The non-profit sector has traditionally been driven by a “dependency” model, relying primarily on philanthropy, voluntarism and government subsidy, with earned income a distant fourth. But social entrepreneurs have turned that formula on its head: Philanthropy, voluntarism, and government subsidy are welcome, but no longer central, because the dependency model has been replaced by two others. In the non-profit world “sustainability” can be achieved through a combination of philanthropy, government subsidy and earned income. It’s a wonderful thing, sustainability, but for many non-profits it’s only a way station. “Self-sufficiency”, on the other hand, can be achieved only by relying completely on earned income, and is the ultimate goal of the most ambitious social entrepreneurs.
In short, as long as non-profits continue to be dependent on contributions from individuals, grants from Foundations, subsidies from government and other forms of largesse, they will never become sustainable or self-sufficient.
“It’s my theory,” says Kathleen Buescher, President and Chief Executive Officer of Provident Counselling Inc., a US$ 5 million dollar family services organisation in St. Louis, “that non-profits in the future will have to fund a lot of their mission this way. We’re just not going to have sufficient other money to do it. We’ll have to earn it ourselves. And the beauty of making a profit, as we’ve been able to do during the past 15 years is that you can do a lot with the money, you can do what you want to do. You can do it how you want to do it for as long as you want to do it and you don’t have to make anybody happy except your own Board and staff. You don’t have to meet anybody else’s expectations. That’s a very freeing idea, and once you feel it, you don’t want to go back to the confines of any other type of funding.”
0 Comments