More and more nonprofits are using entrepreneurship to generate revenue to supplement philanthropy in supporting their missions and social impact. It is a vivid manifestation of the innovative side of the nonprofit sector.
Nonprofits who start social enterprises are smart. They recognize the reality that philanthropy has been at capacity for years. The only way they can keep pace with the growing needs of their communities is to develop new sources of earned revenue that will enable them to go beyond what philanthropy can support.
For example, the latest IRS data on nonprofit revenues shows that contributions, gifts, and grants comprise only 22 percent of total nonprofit revenues. One partial indication of nonprofit social enterprise activity is their reported unrelated business income. The data show that nonprofits report gross unrelated business income $12.9 billion. Since 2001, gross unrelated business income has grown by 60 percent. And this surely understates total nonprofit social enterprise activity by the untaxed portion of their sales.
Next Tuesday, October 24 the Nonprofit Sustainability Showcase will highlight pitches by five newly-launching nonprofit-owned social enterprises: Center for Balanced Living, Equality Ohio, Rebuilding Together, US Together, and YMCA. Combined they need $850,000 to bring their businesses to profitability. The amounts they need range from $40,000 to $350,000. They hope to reach a combined $6 million in annual sales in five years and earn a 7.5% net return. These businesses will create sustained impact in a way a typical grant or investment could never do.
You can learn more about the evening at this link. Registration is free and refreshments will be provided. I hope that many of you will take advantage of this opportunity. If your schedule doesn’t permit, invite your colleagues to attend and bring back their insights.
So many of you work every day to advance your communities. This is a rapidly expanding new way we are putting Columbus on the map. I encourage you to be part of this movement.