This is a hell of a time to start a new social enterprise. The economy is grim, fundraising is miserable, the giddy do-it-all optimism of the '90s is a memory. And yet, the needs of the poor are enormous. The world cries out for innovative minds to find and apply new ways to solve problems and plug holes in society. In other words, opportunity is knocking—hard.
According to three dynamic panelists at the conference session "Challenges of Nonprofit Start-ups," creativity, guts, and inspiration go a long way toward launching and running a start-up. The key is to think strategically about how you want to address a social issue and where you can fill a niche that is currently not being served, said the entrepreneurs at the session.
Their advice was realistic and made good sense. For starters, said Robert Carmona, President and CEO of Strive, a network of services in nineteen cities that help people in poverty acquire and keep jobs, it is "tough to impossible" to get a new enterprise off the ground in the current economic climate. But there is no reason not to try anyway, he said. What to do: Align your project with an existing organization as a new department. You will have a much better chance of survival and perhaps success under the umbrella of a nonprofit that is already up and running.
| The heart of starting a social enterprise is to answer the question, "How do I fit in?" |
| —Brian Kreiter, National Student Partnerships |
Even in better economic times, the panelists said, it was a challenge to get their own projects off the ground. Theresa Ellis, for instance, founded Harbinger Partners, an organization that brings for-profit and nonprofit groups together by linking technology experts (the for-profit side) with community service (the nonprofits), even as the stock market started to drop a couple years ago. The first person that she called to discuss her idea hung up on her, she admitted with a grimace.
Similarly, Carmona told the audience that Strive started during the Ronald Reagan presidential administration, not a promising time for social service providers. Strive began in a basement in East Harlem. It now has offices in nineteen cities.
Be flexible about how you want to acquire capital, he advised. Foundations are fickle, so always keep several irons in the fire. The first funders of Strive were private, but now 30 percent of the funding comes from public money, he said. Yet garnering government money also allows his organization to influence policy in a way it might not otherwise be able to do.
Smart entrepreneurship
Many of the tips for launching a social enterprise start-up apply equally well to any other entrepreneur. Potential entrepreneurs in the social arena should be looking for a social niche to fill, said Brian Kreiter, co-founder and chair of National Student Partnerships, a group that runs drop-in centers to provide multiple resources—daycare, job training, drug rehabilitation—to people entering or reentering the workforce. They also need to work closely with other organizations to benefit from the expertise of other social entrepreneurs and individuals like themselves, he said.
"The heart of starting a social enterprise is to answer the question, 'How do I fit in?'" Kreiter said.
According to Carmona, Strive formed alliances with other nonprofits to help strengthen Strive's raison d'ªtre of keeping clients on the job. These included daycare groups and battered women's shelters. "We were part of a puzzle," he said.
Recruiting like-minded people to help you is also a task that can be approached strategically. Kreiter and Kirsten Lodal, the CEO of National Student Partnerships, were students at Yale University when they dreamed up the idea for their program. But they did not recruit student help in the usual manner by papering the university bulletin boards with flyers. Instead, Kreiter said, they pursued forty students specifically with the aim of creating two distinct teams: one with social outreach skills, the other with business ability. They described why each of the forty individuals would have something to offer their group. This tailored recruitment process helped get NSP off the ground.
Fundraising and boards of directors are other important domains of social enterprise that can be well managed. Recruit a board of directors on the basis of what each person brings to the table, panelists said. "Map it looking for where the holes are," advised Ellis.
National Student Partnerships first built up a board of advisors, people who would be able to offer concrete advice on specific organizational issues the group faced, said Kreiter. A board of directors can then mainly offer help in fundraising.
Another way to get people on your side is to start networking one year in advance of when you'd like to launch, suggested Kreiter. Don't ask for a check. Instead, describe your vision; ask for help in conceptualizing it. This takes the focus off money and puts it on the power of relationships.
"People at first fund the 'I' in the organization and then the organization" on its own merits, observed Carmona. In the beginning, though, funders need to believe in the founder.
It is all too easy for social entrepreneurs to get sidelined by their management hurdles—vision, personnel, funds—all the panelists said. But unlike many other means of employment, passion is vital for social entrepreneurs. One way to keep the passion alive is to be lucky enough to have a network of friends and mentors who believe in the organization's goals too, said Ellis.
Another thing, simple as it sounds, is difficult for busy entrepreneurs to do: regularly keep involved with the organization's client base. "I involve myself in group orientation even on weekends," said Carmona. He offered advice to the session audience that might resound for any wise manager: "Stay in contact with clients to learn their needs."