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Jan 23, 2017

Will Current Worries Prompt More Focus on Social Entrepreneurship?

There is a flood of worry among nonprofits about where federal funding may go and whether there may be changes in the tax laws that would diminish the incentive for charitable giving.

Without diminishing these worries in any way,  we must remind ourselves that government and charitable support have been challenging for quite awhile.  The annual surveys by Nonprofit Finance Fund have documented for years the trend of governments’ paying less in overhead and paying their bills later and later.  And the IRS Statistics of Income documents that charitable contributions’ role in nonprofit revenues has been stagnant since the mid-1980s. And the annual reports of the Committee Encouraging Corporate Philanthropy suggest a shift toward more in-kind and volunteer support as cash support holds its own.

Nonprofits have needed to have a  backup plan for sustaining their mission long before 2017.  That backup plan should be to diversify their revenue sources.  Being predominantly dependent on federal government contracts is a precarious funding model.  So is being predominantly dependent upon annual fundraising.

These factors have been my motivation for emphasizing the development of new, profitable activities by nonprofits, a diversifying revenue source that is currently popularly labelled as social enterprise.

In the current, partisan political environment, social enterprise has the additional benefit of its bipartisan appeal.  Conservatives like the fact that social enterprise is  independent of government and charitable support.  Liberals like the fact that social enterprises create social impact and can enhance the ability of nonprofits to sustain their social mission.

Recently I wrote about my frustration that so few nonprofit organizations are jumping on board the social enterprise movement.  Perhaps the current worries will catalyze more nonprofit interest in social entrepreneurship.  We are ready to help.  Our blogs, Face book page, website, and Twitter are the first places to start.  Ready for more?  Contact us and we will get you going in pursuing the self-sustaining social impact of social entrepreneurship.

Allen Proctor, President and CEO

Center for Social Enterprise Development