Social Enterprise: Myths & Realities
OC 2.0 – Nonprofit Leaders Summit May 23, 2014
Jerri Rosen – CEO and Founder, Working WardrobesDiane Helfrey – Executive Director and Founder, Social Venture PartnersLaMecia Butler – Portfolio Manager, REDFIosefa Alofaituli – Executive Director, Oak View Renewal Partnership(Moderator)
Coming to “Terms” with Social Enterprise
Definitions of Terms:Social EntrepreneurshipSocial EnterpriseDouble Bottom-LineSocial 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 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
Social mission
Business
Social enterprise
Reduction of social costs
Stronger families
Thriving communities
More people employed
Potential Outcomes:Inputs:
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, non-obvious 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
SVP: Unleashing Potential
• 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
socialventurepartners.org 9
Network Momentum
• SVP is the largest global network of engaged donors.• 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
socialventurepartners.org 10
L.A.’s Programs
• Local SVPs tailor programs based on market dynamics and Partner interests.• Multi-year Investments• Social Innovation Fast Pitch • Partner Education and Events• New: Encore Fellowships
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 wine/cheese salesTheater Groups admission feesEducation tuitionHospitals fees to underwrite
support to poor
Social EntrepreneurismFor 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 lowo 19% of Americans believe charitable organizations
run their programs well
More nonprofits added every yearo 3,200+ new nonprofits in OC in 2014
The big are getting biggero 6% of nonprofits control 85% of revenueo 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 investingWell written business plans are being fundedSocial 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 EnterpriseRelated 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
Tustin1071 Main Street/ Newport Avenue 714-573-4596
Laguna Niguel 28051 Greenfield Drive/ Crown Valley 949-425-9900
Shop OperationsPaid 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
Anaheim3150 Lincoln Avenue/ Western 714-816-0991
Costa Mesa803 19th Street/ Placentia 949-425-9900
Garden Grove 12761 Harbor Blvd. Suite I-2
Funding Our Services 2013
Projected Site Locations
Current Hanger Boutiques
Current Thrift Shops
Retail Revenue History
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
-200,000
0
200,000
400,000
600,000
800,000
1,000,000
1,200,000
1,400,000
12-Year Comparison
REVENUEEXPENSESPROFIT
PROJ’D
Operational IssuesHave 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 LearnedFocus on financial sustainability
Build finance department strength in front of the curveDevelop Plan A and a strong Plan B
Build resale shop operation strength earlier
Reduce dependence on fundraising events
Easier Lessons Learned
Focus on core businessesResale operationsClient services
Resale and thrift shop can be recession proofFocus marketing efforts
Before & After
Before & After