Traditionally, the divide between a for-profit or nonprofit organization was clear: for-profit businesses would engage in revenue generation and nonprofits would engage in charitable work to solve social issues and would largely stay away from revenue generation. The rise of social enterprises in recent years, however, has made that distinction less and less clear. Social entrepreneurs are finding innovative ways to challenge the traditional thinking about nonprofit organizations (by focusing on economically sustainable models) and for-profit businesses (by focusing on solving social issues). As you set out on your mission to change the world, you will have to decide if you want to form your venture as a for-profit or nonprofit–or perhaps some hybrid of the two. The answer will largely depend on your best guess as to source of funding and your activities.
Nonprofit organizations are finding it more and more challenging to access much needed capital to carry out their mission-related activities. With increasing competition for a decreasing supply of grants from institutions and the government, nonprofits have had to get creative by turning to alternative sources of funding, including crowd source funding among others. You may have asked yourself, “can nonprofits sell products?” Yes, but with some restrictions!
One often overlooked method to build a sustainable nonprofit is by generating income through the sale of goods or services. Unfortunately, many nonprofits rule out this source of capital because they mistakenly believe that nonprofits must rely solely on grants and donations. Read more