Transcript Coming to “terms” with Social Enterprise

Social Enterprise:
Myths & Realities
OC 2.0 – Nonprofit Leaders Summit
May 23, 2014
Jerri Rosen – CEO and Founder, Working Wardrobes
Diane Helfrey – Executive Director and Founder, Social Venture Partners
LaMecia Butler – Portfolio Manager, REDF
Iosefa Alofaituli – Executive Director, Oak View Renewal Partnership
(Moderator)
Coming to “Terms” with Social Enterprise
Definitions of Terms:
Social Entrepreneurship
Social Enterprise
Double Bottom-Line
Social Innovation
Social Entrepreneurship
The process of pursuing innovative solutions to social
problems. More specifically, social entrepreneurs
adopt a mission to create and sustain social value.
They pursue opportunities to serve this mission, while
continuously adapting and learning. They draw upon
appropriate thinking in both the business and
nonprofit worlds and operate in a variety of
organizations.
- "The Meaning of Social Entrepreneurship"
J. Gregory Dees
Social Enterprise
“Social Enterprise is any mission-based earnedincome business or strategy undertaken by a
nonprofit for the purpose of generating revenue in
support of the nonprofit’s social mission.”
- Social Enterprise Alliance
Inputs:
Social
mission
Potential Outcomes:
Reduction of social costs
Stronger families
Social
enterprise
Thriving communities
Business
More people employed
Is this new?
Social Enterprise is centuries old!
 Monasteries
Wine & Cheese Sales
 Theater Groups
Admission Fees
 Education
Tuition
 Hospitals
Fees to underwrite support to poor
Double Bottom Line
Mission focus delivers a social return
Business focus delivers a financial return
- Donations and grants gain leverage
- Unrestricted income
More mission is possible!
Social Innovation
Innovative social organizations employ new, nonobvious and/or simple, “elegant” solutions to
address social problems more effectively than other
organizations
- Pioneering new products or services
- Delivering products/services in new ways or to
new populations
- Employing new processes, organizational
structures, or business models
- Social Venture Partners
Social Venture
Partners
• Social Venture Partners builds powerful relationships
among people who want to give back and the nonprofits
that make change possible.
• Model of engaged philanthropy: leverage money, time,
talent, and connections
• Focus on a dual mission: Support high-potential nonprofits
by building their capacity; Help individuals achieve greater
impact with their giving
SVP: Unleashing Potential
socialventurepartners.org
9
• SVP is the largest global network of
engaged donors.
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Founded in 1997 in Seattle
Others inspired to start new chapters in 1999
SVP International formed in 2001
Founded in LA in 2004
Today: network of 36 member organizations in US, Australia,
Canada, China, India, Japan
Network Momentum
socialventurepartners.org
10
• Local SVPs tailor programs based on
market dynamics and Partner interests.
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Multi-year Investments
Social Innovation Fast Pitch
Partner Education and Events
New: Encore Fellowships
L.A.’s Programs
socialventurepartners.org
11
Social Enterprise:
Myths & Realities
Social Enterprise
“Social Enterprise is any mission-based earned-income
business or strategy undertaken by a nonprofit for
the purpose of generating revenue in support of the
nonprofit’s social mission.”
-Social Enterprise Alliance
Is this new?
Social Enterprise is centuries old!
Monasteries
Theater Groups
Education
Hospitals
wine/cheese sales
admission fees
tuition
fees to underwrite
support to poor
Social Entrepreneurism
For profit business
-Home care services for disabled
-Adult day care services
-Low cost housing projects
-Wind farms
Non-for profit businesses
-Workshops for at-risk youth
-Substance abuse shelters
-Thrift shops
Social Entrepreneurism
Earned income leads to sustainability
The Siblings:
-Social innovation
-Social enterprise
Double Bottom Line
Mission focus delivers a social return
Business focus delivers a financial return
-Donations and grants gain leverage
-Unrestricted income
More mission is possible!
What are the hard facts?
Public trust in the nonprofit sector is low
o 19% of Americans believe charitable organizations
run their programs well
More nonprofits added every year
o 3,200+ new nonprofits in OC in 2014
The big are getting bigger
o 6% of nonprofits control 85% of revenue
o Hospitals, universities
What’s the upside?
Financial impact
-Multiple sources of income
-Less dependence on funders/grants
Non-financial impact
-More efficient practices
-More clients served
Organizational impact
-Mission related
-Sustainability
Is there a money trail?
Philanthropists and corporations are looking at a
new model of giving
Social Venture Capitalists are investing
Well written business plans are being funded
Social Enterprise Academies
Business people are attracted a nonprofit
operating an enterprise venture
Is the Business Community
Aware?
Only 20% of corporate funders in Orange County are
familiar with Social Enterprise Investing
12.5% are not familiar at all
67.5% recognize the national trends and are open to
learning about it
What is new?
Expanding pool of knowledge
Growing community of practitioners
-Social Enterprise Academies
-REDF
Support systems/SEA
-National conference, communication networks
-1,100 members; 350 at annual conference
Increasing expectations to apply business practices to
the nonprofit sector
What’s our challenge?
Access to Capital
-Knowing what, how and where to look
Entrepreneurial Capacity
-Market awareness
-Value assessment
-Functional expertise
Market Viability
The Ideal Social
Enterprise
Related to mission
Feasible and realistic
Responds to a genuine market need
Builds on strengths and assets
Energizes Board members, staff and stakeholders
Makes enough money to achieve financial goals
Tustin
1071 Main Street/ Newport Avenue
714-573-4596
Laguna Niguel
28051 Greenfield Drive/ Crown Valley
949-425-9900
Shop Operations
Paid Manager and Assistant Manager with
resale or consignment shop experience
Fashion Board Volunteers
-12 – 20 per store
-Flexible shifts
-Customer service advocates
-Merchandise and sell!
Local Store Marketing
Resale Shop Promotions
Girls Nite Out Parties
Anaheim
3150 Lincoln Avenue/ Western
714-816-0991
Costa Mesa
803 19th Street/ Placentia
949-425-9900
Garden Grove
12761 Harbor Blvd. Suite I-2
Funding Our Services 2013
Current Hanger
Boutiques
Current Thrift Shops
Projected Site
Locations
Retail Revenue History
12-Year Comparison
1,400,000
1,200,000
1,000,000
800,000
REVENUE
600,000
EXPENSES
PROFIT
400,000
200,000
0
2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014
-200,000
PROJ’D
Operational Issues
Have professional managers with retail
and/or resale shop experience
Develop a training program for shop staff
and volunteers
Provide an incentive in exceeding goals
Utilize all promotional opportunities
Develop social media campaigns
Hard Lessons Learned
Focus on financial sustainability
Build finance department strength in front of the
curve
Develop Plan A and a strong Plan B
Build resale shop operation strength earlier
Reduce dependence on fundraising events
Easier Lessons Learned
Focus on core businesses
Resale operations
Client services
Resale and thrift shop can be recession proof
Focus marketing efforts
Before & After
Before & After