Nonprofit Harvest

Assisting nonprofits gather financial management resources that will help them build sustainable futures.

January 27, 2009

SEN Top Ten

Filed under: MNBudget, Minnesota, Mission, Networks, Social Enterprise — Tags: , , — ashley @ 4:54 pm

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

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