Should Nonprofits Seek Profits?

Should Nonprofits Seek Profits? asks a number of key questions:

• What's driving nonprofits to pursue profits?


• Are financial claims accurate?


• Does this venture contribute to the organisation's core mission?

The authors, Foster and Bradach, are with the Bridgespan Group, a Boston and San Francisco based nonprofit strategic consulting firm affiliated with Bain & Company. The article is from the February 2005 issue of Harvard Business Review.

What do you think?

Be a SocialEdge Delegate to the Skoll World Forum

The deadline has been extended to midnight (PST) Sunday February 27th for submissions to be one of two SocialEdge delegates to the 2005 Skoll World Forum in Oxford.

Here is the link http://www.socialedge.org/?293@@.3c423605.

Is your marketing working for you?

Paul Lamb is hosting the discussion Marketing for Community-Based Social Enterprise at SocialEdge.

The forum is intended as an exchange where members can share their experience and ask questions. To start things off, Paul offers three marketing tips:

Marketing Tip #1:
Think locally your biggest customer base for a community-based business is located within a 5-mile radius of your store/operation.

Marketing Tip #2:
These days the best advertising investment (most affordable with the highest return) is online marketing through Internet search engines. Your chances of success through sponsored links increases dramatically if you have a website with have e-commerce capabilities.

Marketing Tip #3:
Did you know that Google now has a free advertising program for U.S.-based nonprofits? Check out Google Grants at http://www.google.com/grants/.

Going to the Barricades

From the July 2003 issue of the MicroBanking Bulletin, David Richardson’s paper Going to the Barricades for Microsavings Mobilization: A View of the Real Costs from the Trenches was recommended by attendees at an asset building conference recently held in the Vancouver suburb of Coquitlam.

BONUS MATERIAL:
In The MicroBanking Bulletin: Focus on Efficiency, Richardson wrote 'Unorthodox Microfinance: The Seven Doctrines of Success' and argues for a radical reform of the orthodox approach of using financial services to achieve poverty alleviation. According to Richardson, many credit unions are skeptical of conventional Microfinance lore and are now focusing on commercial viability rather than on outreach.

The author offers seven doctrines for achieving poverty alleviation targets:

• The Doctrine of Open Door Massification:
  Serving a wider range of economic groups leads to better outreach.



• The Doctrine of Micro-savings:
  Micro-saving benefits an MFI with less dependence on external funding and abundant liquidity for lending.



• Portfolio diversification:
  Diversifying into work, housing, health, education, transport and security products. The MFI avoids risk of economic downturns in a single sector.



• Efficiency:
  Better productivity helps MFIs compete with downsizing commercial banks. Larger loans should contribute more to payment of fixed costs. Salary and incentive structures for staff should be re-evaluated.



• Financial discipline:
  Better management of delinquency, loan-loss reserves, loan charge-offs, and reserves of capital and liquidity.



• Self governance:
  Empowerment, matched by checks and balances of economic incentives, financial discipline and systematic vigilance.



• Assimilation:
  Poor people should be assimilated into the mainstream economy by providing them with access to comparable financial products and services.

Motivation and the Cross-Sector Alliance

The Harvard Business School's Working Knowledge series provides a look at budding relationships between business and social sector organizations in the Americas.

What are some of the underpinnings? Take a look at the article found here.

Charities Doing Commercial Ventures: Societal and Organizational Implications

Raymond Dart and Brenda Zimmerman wrote this report which maps the major themes and implications of increased commercial activity in the Canadian charitable sector based on a literature review and interviews with a variety of senior members of the Canadian charitable sector.

The paper begins with an introductory discussion and an overview of the methods and approach undertaken by the authors. The body of the paper elaborates on the "commercial activities by charities" issue in descriptive, thematic and outcome terms. The paper concludes with a summary and an elaboration of questions for further research.

This link will allow you to download the paper.

Does Business Have a Noble Purpose?

At the World Economic Forum in Davos Rakesh Khurana, Professor, Harvard Business School, Ian E. L. Davis, Managing Director, Worldwide, McKinsey & Company, and Lord Browne of Madingley, Group Chief Executive, BP, pondered the question "Does Business Have a Noble Purpose?" at a panel discussion moderated by Laura D. Tyson, Dean, London Business School.

The discussion was primed with the following:

Global companies are central institutions in our society, yet the public rarely seems to focus on the social benefits of their contributions to economic development.

1) What measures, other than shareholder value, can be used to assess value creation?

2) How has the rise of global companies affected public perceptions of business's contributions to society's wider objectives?

3) Should CEOs use their leadership position to influence how business is defined and perceived?

The link to view the discussion is here.

Hard News

The Sunday edition of The Vancouver Courier, the cover story is on challenges faced by The Street - "a bi-weekly dedicated to giving a voice and an opportunity to the homeless".

From the article:

Right now the paper breaks even. Written and edited by volunteers, its published at Horizon Printers at a discount rate. Vendors buy each paper for 30 cents, which covers the printing costs, and sell it on the street for donations. Whatever [the vendor] pockets is theirs to keep, with some of it going to buy copies of the next issue.

The Street was once Spare Change.

This link will take you to the story in the February 13th edition.