A Call to Innovate: Earned Income

Ben & Jerry give you a good reason to get fat: Social Enterprise / Partnershops

I previously penned the (subtly titled) article, “Hey, Nonprofits! Wake up! You can innovate or you can die.”

The piece included 20 questions that I’ll be exploring in more detail under the heading “A Call to Innovate.”

Here is the first question: Can you offset some of your philanthropic dollars with earned income?

Social enterprise. Social ventures. Earned income. Call them what you will, these efforts are an important part of the future of nonprofits.

That’s what everyone’s been saying for years.

But aren’t they also an important part of the history of nonprofits?

A few examples:

v      Thrift stores (i.e. Goodwill)

v      Museum gift stores

v      Gymnasiums (i.e. YMCA)

v      Rental facilities (i.e. Boy Scouts campgrounds)

v      Packaging/Assembly services (i.e. work-service sites for people with intellectual disabilities)

Many of these ventures are as close to the core mission of these organizations as any other part of their work. But over the past couple of years, we have seen the emergence of ventures that were more directly aimed at generating profits and less and impacting mission.

For example, a youth development organization owning a Ben & Jerry’s Scoop Shop. A pet shelter owning a consignment shop. A theater troupe operating a hair salon (I mean, that could happen, right?).

What is the ideal blend of “margin and mission”? When can innovation lead towards mission creep in the name of profits?

Here is an approach that I recommend adopting when considering what earned income activities to pursue:

1. Create an “asset map” that charts all of the areas of expertise that are a part of your organization, as well as the tangible assets that you own (i.e. real estate)
2. Build a “relationship map” that documents all of the connections that you have in the community that could be naturally/easily leveraged into a business relationship (i.e. your natural customers)
3. Cross the two of these maps to see which of your assets are currently being purchased by your relationships
4. Explore the opportunities that present themselves through this process, and determine if there are any that naturally jump out; if so, attempt to calculate the possible value of a venture aimed at monetizing that relationship.
5. Similarly, document all of the additional needs within your relationship map. See if there are any untapped opportunities to capitalize on multiple relationships at once (i.e. if you have a relationship with several dozen churches, a floral business might be a good venture to explore… particularly if you are The Arboretum)
6. Analyze the “highest yield” opportunities that emerge from this process to determine the 3 – 4 that make the most sense for your nonprofit.

The last of these if going to be different for each organization.

For some, the one that makes the most sense will be the most profitable. For others, the most mission-related. For others, a hybrid.

What formula do you think applies to your organization? 

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Can government funding kill nonprofit innovation?

This little light of mine, (the Edward M. Kennedy Serve America Act) gonna let it shine...

Writing in The Wall Street Journal, Howard Husock -- the Manhattan Institute's Vice President, Policy Research and the Director of that organization's Social Entrepreneurship Initiative -- recently wrote:

"This week, the president signed into law the Edward M. Kennedy Serve America Act, which authorizes a huge expansion of the Americorps program, potentially tripling the number of its government-paid "volunteers." The legislation -- which also promises federal funds for "effective solutions developed by social entrepreneurs" -- was heralded as a victory for patriotism and public service...But is it truly good news? Those who cherish the independence of American philanthropy and the nonprofits it supports actually have reason for worry."

He then goes on to conclude::

"Sadly, social entrepreneurs -- who have often started organizations to help us cope with the failure of government programs -- may well be tempted by the big money. But that won't be the best way to serve America."

The crux of his argument is this:

"The Kennedy Act threatens to thwart this creative movement. It will throw so much money at nascent programs that these otherwise independent efforts will lurch after federal dollars and bend toward government directives."

Frankly, I find this idea a bit preposterous. In what other sector would an infusion of capital serve as a barrier to innovation? Yes, there might be some waste -- look at the money that was squandered on funding ridiculous start-ups during the Internet boom of the 90s. However, didn't the flood of angel investors throwing money into dot-coms result in some remarkable breakthroughs in innovation?

Similarly, don't both political parties agree that the government's investment in green technology will drive innovation in the energy economy? Why are we not concerned about the way that these funds will make scientists "bend toward government directives"?

Why is it that we think that nonprofits would not similarly respond with creativity and innovation to this sudden influx of both financial and human capital?

Yes, there will be waste and "money chsing"... just as in any other sector. Let us remember that nonprofits might be charitable in purpose, but they are still businesses: no margin, no mission.

I do not see the Edward M. Kennedy Serve America Act inhibiting innovation. Rather, I think it has the potential to spark an amazing new wave of volunteerism and engaged philanthropy that might not otherwise exist.

What do you think?

Read the article here:
Eating From the Hand That Bites You - WSJ.com

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Obama Engages Nonprofit Community

Obama taps officials from Echoing Green and Public Allies to foster innovation in his administration

Thanks to the Chronicle of Philanthropy.com: for this encouraging news about the way that the Obama administration is beginning to engage the nonprofit community:

Two Charity Heads Among Leaders Advising Obama on Innovation

Two charity leaders have been appointed to a group of more than 30 people that has been asked to help the incoming Obama administration devise an “innovation agenda.”

They are: Cheryl Dorsey, president of Echoing Green, in New York, which provides fellowships to entrepreneurial nonprofit leaders; and Paul Schmitz, president of Public Allies, in Milwaukee, which trains young people for nonprofit and public-service careers."

Their group — the Technology, Innovation, and Government Reform Policy Working Group — will recommend ways to modernize government; use technology to expand the economy and solve pressing national problems; and promote “active citizenship” and government partnerships with civil-society organizations, according to the Obama transition project’s Web site.

Read the rest here:

http://philanthropy.com/news/government/index.php?id=6430

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Service Targets Elder Volunteer Corps

ReServe of New York enables "experienced" volunteers to give back after retirement

I heard about ReServe Elder Service, Inc. through the TNMAN (Texas Nonprofit Management Assistance Network) conference that I attended last week, and wanted to share the info about this innovative approach to volunteerism:

ReServe: Putting Experience to Work

ReServe connects New York City's experienced older adults with stipend-paying opportunities that challenge them to use their lifetime skills for the public good. Building on the groundwork laid by the pioneers of civic engagement for older adults, ReServe is putting words into action.

ReServe educates civic institutions about the wisdom and experience that older adults can bring them, works to create service opportunities, and recruits, trains, places and supports older adults on the job. We invite you to join us.

More info at the organization's site:
http://www.reserveinc.org/

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