 A
“FUNDER’S” PERSPECTIVE ON SOCIAL ENTERPRISE
by Martha J. Perry, Associate Executive Director, McCune Foundation
It was in 1999, while discussing the fragile state of many
nonprofits with a colleague, that I learned about the work of Bill
Shore and was encouraged to read his book, The Cathedral Within.
Immediately thereafter I brought Bill to Pittsburgh for a discussion
with foundation representatives and nonprofit executives. Since that
time our Social Enterprise Committee has been building the
infrastructure to support the social enterprise movement in our
region. The infrastructure includes two major conferences focusing
on social enterprise, many seminars and training courses, technical
assistance, venture capital, initiation of the
Social Enterprise
Accelerator, and, most recently, founding
of the Institute for Social Innovation at Carnegie Mellon
University. Make no mistake about it, social enterprise is still in
its nascent stage as a movement but the activity level is high,
vibrant, and sometimes scary.
Social enterprise involves shifting paradigms
Social enterprise requires nonprofit organizations to think and act
like businesses. Organizations that are willing to assume risk,
apply business principles, and launch social enterprises report that
this new approach is transformative and powerful for the entire
organization.
There are three major things for foundations and other potential
funders of social enterprise to consider before providing funding
for ventures:
1. Assess readiness
It is essential that the board buy into the idea and that the
organization is up to the task: that its leaders and staff have the
skills and capacity to make it work. Our successes and failures have
been clearly related to these factors.
2. Fund for the long term
Foundations should capitalize ventures adequately and be there for
the long haul. Social enterprise is not an easy fix or short-term
solution. Undercapitalizing sets up the organizations for sure
trouble and possible failure. I’ve found that providing grants in
phases is a good way to measure progress and adapt as the enterprise
develops. It is not unusual to face unforeseen costs or the need to
take a different route.
3. Give more than money
To be successful in social enterprise, organizations need more than
cash. Foundations can serve a valuable role in creating the
entrepreneurial environment and providing the support, training, and
technical assistance that encourage innovation. For instance,
foundations might help create a regional social enterprise committee
made up of nonprofits, funders, consultants, academicians, and
business leaders. And foundations can facilitate broader public
discussions about social enterprise through media outlets. Another
key role might be facilitating discussions about legal and
legislative issues related to social enterprise.
I am sold on social enterprise as an earned income strategy that is
valuable for many nonprofit organizations. The field is developing
rapidly and many good resources are now available to help advance
the movement. Social enterprise and other innovative approaches will
strengthen nonprofits for the important work they do in all of our
communities.
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