See How Nonprofit Innovation Supports Mission
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.