HOW to ELEVATE YOUR NOT-FOR-PROFIT’s OPTIONS to GENERATE REVENUE USING SOCIAL ENTERPRISE

This paper addresses the following questions: what is social enterprise, why is it needed, and how does a small not-for-profit (NFP) structure social enterprise for success? Social enterprise provides an avenue for NFPs to generate a consistent form of revenue while engaging with its community, donors, and stakeholders. It employs a profit driven business model to create a product or service operated by a NFP entity where the profits of a “business” are spent to further the entity’s mission. NFPs currently face a changing landscape in giving making a new form of revenue generation crucial. Giving morphed recently due to generational shifts in the donor base from traditionalists and baby boomers to generation X and millennials. Millennials and generation X are not as generous as traditionalists and baby boomers especially with large dollar giving. We detail three forms of social enterprise (impact investing, donate-to-sell, and a repurposed traditional business model) noting the benefits related to each. A few pitfalls of implementing a social enterprise are discussed including tax implications and avoiding the white savior trap. Tax implications center around Unrelated Business Income tax (UBI) and understanding how to identify how much revenue from social enterprise can be too much. There are common mechanisms to mitigate developing a white savior complex through engaging the NFP’s community. We also detail marketing and operational strategies to consider when designing a social enterprise. The important message in our paper is how can a small NFP implement a successful consistent revenue stream via social enterprise.