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The Sustainable Solution Social Enterprise

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The Sustainable Solution Social Enterprise Powered By Docstoc
					www.se-institute.org
    Agenda

   What Is Social Enterprise?

   The Problem and The Solution

   Social Enterprise Leadership Forum
    Model
What Is “Social Enterprise”?

 An organization or venture that advances its social
 mission through entrepreneurial earned income
 strategies.
                   -- Social Enterprise Alliance

 Earned income can come from revenues generated
 from the sale of products and/or services, or a
 strategic alliance between a for-profit company and a
 not-for-profit.
One More Definition
Entrepreneurial Nonprofit

 An organization that seeks to match its core
 competencies with marketplace
 opportunities in order to simultaneously
 generate more earned income and expand
 social impact – the “double bottom line”
  Is Social Enterprise
  A New Idea?
 No… The quid pro quo exchange of value has
  underwritten social causes for centuries.

In the U.S. this year nonprofit commercial sales will
   generate billions in revenues
Success in Education

    Harvard                           The Prentice School

   Fundraising receipts for the         Dedicated to the needs of
    University totaled $590 million       students with language
    from 82,000 donors in fiscal          learning differences (also
    year 2005, a $50 million              known as Specific Language
    increase over fiscal year 2004        Disability or Dyslexia).
   Tuition represents 38% of            Earned Income: 88% from
    revenue                               tuition
   Founded 1636                         Founded in 1986
Success in Publication

National Geographic
   Purpose is the increase and
                                    Freedom Writers
    diffusion of geographic            Empowers teachers and
    knowledge                           underserved students
   Publishing, cable television,      Annual Budget is $550,000.
    research                            35% from earned income
   Makes grants                       Book sales, curriculum product
                                        sales, speaking engagements
PCRF                                    & workshops and licensing.
   Improve care, quality of life       Looking ahead to plans for
    and survival rate of children       Freedom Writer Academy,.
    with malignant disorder            Movie Release
   Marketing cards to distribute
    message
   Make grants to fund research
A Delicious Solution




   Hershey Trust owns 75% of the voting shares of Hershey Foods.
   The Trust owns and operates the Milton Hershey School, providing
    room, board, care and education for 1300 disadvantaged children
   In 2002 Hershey Trust killed a deal that had been negotiated to sell
    to Wrigley at $12.5 BILLION!


              Glen Ivy Hot Springs
           $1.5 million annually to nonprofit
Much More Than a Thrift Store

Goodwill of Orange County
The most critical thing we offer is opportunity. The people we
work with don't want charity, they want a chance to succeed.

Current Budget: $65 million     Earned Income: $41 million

Enterprises:
Custodial                       Thrift Stores
Landscape                       Mailroom Processing
Document Destruction            Supported Employment
Assistive Technology            shopgoodwill.com
Successes Yes…However,


“The very survival of many social
 services, arts and other nonprofits is
 at stake…”

    Jerr Boschee
So Why is The Nonprofit Sector
in Trouble?

   traditional sources of funding unable to keep pace
   there are more non-profits competing for funds
   number of people in need has mushroomed
   the reputation of the sector has been frayed by
    scandals
   Increased cost of raising money – both financial
    and staff-related
   Increasing demand for quantified results
Disturbing Trends

More competition every year
   600 new not-for-profits in OC between 1997 and 2000.
   Statewide 70,000 new not-for-profits between 1999 and 2006

The big are getting get bigger
   6% of nonprofits controlling 85% of the revenue locally
   Nationally, after religion ($93.2 billion), next largest category,
    colleges, universities and other educational organizations,
    collected $38.6 billion. Left @$98 billion for everything else.

In some sectors continued decreases in
government funding for programs (i.e. Seniors)
Donor Fatigue

   Is my donation really making a difference?
   Many worthy causes, how do I choose?
   No matter what I give, they need more!
   Reduced mission due to budget shortfalls
   Focus on mission vs. fundraising
   Need a sustainable model
   Transform from surviving to thriving

                              Lead To…
The Charity/Non-Profit Model
(Funding Dependency)


            500

            400
 $100,000
  per year
            300
 donation
stopping in
            200
  5 years
            100

              0
                  1   2   3   4   5   6   7   8   9   10
                                  Year
Endowment Model
(95% Wasted)


$500

$400

$300                                              $100,000 a year
                                                ending in 5 years
$200

$100

 $0
       1   2   3   4   5   6   7   8   9   10
                       Year
The Social Enterprise Model
(Funding a Legacy)


             500

             400
  $100,000
   per year 300
     loan
 stopping in 200
   5 years
             100

               0
                   1   2   3   4   5   6   7   8   9   10
                                   Year
             Which Model Makes More Sense?
                                                                                                                        Social Enterprise
                                                                                                              500

                                                                                                              400
                                                                                                $100,000
                                                                                                 per year 300
                                                                                                   loan
                                                                                               stopping in 200
                                                                                                 5 years
                                                                                                              100

                                                                          Endowment                            0
                                                           $500                                                     1   2   3   4   5   6   7   8   9   10
                                                                                                                                    Year
                                                           $400

                                                           $300
                  Charity/Non-profit
                                                           $200
            500
                                                           $100
            400
 $100,000
                                                            $0
  per year                                                        1   2    3   4   5   6   7     8   9   10
            300
 donation
                                                                                   Year
stopping in
            200
  5 years
            100

              0
                  1   2   3   4   5   6   7   8   9   10
                                  Year
The Sustainable Solution
Social Enterprise ~ The Double Bottom Line

   Mission focus delivers a social return
   Business focus delivers sustainability
   Donations and grants gain leverage-increase mission
   More income is “unrestricted” or discretionary!
   Dependence on uncertain grants are reduced; “No
    strings”
   More “mission” is possible
What’s Missing To Accelerate
Social Enterprise?

   A leadership network specifically to support the
    social enterprisers working on the unique double
    bottom line challenges of “mission and margin”

• An environment that celebrates innovative,
    entrepreneurial, high-impact organizations

•   A robust “pipeline” of social sector enterprises
    planning and launching ventures
 Addressing Critical Success Factors
Coaching to the organization’s leadership team and Board on social
 enterprise development and management

Connections service providers, investors, corporations and university
 partners, government agencies, media

Capital to finance venture growth strategies, build syndicates of other
 investors, and to offset the cost of service providers

Credibility to the ventures as they seek out partners and ongoing
 support

Capacity Development within the nonprofit to provide a strong
 foundation for mission delivery
10/25/2011                                                        20
Observation From A Pioneer
in the Field

“Of course there are no guarantees. Some of these
  enterprises may falter and disappear. There is no
  more cold-blooded animal in the world than the
  market.”

      -- Jerr Boschee
Social Enterprise Institute

Mission
 Offer organization leaders a unique opportunity to
 develop the skills and networks needed for
 successful social enterprises.


Strategy
  Facilitate Social Enterprise Leadership Forums
  that help leaders create a legacy of self-sufficiency
  through support, coaching and access to regional
  and national expertise.
Proven Models




•The world’s largest CEO membership organization
•12,000 CEOs Internationally

•TEC companies double growth

•Meet monthly (8 hours)

•$12,000 annual fee
Proven
Models


•Young President’s Organization
•50 years
•9,500 < 50 year-old Presidents
•$9,000 annual fee
•Meet Monthly
SEI Business Advisor Members

   Apply their success as a leader in private business
    to social enterprise organizations where financial
    AND social return on investment can be created
    simultaneously;

   Enjoy the challenge of applying themselves to new
    issues and environments, while providing valuable
    input and mentoring
Advantages of
Peer-to-Peer Learning

   Top executives often lack a network of true peers
    with whom they can share freely and openly

   Opportunity to test ideas and strategies

   Learn from real-world experiences – both successes
    and failures

   Enhances the CEO’s ability to work on their
    organization, not just in their organization
Leadership Forum Format
    Leaders meet once a month for four hours

    12 – 15 leaders per Forum group

    Social enterprise site visits

    Invite guests on a quarterly basis
Social Enterprise is Making News

The Orange County Register
  Saturday, March 25, 2006


Helping Themselves
Philanthropists aid
nonprofits in earning
their own revenue.

By JOHN GITTELSOHN
OC METRO
Results in Senior Care


                   SELFund
                   Senior One
                   obtained loan


          Senior One
          Introduced to their largest
          customer
 Results in Cancer Research

Connected to greeting card
specialist. Resulted in:


35% reduction in expenses
Projecting 50% increase in 2007
revenues from card sales
2008 year-round card sales
SE Exclusive!


 The Social Enterprise Institute (SEI) is now the
  exclusive national provider of leadership forums
 for the Social Enterprise Alliance
Save The Date

The 2007 SEA Annual Conference is coming to
 Southern California April 17-19th 2007, the largest
 Gathering of organizations committed to pursuing
 financial sustainability through “social enterprise”
New Social Enterprise
Fund Initiative
SEI is working with the Orange County Community
Foundation to launch a Social Enterprise
Initiative Fund to provide planning and
implementation grants to promising SE
projects in Orange County.
Forums Expanding in California…

  San Diego
  Bay Area
  Los Angeles
  Ventura
  Sacramento
  Fresno
  Inland Empire
                   …and Beyond

				
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posted:3/19/2008
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