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Jun 7, 2014

Central Ohio Nonprofits Are Better Positioned to Start Social Enterprises than Peers Elsewhere

The newly formed Center for Social Enterprise Development has just released its first product, a report on the state of social enterprise in Central Ohio.  Prepared by Tania Sherry, Sean McGee, and Dave Parker of CauseImpact, the report finds that Central Ohio nonprofits are better positioned to start social enterprises than their peers elsewhere in the U.S.

The survey of about 100 nonprofit leaders in Central Ohio compared its findings with prior surveys of nonprofits elsewhere in the nation.  It found that Central Ohio nonprofits are “more likely than their peers in other communities to try more innovative approaches, and more confident in their ability to succeed in new enterprises that both generate revenue and create mission impact.”  Those which have already started social enterprises think of themselves, not as charities, but as “innovative and entrepreneurial organizations that happen to be organized as nonprofits.”

In a foreword to the report, Dale Heydlauff, President of the AEP Foundation, concluded “the new field of social enterprise will have a home in Central Ohio.  The entrepreneurial spirit that drives our local for-profit companies is stimulating our nonprofit sector as well, to the benefit of us all.”

Respondents noted that the two greatest needs a nonprofit faces are sufficient staff capabilities to operate a start-up enterprise and the availability of adequate start-up capital.  Both these areas need more resources if Central Ohio is to have a robust social enterprise sector.  The report notes “while a number of entrepreneurship-oriented education programs are offered or planned at local colleges and universities, few of these programs are designed for practicing nonprofit executives, and fewer still offer in-depth training or ongoing support.”  Regarding availability of capital, the report notes “the most common source of startup capital has been foundation funding….there are virtually no opportunities for individual investors to directly support new social enterprises through debt or equity.  This leaves nonprofit leaders in Central Ohio with relatively few sources of capital for these ventures…”

The report contrasts the views of nonprofits who currently operate social enterprises with those which do not.  Calling the latter “non-enterprisers”, the report found non-enterprisers much more concerned with the impact of social enterprise on their tax-exempt status, a concern that would be easily allayed if more extensive education and training opportunities were available.  They also are much more concerned that their organization does not have the culture or capacity to make a social enterprise successful.  The fact that those who have done it already are much more confident of success highlights the importance of providing support, mentoring, and networking opportunities to get non-enterprisers past the butterflies all first-timers will have.

The report closes with comparisons between the survey results for Central Ohio and those for other parts of the nation.  It notes “while Central Ohio respondents are facing the same challenging market conditions as nonprofits elsewhere, their significantly higher scores … suggest that they are better positioned to face these challenges head-on.”  Not surprisingly, Central Ohio nonprofits also have higher expectations for success.

This report confirms that Central Ohio is fertile territory for an aggressive effort to support and develop social enterprise.  The Center for Social Enterprise Development and the formation of the CINCO Fund, LLC should catalyze this effort.  For copies of this report, email info@cincohio.com.