Today the distinction between for-profit and non-profit organizations is becoming increasingly blurry. For-profit businesses are emphasizing social entrepreneurship and non-profits are developing sustainable business models. With the crossing of traditional boundaries a different model of enterprise has emerged, the social enterprise.
If you have ever purchased a box of cookies from a Girl Scout or donated clothing to a Goodwill store, you have contributed to a non-profit social enterprise. The pursuit of social enterprise or “earned income” by a non-profit is hardly a new idea, though the concept has made a resurgence in recent years as many non-profits seek out new funding streams.
While the Great Recession is now technically years behind us, non-profits are finding corporate and private giving rates have not recovered. Similarly, a decline in federal funding through sequestration has left many organizations struggling to keep up with the demand for services. According to the Non-Profit Finance Fund’s 2014 State of Sector Survey, 56 percent of non-profits said their organization is unable to meet demand for services, the greatest shortfall in the past six years of the survey. Of the more than 5,000 organizations surveyed, 26 percent reported they will pursue an earned income venture in the next year as a strategy for bringing in additional funding.
Catholic Charities was a pioneer locally when it launched the Community Interpreter Services (CIS) social enterprise more than 25 years ago. The program, headquartered in South Boston’s Labouré Center and operating throughout the state, helps corporations and agencies overcome language or cultural barriers through interpretation and translation. The revenue from the program—which now employs 200 interpreters fluent in more than 80 languages—is used to fund Catholic Charities Refugee and Immigration Services programs including resettlement and legal aid.
While the Community Interpreter Services program was rooted in the agency’s long-standing work with immigrant communities, other local non-profits are finding fresh ways to integrate a social enterprise that will have a multi-pronged impact on the organization. For example, Pine Street Inn’s food services social enterprise, iCater, expanded in recent years to include corporate catering. Not only do proceeds from iCater fully fund Pine Street’s food services training program, but employment with iCater provides job training and professional experience to Pine Street Inn clients.
As social enterprise endeavors continue to expand in the Greater Boston area and across the country, the line between a socially responsible for-profit business and a social enterprise non-profit can be increasingly fine. Brands like Toms Shoes and Warby Parker eyewear should be applauded for incorporating social good into their business models, but it is worth noting that they can also use the marketing benefits of this model to turn a profit for stakeholders.
We need to encourage non-profits – especially those that provide crucial social services – to pursue alternative funding strategies while ensuring the process not only reflects but supports the organization’s greater mission. Selling a product and putting the proceeds toward a charitable cause has its merits, but when an organization is able to leverage its pre-existing expertise or knowledge to offer a good or service that others cannot, a true social enterprise is born.
The holiday season is behind us, but the demand for social services continues to grow. Please consider supporting social enterprises this winter and helping these important organizations maximize their social impact.
Deborah Kincade Rambo, LICSW, is President of Catholic Charities of the Archdiocese of Boston.
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