Social enterprise bolsters botttom line for nonprofits

By Katy Snyder
JVA Consulting Communications/Resource Development Associate

This week, JVA President Janine Vanderburg is attending the Social Enterprise Summit in New Orleans. Janine is twittering from the summit to keep all of us apprised of the brilliant ideas that pioneering social entrepreneurs will be presenting. As a primer, we thought we’d revisit the topic of social enterprise and tell you a little about what it is and how some JVA clients have used social enterprise to bolster their bottom lines (something that’s more important than ever as corporate and individual donations decline).

Social enterprise is when mission-driven organizations use revenue-generating strategies to forward their mission. Products or services for sale must be tied directly to the mission of the organization in order for it to be considered social enterprise.

Here’s how JVA has worked in the social enterprise arena in the past:

In September 2008, JVA partnered with the National Center for Social Entrepreneurs (NCSE) and the Family Resource Center Association (FRCA) to help build the capacity of rural nonprofit organizations.

As regional facilitators for NCSE, JVA identified three family resource centers in rural Colorado and provided them with the training and resources to develop business plans for social enterprises that helped them develop a product, employ their clients and increase overall sustainability.

La Llave Family Resource Center, Tri-County Family Care Center and Rural Communities Resource Center were selected to participate in an eight-month process with JVA to come up with a marketable product from which their organization could eventually draw revenue. Participants were charged with conducting market research to come up with a unique product that could fill a niche in their community, drafting a business plan and determining costs associated with their product so they could come up with a price point that would allow them to profit.

JVA’s director of Planning Services and Social Enterprise said that through the process, participants went from not thinking about marketing at all to becoming entrepreneurs who could look at what they were doing and say, “How do we turn that opportunity into money in a way that not only supports but honors our mission?”

One of the centers selected for participation, La Llave, works with families throughout the San Luis Valley, providing them with support services to help improve literacy levels of both adults and children. After doing market research and conducting a focus group in the heavily Latino San Luis Valley, La Llave found its niche: table decorations for quinceñeras, wedding celebrations and graduations. Although families often make these decorations together, the process is time-consuming and the materials needed require families to travel hours to Albuquerque, Santa Fe or Denver. By ordering products wholesale and assembling them en masse, La Llave can save families time and money.

Sales of the product are keeping two part-time La Llave employees—both former clients—busy, and La Llave anticipated it would break even and begin making a profit by the spring. In the future, La Llave anticipates it will be able to hire seven new full-time employees with profits from sales of its decorations.

Tri-County Family Care Center, whose office is located in Rocky Ford and serves Otero, Bent and Crowley counties, went through several ideas trying to come up with the perfect product. After some coaching from JVA and market research using the NCSE model, Tri-County decided to focus its attention on custom-made computer slide shows. Like La Llave, it targeted family affairs, such as weddings, funerals and graduations. Not only was this product guaranteed to be in demand (research showed that there was no one in the area making slide shows and that many adults were not technologically savvy enough to easily make their own), but it also allowed for a solution to a problem that ails many rural counties: lack of jobs for new high school and college graduates. By employing some of these recent graduates, Tri-County gets the technological expertise that it needs to make its product while also creating jobs for young people who might otherwise leave the community.

Founded in 1983 in Yuma and Akron by women looking for ways to become self-sufficient in a rural community, Rural Family Resource Center originally targeted a niche market to make a profit: sewing ranching clothes specifically made for women. Charged by JVA with coming up with a new product in 2008, the group went back to its roots, making hand-stitched toys, clothes and gadget-heavy snowboard bags that were rugged but stylish enough to go from serious backcountry shredding to a trip through the Aspen airport.

Like the other centers, Rural Family Resource Center’s research into market trends in its communities guided its final product choice. As the sewing industry continues to move offshore, companies are no longer able to get a quick turnaround on their product, but handmade, locally stitched products like the Rural Family Resource Center’s can be made in as little as three days. Employing local women and clients of the Resource Center to do the sewing helps the local economy and also teaches employees business basics such as bookkeeping, marketing and customer service.

If you are interested in learning more about how you can grow the capacity of your nonprofit or socially responsible business (rural or not), contact JVA at 303.477.4896. To follow Janine’s tweets from the Social Enterprise Summit, go to Janine’s tweets will be scrolling in a box on the right-hand side of the home page.

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