The hottest trend in charitable work is the social entrepreneurship movement. As a result, traditional nonprofits are increasingly encouraged to be more entrepreneurial. It seems that we are in a transitional phase and your organization is likely somewhere on a sliding scale between a traditional nonprofit model and a new entrepreneurial one. It's not always comfortable to be in that spot.
I was intrigued by a wonderful white paper by Social Velocity, a consultant to nonprofits. It acknowledges that social entrepreneurs often look down on the traditional nonprofit as being stodgy and unwilling to change. At the same time, those organizations that have been in the trenches for many years sometimes feel unappreciated and forced into change.
However, Social Velocity has some excellent suggestions about What Nonprofits Can Learn From Social Entrepreneurs. It comes down to being more innovative, changing the organization's mindset, expanding its goals, and approaching funding in a different way. Here are the main points from the Social Velocity argument:
- Be Bolder. Nonprofits need to think bigger. Think of the BHAGs (Big Hairy Audacious Goals) from Jim Collins' book, Good to Great. Collins says:
"A BHAG is a huge and daunting goal -- like a big mountain to climb. It is clear, compelling, and people 'get' it right away. A BHAG serves as a unifying focal point of effort, galvanizing people and creating team spirit as people strive toward a finish line. Like the 1960s NASA moon mission, a BHAG captures the imagination and grabs people in the gut."
- Lose the Charity Mindset. "Charity" implies that an organization is narrowly "benevolent." It implies need, inadequacy, addressing symptoms rather than causes. Plus, charitable organizations may not invest in infrastructure because every penny is spent on services. Charities are often loved but might lack the respect of their supporters. They are seen as always having a hand out rather than working as equal partners with funders in creating solutions.
- Finance, Don't Fundraise. Traditional fundraising can keep nonprofits in the "starvation cycle" of trying to do more and more with less and less. On the other hand, social entrepreneurs think of "financing" social change, not fundraising for it. The differences in these approaches to funding include:
- funding for both short and long term goals...programs and infrastructure.
- an integrated approach to funding with no silos partitioning off fundraising and programs, and due consideration to money-making endeavors as well as traditional fundraising.
- a greater focus on individuals (who make up more than 80% of all private money in the nonprofit sector) and less on corporate or foundation philanthropy (which make up only 5% and 12% respectively).
- messaging that goes beyond a "tin-cup" mentality to emphasis on the social impact to be achieved.
- raising money to create an effective organization, from great staff to technology to evaluation to training.
- including capital vehicles such as loans and equity in the financing mix.
- finding earned-income opportunities where appropriate.
- willingness to evaluate all financial sources and drop those that are not effective, replacing them with higher net endeavors.
- moving away from "push" fundraising and marketing, such as direct mail, to "pull" efforts that bring in interested donors and prospects through things such as social media.
- Make Donors Organization Builders. Make the case for investment rather than handouts. Convince supporters that building the organization will result in better service and the ability to make a real dent in social needs.
Social Velocity is leading its clients in this direction and having considerable success. Its resources will help you make a check list of the ways your nonprofit can move further along that scale toward new, entrepreneurial ways to think and act.