Is Now the Right Time to Dive Into Social Enterprise?

Glyn Northington

The next time you are contemplating ways to generate additional revenue for your nonprofit, maybe while savoring a cup of CityKid Java, eating a delicious cookie from Cookie Cart, snuggling up in a warm sweater from Industries, Inc., or carrying your recycling out to the curb for pick-up by Eureka Recycling, just look around – all of those organizations just mentioned are social enterprises. Maybe the right way to generate additional revenue for your nonprofit is right in front of you – all you need to do is dive in!

In February, in the blog “Social Enterprise COULD Be Your Next Step,” we looked at the two questions that organizations usually start with when evaluating social enterprise as an option for their organizations:

(1)    What is social enterprise?

(2)    Is it a viable revenue option for my nonprofit?

After an organization determines the definition of social enterprise, and if they see it as a feasible revenue option, then the question is, “So how do I start a social enterprise?”

Propel Nonprofits (formerly Nonprofits Assistance Fund), in partnership with the Initiative Foundation in Little Falls, has been helping nonprofits in Central Minnesota evaluate, plan, and launch social enterprises for the past 3 ½ years. During that time, 35 nonprofits have gone through a program called Financial Resiliency through Social Enterprise (FRSE). With a long-term goal of building the sustainability of nonprofits to further their missions, the goal of the FRSE program is to assist nonprofits in the successful launch or growth of a social enterprise. The program is designed to achieve this goal by addressing common challenges for developing social enterprise, and to foster learning that can be applied in the real world.

It is often quite difficult for small and mid-sized nonprofits, particularly those led by and serving communities of color and immigrant communities, to expand services because of revenue constraints. This challenge provides a perfect opportunity to advocate for social enterprise as an alternative revenue source for community-based nonprofits. The FRSE program combines developmental training, staff technical assistance, business plan support, and grants to support staff time and obtain specialized consulting.

Now, with the support of Northwest Area Foundation, the FRSE program is expanding. This fall, a cohort will begin in St. Paul. Five daylong, intensive, cohort-based trainings will take place beginning in September, which are complemented by expert business consulting and technical assistance to help nonprofits explore social enterprise. Each session builds around a component of a business plan, and participants work on their plans between sessions with the cohort serving as peer reviewers and supporters in the process.

A total of eight St. Paul nonprofits will be selected to be part of the cohort. The ideal candidates have already started to consider social enterprise as a revenue option, or have a social enterprise they wish to expand or optimize. Organizations must be a 501(c)3 nonprofit, be located in St. Paul and have an operating budget between $500,000 and $5 million. To see other criteria, check out our website with all the details.

Starting a social enterprise is not for the faint of heart. So if you are not quite ready to go off the high dive into a social enterprise, that is okay. Continue to be diligent, do all the required brainstorming and analysis, and wait for the right time for your organization.

Staff Author

Glyn Northington