Social enterprise is a strategy being used by many nonprofits, and is one we suggest for the Parkway when (and if) it is managed by a nonprofit organization.
This report excerpt discusses the issue.
Making Money With a Mission
Many charities are starting business ventures, but their goals are as much social as they are financial
By Nicole Wallace
In the past decade, the number of charities running businesses has exploded as organizations sought new sources of revenue. Nonprofit organizations today have a hand in activities as diverse as day-care centers for dogs, used-car lots, organic farms, specialty restaurants, and pest-extermination businesses.
But as charities have gained more experience, they have come to realize that many of their expectations need to be tempered. Many business ventures take years to make money, and even when they do, the returns are often modest. Others never make a profit.
So while the prospect of generating unrestricted income remains alluring, a growing number of charities have come to believe that operating a business is an important tool for meeting their social goals — and not a replacement for other efforts to stay afloat financially, such as seeking government grants or private donations.
"By and large it's not a new way to raise money to keep doing what you're already doing," says Rolfe Larson, who runs a social-enterprise consulting company in Denver. "It's a new way to approach how you accomplish your mission."
No matter how much interest in business activities has been growing, Mr. Larson and other experts believe that far more groups could benefit from experimenting with ways to bring in revenue from sources other than private donations and government aid.
But fear of failure holds too many organizations back, he says.
"To actually fail is considered a problem in the nonprofit sector," he says. "It's a badge of honor in the corporate sector. There are venture capitalists who will only provide resources to an entrepreneur who's already lost $5-million or $10-million because she's made some good mistakes and learned from them."
