The Emergence of the Social Enterprise
The dilemma for non-profit leaders is how to diversify their organization’s sources of revenue while protecting its social mission
Government funding cuts over the past decade have motivated non-profits to add a revenue generating component to their organization’s activities, explains Jean-Baptiste Litrico, Distinguished Faculty Fellow of Strategy and director of the Centre for Entrepreneurship, Innovation & Social Impact at Smith School of Business. Here, Litrico discusses the emergence of the “social enterprise”.
Video Highlights
0:13 The need for non-profits to diversify their sources of revenue started about a decade ago, in conjunction with government funding cuts. The idea of adding a revenue generating component to their activities was motivated by the need for financial stability.
0:55 Non-profit leaders may be hesitant to engage with revenue generation out of concern that doing so could result in some “mission drift”. The dilemma for non-profit leaders is how to diversify sources of revenue while protecting the organization’s social mission.
1:41 When the idea of social enterprise was just emerging, non-profits initially thought of revenue generation as something separate and disconnected from their regular activities. As the concept took hold, we saw non-profit leaders becoming more creative and inventive with their ideas to integrate revenue generation with their existing day-to-day activities.
2:49 For example, Aki Energy is a social enterprise based in Manitoba that provides renewable energy solutions to First Nations communities. It employs and trains individuals in those communities as part of those projects.
3:37 We need to rethink traditional attitudes toward funding the operations of non-profits. We need to think about managerial innovation; how to invent new forms of organizations to address those long-standing problems.