As we reached the halfway point of our monthly cohort sessions in April, some of the nine nonprofits participating in the 2015 Social Enterprise Cohort were very clear on their direction, while others are still exploring ideas and options. Several groups were still trying to nail down a business venture that aligns with and will support their mission, while also generating sustainable income.
When the program launched in January, most Cohort groups included “provide employment opportunities for our client base” as part of their decision-making criteria for selecting their social enterprise. Not surprisingly, as the groups explored ideas and options for their new venture, their decision-making criteria have expanded, as well. Many groups have found that the ideas they feel most passionate about don’t have a high potential of being profitable. Other ideas have more financial potential, but don’t necessarily align with the original decision-making criteria, including employment opportunities for those the nonprofit serves.
A few common themes came up during the April discussion of how to choose between different social enterprise ideas: specific decision-making criteria, concern about how to get board member buy-in, feasibility, energy and enthusiasm around the ideas, etc. However, the most frequently expressed and discussed concern was that of how to emotionally reconcile the commitment to being a nonprofit organization with the desire to also make money and profit.
Overcoming the perceived stigma associated with a nonprofit’s desire to generate income may be the key to enhancing an organization’s ability to have the maximum impact on the individuals and communities they serve.
Let’s look at Girl Scouts of America as an example. Per an article in Inc. Magazine, “The Girl Scouts of the USA is synonymous with cookies—thanks to a troop in Oklahoma that began selling cookies in 1917 to raise funds. The Girl Scouts was founded in 1912, with the goal of teaching girls practical life skills. The cookie business did just that while giving the organization a financial boost, as well. Now the Girl Scouts, which has 3.3 million members, generates more than $700 million in annual revenue from the cookie program.”
Have you ever heard anyone say, “The Girl Scouts make way too much money from their cookie sales. They should scale back because $700 million is just too much.”? By leveraging their social enterprise to serve more than two million girls annually, Girl Scouts USA has reconciled any discomfort of being a service organization with generating significant income in support of its mission.
If the 2015 Social Enterprise Cohort’s experience mirrors that of the inaugural cohort in 2013-2014, participants will begin to make a conceptual U-Turn. As they learn more about social enterprise, visit successful social ventures, and dial in their own feasibility studies and business plans, they will also begin to shift their thinking toward “how can our social enterprise make the most money?” Which is just another way of saying, “How can we serve the greatest good on the grandest scale?”
~ Allison O’Brien