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.

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