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Earned Revenue

Earned Revenue . Should We… or Shouldn’t We…. Social Enterprise.

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Earned Revenue

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  1. Earned Revenue Should We… or Shouldn’t We…

  2. Social Enterprise earned revenue, earned income ventures, nonprofit business activity, social ventures, social entrepreneurship, community wealth creation, social purpose business, social enterprise, common good enterprise, mission-driven business, socially-responsible small business, double-bottom line; triple-bottom line, benefit corporation

  3. “We don’t hire people to grow vegetables. We grow vegetables to hire people.” —Woody Woodruff, Red Wiggler Farm

  4. Types of Social Enterprises Fees for service Manufacturing and product sales Rent and leases Licensing and cause-related marketing activities

  5. Examples

  6. Keep in Mind It’s ok. • Substantially related • No personal, private benefit • Fair market value • After reasonable expenses, “profit” goes back into the tax exempt • Charity distribution upon dissolution

  7. Is it okay? Is it ok to operate a venture unrelated to the nonprofit charitable purpose?

  8. Continuum

  9. We should…We shouldn’t…

  10. Why You Should Why? • Diversifies revenue • Autonomous, predictable revenue • Businesslike discipline • Entrepreneurial habit

  11. Why You Should Be Careful Why Not? • Organizational and cultural fit • Legal and tax issues • Implementation expertise • Not easy money

  12. Managing Expectations • “For most nonprofits, it is unrealistic to expect that ventures could ever completely replace traditional funding sources. Even the most successful ventures seldom provide more than one-third to one-half of an organization’s annual budget.” Rolfe Larson

  13. There are exceptions.

  14. Profile of Social Enterprises How does your organization compare? • By budget • By mission • By number of employees • By location

  15. So, what could be our business?

  16. Opportunity What does this community need? That someone (customers) will pay for.

  17. Three Types to Consider Extending and monetizing current practice. Starting a business. Cause-related marketing

  18. Organizational Assets

  19. Organizational Capacity

  20. Funding • Reserves • Customers • Clients • Funders and donors • Investors • Lenders • Social venture capital • Crowdsourcing platforms • Fellowships • Social venture competitions • Web-based intermediaries

  21. Anticipating Impact If this venture succeeds, what might be the impact on • Mission • Organizational capacity • Money • Community • Reputation • And if the venture fails?

  22. ChangeMatters @changemtrs @amykincaid • Amy Kincaid • www.changematters.com • info@changematters.com

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