A donor management software system assists nonprofits in diversifying their funding sources. One way NPOs can create an alternative revenue channel is by launching a social enterprise, which is a business venture that furthers a philanthropic mission, according to Green Lining. This idea is attractive to nonprofits because of reduced funding from the government, foundations and major funders in relation to the economic downtown. However, it should not replace traditional sources, like grants and loans, but supplement these channels.
What nonprofits should take into consideration before starting a social enterprise
Before a nonprofit launches a social enterprise, it should be sure the organization is prepared to take on the risk of failure, willing to embrace an entrepreneurial approach and able to gain a concrete picture of what success looks like. Ministry organizations should consider whether the services will be profitable, people would pay for these offerings and the product can successfully compete in the private market.
Social enterprises offer individuals training opportunities
Aside from profits, the model creates opportunities, such as hiring people with barriers to employment. For example, a nonprofit business venture may have two missions. One may be to offer gardening services to the city, while the other can be training and employing released offenders on the planting skills necessary for the job. This way, those who have barriers to employment gain applicable skills, pushing down the inability to secure a job when reentering society.
A donor tracking software system helps monitor all of the revenue coming in through social enterprises. Ultimately, social enterprises instill positive change in organizations’ communities, provide skills-based training to people in need and create a funnel for profits to come back to the organization.