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Social entrepreneurism:
Unifying business principles with social impact –
Blurring the lines between the nonprofit and forprofit sectors
For-Profit: Breaking from the traditional profit driven
mode of conducting business and incorporating into
a business’ DNA, a double or triple bottom-line
philosophy that considers People, Planet, and Profit
Non-Profit: Incorporating business models into the
Organization’s operations that consider business
strategies and ventures, self-sustainability, and
effective partnering/collaboration
Picking up momentum in the LI nonprofit sector with
about 1/3 of LI organizations engaged in it in some
form of social enterprise
“Start a company. Change the world.”
 It used to be that if you wanted to make a
difference, you joined a nonprofit. And if you
wanted to make money, you launched a business.
These days, it's not so simple. More nonprofits
are being run like fast-growth start-ups. And
more traditional companies are being built
around social missions.”
–Inc. Magazine, May 2011
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Poverty and Underemployment
Competition Among Organizations
Need for Funding and Resources
Need for Innovation
As a country and global community, we stand at a
unique inflection point. It appears that the world’s
problems are outstripping our ability to address
them. What may be more accurate is that traditional
institutions are no longer sufficient.
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Their has been a significant shift in how information is obtained and
shared through social media
More peer to peer information sharing
Consumer sentiment wields more power today than ever before
Occupy Wall Street – Push for higher ethical standards … the Gordon
Gecko sentiment of “greed is good” is no
longer appropriate
Businesses need to be more cognizant of
their impact on society and the
environment, and need to
get real return on their
philanthropic investments
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Donors are no longer content with psychic benefit,
they are interested in investing in social change
and they are looking for compelling returns.
(Socially Responsible Investments – shift from
values to value)
Corporate partners are looking to nonprofits to
drive business growth, not just make them feel
better (nonprofits need to find more meaningful
ways to work with the private sector)
Need to sell to the private sector their impact as a
business proposition
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Need to develop systems to track impact
and show ROI
◦ Clear channel entered into a partnership
with BB/BS of NY City to provide 2700
PSA’s because of the benefit of the
affiliation
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Production Model: Nonprofit develops a product that is sold to a
for-profit partner. Ex. Greyston Bakery sells Brownies to Ben &
Jerry’s
Endorsement/Royalty Model: Nonprofit obtains revenue for use of
name, logo, trademark, etc. American Heart Association – between
04 and 07 earned over $30 million from pharmaceutical companies
and millions more for their heart-check mark
Co-Business Model: Nonprofit and for profit enter into a CoBusiness for mutual benefit. Big Brothers/Big Sisters Processes 11
million pounds of clothing per year, much of which is sold to its for
profit business partner (Savers) that re-sells it. BB/BS has a
collection system in place and for-profit partner has the secondary
market distribution channel
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Pure Business: Nonprofit generates a business, often times
out of necessity or strength that functions as a for-profit
business. FEGS started up several businesses including All
Sector technology, a for profit entity, which is a leader in the
computer networking and IT space and HR Dynamics, an HR
provider… specifically serving the nonprofit sector.
Franchising: The Sunrise Day Camp developed a day camp
for children with cancer. It is the only true day camp for
children with cancer in the US. They are in discussions with
other organizations to franchise the model, whereby Sunrise
will get a $50,000 per year franchise payment from each
franchisee
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Use of Resource/Expertise Model: Nonprofit has resources or
expertise that is valuable to a for-profit partner. Lymphatic
Education and Research Network has developed a tissue bank
that have different characteristics/markers that researchers
can purchase samples from … or a software company that
beta-tests a software product within a school environment.
School gets much needed software/technology and software
company gets much needed feedback/input.
Mission Driven Business: Nonprofit establishes a business
who’s purpose is to further the organization’s mission while
generating revenue to subsidize its operations. IGHL
developed the Flower Barn and a Bed & Breakfast which
employs the developmentally disabled while generating
profitability that goes back to the Organization. The Viscardi
Center has a UPS store franchise.
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The impetus for the push for social enterprise
Board buy-in
Source of resources
Early examples
Current social enterprises
Developing for profit partnerships
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According to Meticulon CEO Garth Johnson,
"Although many customers come to us with the
motive of doing some social good, they will retain
our services because of the excellent work product
we provide." Meticulon is a Canadian based
nonprofit that utilizes individuals on the autism
spectrum to provide technology solutions such as
software testing, quality assurance, and a broad
range of analytical services including digitization,
scanning and data verification
P+O=S
Problem + Opportunity = Solution
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What are the needs in the community?
How are you poised to effectively fill the void?
Who is your competition in the marketplace?
How are you different/unique?
What is your value proposition?
Can it be self sustaining?
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Technology is still not being used to the extent it
should be by LI nonprofits (ALS raised over $100
million from its ice bucket challenge), ephilanthropy, enhanced social media, donations
through mobile devices, etc.
Donors looking for increased collaborations and
a real connection to community/organ-izational
impact
Most LI based nonprofits are focused on
fundraising for current needs, with tight cash
flows, increasing demands, and shrinking
funding. More than 70% of Li based agencies do
not have any endowment established
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25% of LI based nonprofits are either
currently engaged in a merger (13%) or are
contemplating one (12%).
40% of agencies are still not measuring
outcomes or organizational impact