Nonprofits Assistance Fund and MAP for Nonprofits recently launched the Social Enterprise Network (#SEN). It was a great event, full of energetic social entrepreneurs.
I was amazed at the breadth of experience in the room. We have a vibrant nonprofit community. Many of these organizations are pursuing entrepreneurial earned income strategies. The purpose of this network is to to support and strengthen social enterprise in Minnesota, and provide a space to facilitate dialogue.
These notes are the participants’ thoughts on how organizations can foster a culture of entrepreneurship. Please share your own ideas and any reactions in the comments section.
Top 10 Ways to Foster a Culture of Entrepreneurship
Jim Thalhuber of Goodwill/Easter Seals hosted the first Network on Fostering a Culture of Entrepreneurship. He shared his Top 10 Ways Nonprofits Can Build and Nurture a Culture of Social Enterprise:
10. They keep their board on board
- Set up an enterprise committee
- Don’t let board members “turn off their business brain”
9. They keep their employees engaged
- Be transparent
- Engage as many different people and voices in the process as possible
- Generate buy-in by discussing
- What is going on
- Why it’s happening
- The desired outcomes
- How it will impact everyone’s job
8. They are brutally candid
- Assess the marketplace
- What is unique about your organization?
- What are your skills? What are your core competencies?
- Don’t confuse the way things actually are with the way you would like them to be
- Cannot have tunnel vision
7. They push the envelope
6. They focus, focus, focus on what the customer needs
- 3 most dangerous words: “I like that”
- Doesn’t matter what you like
- What does the customer like? What does the customer want?
- Remember the double bottom line
- The customer’s needs are more important than what you want, but less important than your mission
- Be mindful of this tension
- Know your organization’s priorities to help make decisions when they are in conflict
- A successful social enterprise is where the customer’s desires and the organization’s mission come together
5. They don’t assume anything
- Research
- Make fact-based decisions
4. They are keen on their core values
- Core values – what you do when no one is looking
- Social enterprise is a means to an end – to achieve your mission
- You don’t want the tail to wag the dog
3. They are clear about their core competencies
- What does the market value in your organization?
- How can you leverage that?
- Where is there room for innovation?
- Avoid everything else
2. They are persistent
- Social enterprise is a long-term strategic decision
1. They learn how to dance
- Be flexible
- Have a plan – but don’t be wedded to it
Other Thoughts
Why is internal culture important?
- Internal culture eats change for breakfast
- Takes time and commitment, keep at it
It’s ok for nonprofits to talk about profit
- Some people are nervous to say the word “profit” or “sales” (the “p” word)
- Profit is good
- The real issue is what you do with the profit
- It’s ok to adopt from for-profit businesses
- Use what works: business models, terminology, best practices
- Nonprofits have a double bottom line, so not everything will be applicable
- Helpful framework: I operate a small business within a nonprofit environment
Perceptions
- Is a social enterprise marginalized if it’s one part of a larger nonprofit?
- Important to engage your colleagues
- Social enterprise helps support the mission & core services
- Perception that nonprofits can’t run themselves
- Must be good at the business you are doing
Dealing with Risk
- There is risk involved – but you have to leap/seize the moment
- What is the culture of your organization?
- Is it risk adverse? If you are focused on stability and providing services, a risky venture will not work.
- Having cash reserves increases your ability to take risks
- The value of a needs assessment
- Although it can’t guarantee success, it can help mitigate risk
- Balance risk with market need
- Consider the opportunity cost
- Assess what you can afford
- Can you afford to take the risk?
- Can you afford not to?
- Can you afford to wait?
- Don’t put all of your eggs in one basket
Defining Success
- Do what it takes to be successful – to generate earned income for your organization
- Don’t be married to a particular idea
- Narrow it down to what is successful
- Grow deeper, not wider
- This may mean eliminating programs, rather than adding
- Keep the focus on your mission and core competencies
Getting the Right Board
- Having the right board might be the most important factor in a successful nonprofit social enterprise
- Look outside the organization and your traditional constituencies
- Ideally you want a balance between “business” and “nonprofit”
- Try to recruit successful small business entrepreneurs
- Running a successful small business takes a different set of skills than working at a large corporation
- They have been there, done that (including failed)
- They are probably connected with other successful entrepreneurs
- They could serve in an advisory capacity or be elected to the board
Running a Social Enterprise
- You cannot run a social enterprise like you run a nonprofit
- You must generate a profit
- Time costs money
- What is the true cost of your social enterprise?
- What are the true costs of your programs?
- How much income do you need to generate from this venture?
- This will help you set a realistic price point
Working with the Government
- MCN’s Nonprofit Day at the Capitol is February 5th
- The Property Tax Exemption question will impact nonprofits whether or not they own land
- There are huge budget cuts coming – social enterprise can help mitigate reductions
- Contact your representatives and let them know your thoughts
- The State House and the State Senate both have websites devoted to the budget deficit
