Nonprofit Business Planning

Nonprofit Sustainability

The Mars (chocolate) people opened a big chocolate bar factory today in Kansas.  So what could this have to do with nonprofit governance you might say?

Well.....in the Washington Post article telling of this factory opening, there is a note that the Mars Company owns a chain of animal hospitals/clinics named Banfield (PetSmart).  The company also owns a pet care insurance company.

Well...I said to myself thinking about all the cat projects and animal welfare groups that try in ever-so-humble ways to maintain largely tiny budgets (except perhaps for the ASPCA, why aren't these groups in these businesses -- particularly lucrative if one takes a Wiki glance at the numbers (see Banfield Pet Hospital).  

Frankly the reason I would offer that these groups aren't dabbling in insurance or for-profit ventures may be their size (no economy of scale); lack of knowledge or interest in running a revenue generating business); competition (Banfield) and capital.  All of these are reasonable rationale for finding what I propose could be very effective ways to finance their operations. 

But, what if these groups joined together, say multi-city or regionally or state-wide or even multi-state wide with a for-profit subsidiary that could pursue one or more of these efforts.  In the area of insurance, think Knights of Columbus.  Or think a pet-food brand (which Mars Co. also owns).

Financial sustainability for smaller nonprofits may be better achieved in partnership given today's market.  The opportunities as I've outlined above for animal welfare groups for instance appear pretty wide ranging as they might for other nonprofit industries.  Imagine soup kitchens following the Newman's Own path and perhaps even partnering together and then partnering with Newmans to create a product line that would generate visibility for the cause and revenue.

Imagine.....

Social Enterprise: A Study

The iconic CitiBike program is undergoing some challenges and the New York Times story outlining these challenges provides a series of lessons for social enterprisers.

Some of these lessons include:

a. understanding and responding to demand (when the majority of consumers want to buy an annual plan not a daily plan)

b. fully projecting costs (when you have ?unexpected costs, what to do about budgets going forward)

c. when your business model didn't include philanthropy while similar models did OR you really hadn't charged enough for "naming"

 

Nonprofit Revenue Generation

Nonprofits generate a lot of income from their core services.  Think "state contracts" and fees for services like counseling.  Such service provision is central to mission and while not usually enough to make all ends meet, the income generated represents the springboard for survival.

But beyond the essentials, some nonprofits come-up with additional revenue generating producs and services.  Think Newman's Own salsas and chips or in Connecticut, the University of Connecticut sports chips and salsas.  These are tangentially or brand related products that after expenses, most times, make a financail contribution to the bottom line.  

But an article in the Philadelphia Inquirer moves me to ask: is there a product or service that no matter how lucrative, it just sends the wrong message for some nonprofits to accept the income?  Or do we go back to the other phrase I occasionally refer to: the only thing wrong with tainted money is there 'taint enough of it?

The article, actually a blog, is about the 'Walk of Shame Kit'.  The kit provides young women with the "necessities" pertinent to spending an unplanned overnight with a partner and upon leaving, being more ready to begin the day.  And, some portion of the sales benefits a charity (one of those "buying this makes you a better person and is good for you" pitches.

So, what do you think?  Would you, a women's organization for instance, want a product like the Kit to generate income for your organization?  And, who in your organization would decided?  Does such a question just get flown upto the board where questions of ethics and values maybe get asked and answered?