Social Enterprise: Myths & Realities

1. Social Enterprise: Myths & Realities OC 2.0 – Nonprofit Leaders Summit May 23, 2014 Jerri Rosen – CEO and Founder, Working Wardrobes Diane Helfrey– Executive Director and Founder, Social Venture Partners LaMecia Butler – Portfolio Manager, REDF Iosefa Alofaituli – Executive Director, Oak View Renewal Partnership (Moderator)

2. Definitions of Terms: • Social Entrepreneurship • Social Enterprise • Double Bottom-Line • Social Innovation Coming to “Terms” with Social Enterprise

3. The process of pursuing innovative solutions to social problems. More specifically, social entrepreneurs adopt a mission to create and sustain social value. They pursue opportunities to serve this mission, while continuously adapting and learning. They draw upon appropriate thinking in both the business and nonprofit worlds and operate in a variety of organizations. - "The Meaning of Social Entrepreneurship" J. Gregory Dees Social Entrepreneurship

4. “Social Enterprise is any mission-based earned-income business or strategy undertaken by a nonprofit for the purpose of generating revenue in support of the nonprofit’s social mission.” - Social Enterprise Alliance Potential Outcomes: Inputs: Reduction of social costs Stronger families Thriving communities • More people employed Social Enterprise

5. Social Enterprise is centuries old! Is this new?

6. Mission focus delivers a social return • Business focus delivers a financial return - Donations and grants gain leverage - Unrestricted income More mission is possible! Double Bottom Line

7. Innovative social organizations employ new, non-obvious and/or simple, “elegant” solutions to address social problems more effectively than other organizations • Pioneering new products or services • Delivering products/services in new ways or to new populations • Employing new processes, organizational structures, or business models - Social Venture Partners Social Innovation

8. Social Venture Partners

9. Social Venture Partners builds powerful relationships among people who want to give back and the nonprofits that make change possible. • Model of engaged philanthropy: leverage money, time, talent, and connections • Focus on a dual mission: Support high-potential nonprofits by building their capacity; Help individuals achieve greater impact with their giving SVP: Unleashing Potential socialventurepartners.org

10. SVP is the largest global network of engaged donors. • Founded in 1997 in Seattle • Others inspired to start new chapters in 1999 • SVP International formed in 2001 • Founded in LA in 2004 • Today: network of 36 member organizations in US, Australia, Canada, China, India, Japan Network Momentum socialventurepartners.org

11. Local SVPs tailor programs based on market dynamics and Partner interests. • Multi-year Investments • Social Innovation Fast Pitch • Partner Education and Events • New: Encore Fellowships L.A.’s Programs socialventurepartners.org

12. Social Enterprise: Myths & Realities

13. “Social Enterprise is any mission-based earned-income business or strategy undertaken by a nonprofit for the purpose of generating revenue in support of the nonprofit’s social mission.” -Social Enterprise Alliance Social Enterprise

14. Social Enterprise is centuries old! • Monasteries wine/cheese sales • Theater Groups admission fees • Education tuition • Hospitals fees to underwrite support to poor Is this new?

15. For profit business -Home care services for disabled -Adult day care services -Low cost housing projects -Wind farms • Non-for profit businesses -Workshops for at-risk youth -Substance abuse shelters -Thrift shops Social Entrepreneurism

16. Earned income leads to sustainability • The Siblings: -Social innovation -Social enterprise Social Entrepreneurism

17. Mission focus delivers a social return • Business focus delivers a financial return -Donations and grants gain leverage -Unrestricted income More mission is possible! Double Bottom Line

18. Public trust in the nonprofit sector is low • 19% of Americans believe charitable organizations run their programs well • More nonprofits added every year • 3,200+ new nonprofits in OC in 2014 • The big are getting bigger • 6% of nonprofits control 85% of revenue • Hospitals, universities What are the hard facts?

19. Financial impact -Multiple sources of income -Less dependence on funders/grants • Non-financial impact -More efficient practices -More clients served • Organizational impact -Mission related -Sustainability What’s the upside?

20. Philanthropists and corporations are looking at a new model of giving • Social Venture Capitalists are investing • Well written business plans are being funded • Social Enterprise Academies • Business people are attracted a nonprofit operating an enterprise venture Is there a money trail?

21. Only 20% of corporate funders in Orange County are familiar with Social Enterprise Investing • 12.5% are not familiar at all • 67.5% recognize the national trends and are open to learning about it Is the Business Community Aware?

22. Expanding pool of knowledge • Growing community of practitioners -Social Enterprise Academies -REDF • Support systems/SEA -National conference, communication networks -1,100 members; 350 at annual conference • Increasing expectations to apply business practices to the nonprofit sector What is new?

23. Access to Capital -Knowing what, how and where to look • Entrepreneurial Capacity -Market awareness -Value assessment -Functional expertise • Market Viability What’s our challenge?

25. Related to mission • Feasible and realistic • Responds to a genuine market need • Builds on strengths and assets • Energizes Board members, staff and stakeholders • Makes enough money to achieve financial goals The Ideal Social Enterprise

26. Tustin 1071 Main Street/ Newport Avenue 714-573-4596 Laguna Niguel 28051 Greenfield Drive/ Crown Valley949-425-9900

29. Paid Manager and Assistant Manager with resale or consignment shop experience • Fashion Board Volunteers -12 – 20 per store -Flexible shifts -Customer service advocates -Merchandise and sell! Shop Operations

30. Local Store Marketing

31. Resale Shop Promotions

32. Girls Nite Out Parties

33. Anaheim 3150 Lincoln Avenue/ Western 714-816-0991 Costa Mesa 803 19th Street/ Placentia 949-425-9900 Garden Grove 12761 Harbor Blvd. Suite I-2

36. Funding Our Services 2013

37. Current Hanger Boutiques Current Thrift Shops Projected Site Locations

38. Retail Revenue History

39. Have professional managers with retail and/or resale shop experience • Develop a training program for shop staff and volunteers • Provide an incentive in exceeding goals • Utilize all promotional opportunities • Develop social media campaigns Operational Issues

40. Focus on financial sustainability • Build finance department strength in front of the curve • Develop Plan A and a strong Plan B • Build resale shop operation strength earlier • Reduce dependence on fundraising events Hard Lessons Learned

41. Focus on core businesses • Resale operations • Client services • Resale and thrift shop can be recession proof • Focus marketing efforts Easier Lessons Learned

42. Before & After

43. Before & After