How to Build a Culture of Entrepreneurship in Your Nonprofit Organization

Nonprofit leaders share original ideas to generate funding through social enterprise & sustainable business models 

February 12, 2018

Nonprofit organizations are on the frontlines of tackling issues ranging from hunger to malaria to refugee displacement to autism awareness. Yet, the nonprofit field is increasingly fragmented, composed of lots of small organizations that never achieve financial sustainability or scale. In their recently published book Engine of Impact, Stanford lecturers Bill Meehan and Kim Starkey Jonker report that 40% of nonprofit directors were unable to meet fundraising goals and 29% said their organizations had experienced serious financial difficulties.

The stakes for failure in the nonprofit sector can feel dramatically high. These organizations are often providing critical services that sustain communities at the local and global levels. Yet, they’re operating in rapidly changing landscapes where donors suddenly have new demands and traditional sources of funding are drying up.

 

Nonprofit to Social Enterprise 8 Days 8 Lessons with 8 Nonprofit Leaders

 

How can the best organizations adapt? Increasingly nonprofits are thinking about developing earned income streams or incubating social enterprise models to diversify their funding, cross-subsidize core programs and become less beholden on grants. All of this might sound advisable in practice, but trying to foster a culture of entrepreneurship and lean innovation to unlock business opportunities within nonprofits can be daunting. The challenges range from slow-moving bureaucracy to complicated markets where the end users have limited ability to pay for new goods or services. Many nonprofit employees also worry that pursuing profits might district from their core social mission. But this doesn’t have to be the case.

As Acumen has learned from more than 15 years of investing in social enterprises around the world, business models that effectively serve the poor and achieve meaningful social impact are certainly challenging--but not impossible-- to build and scale. We recently spoke with eight nonprofit leaders who are on the forefront of exploring and testing entrepreneurial approaches to create their own sustainable funding models or cultures of innovation. We’ve collected their key lessons and pieces of advice for other nonprofits who are looking to transition to social enterprise models or adopt business-savvy practices to advance their missions in 2018 and beyond.

 

Reece Soltani's of AARP Foundation Head Shot

Reece Soltani 

Social Entrepreneur in Residence, AARP Foundation

Lesson 1: How to Cultivate a Culture of Innovation

Secure buy-in from your organization’s leadership to cultivate a culture of innovation. If you can, appoint a dedicated staff member to drive entrepreneurial initiatives.

GO TO LESSON 1

 

Jaclyn Goris of Feeding Matters

Jaclyn Goris 

Senior Director of Programs and Strategic Initiatives, Feeding Matters

Lesson 2: Strategic Planning

Be strategic, but don’t obsess about creating a 15-page business plan. Test things quickly, rather than doing exhaustive planning.

GO TO LESSON 2

 

Sam Dawson of Global Brigades

Sam Dawson 

Sustainable Development Associate,Global Brigades

Lesson 3: Disrupting Traditional Value Chains

To find potential revenue streams, look for opportunities to create efficiencies or disrupt traditional value chains.

GO TO LESSON 3

 

Earned Income Strategies Webinar Banner Showing Book and Text

 

Cortni Grange of Flye

Cortni Grange 

Executive Director, FLYE

Lesson 4: Cultivating a Selling Mindset

Focus on sales early in your nonprofit’s entrepreneurial journey. Cultivate a selling mindset.

GO TO LESSON 4

 

Addison Nuding of WellDone

Addison Nuding 

Managing Director of WellDone

Lesson 5: Understanding Customers and their Struggles

Know your users. Understanding customers and their struggles is foundational to building successful solutions.

GO TO LESSON 5

 

Kathryn Taezsch of World Vision International

Kathryn Taetzsch

Global Director, Humanitarian Partnerships & Cash Based Programming, World Vision International

Lesson 6: Leveraging Corporate Relationships

Figure out your unique strengths as a nonprofit and then leverage relationships with corporate partners to fill in the gaps. Don’t try to recreate what the private sector is already doing well.

GO TO LESSON 6

 

Jacquelyn Rose of Connecticut Children's Hospital

Jacquelyn Rose 

Advancing Kids Innovation Program Manager at Connecticut Children’s Hospital

Lesson 7: Risk-Taking to Find New Funding Streams

Don’t assume that a heart-warming social mission will come with guaranteed philanthropic funding. Instead, embrace risk-taking to find new funding streams.

GO TO LESSON 7

 

Headshot of Liz Rowe Director of Business and Commercial Development, Action for Children

Liz Rowe 

Director of Business and Commercial Development, Action for Children

Lesson 8: Diversifying Funding and Horizon Scanning

Diversify your funding sources before your funding gets cut. Conduct horizon scanning exercises to plan ahead.

GO TO LESSON 8

 

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