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