Our agency is no exception. The Oil Region Alliance, the lead economic development and tourist promotion agency for all of Venango County; part of northern Crawford County and located in northwest PA, for example, is an organization that relies heavily on membership dues and municipal contributions to further it's mission. And, these funds are highly correlated to the economy. In good economic times membership dues and municipal contributions go up and in bad economic times membership dues and municipal contributions go down. So, the idea of social entrepreneurship, or the evolution to self-sufficiency by creating an alternate revenue source makes sense for the longevity of our agency and the long-term success of it's mission.
There are obviously pros and cons. According to the Nonprofit Board Answer Book II (BoardSource, 2002, pp. 76 & 77) social entrepreneurship can help your nonprofit:
- Generate new sources of revenue to help pay for administrative and overhead costs that traditional funds can't.
- Diversify income sources and reduce reliance on signature fund drives.
- Raise visibility in the community and create new ways for people to become connected to the agency.
- Build upon the mission and create new jobs in the community.
On the other hand, there are these drawbacks:
- Failure. Every entrepreneur understands there are risks to new ventures.
- The organizational structure may be too bureaucratic to accommodate a profit-oriented venture.
- Unfavorable publicity may come your way when you compete with for-profit competitors.
- Stakeholders may become confused about the mission.
So, as you can see, there are many variables to consider when building social entrepreneurship into your nonprofit business model. It is the proverbial "catch 22" where the agency wants to further it's mission but resources are dwindling. The community needs and often expects the nonprofit to function, but is not willing to fund the effort. Therefore, the agency has to get creative in order to survive. Please let me know your thoughts on social entrepreneurship?