http://www.devex.com/en/blogs/the-development-newswire/kevin-short-ngos-should-follow-market-mechanisms-transform-to-social-enterprises
Kevin Short observes that the transition from nonprofit to social enterprise can be eased “with the proper expertise and accounting, strategic partnerships, an open mind, and a dose of daring.”
In fact, successful Ecuadorian social entrepreneur Peter Pinchot realized financing a social venture “isn’t very different” from financing a “normal small business.”
His organization, Pinchot Institute for Conservation, which operated a community forestry enterprise called EcoMadera, was stuck in a rut. It was not attaining its expected environmental and economic benefits.
That is, until the organization decided to restructure to a social enterprise model and opened itself up to market mechanisms and outside investors to bring in capital. It also brought in professionals and integrated them with community shareholders. Since then, EcoMadera’s assets and operations have expanded tremendously even as it freed itself from reliance on subsidies.
For Mexico’s Francesco Piazzesi, his non-governmental organization’s successful transition to social enterprise has enabled it to generate in five years “the social impact equivalent to 20 years as an NGO.” He attributes the success of his organization Echale a Tu Casa to the following: a business plan with clear goals and targets, a revamped accounting process, and reconfigured messaging.
“While I felt good about what I was doing as a non-profit, we learned that as a business we could make real social impact,” Piazzesi said of his organization’s community-based self-build housing program.
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Kevin Short: NGOs Should Follow Market Mechanisms, Transform to Social Enterprises
Posted by Che de los Reyes on 25 August 2011 07:40:18 AM
Many nonprofit organizations around the world are starting to realize that following a for-profit model can transform their operations into efficient, independent, self-sustained enterprises, and amplify their social impact while still remaining true to their philanthropic ideals.
In fact, successful Ecuadorian social entrepreneur Peter Pinchot realized financing a social venture “isn’t very different” from financing a “normal small business.”
That is, until the organization decided to restructure to a social enterprise model and opened itself up to market mechanisms and outside investors to bring in capital. It also brought in professionals and integrated them with community shareholders. Since then, EcoMadera’s assets and operations have expanded tremendously even as it freed itself from reliance on subsidies.
For Mexico’s Francesco Piazzesi, his non-governmental organization’s successful transition to social enterprise has enabled it to generate in five years “the social impact equivalent to 20 years as an NGO.” He attributes the success of his organization Echale a Tu Casa to the following: a business plan with clear goals and targets, a revamped accounting process, and reconfigured messaging.
Being transparent and convincing financial institutions and equity investors that you have the potential to deliver on resources was also key to Echale a Tu Casa’s success. All these were made possible with the help of business leaders and professionals from the private sector, particularly a mentor from Ernst & Young Mexico.
“While I felt good about what I was doing as a non-profit, we learned that as a business we could make real social impact,” Piazzesi said of his organization’s community-based self-build housing program.
Read more:
- Fundraising Basics: The Successful ‘Elevator Pitch’ for Social Entrepreneurs
- A (Development) Business Revolution, Thanks to Social Entrepreneurs
- What Aid Agencies Can do to Boost Social Enterprise
- Doing Business and ‘Doing Good’
- Bill Drayton: An Icon for Social Entrepreneurs
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