Lately our group has been thinking a lot about ways the nonprofit community can respond more effectively to key social issues facing our nation and the world. We have been fortunate to interact with some of today’s most provocative thinkers in philanthropy and nonprofit management who are challenging nonprofits to reexamine their business models. One of our goals is to highlight innovative new ideas that can address social issues and impact our clients and their constituents in the most positive ways.
 As an example, in this issue of The Spark, Jan Halpin describes one innovative new model for generating funds to support nonprofits – the concept of social enterprises. Contact us to share your experience with social enterprises. Innovative practices always interest us!
Richard Tollefson
President
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REALLY – IT IS OK TO MAKE A PROFIT!
Jan Halpin, Principal
Despite what many think, nonprofit organizations are not required to struggle financially.
Low Overhead is Not Always the Best Metric: Too often people assess a nonprofit’s efficiency solely by examining its Form 990 for the lowest possible percentage of overhead. We forget that sometimes it takes money to make money … and to deliver effective programs, services and positive outcomes. If programs and services are inferior because of lack of resources, being frugal just does not compute!
However, it seems that the paradigm of using the 990 as a nonprofit’s premier measurement tool is not going to change anytime soon, so… how is a nonprofit to get the money needed to be effective?
Social Enterprise as Revenue Source: One solution is to consider starting a “social enterprise”- sometimes also referred to as “social purpose business.” The Social Enterprise Alliance defines a social enterprise as: “An organization or venture within an organization that advances a social mission through entrepreneurial, earned income strategies.” A social enterprise is, in effect, a business within a nonprofit organization which provides a revenue source to sustain the nonprofit’s work. A social enterprise can also create jobs for clients and the greater community.
An example of this can be found with one of our clients, UMOM New Day Centers, a homeless family shelter, which has operated the New Day Gourmet catering business for a number of years. The catering business is intended to be a profit-producing entity generating income for UMOM and providing job training to its residents. They are now investigating the possibility of adding another food delivery system.
Best Practices for Social Enterprise: Not all nonprofits are ready to undertake such a commitment. Both senior management and the Board of a nonprofit must fully understand and embrace the process for structure and management of a social enterprise. Just as there are best practices for nonprofits, so there are for social enterprises. Experience has shown that the most successful and sustainable social enterprises have:
- A mission related to the nonprofit’s mission
- A solid business plan in place
- Separate funding – so it cannot drain the resources of the nonprofit
- An annual strategic plan, re-visited each year
- Flexibility to “depart” from the plan – that is, to be innovative, but not to “drift”
- Creative, effective marketing
- “Good doers vs. do-gooders”- that is, key staff must be savvy in the particular business, rather than in nonprofits
Investment Possibility: Investors can also benefit from social enterprise. A social enterprise may be established under various legal structures which may enable investors (as opposed to donors) to make a  modest return on their investment. Social enterprises are a growing movement and means of sustainability that merit being explored.
Learn more about social enterprise by contacting Jan at
Halpin@PhoenixPhilanthropy.com.
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Congratulations! Our clients won three of the four categories in the
2011 Organization of Nonprofit Executive’s (ONE) Director of the Year Awards : Paula Hardison, The Wellness Community, for The Community Partnership Award; Linda Lyman, Greater Phoenix Youth at Risk, for The Organizational Leadership Award; and Roberto Armijo, Community Information & Referral, for The Leader of Distinction Award. Edmundo Hidalgo, President and CEO of Chicanos Por La Causa, and Chairman of the Board of our client, Maricopa Community  Colleges Foundation, was named the winner of the ONE Innovation Award. Our congratulations also go to Michelle Dionisio at Benevilla, for being a finalist for The Leader of Distinction Award. The Phoenix Philanthropy Group was proud to co-sponsor the ONE Awards. (Winners shown at right).
The Phoenix Philanthropy Group was also a co-sponsor of the 2011 Eight, Arizona PBS - Be More Awards. Our client, Valley Forward Association, was nominated for the Be More...Entertaining Award for Outstanding Achievement in Special Events. Below, our Steve Zastrow presents the Be More...Brilliant Award to Barbara Ralston of Fresh Start Women’s Foundation.
 At the Spring 2011 international meeting of Association of Science-Technology Centers (ASTC) CEOs, Richard Tollefson, President, and Julie Iacobelli, Senior Consultant, facilitated two sessions.
The February CASE Winter Institute for Chief Development Officers included Julie’s presentation of the rigors and successes of Board Boot Camp.
Richard Tollefson, President, made the following presentations recently:
- Council for the Advancement and Support of Education (CASE) District VII Conference: New Paradigms in Community College Advancement with Cheryl House, Executive Director, Pima Community College Foundation, and Sandra Kirschenmann, Vice Chancellor, Resource Development, Los Rios Community College District and President of the Los Rios Foundation
- The 19th Annual CASE Institutionally Related Foundations Conference: Two presentations, one with Laura Brehm, President and CEO, University of Montana Foundation, and Of Counsel to Phoenix Philanthropy, and Steven Helfgot, President and CEO, Maricopa Community Colleges Foundation, on Sustainable Impact: Strategic Planning that Supports Your Foundation's Unique Culture and Dynamic and the second on International Fundraising Nuts and Bolts
- Southern Arizona Chapter of AFP: Philanthropy Today and Tomorrow - Leading Trends and Issues Impacting Fundraising Potential and Performance
- Henry & Horne Phoenix Lunch and Learn: Fundraising 101: Strategies for Success
Jan Halpin, Principal, and Julie made presentations to the national conference of the North American Riding for the Handicapped Association (NAHRA): Grants – Part of the Plan and Board Boot Camp.
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IN THIS ISSUE
About Us
The Phoenix Philanthropy Group partners with organizations to optimize their impact on our global society. We do so by serving their needs with strategic, innovative, accountable, and outcomes-driven fundraising, constituent relations, and organizational development programs.
Contact Us
Phone 602.380.2478
Toll Free 1.877.524.8774
Fax 602.468.9547
Photos of R. Tollefson, J. Halpin:
Ken Easley Photography
Photo of L. Kimball:
Pam Spicer, Spicer Photography
Photo of B. Ralston, S. Zastrow:
Michael Ging
Laurel Kimball
The Spark Editor-in-Chief
Assistant Editor
Kellie Teskey
The Phoenix
Philanthropy Team
Richard Tollefson
Laurel Kimball
Jan Halpin
Marc Kellenberger
Julie Iacobelli
Steve Zastrow
Kellie Teskey
Laura Brehm
Myra Garcia
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