Perspective 2: Why run a social enterprise as a non-profit?
Perspective 2 of 3
As a for-profit social enterprise, we:
- Have access to multiple forms of capital (angel investors, social investors/funds, venture capital funds, commercial loans, grants), and therefore have more flexibility with our growth strategy
- Can connect easily with philanthrocapitalists and the growing number of people that are sick of donating (particularly to a business!); we’ll take your dollars and give you both a healthy social and financial return
- Are more readily accepted by other members of the private sector, as we face similar pressures and are seen to be on the same playing field (e.g. no extra benefits); able to collaborate more easily in the market (PS working groups, government, chambers of commerce)
- Must be profitable and sustainable, therefore giving us more freedom to grow organically at our own pace; no need to always be searching for additional donor funding to continue operations
- Do not have to tie up valuable management time and resources to work with donors (i.e. free from dreaded log-frames, donor-driven monitoring/reporting/funding, new funding proposals, periodic audits from donors thousands of miles away that have little on-the-ground experience to add)
- Must be efficient, effective and valuable – if our product/service is not filling a real need, the market will tell us. Because our product/service is meeting a real need sustainably, we are maximizing our social mission and can replicate it as much and as quickly as the market will allow
And – well – it’s just the moral thing to do. All the pros listed in Perspective 1 give non-profit social enterprises an unfair advantage. We compete on the same field as any other business, and it irks us when a non-profit can undercut our price and cost structure and exploit its beneficiaries for an easy sale. Who determines that the non-profit social enterprise is providing any more social impact than our for-profit model, and therefore is entitled to additional benefits?
~ by responsiblenomad on May 26, 2011.