Guide to Mission-Driven Social Entrepreneurship Strategies

1. MISSION • Why do we do what we do? • The purpose or reason for being of the enterprise • Typically is short • To serve the most vulnerable (International Red Cross) • Changing lives through jobs (Chrysalis) • Mission drives strategic goals, objectives and the entire fabric of the organization

2. MISSION STRUCTURE SOCIAL ENTREPRENEURSHIP LEVERS GOVERNANCE, STRATEGY & RESOURCES DECISION SUPPORT SYSTEMS SERVICE DELIVERY SYSTEMS HUMAN RESOURCE SYSTEMS ORGANIZATIONAL CULTURE SOCIO-ECONOMIC PERFORMANCE

3. MISSION GUIDES STRATEGY • What is our mission? • Who is our main customer? • What does the customer value? BUT ONGOING STRATEGIC ASSESSMENT ALSO CAUSES RE-EVALUATION OF MISSION

4. NFTE STRATEGIC REASSESSMENT WITH McKINSEY 1990 mission To promote entrepreneurial literacy among highly at- risk and economically and or physically disadvantaged minority youth living in America’s inner cities and to help each one start his/her own business. 2001 mission To teach entrepreneurship education to low-income young people, ages 11 through 18, so they can become economically productive members of society by improving their academic, business, technology and life skills.

5. SUBSTITUTES/ ALTERNATIVES PARTNERS BUYERS SOCIAL VALUE/ COMPETITION NEW ENTRANTS USERS (CUSTOMERS) SUPPLIERS (HR, SUPPLIES) COMPETITIVE STRATEGY FRAMEWORK

6. MISSION DEDUCE RESOURCE NEEDS/ DEVELOP ECONOMIC MODEL RESOURCE ASSESSMENT DEFINE DESIRED RESULTS DEFINE CAPABILITIES FOR SUCCESS DEVISE AN OPERATING STRUCTURE

7. DEVISING AN OPERATING STRUCTURE • Which capabilities are you particularly well suited to provide? Can you really provide products and services better than or more efficiently than others that are already out there? • Which capabilities are most crucial to the value creation process? Can you do this in-house or find a skilled external partner? • Which activities motivate and provide meaning for your organizational members? You should try to keep these activities in-house. • But, what about cost? Which capabilities can be bought more cheaply?

8. DEVELOPING A RESOURCE SMART ECONOMIC MODEL • Venture Capital (CDVC, other) • Grants & Donations (Government, Foundations, Corporations, Individuals); Venture Philanthropy • Event fundraising—bake sales, raffles, concerts etc. • Cause-related marketing • Program-related investments • Loans • Revenue Generation (Fees, Sales etc.) • Who benefits from your venture? • Is it appropriate and practical to charge them a fee for this benefit? • How much could you charge while still achieving your social objectives?

9. The Social Enterprise Spectrum Purely Philanthropic Purely Commercial Motives, Methods, & Goals Appeal to goodwill Mission driven Social value Mixed motives Mission & market driven Social & economic value Appeal to self-interest Market driven Economic value Beneficiaries Pay nothing Subsidized rates, or mix of full payers & those who pay nothing Market-rate prices Below-market capital, or mix of donations & market-rate capital Capital Donations & grants Market-rate capital Key Stakeholders Below-market wages, or mix of volunteers & fully-paid staff Workforces Volunteers Market-rate compensation Suppliers Make in-kind donations Special discounts, or mix Of in-kind and full-price donations Market-rate prices Vendorism, bureaucracy & dependence on funders Commercialism, mission drift & neglect of underserved communities Culture clash, political conflict Pitfalls * Adapted from Dees, Enterprising Nonprofits, HBR 98105 (1998)