Nonprofits exist to provide vital services and resources – not to make money. However, they need to make money if they are going to provide those services and resources. That’s why enterprise is not a dirty word in the nonprofit realm – in fact, it’s a crucial word. For nonprofits, enterprise often should be embraced.
Enterprise can be a vital way for nonprofit organizations to thrive and excel in their social mission. When done correctly and with the emphasis kept on the nonprofit’s broader purpose, it can provide a tremendous source of strength to a nonprofit and help to widen its audience.
Sharing examples of both a local nonprofit and a national one will help illustrate the value of enterprise to nonprofits. The Spring of Tampa Bay is a nonprofit domestic violence center that does great things for survivors of domestic violence and their children. They provide comprehensive services – from legal services and safety planning to childcare and housing. For a long time, they have also run a thrift store and a boutique. Thrift stores are one of the more common enterprises that nonprofits adopt. The Spring Thrift Store and Spring Boutique, which operate from donated items, are fully integrated into The Spring of Tampa Bay’s overall mission. A well-known national example of a nonprofit whose enterprise efforts are central to supporting its mission is the Girl Scouts, whose famous cookies go on sale for six to eight frenzied weeks every year. Nonprofits that implement commercial enterprises want to be sure the enterprise falls in step with their mission or they will risk undermining their broader purpose and turning off both supporters and those they serve.
Revenue and resources
Revenue generated from the sale of items provides The Spring of Tampa Bay with an important revenue stream, as the organization notes that 100% of net proceeds go to supporting the nonprofit’s services. Similarly, net proceeds from Girl Scout cookie sales stay local with the originating council and troop to fund activities for the participating girls and to support impactful girl-led community projects. Donations and other outside sources of funds for nonprofits can be inconsistent and unpredictable, so operating a commercial enterprise as part of the nonprofit can offer major benefits as a more reliable source of funds. In addition, choosing an enterprise that aligns with the mission of the organization can help to bolster services. In the case of The Spring of Tampa Bay, for instance, donations of clothes and household items can go not only to the thrift store but to the survivors of domestic violence the organization is helping. For the Girl Scouts, the selling of the cookies provides a valuable learning experience for the members of the scouts every year.
A well-run commercial enterprise is not just about the revenue and resources it brings in – it also is about who it brings in. An enterprise such as a thrift store or a highly visible operation selling delicious cookies is creating a service and resource that will help to attract the attention of the community and that will build goodwill. That strengthened level of awareness is invaluable, and it leads to new volunteers, new individual and corporate support, and new employees. Most importantly, it also spreads the word about the services that your nonprofit offers to those who most need those services. When they need your organization’s help, they will know where to turn.
When a nonprofit strives to create a meaningful enterprise that is mindful of its mission, then it can lead to powerful, far-reaching results. At Fryed Egg, we can help nonprofit organizations develop and incorporate commercial activities into their mission as a way of building their constituency and bringing in vital revenue sources. If you want to learn more about how Fryed Egg can help, contact us at (813) 478-0494 or [email protected] or visit www.FryedEgg.com.