Earned Income, Social Enterprise and Fee for Service

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

What is social enterprise?

An organization or venture that achieves its primary social or environmental mission using business

Social Enterprise Alliance, 2009

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

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

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?

Do worry about…

• Customers

• And did we say,

CUSTOMERS?

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???

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

Identifying Opportunities

Resources +Conditions/need +A solution that:

–Advances your mission–Builds on your resources–Customers will buy

= A good opportunity

What Resources, Strengths & Assets Do You Have to Build

On?

Tangible Resources

• Human Capital • Technology• Money• Facilities• Products or services you currently offer• Other?

Intangible Resources

• Reputation and Brand • Relationships/community connections• Information/data• “Brains”--what you know• Other?

What unmet needs are out there?

• In your community• In your field• Among your clients• Other?

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?

Opportunity Activity Based on your resources, unmet needs

and advancing your mission list your possible opportunities on a sheet of

paper

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?

Why roll the dice……when a feasibility scan can help you learn

more?

1. Ask people what they think

• Surveys• Interviews• Conversation

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

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

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?

Next steps

• Walk through and around your office with fresh eyes. Jot down what you see:– People– Space– Equipment– Resources

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.

Questions?

Now get out there…