, a show of hands across these three categories: How many are just getting started – you may have heard the phrase “social enterprise” but it's just a big box of question marks? (a few) How many of you feel you have a handle on it – you get what people typically mean when they use the phrase, you understand the range of business models and funding sources, you may actively be considering social enterprise activity for your organization, or you're assisting your clients or grantees to do that? (a few) And how many of you feel very familiar with the concept and practices? You're strategically engaged or NOT engaged with social enterprise, for yourself or your clients or grantees? (a few) (Asked who I was missing, and heard from a few who think they understand social enterprise but weren’t sure how it applied to their organization.) In this hour we'll: * offer a working definition of social enterprise * review basic models and funding options for nonprofit social enterprises * offer some resources for thinking about whether and how social enterprise has a place in the way we take care of each other and this planet we live on (We also originally planned to break into small group discussions, but didn’t have time )
- #5 Fortunately, 37 years after the phrase “social enterprise” was first used, we all agree on what that phrase means and don't have to spend any time asking “what is social enterprise?” OK, that isn't yet true – we could spend the entire hour asking that question – but for today I'm going to propose that we hang our hat on this very simple definition offered by the Social Enterprise Alliance, where “Social” effectively stands in for “good for people and planet” and “Enterprise” stands in for “using methods and disciplines of business and the power of the marketplace” Our working definition for today – and one that has served SEA's members well – is: Social enterprises are businesses whose primary purpose is the common good, using methods and disciplines of business and the power of the marketplace. They are nonprofits using business models and earned income strategies. They are for profits whose driving purpose is social or environmental. And the question we're asking today is, “Is social enterprise a strategic fit for your organization?” Does it make sense – or why would it make sense – for your organization to embrace social enterprise as a strategy in fulfilling your mission?
- #6 Why is this question important? Many of you are simply feeling pressure to ask it. You're sitting in this nonprofit-organization-shaped pressure cooker. Your funder or your board or your boss has decided for you that this question is important.
- #7 Or maybe it's important because the status quo isn't working. You have a feeling you're burning through other strategies in a way that's keeping you from getting where you know you need to be.
- #8 I think the question is important because it invites us to consider every possible organizational and funding strategy available to us. It asks us to at the very least be familiar with the range of ways we can organize – and move our money around – to create the world we want to live in.
- #9 I think this question is important for what it makes possible. Whether we want to develop social enterprises inside our own organizations, or formally partner with other non or for profit social enterprises, or simply informally support these methods when they're aligned with our mission it's only by considering those directions thoughtfully, even strategically, that we can get a glimpse of how empowering they could be.
- #10 Before we dive into a review of nonprofit social enterprise structures and funding types, let's ground this in the work that each of you are doing. This outline of a nonprofit's vision and mission is taken from Hildy Gottlieb. “Our vision is of a community where ____________________” for you that might be, “where everyone who wants to have their own home is able to” or “where every animal who comes in contact with a human being feels loved” Our organization is taking on a piece of the work that's required to bring that into reality. That's the mission part. “Our mission is to do _______________ – to take these actions – for ________________ – whom? Who do we serve? In other words, it's the most basic way to describe the world you WANT to live in, work you're taking on to help make that happen, and who you're doing that for. Take a few minutes to fill out on the strategy worksheet. Don't worry if this doesn't look anything like your organization's normal vision or mission statements. No one's going to see this. This is just a thought experiment to ground the next part of our discussion.
- #11 As all of you know, the bridge between our vision – the world we want to see around us – and our mission – the work we're doing – is the realm of diagnosis, theories of change, capacity, strategy, and action. That's a HUGE bridge full of lots of options. For the next 15 minutes or so, we're going to dive into the options that fall under the “social enterprise” umbrella, and then we'll explore ways to strategically consider whether they're a fit for where your organization is today, and where you want it to go.
- #12 This is where the slides stay elegantly simple, and we turn to the Resources document for the “meat” (or tofu). http://tinyurl.com/NSEA-CNM2015 And remember that this document – and the powerpoint and other handout – will be available to you online. Everything that's underlined is hyperlinked. This is just a portal to a WORLD of information you can refer back to for as long as you need to. We've already gone over Section A, the working definition of social enterprise, and are now into Section B on page 2. The first section suggests three relationships between a nonprofit's programs and its social enterprise activities: * Embedded basically means the investable, earned income strategies are baked into the programs. * External means the two are completely separate. * Integrated means an overlap, with some cost and asset sharing. The next section is “What do nonprofit social enterprises do? (inspiration for your own activity as well as strategic partnerships? The last two pieces in this section will already be familiar to you. The first is a quick note about mission alignment. [riff] Often, the very tax deduction that makes nonprofits possible can also create a tension between the source of your funding and the benefits you deliver. Sometimes that's a creative tension, and sometimes it's just, well, tension. Aligning a social enterprise with your mission is one way to ease that. And the last piece is just a quick list of all of the ways social enterprises can be legally formed, in addition to nonprofits, as a reference for strategic partnerships or what can get “spun off” of a nonprofit as it's enterprise activities grow.
- #13 Obviously, grants and donations are still very much available to nonprofits whether they develop social enterprise activities or not. That funding landscape is already very familiar territory, so in this section we've focused on the kinds of investments that are made in nonprofit social enterprises – where the monies given to support those enterprises are expected to be returned even if at zero interest. As for the kinds of investments that are available to nonprofit social enterprises, there are only a couple so this will be real quick. Just kidding, there are ALOT but this will still be quick, just the briefest overview so we have a shared sense of the landscape. Many of these will be familiar, and perhaps a few will be new. The first note here is about the expectations on financial returns – as I mentioned they range from zero interest to below-market, to market-rate, to even higher than market (thanks to a new movement branded “impact alpha”). The list of investment types starts in familiar territory – program-related investments, market-rate investments, and recoverable grants – all offered by foundations. The next type, community-sourced microloans, are relatively new websites, or platforms, that make it technically easy to collect very small loans from the people who know and trust you, which in the aggregate support the investable project you have in mind. Kiva Zip, for example, collects loans for as little as $5 each to fund projects that average around $5,000. Community Sourced Capital collects loans for as little as $25 each to fund projects that average around $30-50,000. Each community-sourced funding platform – whether giving or lending – is a little different. Some of those details are described here, and I'll be giving a talk later this month about Kiva Zip, Community Sourced Capital, and crowdgiving platform StartSomeGood.com. (contact nashvillesocialenterprise.org for info). The next category is donor advised funds. These give people like you and me a chance to donate into a fund, and receive a full tax deducation for that fund. The donations are pooled, and dispersed by a fund manager according to the donors' advisement. Donor advised funds can be used to disperse grants or investments with an expectation of a return, and some community foundations around the country are just now beginning to experiment with making loans to local nonprofits, through an initiative launched by Business Alliance for Business Alliance for Local Living Economies and the Rudolf Steiner Foundation. There are also fund managers, like Impact Assets, that are dedicated exclusively to these kinds of investments. Just two more: Community development finance institutions like Pathway Lending, which is based here, provide a range of services including loans to nonprofits for energy efficiency outcomes and other purposes on a case-by-case basis. Impact investments are understood to INCLUDE the Mission investments listed above, as well as all existing and potential investments – including debt and equity – made with expectations for social or environmental AND higher-than-zero-percent financial returns. That adds up to an estimated $1 trillion dollars, which can look awfully sparkly.
- #14 If more people than ever WANT to be investing in projects and businesses that help take care of the people and planet, and that give them their money back so they can re-invest it... … what does that now make possible? What kind of path does that create? And how might it intersect with your organization's path?
- #15 That takes into a conversation about strategy. I love this picture. It's called “pixellating a fractal planet.” What social enterprise strategies, IF ANY, would be a good fit for your organization? Not in a pixellating way, but in a way that moves with and complements the patterns of your organization?
- #16 You'll see that in the Resource document (http://tinyurl.com/NSEA-CNM-2015) we've offered a few resources to help nonprofits answer that question. The kinds of strategy simply remind us that strategy can mean more than “plan.” - it can also refer to an organization's perspective, pattern of behavior, position in the market, and ploys or maneuvers in the marketplace.
- #17 This is my favorite definition of strategy: “Strategy is a pattern in a stream of decisions.” In the document’s “considering capacity” section, we've borrowed from McKinsey to list several elements that contribute to your organization's capacity to do what it does. This list is just the tip of the “strategic assessment” iceberg. McKinsey breaks these elements down into over 60 different capacity points. The question samples that fill out the rest of this section on the document give a glimpse of just how granular the assessment can be. The goal today is to give you a chance to explore this kind of assessment, and to introduce you to resources that are available to you when you're ready to take a deeper dive. One of those resources is CauseImpact, based in Ohio and very active here in Nashville as a resource to CNM and its members. Many of you likely already know Sean McGee, one of CauseImpact's principals. Sean is here and I'd like him to say a few words about CauseImpact's services before we break into a small group exercise around this. [Sean] And then I’d like to ask Dan Surface to say a few words about his experience in leading a nonprofit social enterprise. [Dan] [Review of the strategy worksheet handout – available on http://tinyurl.com/NSEA-CNM-2015]
- #18 Don’t hesitate to reach out to the Social Enterprise Alliance for more resources and support as you explore this question. http://se-alliance.org http://nashvillesocialenterprise.org Thank you!