The National Executive Service Corps is supporting its nonprofit clients, hit hard by the economic downturn, by helping them to identify enhanced revenue opportunities. Social Enterprise, a type of Earned Income, is becoming an increasingly important new source of revenue for struggling nonprofits. It represents a way for a nonprofit to identify new revenue streams that can become regular, consistent income to supplement existing fee-based programs, government grants, annual donor solicitations or benefits, or other intermittent sources of income. It can expand existing services to new clients, or can develop new services to offer to existing clients.
NESC recently completed a Social Enterprise strategy for a social service agency in New York that found itself with excess IT capacity. After researching various scenarios, NESC consultants wrote a Business Plan to turn that excess capacity into a successful outsourcing service, providing IT services to other nonprofit organizations. Today its income generates additional revenue that can be used to strengthen its core services and increases its capacity to deliver those services. NESC is also helping a private arts club in New York to develop a Social Enterprise program.
To enhance NESC's practice in this area, we have formed an alliance with a leading New York law firm which has agreed to provide pro bono services related to Social Enterprise initiatives for carefully selected NESC clients. These services, where utilized, will save the nonprofit the substantial legal fees which such a project might otherwise entail, and which might make such a project too expensive for small organizations to undertake.
Earned Income programs which further the mission of the nonprofit constitute Social Enterprise ventures, an important consideration for a nonprofit organization. Whether or not the business activity is related to the mission of its operator must be carefully considered in developing any earned income strategy in order to protect the nonprofit's 501(c)(3) status.
Through brainstorming sessions, NESC guides the client to identify areas of excess capacity that can be turned into a new source of ongoing revenue. NESC will then assess the viability of the potential enterprise. Where viability seems assured, NESC will design a Business Plan and the associated Operations and Action Plans required to launch the business.
Unlike other forms of fundraising, a Social Enterprise initiative does not rely upon the goodwill of philanthropic foundations, corporations or individuals. It does not rely on grant writing, galas or prospect cultivation. But, if launched successfully, it can provide consistent cash flow to the host nonprofit, year after year.
- For a Manhattan-based arts organization, NESC consultants crafted a business plan to create an art gallery out of unused space, and offer it for rent to other arts organizations that do not have public space for displaying art.
- For a Connecticut-based museum faced with increasing operational expenses without a comparable increase in revenues, NESC identified new sources of earned revenue, evaluated options and developed financial assumptions and projections.
- For a Long Island social services agency, NESC devised a business plan to support the agency's outsourcing of IT services to other social services agencies.
- For a Queens-based healthcare provider, NESC was asked to evaluate equipment sales and repair activity, and the feasibility of establishing a business operation in order to generate additional revenue.
