The Nonprofit Entrepreneur: Sustainability –

How can budding nonprofit entrepreneurs plan to have a sustainable social enterprise?

Nonprofit entrepreneurs can make their social enterprise sustainable by having an actual business model in place. The main reason nonprofits fail is because they have no plan to generate income on their own and instead focus too much on the cause itself. That’s great for a year or two but what ultimately happens in these cases is the nonprofit sputters out and dies.

Many nonprofit entrepreneurs figure they’ll just raise the funding needed for their mission from grants, donations or foundations, but realistically grant money is hard to come by, especially since the financial crisis began in 2008. Even if you are ultimately able to obtain funding, it won’t come in at the regular intervals you’ll need to keep the lights on and pay your employees on time.

Instead nonprofit entrepreneurs should consider their nonprofit as an actual business. A nonprofit business is exactly the same as a for-profit business except for the fact that the “profits”, if you will, are used toward the nonprofit’s cause, not to enrich the owners. A long term nonprofit has to have viable business revenue streams. Now grants and tax-exempt status certainly help and give a nonprofit a leg up on the for-profit sector, so these revenue streams might not need to be as robust as in a for-profit enterprise. In short, treat your nonprofit as an actual business if you want it to stick around for a while.

Edited by Valerie Jones

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Andrew Wilkinson began his career working as a Silicon Valley engineer in the high-tech industry. He also spent time as a management consultant to Fortune 500 technology companies before his foray into nonprofit entrepreneurship. Wilkinson is currently the executive director and co-founder of StudentDonate, a nonprofit whose mission is to help students afford a higher education.