by: Alex Alden
Yes, it will make you more financially sustainable. Yes it will increase your impact if you do not have to be constantly chasing grants, but that is not the real reason why nonprofits need to be doing business.
It is because we need you. The world is in the throes of late stage neoliberal capitalism, a system that has failed us and failed our planet. Leaders all over the world, including Klaus Schwab founder of the World Economic forum, are calling for a new economy. One that values the environment, human life, and equality. However, humans have been trading and bartering for a long time, 300,000 years some say. The idea that we will give up something that has been intertwined with our history for so long seems unrealistic.
Enter nonprofits. We need a new narrative of what trade and value could be, and nonprofits with their focus on mission above all have a key role to play in that. Those putting the environment and people first have a necessary perspective in imagining and designing the new economy. However, there have been many times where nonprofits are sidelined in questions of business; Their reasoning: of lack of experience and profit vs. nonprofit mentality. By doing business, nonprofits can gain that seat at the table. Not only will business units drive financial sustainability, but business truly led by impact has the potential to introduce new models into the ecosystem of what a regenerative economy could look like. It also does not require a complete mission shift; organizations are usually already doing programming or offering services that with a little creative thinking can be monetized—whether innovating on your existing capabilities to create new products and services or reaching new markets with your current services to expand your impact. You already have the capabilities, but now you need a mindset shift.
The idea of a ‘social enterprise’ is not new, but often they are being started by business people used to working within the current system. With more people from the nonprofit sector, introducing innovative and impactful business models can create a new version of what the economy could be.