Profit with a Purpose
Social enterprise can refer to the entire model of an organization, or just one part of its operating structure. Social enterprises can be for-profit businesses or not-forprofit entities that directly address an issue through the products it sells, the services it offers, or the employees themselves. Tools for Change, for instance, educates visitors in ecologically sound living and sustainable consumerism directly through its retail offerings, which in turn fund The Ecology Center’s slate of environmental programs. And while The Center is funded largely by foundations, corporations, and members, the profits from Tools for Change represent one segment--a growing one at that--of its revenue mix. Who says nonprofits need to be nonprofit? Nonprofit is actually a misnomer. A more accurate way to describe charitable organizations like The Ecology Center is not-for-profit. The IRS defines not-for-profit organizations as those that exist to 6
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What is Social Enterprise? Social enterprise is a venture designed to achieve a social or environmental mission using business methods. Unlike the conventional nonprofit model, where an organization is largely funded by philanthropic grants and donations, social enterprise is an innovative way for a nonprofit organization to generate the revenue it needs to advance its programs, keep the lights on, and pay its staff.
Tools For Change may look like a gift shop. But it’s so much more —it’s a new way to educate, operate, and achieve a mission.
VALUES serve a charitable purpose—in our case, environmental education. So long as profits do not benefit an individual, but benefit the advancement of the organization’s mission, then social enterprise is a wonderful way for not-for-profits to sustainably generate their own resources and diversify their income stream. Snapshots: Examples of Social Enterprises Goodwill Industries, widely known for their chain of secondhand stores, is a nonprofit organization that provides job training and workforce development, using proceeds from its stores to support programming that serves people with specialized needs, such as people with disabilities, seniors, and people with criminal backgrounds.
Crystal Cove Alliance is a nonprofit partner of the California State Park System and is dedicated to supporting scientific research, restoring and preserving the Crystal Cove Historic District, and presenting public education programs. The Alliance generates nearly 40% of its total operating expenses from rentals of the historic cottages, which are often booked up to 6 months in advance. At a time when the economy is in dire straits, and the state of California’s budget is recovering from epic imbalance, Crystal Cove Alliance’s social enterprise ventures are a truly inspiring model for innovative ways for nonprofits to sustain their own needs.
SOCIAL ENTREPRENEURSHIP Practitioners often differentiate social enterprise from social entrepreneurship, a broader term that includes the diverse individuavproaches to addressing the large-scale social issues that the public and business sectors haven’t adequately addressed--such as poverty, educational inequality, and health care. Rather than adopting a business model to achieve a social mission, social entrepreneurs set out to change the very system in which these problems are fundamentally entangled. Social entrepreneurs include For-Benefit organizations, B Corp companies, and even the Corporate Citizenship and Triple Bottom Line efforts of large companies. Some of the amenities and ways of life we enjoy today can be accredited to history’s most influential social entrepreneurs, including: · John Muir: a naturalist and preservationist who established the National Park System and founded the Sierra Club · Susan B. Anthony: a social activist who fought for women’s suffrage · Florence Nightingale: the founder of modern nursing who established the first nursing school and led efforts to reform hospital conditions
An eco-journal of obtainable and sustainable solutions curated by The Ecology Center