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-II CHANAKYA BATCH 2008-09 DATE- 19/01/2009
PRESENTED TO: Dr. (Mrs.) Vilasini G. Patkar
PRESENTED BY: Anandita Singh Roll No.- C-34
EIGHT BASIC PRINCIPLES FOR NONPROFIT ENTREPRENEURS
:BY JERR BOSCHEE
ABOUT THE WRITER:
Jerr Boschee has spent the past 20 years as an advisor to social entrepreneurs in the United States and abroad. He is the founder and executive director of the Institute for Social Entrepreneurs, 9560 Dogwood Circle, Eden Prairie, Minnesota.
IN TRODU CTI O N
entrepreneurship is the work of a social entrepreneur. Someone who recognizes a social problem and uses entrepreneurial principles to organize, create, and manage a venture to make social change. Business entrepreneur typically measures performance in profit and return. A social entrepreneur assesses success in terms of the impact s/he has on society.
entrepreneurs often work through nonprofits and citizen groups, many work in the private and governmental sectors. The main aim is to further its social and environmental goals. This need not be incompatible with making a profit - but social enterprises are often non-profits. Social enterprises are for ‘more-than-profit’
entrepreneurship has moved now
into the mainstream.
years they were hovering around the
edges of the nonprofit sector.
nonprofit veterans have given eight basic principles for nonprofit entrepreneurship.
INCOME IS PARAMOUNT.
nonprofit sector – a reliance on philanthropy,
voluntarism, and government subsidy.
Earned income has been viewed as something extra. entrepreneurs –
On revenue side, earned income has become the primary goal. Philanthropy, voluntarism, and government
subsidy are added value but not the central.
shift – not well understood or
accepted by many in the sector.
Failure to perceive the difference between “innovation” and “entrepreneurship”. Innovation – doing something new. Entrepreneurship – doing something that makes money.
Entrepreneurship – a label for almost
any new approach that has a social outcome.
an innovation i.e. to design, develop,
and implement a new program.
an Entrepreneurship – useful to sustain
it without depending on philanthropy, and government subsidy.
between earned revenue and donated
Earned revenue – leads to sustainability and self – determination.
Donated revenue – leads to dependency and kindness of strangers.
– risk for social entrepreneurs,
therefore, unwilling to take.
committed to become financially
self- sufficient – in order to do more mission!
sources of funding became less
available during 1980s and 1990s.
and more non-profits discovered the
importance of paying their own way.
genuine social entrepreneurs.
2. BE A PLAYER OR DON’T PLAY AT ALL.
Drucker – Began preaching a new gospel
social entrepreneurs sharpen their
to nonprofits in the early 1990s.
organizational focus and expand their impact.
Given advice to CEO of General Electric to do improvement in the Company – stop trying to be all things to all people.
Repeatedly urged non- profits to do the same. Calls it “organized abandonment”.
advice runs against the grain of
the traditional non-profit mentality.
is agonizing. caveat: Being a social
entrepreneur does not mean eliminating a program just because it loses money.
a nonprofit is the best or the only provider of a
program that’s critically needed, it has an obligation to continue the program.
managerial challenge is to find other sources entrepreneurs have discovered that
of revenue to cover the cost.
reducing the number of programs they offer actually enables them to serve more people.
they have the time and resources to
expand their efforts.
3. STARTING A BUSINESS VENTURE IS NOT THE ONLY PATH TO SUCCESS.
a business isn’t the only way to be
successful as a social entrepreneur.
most important is “earned income
strategies,” which have nothing to do with starting a business venture.
two approaches differ substantially in of purpose, expectations, and
every nonprofit has opportunities for
earned income lying follow within its existing programs.
exploiting the opportunities , nonprofits
can register impressive gains.
their percentage of revenue from
earned income by as much as 15% within one to three years.
a nonprofit has gained experience with
earned income strategies, it may consider launching a formal business venture.
goals would be much more ambitious and only reason for a nonprofit to start a for significant growth and
the strategy completely different.
business venture is to exploit a specific opportunity profitability.
4. UNRELATED BUSINESS ACTIVITIES ARE DANGEROUS.
nonprofit entrepreneurs have started
business venture unrelated to their mission in the late 1970s and mid-1980s.
nonprofits learned a painful lesson :
Attempting to start an unrelated business venture means they were lost.
nonprofits today are emerging directly from their core competencies and basic strengths.
nonprofits have been concentrating on businesses:
two types of ventures:
DuRand of Minnesota Diversified the concept of an “affirmative the most common form of social
business” in the early 1970s.
a sheltered workshop, an affirmative
business is created specifically to provide
permanent jobs, competitive wages, career opportunities, and even ownership for people who are disadvantaged, whether it be mentally, physically,
economically, or educationally.
the years, DuRand took MDI from an investment a of $68 $100 and seven million business
employing more than 600 people
were developmentally disabled. dozens of other nonprofits have
followed his example.
profits delivers mission-driven products or payment may come from a third party
services directly to clients.
such as a government agency or entitlement program or from a private insurance company.
affirmative businesses, few of these
businesses actually employ the people they serve.
Assistive devices for people who are physically challenged, Personal care services to help elderly people at home, Interactive instructional programs for potential high school dropouts,
divorce, Hospice care for terminally ill patients, and many, many others.
5. BE PATIENT–AND DON’T RUN OUT OF MONEY.
entrepreneurs are badly famous for
underestimating the amount of time and money they’ll need to reach their goals.
to a study, significant revenue for
most companies doesn’t begin to flow until the seventh year of existence.
by the sixth year, the nature of the
business has typically changed completely.
must invest in their business
they cling to a cost mentality, their
chances for success are minimal.
6. RECOGNIZE THE DIFFERENCES BETWEEN INNOVATORS, ENTREPRENEURS, AND PROFESSIONAL MANAGERS.
entrepreneurs, and professional are all needed in the
organization, but at different times.
an individual possess more than one
of the three skills.
Are the dreamers. They create the prototypes.
Are the builders. They turn prototypes into going concerns.
Secures the future. Trustees, ones who install the systems and other parts of the infrastructure. Make sure that the going concern keeps going.
in the nonprofit sector –
are scarce, organizations try
adjust the people into positions where they don’t fit.
entrepreneurial strategies which
arises from having an innovator trying to do an entrepreneur’s job.
a professional manager trying to be an
innovator, and so on.
7. THE “NONPROFIT” CULTURE GETS IN THE WAY.
the nonprofit world - a collection of
unspoken compacts that tell us who we are, who we serve, why we serve them, and how.
undergo a radical set of changes.
of the most important changes are:
Be willing to take risks. Make tough choices about staff members. Relinquish control. Emphasize market pull. Price more aggressively.
8. REMEMBER THE NOAH PRINCIPLE.
of making a commitment.
aren’t any guarantees— except for
If you always do what you’ve always done, you’ll always get what you’ve already got.
Wayne Gretzky, the Hall of Fame
hockey player, "I always missed a hundred per cent of the shots I never took.”
the pioneers have learned to live by the
Noah Principle: No more prizes for predicting rain. You only get a prize if you build an ark.
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