Social enterprise is the future of non-profit organizations
I spent today with social enterprise on the brain. In a class that’s part of my non-profit management program at Duke University, David Rendall, a Mt. Olive College business professor and author of some very cool books, proposed social enterprise as the future of non-profit funding.
As of 2006, there were nearly 1 million 501(c)(3) organizations in the US — a nearly 70% increase from the 536,000 there were ten years earlier — and I’ve heard that number currently grows at a rate of 1,000 per month. As the number of non-profits grows, inefficiency within our field goes up while the pool of available donors shrinks. Competition will be high for donations, and only well-oiled organizations will be able to thrive in the super-saturated market.
Given the conditions of the market for non-profits, how can non-profits protect themselves for the future? One way to look at becoming a social enterprise: a non-profit organization that generates earned income to support its social purpose. Earned income is revenue that’s received in exchange for products or services
Here are some notes from David’s class:
Organizations should combine service with business. A great example is TROSA, an organization in Durham, NC, that provides residential rehabilitation to recovering substance abusers. TROSA gives their program participants jobs in several businesses, including landscaping, framing, moving, and event logistics. The men in the program get job experience and structure to continue their rehab, and the organization gets much-needed funding from their enterprises across the state. In fact, my home-owners association contracts with TROSA to do our yard work.
Social enterprise should participate in the Experience Economy. More and more, consumers are paying top dollar to have unique experiences. It’s why Wilco broke new ground — ignoring the naysayers — by providing albums for free to generate million-dollar interest in their tours. It’s why people from all over the Mid-Atlantic region flock to Durham for the World Beer Festival and why people go to the symphony. They want non-replicable experiences. Non-profits should consider eco-tourism, travel, direct service opportunities, and experiential events as new fundraising mechanisms.
Don’t take on business models that have been rejected by the private sector. In the age of eBay, we don’t need another thrift store. Goodwill still manages to make it work very well (while linking it to their direct service to the public), but unless you have the capacity to launch a national chain, you should leave it alone.
Consider other audiences for our organization. Too often, groups dismiss social enterprise because the people they serve can’t afford to pay. Don’t concentrate solely on your service constituency, but think about businesses and individuals who are willing to pay for what you give. For example, one of my classmates today runs a violence alternative training program for prisoners and at-risk youth. They could slightly modify their program and teach conflict resolution and alternative dispute resolution techniques to corporations. The corporate training and consulting could completely fund their prison and school programs.
And finally, don’t start a non-profit, start a social enterprise that can make money and then fund charitable pursuits. Starting a business is far, far easier than starting a non-profit. All of the forms, legal information, reporting, and liability with a non-profit added to the super-saturated market for non-profits is reason enough to concentrate on social enterprise.
David’s class was by far the best I’ve had in the Duke non-profit program, and he’s an excellent thinker on leadership and how we can expand the non-profit sector. Check out David’s blog to learn more about his teaching, speaking, and international consulting and stay tuned for more info on him. I think he and I will be sharing a lot of ideas in the future.
It’s not often that two of your favorite things come together
I try to stay away from politics on the blog, but I couldn’t help but pass on this NY Times article about Obama’s visit to Chapel Hill. Go Obama and Go Heels!
Dribbling Past Rev. Wright, Obama shares the court with the Tar Heels
Balling on a Budget: Five reasons twenty-somethings should buy a home now
I’ll be starting a new category today called “Balling on a Budget,” which will present ways we twenty-somethings can maximize our money and save for the future while still living our fabulous lifestyles.
It’s time for a celebration! I am about six weeks away from my first anniversary as a homeowner. At the same time, my best friend Josh, who is 23, is preparing to close on his first home down in South Carolina. I encourage twenty-somethings in small to medium cities to take a hard look at buying a home. Here are some things that might convince you to buy:
Buying a home saves you money long-term. As I mentioned in an earlier post, I had no parental support during or after college, so I’ve had to earn and save every dime to my name. Before I bought my townhome, I was splitting $1500 each month in rent with two college friends, which is pretty fair for our area.
My monthly payment including mortgage, taxes, insurance, and homeowners association dues ends up being half of my old rent. It’s a phenomenal savings, and I know that every payment I make adds to home equity. Instead of losing money each month to magically poof into the pockets of a developer, I’m paying myself. It’ll definitely pay off when I’m ready to sell.
There’s free money out there. National and state initiatives provide down-payment assistance to first-time home buyers who make less than the median income in their areas, which applies to most young non-profit professionals. The best part is that the process is pretty objective — if you qualify, you get the money — and few people take advantage of the programs.
Through programs with the City of Durham and the North Carolina Housing Finance Agency, I got about $45,000 in down payment help and my closing costs covered by public sources. I only had to put $750 down and attend classes for first-time home owners.
And the income requirement is based upon your income at the time of your loan application. If you get a raise or a better job after you’re in the house, nothing changes.
Check out the HUD website to find information on first-time homebuyer programs in your state. The site will lead you to the free money and tell you about free programs to counsel you out of bad credit or to walk you through the entire home-buying process.
The time is right (if you have a few years). It’s a buyer’s market, and we should take advantage of the housing bust’s falling interest rates and prices. There are opportunities for us to get great real estate at phenomenal prices. It will take a time investment, though, but not a long-term one.
Of course “long-term” is subjective, but many people erroneously think buying a house during the housing crisis locks you into a 30-year commitment. Don’t plan on buying a house and flipping it next year or the year after, but if you think you’ll be in an area for 3-5 years, it could be worth it to buy. Some folks disagree, but I definitely think the time is right.
Roommates can pad your budget and help you save. If you buy a house with multiple bedrooms, renting them out to other twenty-somethings or college students could give your budget just enough of a boost to save tremendously. Instead of paying a real estate developer for rent, you’re now the landlord.
And finally, buying a home gives you the opportunity to express yourself. I hated the fact that I couldn’t paint in apartment and dorm living. I mean, I could have, but I would have been forced to paint it back to the sterile white color or lose my security deposits. In my house, I’ve been able to paint almost every room and invest in art that reflects my personality and gives me pride.
But of course, buying a home isn’t right for everyone, and a first-time buyer should be prepared for some serious work ahead. Stay tuned for a post that discusses challenges twenty-somethings will have to face if they want to buy a home.
Fast Company says my boss is like a monkey, a dog… maybe even a steer
Quick post, but my friend Kerra told me to pick up the current Fast Company magazine, which features a great article on how we can manage our bosses to get the desired working relationship.
Bosses are tough. I’ve worked for yellers, bullies, silent types, huggers, mentors, and complete goof-offs. Right now, I now face the extraordinary rewards and challenges — mostly rewards, in case Dan is reading (haha) — of working for one of my best friends. No matter how great the boss, though, we’ve all been in situations where we’re not entirely happy with how our boss treats us and wish we could change it.
According to Fast Company, we can change our boss’ behavior by doing one thing: treat them like animals.
Dan and Chip Heath propose that we use the techniques of exotic animal trainers to manage our bosses and create the work environment we need. They suggest that we ignore bad behavior, reward good behavior, and stay consistent.
It makes sense to me. I don’t have any experience with exotic animals, but I grew up with pets (three dogs, a flock of ducks, a cockatoo, rabbit, cat, and even a show steer — yes a cow), and the techniques they recommend were the only way we could get the animals to do anything.
At work, it makes sense especially because many of the supervisors we encounter are continually learning how to manage and lead while facing pressure and deadlines from their bosses. We have to make sure their learning process includes how to deal with us in order to keep us happy and get top results.
So the next time my boss does something I don’t like, I’ll try to think of him like Mooey, my old show steer. By ignoring bad behavior, rewarding the good, and staying consistent, it should work. But be careful, even the most carefully trained animals can unexpectedly cause serious harm.
From margaritas to Quadrant II: My time management lesson
Many apologies for not posting for a week, but the past week has been pretty stressful with crunch time coming strong at work. I’ve got a 63,000-piece mailer dropping next week, and our major gift campaign goes public on April 29. Running back and forth with all the tasks at hand sent my stress levels to a high that could only be mitigated by Margarita Thursday at the local Mexican diner.
My boss — a good friend and mentor — noticed my stress and challenged me to move from being reactive to the admittedly crazy workload to calmly concentrating on our priorities. I noodled on his advice over the weekend, and checked out some information one of our trustees passed along a few months ago — Covey’s four quadrant time management system.
It seemed a little hokey at first, but Stephen Covey’s matrix system has given me plenty of insight on how I can be more effective and drastically decrease stress.
Quadrant I contains things that are both urgent and important, akin to firefighting or triage work. Life naturally puts us in this quadrant from time to time because stuff happens and we have to respond to it. However, we often send things into crisis mode because of procrastination and lack of planning. Spending too much time here will lead to stress and burnout, which I definitely experienced at a previous job whose culture was deeply rooted in Q1.
Quadrant II is where we need to be; it contains things that are important, but not urgent. Tasks can be scheduled when you can give quality thought to them. Quadrant II is where we do longrange planning, anticipate and prevent problems, empower others, and increase skills through personal development. Ignoring this Quadrant enlarges Quadrant I, creating stress, burnout and deeper crises.
Good examples of Quadrant II tasks include preparing for an important meeting, building relationships with coworkers and mentors, family time, meaningful personal time, and exercise.
Quadrant III activities are masked distractions. They must be dealt with right now, but frankly, are not important. People in this quadrant react to things that are urgent assuming they are also important. Often the urgency of these matters is based on
the priorities and expectations of other people, and operating here produces a shortterm focus, broken relationships and a loss of control.
The final quadrant, Quadrant IV, includes things which are neither urgent nor important — pure wastes of time. Some meetings could fall into this category - they’ve been scheduled in advance, but if they achieve nothing, or you don’t contribute to them, then they have simply wasted time. Some of my examples include commuting (I traveled 35 minutes each way in my last two jobs), reading the latest political news and gossip, and most YouTube adventures.
After such a stressed-out week, I’m making it a goal to shift my work and home time to Quadrant II and do as Covey advises: define my personal and professional priorities then organize and execute around them.
At work, those priorities are our major gifts and direct mail programs. On the personal front, it’s reading and blogging, spending time with my girlfriend and best friends, meeting new friends in Durham, and getting in better shape.
Each week, I’ll be revisiting my priorities and scheduling tasks to make progress on them. I can already notice a huge difference in my productivity, and I think I’ll not need a margarita to calm stress for a while. This Thursday, they’ll be just for fun (haha).
I borrowed the image from The Quixotic Hierophant . For more information on Covey’s “First Things First” model, check out this 1994 essay on his website.
Four tips for twenty-somethings to navigate the generation gap at work
I ran across this Chronicle of Philanthropy article, which discusses generation gap challenges in the non-profit workplace. As someone who has been the youngest person in every organization I’ve worked with, I can fully understand the challenges of balancing that gap.
The article reminded me of In Good Company, a 2004 film in which Topher Grace plays Carter Duryea, a naive, know-it-all twenty-something who flails in a job managing people twice his age.
In Good Company is one of my favorite movies (well worth renting or buying), and if you pay attention to the things Carter did wrong, you can learn some great lessons on how twenty-somethings can effectively handle being the NKOTB (New Kid on the Block) and use it to advance one’s career:
Enter with humility. From day one, be respectful and mannerable to all employees, no matter their rank or age and go out of your way to be nice to people. I carve time out of my day to have a conversation with each of my coworkers, and everyone in the office hears my Southern “How yall doing?” spoken to everyone I pass in our building. This shatters the stereotype of the young know-it-all punk and sets the tone for open conversation and friendships.
Build relationships with the veterans. When I took my first political job, I befriended the woman whose office was next door. She was the longest-serving employee, having served at least 7 years more than both the CEO and CFO, and had the largest state-wide network of anyone there. She not only gave me great insight into the business, but she also became my mentor, giving me valuable career and personal advice, standing up for me when a bully attacked, and giving me references. Although I moved on from that job, she and I still keep in touch.
Seek institutional knowledge. Ask the people who have been at your organization for a while to give you context on the organization’s history and current problems. Not only will you better understand the issues facing the organization, you’ll almost always learn some lessons and potential pitfalls you wouldn’t otherwise see. Plus, it helps with relationship building.
Be helpful outside of your job responsibilities. You can easily win friends and influence your older coworkers by being of service to them. At one job, the staff was responsible for taking the trash outside to the curb three times a week, and I volunteered to lead trash duty each week. At my current job, one other coworker (who is 25 and really cool) and I have helped teach MS Excel and Publisher to veterans without much computer experience. It continues relationship building and developing an office brand of being helpful and a team player.
These tips have helped me navigate the generation gap in my career, and I hope it can help someone avoid making Carter Duryea’s mistakes.
Carefully shifting staff, board time from grassroots fundraising yields greater results
Many non-profits use grassroots fundraising — small, low-dollar, community based strategies including sales, low-dollar fundraising events, and community fundraisers — as their main method of fundraising. And many folks think they’re wastes of time — that non-profits should completely ditch them for major gifts.
I fall in the middle; balancing grassroots and major gift fundraising is key to the success of an organization’s development program. Major gifts should be the top priority, but despite its very low return on investment, grassroots fundraising gives you community visibility and gets donors’ “feet in the door.”
Before 2007, the Ronald McDonald House of Durham, the organization I’m working with, made grassroots mechanisms its primary focus. They used a significant amount of staff, volunteer, and board time planning an executing these events, although they don’t bring in a lot of money. Factoring in paid staff time, I’m sure the organization, like most non-profits, lost money on these events.
We are currently undergoing a large transformation, particularly in development — part of which includes a large shift from grassroots fundraising to major gifts. Here are some specific strategies we’re trying:
Spend the bulk of staff time on major gifts. My boss and I have been spending most of our time on capacity building and launching our major gifts program.
Engage the board in major giving. Our board previously spent time on grassroots events, but we’ve started getting them involved in major gifts — connecting us to and talking about the organization with community leaders. The shift is going well. So far we’ve gotten three board members formally with our annual giving program, and five others are working on a lead gift ask for our capital campaign.
Spend time on corporate sponsorships for events. Each year, we host a large wine auction, and we increased gross revenue by $30,000 because of corporate sponsorships. We hope to bring it up by $75,000 more next year. Our community events directors primary role for this event is soliciting corporate sponsors.
Let volunteers lead low-dollar programs. We are letting committed volunteers take the lead on our large community events, and in 2009, we hope to get a handful of volunteers signed on to lead a comprehensive program for donors who give $999 or below annually.
Use the Internet for grassroots donors. Barack Obama’s fundraising juggernaut exemplifies the power of having many low-dollar donors. At work, we’re seeing more and more inquiries about donating online, especially setting up recurring donations.
We’re not only trying these techniques at work, but I’ve pitched a similar model to Traction, the 501c3 whose board I serve on. As a young organization with only one staffer (an ED), board members have to take on many roles usually reserved for a development staff.
I’m trying to lead the shift from grassroots to major gifts for Traction, and here’s a training PowerPoint I prepared to start that move. I welcome feedback on it or anything else in this post.
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