What happened to the simple choice between for-profit and non-profit?
There are many more options now and lots of new terminology: social enterprise, social innovation, social entrepreneurship, for benefit, social venture.
Once upon a time you existed for social good or you existed to make money. It’s not so clear anymore.
Visionary nonprofit leaders are paying attention to the blurring lines (
even if the terminology remains fuzzy).
A History of Social Enterprise
Way back in 1917 Girl Scouts started selling cookies. Pretty soon they were earning a lot more than was needed for a camping trip.
On the other side of the equation, the actor Paul Newman cre
ated Newman’s Own products and donated all after-tax proceeds to charities including his own Hole in the Wall Camp (now SeriousFun Children’s Network).
Two different approaches – one from a nonprofit, one from a for-profit – both designed to raise money for children’s programs.
In recent years both approaches have become popular. Regardless of tax status, many organizations exist for social good.
What’s different now is the sense that traditional funding sources may be drying up. To make up for shortfalls you need to take an entrepreneur’s view of making money.
The most important consideration is keeping the venture aligned with. Your social enterprise will take a lot of effort – effort that should not divert your attention from the mission.
Girl Scouts started out baking the cookies they sold. They were learning cooking skills and business skills. Although they don’t make the millions of boxes sold every year now, they do learn how to sell and how to manage money.
If you haven’t begun to explore the possibility of creating a product or service that produces income, now is the time.