Ever wish for a strong, stable revenue stream that didn’t require constant care?
Your time is precious. Donors need your attention. Your Board needs your attention. Staff, volunteers and clients need your attention.
How on earth could you add one more task to your already overflowing Inbox?
But – what if adding one component increased your cash flow by tens of thousands of dollars each year?
“Social enterprise” is a hot topic in many nonprofit circles today.
In short, this refers to a nonprofit which runs a for-profit business to fund the organization.
Or, it can also mean a for-profit business which donates heavily through its own nonprofit. Think Toms, best known for its “get one/give one” shoe program. Toms also donates eyewear, provides clean drinking water, and promotes safe births through global education and resources.
In the past, most pregnancy help organizations (PHOs) went no further than selling event t-shirts or having sales (flowers, crafts, hams, turkeys) at various times of year. Yet, selling items with high cost and low return is a challenge, and can tax time and resources.
Over time however, more than a few PHOs turned to social enterprises, such as thrift stores, to fund their work, with varying success. Some PHOs are seeing yearly profits above six figures, while others struggle to break even.
It is important then, to consider how a social enterprise might impact your PHO, and to look at different options, benefits and risks:
Three Great Reasons to Start a Social Enterprise
1. Steady revenue stream
The mythical stream of never-ending revenue can exist. A surprising number of pregnancy help organizations (PHOs) enjoy stable revenue through small businesses.
A recent gift of a 9400 square foot store has Development Director, Paula Kinard, looking to grow profits upwards of 50% annually.
(Photo above courtesy Blessingdales. Reprinted with permission.)
Hope Unlimited, PRCs in Paducah, KY and Metropolis, IL, actually began as a thrift store. In 1989, one woman wanted to help single moms with diapers and baby clothing and began a small thrift shop from her home. The clinics grew from there. According to Client & Volunteer Services Director Julia Waddell, each center operates its own thrift store.
Together they bring in nearly $40,000 annually.
2. Job skills training
One major drawback to opening a store is the manpower it takes to run it. Many social enterprise programs also develop a job-skills training component. What better way to meet the job-readiness needs of clients than through hands-on training? And score free labor in the process.
Blessingdales has a fully integrated job-skills training program for Living Vine residents. Customer service and retail experience can be invaluable in helping single moms gain practical experience and strengthen their resumes.
3. Greater opportunities for donor/client involvement
Donors love to see the impact of their donations. But it’s not always practical for them to meet your clients.
A store is a great way for donors to deepen their relationship with your organization. This can translate into more and larger gifts in the future.
Top Social Enterprise Ideas on a Budget
Thrift stores can be a great way to involve the community – donating new and gently-used items, volunteer hours for cleaning and organizing stock, and opportunities to purchase things they want at drastically reduced prices.
But, many communities are overrun with thrift stores. Large national chains like Goodwill and Habitat for Humanity’s ReStore programs can be heavy competition. Drive around your area and check out your competition. You may see an opportunity everyone else is missing.
Pregnancy & Resource Centre of Windsor, Ontario, CA Executive Director Judith Brown saw an opportunity to resell new and gently-used wedding gowns in her community. Brides Choice & Yours meets a unique community need. Read their story here.
Everyone loves to eat. Whether you envision whole-grain pomegranate-nut muffins or you are vying for Cupcake Wars champion, some nonprofits are successfully using food sales to empower their clients, bless their community and impact their bottom line. Where would the Girls Scouts be without those delicious cookies?
One major caveat – Investigate carefully your local and state food safety regulations. The Health Department may require permitting and even a commercial kitchen to make and resell food items.
Many churches already have commercial kitchens and you could schedule time to use one each week. This could also be a great opportunity for volunteers to participate in making the products you plan to sell. Also, you may find restaurant owners who support your mission and will allow you to use their equipment once or twice a month.
Think about ways you can plan ahead and build sales before you invest a lot of time, money and headache.
Have you considered the gifts and talents lurking in your clients and volunteers? Blessingdales sells a series of books written by Living Vine residents.
Wonderfully Made books are based on their morning study of the book of Proverbs.
Authors and illustrators each earn $1 for every book sold. What a great way to encourage an entrepreneurial mindset in your clients and also bless them financially. (Photo above courtesy Blessingdales. Reprinted with permission.)
The 5 Ps of Social Enterprises
The Boy Scouts know a thing or two about planning: Proper Preparation Prevents Poor Performance.
Here are a few areas to carefully consider before diving into your very own magical revenue stream.
Current staff may be all you have to start with. But it is impossible (and unfair) to expect them to continue handling their current workload and also work a second job in your new store. Current staff may be fine to begin with, but you will probably want to hire permanent staff in order for your business to grow and better sustain your PHO.
Cost of doing business
As the old saying goes, it takes money to make money. Talk with local business leaders in your area. You may find some willing to serve on a task force to create and finance a small business startup. You may even find some passionate, new advocates for your ministry.
You can’t jump into the social enterprise waters feet-first and then get upset when your hair gets wet. How can you start small? Dip your toes in before you decide to swim.
How can you utilize current resources before renting space or hiring staff?
One idea is to utilize times when your offices are closed, opening your doors to the public to sell your wares. By opening for business in your own offices one weekend a quarter and slowly building to once a month, then once a week, you will probably be ready for your own store.
Other ideas include joining the local craft-fair circuit or when speaking at functions in churches or elsewhere, setting up a booth in the lobby to sell items (if approved).
There are nearly as many ways to create a social enterprise as there are companies doing it.
One more thought? Consider taking your Board and Executive staff on a field trip to visit an organization successfully operating a social enterprise. A first-hand look is often the best way to see the path to future success.