Friday, January 22, 2010

Social Enterprise Failure

"..[B]lending nonprofit and for-profit thinking could do significant damage to civil society as the philanthrocapitalist revolution roles on."

Michael Edwards, Small Change

I don't think anyone has summed up the full range of impacts from nonprofits going down the social enterprise or philanthrocapitalist path. Usually we hear about the stars -- or occasionally a survey is done on one type of nonprofit business, like nonprofit staffing agencies.

Just off the top of my head I can think of a dozen or so failures around the country, enterprise failures that sometimes contributed to bringing seemingly strong nonprofit organizations down. As a part of our collective aversion to talking about failures and mistakes, this is fugitive territory.

Now, we've also had a lot of failed nonprofit replications of model programs, deadly executive transitions, and nonprofit meltdowns. The failure of social enterprises is clearer because they can't persist if private revenue dries up, unless,of course,success is redefined in terms of amount of revenue generation, length of start-up, or the value of other benefits. Yet we should admit that nonprofits have the ability to hold onto existence beyond the call of purpose or the availability of resources. Social enterprises generally do not have this capacity. Like business, when they fail, they fail.

Nevertheless, it's worth tallying up the costs and benefits of social enterprises for the nonprofit sector if this hasn't been done. And let's focus on those social enterprises that promise revenue, jobs, and other services for low-income communities. I think we might be surprised by the results of such an analysis.

1 comment:

Anonymous said...

The great pillar of American democracy is journalism.
The journalist paycheck relies on newspaper advertising
which has gone to google and the internet. Power
groups like government corrupt officials need not fear
the investigative reporter who have been laid off.

Second great pillar of American democracy is
small social groups. Innovation, risk taking and entrepreneurship
is DIRECTLY connected to small social groups.
Two students try something new at school. They drop out and start
Obviously, even the local Parent-Teacher's Association (PTA)
or 'bridge club' tends to grow WOMEN politicians and Sierra Club Directors.
Before, 'leadership' was learned through small, local groups
even including the volunteer ambulance corp., boy scouts and even
Rotarian charity drives.
Even I have met interesting people at the Unitarian discussions.
An extreme example. Muslim children were singled out and bullied.
The girls were assaulted. The girls joined the GIRL SCOUTS. They sell
GIRL SCOUT COOKIES door to door and even those who hate
are still required to buy.
No one will cut the lawn of the FORECLOSED, abandoned house in Detroit,
Motor City, USA. Rats in abandoned areas and in Florida, mosquitoes in
abandoned swimming pools lead to epidemics of disease like the Black Plague.
Some young kids are afraid to get together for fear of being labeled
'gang members' in Washington, D.C., capital of the NATION and known as 'murder
Fall of the empire (Afghan war);
fall of voter registration and the republic;
fall of CIVIC society small groups