The Goldie Company

The New Nonprofits

Tuesday May 22, 2012

by Charley Ansbach , CFRE

As industry begins to explore new approaches to sustainability so too the nonprofit sector is evolving toward a model of re-defined, long-term vitality, just in time. 

There currently are more than 15,000 hard-working nonprofit organizations in the Greater Sacramento area.  Their important community work is supported by thousands of donors.  Much is being accomplished.  However, it is also not unusual for more than one organization to be working on the same social challenge, not partnering together and asking the same donors for support.  That seeming duplication in costs and objectives has been a growing concern for many funders, particularly in tough economic times.  Similarly, many community challenges, such as homelessness, healthcare, education and the environment seem to be growing almost endlessly in scale and cost, while the ability of public programs and nonprofits to actually solve those issues seems more and more remote. Many nonprofits report that if they had more donations they could close more of that gap but the current ability and willingness of many donors to give has plateaued or declined.  As a result, the effectiveness of the nonprofit, donor-driven model has come increasingly into question.  Something in the nonprofit sector has to change.  Fortunately, a transformation is underway.   

According to thought leaders like Harvard’s Michael Porter and Marc Kramer, the private industry sector is and must be transitioning out of the industrial age and an ‘Easter Island’ approach to the use of social and environmental resources into a new paradigm focused on the interdependent sustainability of people, planet and profit. Similarly, the nonprofit sector is and must be evolving from the Elizabethan charitable good works and donor-driven model to one more focused on innovation, enterprise, partnership, diversified income, measureable outcomes and transparent accountability to solve community issues at a larger and more sustainable scale.  These are the ‘new nonprofits’ that will be able to deliver sustainable social value to the community.

One indicative community challenge in which nonprofits will play a growing role is in addressing the needs of the growing wave of seniors.  More than 10,000 people per day are turning 65 in the US.  Seniors often require more and different services than the rest of the population.  Commercial firms tend to aim at the top of the senior economic pyramid where there is the greatest spending power. Many of the needs and interests of the rest of the senior population are left to be addressed by public programs and nonprofit organizations.  Publicly funded programs, which are currently under fire, and traditional donor supported nonprofit services will not be enough.  This is creating the challenge and opportunity for innovative, affordable products and services for seniors and the prospect of new income for the nonprofit and for-profit sectors.

One emerging ingredient in this opportunity mix is the “social entrepreneur” — a unique hybrid of leaders from the nonprofit sector eager to apply business skills to creating sustainable social solutions and from the for-profit sector similarly eager to apply conspicuous ethics and positive social and environmental impacts to effective business management.  Up until now, traditional nonprofits have been among the most resistant to social entrepreneurship for fear it would attract funds away from normal social mission programs, and because business methods were often purposely kept out of the nonprofit sector for fear of losing focus on social impact in favor of profit.  Moreover, the laws of the land governing for-profit and nonprofit corporations fostered that division, but no longer.

When it comes to seniors, nonprofits, social Entrepreneurs and ‘impact’ for-profits led by social worldwide are creating a wide range of new models that indicate a direction for innovation.

Biddy Bags: a niche market, nonprofit, social enterprise in Australia commissions seniors to knit, crochet and sew contemporary designs thought up by younger women. Biddy Bags is flourishing, creating handbags, ‘iPouches’, tea cozies and other products to satisfy a demand for ‘nanna chic’, while engaging isolated older women locally and globally in a satisfying social, personal income generating activity.

S.I.E.L. Bleu: started by two French sports training students, it focuses on the 75 and older group living in retirement homes by creating a program of gentle exercises done while sitting.  Retirement homes and their vendors pay the majority of the fee. Costs are kept low with things like dumbbells made from plastic bottles filled with sand, so the service is affordable, while generating a net return.  This social enterprise grew from serving 12 homes to over 1600, and more than 200 employees.

South Fraser Concierge: a social enterprise of South Fraser Women’s Services Society in British Columbia where net profits help fund the Society. They provide affordable housing cleaning, house sitting, closet organization, garage clean-up and other services.  For seniors they add checking on loved ones, companion visits, transportation, cooking, home downsizing, estate sale preparation, shopping, meeting repair people, prescription pick-up, and more. 

ITNAmerica:  a national non-profit transportation service based in Maine for seniors and the visually impaired provides affordable transportation in automobiles by matching seniors with paid and volunteer drivers in local communities. The system is based on an innovative software solution that opens up a major market for this social enterprise.

CSS Foods: an Anaheim, California social enterprise food processor serving colleges and operating out of a 22,000 square-foot commercial kitchen.  Net proceeds go back into Community SeniorServ, a non-profit agency serving low income seniors of Southern California.

Sacramento has a wealth of worthy nonprofit organizations and dedicated donors.  It also has a growing cadre of social entrepreneurs.  Groups like PRIDE, Goodwill, St. John’s Shelter and others are leading the way in applying innovative business and social concepts to solving social issues in sustainable ways. Not all social issues can be addressed in a business format but the opportunity exists to apply more of this kind of thinking to services for seniors, as well as many other challenges. In doing so, the ‘new nonprofits’, the social entrepreneurs, and the ‘shared value’ for-profit businesses will help improve and economically grow the region, just in time.