Volume 2 • Issue 2
IN THIS ISSUE: 3
EXPLORING SOCIAL ENTERPRISE: Why it should be on the top of any nonprofit's strategic agenda
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SOCIAL ENTERPRISE IN NASHVILLE: Project Return and PROemployment
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BOOK REVIEW: “The Way of Tea and Justice” by Magdalene & Thistle Farm's Becca Stevens
Volume 2 | Issue 2
Welcome to this issue of NNR PUBLISHER Susan King
Center for Nonprofit Management
ADVISORY TEAM
Lewis Lavine
Center for Nonprofit Management
Brad Gray
Center for Nonprofit Management
Keel Hunt
The Strategy Group
Rich Rhoda
Tennessee Higher Education Commission
Linda Schact
Nelson and Sue Andrews Institue on Civic Leadership at Lipscomb University
CONTRIBUTORS
Dave Parker
CauseImpact
Sean McGee
CauseImpact
Patricia Shea YWCA
Susan King
Center for Nonprofit Management
37 Peabody St. Nashville, TN 37210 (615) 259-0100 cnm.org For content suggestions, contact Susan King at susan@cnm.org or (615) 259-0100 ext. 304
In today's nonprofit landscape, where there is more competition for funds that can at times be scarce, more agencies are looking for ways to diversify their revenue. One common concept that continues to reverberate throughout the sector is the idea of social enterprise. Social enterprise is everywhere these days in the nonprofit news, but can leave some organizations with more questions than answers. What is it? How can an agency begin? How can a nonprofit determine if it's the right fit for the organization's mission and vision? This issue of the Nashville Nonprofit Review is all about social enterprise. Read from two experts, Dave Parker and Sean McGee, as they discuss the process and the reasoning behind why you should consider social enterprise. Next, read the story of one Nashville nonprofit that saw an opportunity to offer an extension of its current services and add a new revenue source. Lastly, read a review of a book from the founder of a wonderful example of a social enterprise. We hope you enjoy this issue! About the Center for Nonprofit Management
Our mission: To create and sustain nonprofit excellence Our vision: Better communities through extraordinary nonprofit services For 28 years, the Center for Nonprofit Management has been a home to Middle Tennessee’s nonprofit leaders. Located in the historic Trolley Barns near downtown, it offers a place to relax, share triumphs and find solutions to problems. At CNM, nonprofit board members, executives and staff have the opportunity to learn how to enhance their services through our comprehensive calendar of skillbuilding workshops, our consulting services and our annual Bridge to Excellence conference. CNM celebrates and recognizes the enormous positive impact made by its nonprofit members through the annual Salute to Excellence awards dinner. 2
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Exploring Social Enterprise: Why it should be on the top of any nonprofit's strategic agenda by Dave Parker & Sean McGee
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CauseImpact
onsider these two statements: “The intention of social entrepreneurship is to build sustainable income – a very laudable intention. However, the road to hell is paved with good intentions.” “You have hundreds, thousands of causes in this area alone. How can you say ‘Give to us and not them?’ To just rely on traditional fundraising is, to me, not being proactive.” These are actual opinions expressed by two nonprofit chief executives in the same market. Which statement most resonates with you and the leadership of your organization? Our belief is that the exploration of social enterprise opportunities should be a top priority on any nonprofit organization’s strategic agenda. Thousands of
entrepreneurial nonprofit organizations have demonstrated that social enterprise can be an effective long-term solution for addressing more community issues, while also achieving greater economic selfdetermination. The collective experience of these pioneering nonprofits has helped to refine processes that greatly increase the chances of success for nonprofit organizations of any size. By systemically applying a process that works, nonprofits can become more financially self-reliant and strategically positioned for growth. What is social enterprise? Before we address the question of what constitutes a social enterprise, a few words about definitions: Our belief is that definitions can sometimes be overly simplified. In the case of social enterprise, the most important factors are the underlying concepts that 3
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inform the understanding of possibilities for a given organization.
good, either through its products and services or through the number of disadvantaged it employs.
When we ask nonprofit executives or board members if being more entrepreneurial is a key to being more successful, the response is uniformly “Yes, now more than ever.” When asked if having more unrestricted earned revenue is a good thing, these same audiences will reply, “Yes, no question.” And when asked if it is important to be more aware of the markets they serve and of competitive forces, the reply is “Yes, this is essential.” However, when these same individuals are asked if social enterprise is a good thing, the answers are far more varied and fall somewhere between the two poles expressed in the quotes above.
• Its commercial activity is a strong revenue driver, whether a significant earned income stream within a nonprofit's mixed revenue portfolio, or a for-profit enterprise.
The Social Enterprise Alliance, having adopted different, though related, definitions over the years, currently posits the following: “Social enterprises are businesses whose primary purpose is the common good. They use the methods and disciplines of business and the power of the marketplace to advance their social, environmental and human justice agendas.” Our feeling is that is a pretty good definition to work from, partly because the Alliance goes on to provide the following characteristics as guidelines to distinguish a social enterprise from other types of businesses, nonprofits and government agencies: • It directly addresses an intractable social need and serves the common
likely to uncover earned income opportunities, however small, that can financially strengthen the organization. Is your organization aware of its earned income potential? Is there a gap between your current earned income generation and your full potential? And, if so, are you optimizing this potential in as brisk a fashion as
• The common good is its primary purpose, literally “baked into” the organization's DNA, and trumping all others. We consider this definition sufficiently broad enough to allow for a number of mission and Thistle Farms and the Thistle Stop Cafe are both social money enterprises ofNashville-based nonprofit Magdalene House. outcomes, Read the book review in this issue to learn more about which should Magdalene and its founder Rev. Becca Stevens. always be tailored to the possible? individual organization. Our case for social enterprise A common thread within current discussions about and approaches to social enterprise is that earned income — whether through ventures separated from the parent organization or derived from commercialized core programs — has few, if any, strings attached. It is unrestricted and, therefore, is a “good thing.” An effective process for exploring social enterprise opportunity is
To be sure, this primary is focus on financial return is not to minimize other “softer” results from working an effective process. These results include: • Increased efficiency: You’re able to produce the same mission results with fewer resources. • Amplified mission impact: You’re able to produce more mission results with the same or fewer resources. 4
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Improved quality of services: You’re better able to accommodate your customers’ preferences. • Organized abandonment of peripheral programs: You’re able to recognize and act upon marketplace realities, shifting resources away from obsolete or underperforming programs in order to better focus your resources on those programs and activities that yield maximum mission results. A process that works We’re big advocates of this process, and have successfully introduced it to markets all across the United States. This approach greatly enhances an organization’s chances for success by helping to develop an entrepreneurial mindset within the organization, guided by a sequence of actions to isolate, investigate, and implement a plan for venture success. 1. Establish a Strategic Framework A strategic framework ensures that the organization and its stakeholder groups have clarity of purpose and alignment around desired mission and money results. This framework answers the question: “What results would we have to see to make any social enterprise endeavor worth the effort?” To establish this strategic framework, your organization should: • Undertake a culture check, which addresses attitudes and perceptions. Are you and all of your stakeholders comfortable with idea of being more
entrepreneurial? Are you comfortable with the idea of seeking out social enterprise opportunities? Are you committed to adopting a more innovative and entrepreneurial management style and creating a stronger, customer-driven culture? • Delineate your driving forces. What is causing you to consider social enterprise as a strategy? What are you hoping to get from this approach? What pressures or expectations are you hoping to
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An effective process for exploring social enterprise opportunity is likely to uncover earned income opportunities, however small, that can financially strengthen your organization. address?
questions: What will you achieve to further your mission? What will you achieve to increase your financial self-reliance? By when? What will success look like and how will you measure it? • Examine your assets. What core competencies underlie your work? What physical assets do you have? What do you do very well? Who do you know? The answers to these questions, individually and in combination, are fertile ground for good ideas. • Establish an team. This group will guide your process of new venture development, and provide counsel and insight during your investigation. • Perform rigorous brainstorming and selection. Only after the
• Explore your expected outcomes. What mission results and net financial return will constitute success for your organization? These expectations are personal to each organization, and could vary widely from one organization to another. What are the results your organization expects from becoming more innovative and entrepreneurial? Your organization can best Scrape Made Art, or smArt!, is the social enterprise determine its objectives ofProgress Inc. , which just launched in 2014 in for entrepreneurship by Berry Hill. addressing these 5
Nashville Nonprofit Review
strategic framework is in place, the feasibility investigation becomes much more straightforward, because you have already established what your venture will need to accomplish to make it worth starting. The feasibility portion of the process Employees are busy sorting merchandise at ThriftSmart involves an preceding steps have been attended investigation of external and internal to should your organization begin collecting revenue-generating ideas. considerations of the initiative being considered. You may already have quite a few ideas in hand, but it is critical to External, or market, considerations: refrain from evaluating these ideas until the preceding steps have taken Who wants what? place. Once your planning team has done a culture check, clarified driving forces, done an asset inventory and defined your desired mission and money outcomes, the team can use this work to winnow the list of ideas. Those ideas that are most consistent with your mission, that make use of existing assets, and will meaningfully contribute to your expected outcomes, are the ones that you should focus on. The team can be involved in the scrutiny of ideas and prioritization of the relative few that merit a more involved investigation. 2. Conducting Feasibility In our experience, like their forprofit counterparts, many nonprofit organizations like to dive right into scrutinizing a favorite idea rather than doing the work described above. Resist this impulse! Once a
What does it take to acquire a customer? Can we do it better than the alternatives the customer has identified? Why would the customer choose us over the alternatives? What will it cost us to deliver this value? Are all of our activities accounted for? How has overhead been allocated? Does the amount that the customer will pay exceed our cost?
What value are they seeking?
At what point do we realize breakeven?
How do they define value?
How much volume can we do? At what point do we run out of capacity?
How do they want to receive the value? What is most important to them?
What is the cost to gain additional capacity?
How else can they get it?
How much net profit can we realize?
What do they perceive to be alternatives?
Does the profit potential help us realize the money objective we’ve established?
How else can they get this value? What will they pay? Internal considerations:
Can we do it? Do we have the assets? Competencies? Expertise?
Will the initiative help us realize the mission objective we’ve established? All of these questions – and more – must be addressed in order to make an informed ‘go / no go’ decision on the venture in question. 3. Planning, Implementation, 6
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When feasibility has been thorough and yields a ‘Go’ decision, the fruits of the feasibility work can be rolled into a more detailed plan for a successful social enterprise. No plan, however, goes exactly as the planning team envisions, so it’s worthwhile to keep the social enterprise team engaged in order to effectively adapt the plan as needed. John Rush, CEO of CleanTurn, a workforce-development social enterprise in Columbus Ohio, puts it thus, "In the entrepreneurial phase of a social enterprise you are not satisfied with what you see but you have to remain patient and diligent realizing nothing beautiful is created overnight. A social entrepreneur must embrace the ambiguity, the messiness, the apparent sloppiness and all of the real blemishes and wrong stitch patterns so as to see, in time, the realization of something inspiring, engaging, sustainable, impactful and beautiful." When do we begin? We find that most organizations consider a social enterprise for of three reasons: Crisis, Chance or Choice: • Crisis: For example, the organization might be losing a substantial source of funding in the near term, and considers social enterprise as a way to right the ship. • Chance: An opportunity has presented itself, perhaps from the outside but oftentimes because a
Board member or key stakeholder has an idea they believe the organization should pursue. • Choice: In this case, the organization is seeking to broaden its financial resource base and increase its impact, and believes a social enterprise approach can help. An organization should always look to optimize its earned revenue across all programs. However, if an organization is in the midst of a major organizational endeavor – such as a strategic plan, leadership transition, capital campaign or the like – it is better to wait until that
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Those ideas that are most consistent with your mission... and will meaningfully contribute to your expected outcomes, are the ones that you should focus on.
endeavor is complete before launching a new social enterprise. Why? The energies and focus required to successfully launch a social enterprise are substantial, and those organizations that split resources and attention tend to have less success.“When is the best time to plant a tree?”The answer to this Japanese proverb? “Twenty years ago.” Our human nature oftentimes pulls us toward regret for what we should have done previously. The proverb, though, continues. It asks,“When is the next best time to plant a tree?” The answer? “Right now.”
Opportunities at CNM
Social Enterprise Catalyst Interested in exploring a social enterprise for your organization? CNM is partnering with CauseImpact for the Social Enterprise Catalyst: a one-year project for organizations to develop a launch-ready social enterprise. Applications will be available in early December and will be due in mid-January. Learn more about this opportunity on Wednesday, Dec. 10 at the Generating New Revenue from Mission-Related Ventures half-day session with Dave Parker and Sean McGee from CauseImpact. Register or learn more at cnm.org. Thank you to our Social Enterprise Catalyst sponsors:
Happy venturing!
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Social Enterprise in Nashville: Project Return and PROemployment by Susan King Center for Nonprofit Management
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or 35 years, Project Return has offered support and employment services to those convicted of felonies or serious misdemeanors during their first 12 months after release from incarceration, when they are at their most vulnerable. With seed funding from the Office of Criminal Justice Programs in place, the time was right to start a social enterprise: PRO Employment, said Bettie Kirkland, executive director. “[PRO Employment] was not only on mission, but completely aligned with what we do,” she said. PROe is a transitional jobs initiative through which participants gain employment opportunities across the community. The majority of the work happens beyond the walls of Project Return’s offices just south of downtown Nashville. Because the program is not constrained by physical space or number of employees, Kirkland said its growth “feels limitless and untethered by size constraints and therefore very scalable.” Darrell Hawks, business development director, joined
Project Return two years ago to help develop and launch PROe, which was a natural enhancement to the services already offered by Project Return, which connects hundreds of formerly-incarcerated people to employment each year.
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Employment is the major focus at Project Return, and program
[PROemployment] was not only on mission, but completely aligned with what we do participants are given the opportunity to learn how to write résumés, market their skills and talk with potential employers during a three-day intensive job readiness training program. In addition to employment services, Project Return participants are given food bags and referrals for services as needed, access to counseling services, work clothes and equipment as needed, and the identification required for employment, such as state-issued IDs, driver’s licenses and birth certificates. Perhaps, most importantly, they’re specifically coached on how to answer the
“felony question.” Participants are taught how to prepare an honest answer that highlights what they have learned from their experience. PRO Employment was modeled after the Center for Employment Opportunities (CEO), an existing transitional employment program in New York. The team at Project Return started by working with CEO closely for six months to get technical assistance and learn more about how they operate and function. Transitional employment agencies contract with businesses in the community—whether they’re private, public, local or national—and essentially act as a third-party staffing company to get those that they serve, the formerly incarcerated in the case of Project Return, working. The organization then takes on the task of screening, hiring, training, transporting, supervising, coaching and paying job-ready motivated workers to work on sites throughout the community. The transitional 8
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employment partner gains access to a motivated, job-ready workforce plus administration and supervision support. To begin building relationships with potential transitional employment partners, the team began what Hawks called a marketing campaign in May 2013. They started by reaching out to the dozens of businesses Project Return had already been partnering with for their employment referral program, and continued to be active with the Nashville Chamber of Commerce and other places they were likely to find businesses with staffing needs. “When we’re talking to employers, we’re open to whatever opportunity they have,” Hawks said. “How that happens for us is cold-calling. We do what we teach our participants to do, which is to reach out to businesses with information about ourselves.” PROe received its first contract in July 2013 with a local call center. It was a small, local operation that gave Project Return the chance to put the model they had designed to work and to execute the in-house system for screening, hiring and placing workers on the job, invoicing and working with the employer to meet their needs. Over the course of the next few months, they received a couple of more contracts, including a manufacturer in Wilson County.
The geographic aspect of this presented an opportunity to amplify the transportation component of their enterprise. One of the key elements of PROe is that they provide transportation to and from the work site for the largely Davidson County-based employees.
PROemployment, a social enterprise ofProject Return, provides jobs for those who have been released from incarceration for a felony and serious misdemeanor in the past 12 months.
“We rented a van and those 100 workers, 39 have picked up workers starting at 4:30 transitioned to long-term jobs, a.m. and were at work at 6 a.m. which is a primary objective of for six days a week,” Hawks said, the program. Collectively, those regarding the early weeks of the participants have been transported Wilson miles to and In most cases, our 55,000 County work. work, and paid folks have little or from That more than$165,000 transitional no work experience — in wages. employment or at least no recent partner experience or current “We are preparing requested reference base them to find that more workers long-term just before employment even Christmas, which increased the while they’re on our transitional crew to an average of 12 people, work crew,” Hawks said. “We’re sometimes requiring two vans for working with them to acquire transport. Since then, through long-term positions on the support from various transitional job site, which organizations, Project Return has happens regularly, and they’re acquired three vans which they working with our counselors to operate today. pursue other long-term employment. All the while, In July of 2014, Project Return they’re gaining a recent work signed their sixth transitional experience, reference base, and employment contract with a income.” manufacturer in Portland, Tenn. Today they have 27 workers on One way Project Return coaches various PROe work crews. Since the participants is with “van talk.” PROe launched in July 2013, Transportation coordinators are nearly 100 formerly-incarcerated more than just drivers, they’re people have been employed, of passionate about the mission and
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about mentoring their passengers, so they are providing coaching and advice to them on the ride to and from the job. Coaching is also available during worksite visits and via phone. Looking forward, Hawks and the Project Return team see great opportunity for growth and expansion.“Thousands of folks are returning to our community from incarceration each year, looking for work,” he said. “And there are many jobs in the community, especially during these growing times, for which they qualify.” One key area for expansion, Hawks sees, is in the public sector. “CEO [their New Yorkbased peer] works largely with public agencies. They’re providing janitorial services for public buildings or they’re working on clean-up of streets or parks for local government.” As Nashville is currently seeing tremendous growth, Project Return also sees new opportunities for PROe and continues to pursue expansion into other growing industries, like construction and hospitality. “It’s ever-important for nonprofits to think creatively and innovatively about how they do their work, meet their mission, and generate resources—specifically funds—for continuing to do that work,” Hawks said. "Project Return’s transitional jobs initiative is funded in part under an agreement with the State of Tennessee, Department ofFinance and Administration, Office ofCriminal Justice Programs and is supported by Award #2012-DJBX-0280 awarded by the Bureau ofJustice Assistance, Office ofJustice Programs, USDOJ. "
BOOK REVIEW
The Way of Tea and Justice by Rev. Becca Stevens Review by Patricia Glasser Shea YWCA
T provides a delicious invitation to learn more about tea while he Way ofTea and Justice
highlighting our continued need, as a society, to demand justice for women and girls. Using her exceptional storytelling skills, the Reverend Becca Stevens ties the traditions and trade of tea to the injustices experienced by women living in Nashville and around the world. Through both beautiful and harsh stories, the founder of the Magdalene and Thistle Farms reminds the reader of our connectivity to our own past, present and future, as well as to each other. With each word (or sip of tea) we are
asked to pause and connect to the history of tea, the importance and beauty of its traditions, while allowing ourselves to realize that tea can be Patricia Shea, Executive Director ofthe YWCA a source of oppression for women as well as an opportunity for economic independence. From the book: “Thus tea becomes a beautiful symbol of the theological truth that we are all connected, and although each kind of processed tea has different effects and flavors, it’s like love: It all comes from the same source but can be expressed a thousand ways.” 10
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the journey from concept to reality, and woven throughout is the belief that one small group of people can make a big difference. “It seems crazy sometimes to think that any of us can try to change the world by our small inspirations of justice, but it is crazier to think that the world will change if we never try.” I smiled when Becca shares her “blissful ignorance” in the first chapter. “Let’s open a beautiful café with tea and serve a million cups to friends and strangers, and start a new tea revolution to help end trafficking. How hard can it be?” We find out how difficult it truly was in the pages that followed. As Becca explains, trafficking is a direct result of silence and ignorance by communities. It is rooted in the desire to keep the sickness of addiction and child abuse secret. The more light we can shed…the safer our whole community will be. The Way ofTea and Justice and the Thistle Stop Café are shining the light on injustices, while embodying the following guiding principles: hospitality, chado (harmony), story, and healing. I appreciated Becca’s description of growing and preparing a cup of tea and likening it to a spiritual opportunity to grow and develop ourselves and get closer to paradise. Through the act of serving tea, she reminds everyone that serving is truly a gift one gives to oneself.
Service is joy, not work. “Living in paradise means looking for every opportunity to serve. When we live a life full of service in love, we are there already.” As a nonprofit leader, one of my favorite quotes comes from Becca’s description of tea gardens, where she shares her belief that the sweetest paths we create are those that are carved for others to walk. Whether she is thinking about her work at Magdalene, in the Episcopal Church or our work at the YWCA, I couldn't agree more. Becca’s book has made me excited to incorporate the delicacies and rituals of tea into my own work at the YWCA and my own life. I encourage everyone reading this to visit the Thistle Stop Café, have a cup of tea, and pick up a copy ofThe Way ofTea and Justice.
Continue the conversation
Resources
Inspired by this issue to learn more social enterprise and how it might fit with the vision and mission of your organization? Below are some websites and LinkedIn groups to help you get started in joining the conversation.
LinkedIn Pages and Groups
Center for Nonprofit Management Social Enterprise Alliance Taproot Foundation Business Prof for Nonprofit
We all can take a lesson from this inspirational social justice leader and author who so perfectly imparts, “Not knowing what lies ahead is no reason not to start walking. If we stay where we are, we will never get anywhere.”
Websites
Thank you Becca!
Opportunities at CNM
Rev. Becca Stevens is the founder of Magdalene and it's social enterprise, Thistle Farms. The Nashville nonprofit also operates a second social enterprise: Thistle Stop Cafe.
Center for Nonprofit Management Social Enterprise Alliance Nashville Entrepreneur Center Generating New Revenue from Mission-Related Ventures Dec. 10; 8:30 a.m.-noon Register at cnm.org Social Enterprise Catalyst (see page 7) 11