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Earned Income, Social Enterprise and Fee for Service
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Today, we will …
• Define terms
• Clarify your goals
• Understand– Key characteristics of successful
organizations
– Your current readiness and capacity
– What you might do to shore up capacity
• Identify potential earned income/fee for service opportunities
• Identify some next actions
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What is social enterprise?
An organization or venture that achieves its primary social or environmental mission using business
Social Enterprise Alliance, 2009
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Earned Income and Fee for Service
• Nonfundraising income from the sale of products, services, programs or infrastructure– Rents– Licensing– Sales of products or services– Investment income
• Fee for service is one form of earned income
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What are your goals?
• Advance mission (social benefit)ProductsServices
• Diversify revenue• Revenue only• Visibility• Impress donors• My board/our funders think it’s a good idea• We have a transformative world-changing idea
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Things not to worry about at the beginning…
• UBI• Should I be an L3c? How many
subsidiaries do I need?• What programs will get the business
profits?
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Do worry about…
• Customers
• And did we say,
CUSTOMERS?
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What does it take to be successful?
• Dedicated leadership/identified champion • A match with your mission• Culture of innovation • Quick decision-making• Low overhead • Ability to adapt to change • A business plan! • And did we say, CUSTOMERS???
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So what if we’re not ready to launch something big?
• Take risk assessment with multiple board members and staff
• Look for earned income opportunities, including fee for service that don’t require huge additional investments of time or money
• Start with what you have or know
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Identifying Opportunities
Resources +Conditions/need +A solution that:
–Advances your mission–Builds on your resources–Customers will buy
= A good opportunity
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What Resources, Strengths & Assets Do You Have to Build
On?
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Tangible Resources
• Human Capital • Technology• Money• Facilities• Products or services you currently offer• Other?
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Intangible Resources
• Reputation and Brand • Relationships/community connections• Information/data• “Brains”--what you know• Other?
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What unmet needs are out there?
• In your community• In your field• Among your clients• Other?
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Identifying Your Opportunities…
• What can your organization offer to produce income?
• What products might people buy?• What services might you offer? • What expertise do you have?
• Most IMPORTANT: Who wants to buy what you have to sell?
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Opportunity Activity Based on your resources, unmet needs
and advancing your mission list your possible opportunities on a sheet of
paper
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Apply the grandmother test
…before doing extensive market research
OR
Would you get on a bus to take a really sick child
to a day care provider you had never met?
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Why roll the dice……when a feasibility scan can help you learn
more?
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1. Ask people what they think
• Surveys• Interviews• Conversation
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2. See what other people are up to
• Competitor research• Nonprofits in other parts of the country
who do similar work• Go to the Social Enterprise Alliance
Website, www.se-alliance.org
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3. Test your idea
• Market research• Try something on a small scale• Create a survey• Ask people: “ Do you think your friends
would be interested in this?”• Try charging for something you haven’ t• Try a slight fee increase
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4. Put some numbers to paper
• Write down costs of implementing your idea—don’t forget indirect costs of staff time to market, etc.
• Write down potential revenue• Is it worth it?
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Next steps
• Walk through and around your office with fresh eyes. Jot down what you see:– People– Space– Equipment– Resources
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Next steps
• Get a team together and go through the list. Think of which things might be turned into moneymakers.
• Of those items, think about which are a good fit with your mission.
• Of those, decide which will go through a feasibility scan.
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Questions?
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Now get out there…