Social entrepreneurship is a recent term defined as combining entrepreneurial skills with social responsibility. Some social entrepreneurs launch for-profit businesses with the idea of contributing profits to the nonprofits they believe in, some plan to offer discounted goods or services to certain populations. Many entrepreneurial types prefer to use their skills to take the nonprofit sector by storm with their own organization. Whatever the outlet, social entrepreneurism should have a significant impact on the nonprofit sector over the next decade, both in terms of sustainability and how they get work done.
One of the biggest motivators for people to start their own business is to increase their personal wealth. But the reality is that those who succeed in business have a responsibility to give back to the community that helped them reach their goals, and the new generation of entrepreneurs (25-45) seems to be embracing that responsibility. Small businesses of all types are looking for ways to manage their impact on the environment, create opportunities for their employees to volunteer, and set aside some portion of their business or profits to do some good.
Nonprofits will benefit from encouraging this trend and positioning themselves to benefit from entrepreneurial philanthropy. Donor recognition programs should be created or revamped to ensure that these business owners see that organization as a potential symbiotic relationship. The specific needs of the nonprofit should be clear and professionally presented … successful for-profit entrepreneurs are business experts and they won’t be inclined to support an organization that isn’t run professionally.
To that end, the social entrepreneurs who choose to launch new nonprofits are very likely to dramatically alter the landscape of nonprofit leadership. Though nonprofits inherently demand some level of socially-oriented, consensus-based management, adopting fundamental business leadership tactics can raise the level of expectations both in and out of the organization. There needs to be an air of aggressive commitment to tackling the problem at hand, rather than a wait-and-see, inactive approach to managing the programs. Employees and volunteers shouldn’t be treated as though they are doing the nonprofit such a huge favor by their mere existence that nothing is really expected of them. Rather, they should be treated as employees in any other type of business, with specific skills sets required and a certain volume and quality of output required.
In order to succeed in making the intended impact on society, the operations of nonprofits need to be run comparably to successful for-profit companies, with significant focus on business fundamentals with an eye toward innovation in every area of the organization. Every aspect of the nonprofit should be examined for opportunities to innovate and streamline. Money should be managed effectively through a well-developed accounting system and a frequently analyzed financial planning system. Salaries should be set commensurate with the responsibilities – over time, the glory in working for peanuts wears off, and strong talent won’t stick around for that. And, while donor income is critical, no ideals should be compromised for a controlling donor. By developing multiple income streams for the nonprofit, you won’t need to engage in these moral debates … you can just say no if there are too many strings attached.
At the end of the day, a nonprofit corporation is still a business, a must be run as such to succeed. For-profit businesses are undergoing a change as well, so that success depends on getting the edge over the competition by running a tight ship and always looking for innovative ways to compete. These same principles, applied within the nonprofit sector, will result in greater change for the greater good than ever.