Grooming a Social Enterprise
I have shared some of my thoughts and opinions about the field of social enterprise in this blog, including the question of whether the hubbub about creating business ventures is just a new name for a long-standing practice (see Is Social Enterprise Really New or Different). However, I have to extend my congratulations and admiration to the Animal Humane Society (AHS) for their plans to open a premier pet boarding facility at the Minneapolis-St. Paul airport. This plan sounds like a real winner that merges the assets of the nonprofit with a real market demand. I have high hopes that the return to the AHS will not only be financial, but will also increase their visibility, community support and donations, and reputation. The plans are described in a press release issued on March 10th.
When I lead discussions with nonprofits interested in finding a social enterprise idea to pursue, I encourage them to resist the temptation to replicate what looks like a good idea that they read about in an article or heard at a conference. The best enterprises are grounded in both the mission and the assets of the organization. The most successful enterprises support the mission beyond a projected financial return. They also take advantage of one or more assets, such as knowledge and expertise, location, understanding of a community, and reputation. To be financially viable, an enterprise must also find a market – a bona fide market that is willing, and wants, to buy the service or product.
The pet boarding facility looks like a good idea on all of these fronts. It’s a mission fit, takes advantage of organizational assets including understanding of how people relate to and care for their pets, and the reputation of the organization. The market demand is demonstrated every time you talk to a colleague who has to take a half day off before a vacation to drive across town to drop off and then pick up their pet. There are risks, of course. The facility is expensive ($4.25 million) and the AHS is investing $750,000 of their own designated funds to launch the venture. The goal is to return financial dividends to the nonprofit to support other programs, and the pet boarding facility is structured as a for-profit subsidiary of AHS.
Best wishes to the AHS on this venture – and thanks for the great case study for us all to observe.