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Sustainability and social enterprise: questions, questions, questions

Ros 2015 short hairRos Rice, Executive Officer,
Community Networks Aotearoa

Is sustainability in the NFP community actually possible?  It’s something we hear about a great deal, and yet it is probably the most difficult thing to achieve.

It presumes that we should all be able to access regular funding or funds that will enable us to survive without going to Government or to Philanthropic organisations again, but where does this ‘magic’ supply of money come from.

The only place I can think of, is via a successful profitable social enterprise.  So let’s pick that apart shall we?  What economics taught me at University is that any small start-up business will take a minimum of 4-5 years to show a profit.  Is there somewhere that we can access money over and above our start-up investment that will see us through these years until the cash flow starts kicking in?

Please tell me.

What about the small NGO that decides to start up this social enterprise.  How do they fund the wages and consultancy fees for the experts they will need to advise on business plans and to staff the business and set up the new company?  Do they have something viable which other people may want to purchase?  Are they in competition with for-profit small businesses that are struggling to survive themselves?  How many other second-hand shops are there in their neighbourhood?

I also wonder about mission drift.  If the only thing that sustains the small NGO which is set up to look after year one kids between the end of school and 6pm is their social enterprise, (buying cheap stationery and reselling for a profit) their stationery shop –  what is the risk of the business becoming the focus over the stated mission?  I know it’s possible to keep the two separate and it’s possible to give both importance, but how easy is that for people who have never set up a for-profit business and who are not skilled in running two organisations.

The thing is, we are community people often working with volunteers, and we know really well how to do what we do best.  What are the chances of success when we are diverted into surviving by having to consider what we might sell, how we can do it in a tough competitive economy and walk the line between non and for-profit entities to please the Companies Office, The Charities Commission and the bankruptcy court.

What happens when our social enterprise possibly fails?  Are we able to get back into the funding world to save us, or pay our bills or is it all over and another NGO falls over and another community loses an organisation that used to provide excellent services to the people living there.

I am sure many people will have the answers to these questions, but rarely have I heard them voiced in a world that says social enterprise is the answer and social enterprise is the fast quick fix-all that non-profits need to embrace for the sake of that invisible and in my opinion reasonably unattainable goal of sustainability.

This blog has been contributed by a member of ComVoices

ComVoices  actively promotes the value that community sector organisations and their people, both paid and unpaid, add to New Zealand’s economic and social wellbeing through information, and political advocacy and dialogue.

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