Looking to Startups for the Future of Nonprofits

Entrepreneurial nonprofits--those that train people for jobs or sell things as part of their model--are becoming increasingly popular.

San Diego nonprofit Kitchens for Good trains people to be chefs and helps them get jobs afterwards. Photo: Shutterstock

Nonprofits have been struggling for years to maintain the donations and grants that they need to pursue their missions. While some are pretty well set up, others have to scramble, especially those just starting out or addressing a problem that isn’t yet widely known or understood. While donations form the majority of most nonprofits’ income, there are those that are taking on a more entrepreneurial mindset.

There have, of course, been very successful entrepreneurial nonprofit efforts in the past—Girl Scout Cookies and Goodwill stores come most readily to mind—but the world of startups is changing rapidly every day, and it’s a good idea for the nonprofit field to take notice. Well-established nonprofits and charities might not benefit as much as, or even be able to implement ideas taken from, business incubators and the like, but for newer and smaller, more flexible organizations, it’s worth a look.

The core of this idea is that fact that businesses move products or services, through which they generate revenue to cover costs and, ideally, generate a profit. The difference is this: in an entrepreneurial nonprofit, revenue beyond covering costs goes toward achieving the organization’s mission.

“The social enterprise model, with the fact that it has sustainability and revenue built into it, is a much stronger model and it’s a much stronger story to tell people who are giving their money,” Chuck Samuelson, founder of Kitchens for Good, one such entrepreneurial nonprofit, told Voices of San Diego.

By providing goods or services, successful organizations can ensure a steady stream of revenue, one that can rely on a wider variety of “donors” who might be willing to continue purchasing those products even when money becomes tight and they wouldn’t otherwise be able to donate.

Depending on the product provided, such organizations can also provide jobs to people who need them. For groups focused on tackling poverty, this is an excellent added benefit. Feeding the homeless is one thing, but giving hungry people jobs to help them get back on their feet is another thing altogether. A well-structured, entrepreneurial nonprofit can routinely do good at every stage of its operations.

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