October 5th, 2005

Rise of the Social Enterprise

I know it’s been a busy year when I look and see that I haven’t posted a blog entry since March! Thankfully, our marketing associate, Nick Fassler, is good at keeping up with this sort of thing.

Just wanted to share an interesting note from Ode magazine (disclosure: Ode is a client of ours). Ode builds on an article from The Nation earlier this year about the evolution of non-governmental organizations (NGOs). The Nation authors Michael H. Shuman and Merrian Fuller recommend that these groups, a.k.a. “nonprofit organizations” and “citizens groups”, put less effort into fundraising and more into understanding market forces. The search for funding in the form of subsidies and donations takes a lot of time, and many organizations often tap into the same funding sources. In order to be truly successful, the authors conclude that NGOs need to learn how to generate revenue.

Shuman and Fuller see social entrepreneurs as the answer. They argue that the aim of social entrepreneurs should be to break even on their activist activities, and if there are profits, invest them in good causes. The authors predict that increasing numbers of NGOs will have to integrate elements of the free market into their strategies in order to be trully effective in their efforts.