Is your nonprofit exploring sustainable revenue options beyond grants and donations? Social enterprise could be an answer – but it’s important to ask the right questions first.
Hilary Henegar Leads Purppl’s Storytelling and Communications
Traditional reliance on grants and donations leaves nonprofits vulnerable to shifting economic and political landscapes. To build resilience, many nonprofits are adopting social enterprise models to generate consistent revenue, increase financial independence, and deepen community impact.
To build resilience, more nonprofits are turning to social enterprise models as a way to generate consistent revenue, increase financial independence, and drive deeper impact in their communities.
But… launching a social enterprise isn’t a quick fix or one-size-fits-all solution.
Done thoughtfully, it can amplify your impact, reach, and financial stability. But done hastily, it can drain resources, compromise your mission, and create confusion within your community and among your collaborators.
Over the past decade, the Purppl team has guided nonprofit leaders across Canada through the critical, strategic considerations needed to launch a sustainable, income-generating social enterprise. Over that time, we’ve identified key ingredients for success and distilled them into a set of 10 essential questions to help you and your team prepare for the journey ahead. These questions, along with tips and context, are aimed to help you lay a strong foundation for a social enterprise that drives long-term impact.
Below, to get you started, we share a sample of these questions, including examples from some of our favourite organizations who’ve successfully launched a social enterprise to support their nonprofit programs. For the full set of essential questions, download our free workbook!
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10 Essential Questions for Nonprofit Leaders Considering Social Enterprise
Question: Are there services or products you’re giving away that might have market value?
One of the first steps in launching a social enterprise is identifying resources and services already embedded in your nonprofit that could transition to a revenue model. Start by listing your organization’s skills, services, and products – especially those you may currently offer at no or very low cost to your beneficiaries.
Often, nonprofits provide high-quality services that could reach a broader market and generate revenue without compromising the mission. Even better is when they discover revenue-generating activities that actually increase community impact.
For example, Penticton-based social services agency OneSky Community Resources discovered a way to not only address the mental health needs of their clients but also of those in the community who may not be able to afford private practice counselling.
Tanya Behardien, MA, ABS, RCC, Executive Director, OneSky Community Resources
Launching a fee-for-service social enterprise, they were able to provide high quality counselling services that are accessible for three different segments of the community: 1) folks from the broader community who pay just below market rate (~$120-140/session); 2) folks from the broader community who pay a nominal fee (~$20/session); and 3) folks referred from OneSky programs (provided for free through grants).
“Responding to community need was one of the most important elements we took into consideration when developing OneSky’s counselling services model,” says Tanya Behardien, MA, ABS, RCC, Executive Director of OneSky Community Resources.
“We wanted to ensure that anyone who is in need, not just those who are in need and can afford it, have access to high-quality services. What we aim for is a model that creates enough revenue to retain high-quality counsellors while still being able to offer subsidized access to them.”
Purppl Tip: Explore how charging certain audiences for your offerings might be feasible while maintaining your organization’s core impact. Bundling or packaging these services for specific customer segments can allow you to provide value without detracting from your mission.
OneSky opened up its high quality, virtual and in-person counselling services to the public to subsidize the cost for low-income clients.
Question: Is your Board of Directors supportive of a social enterprise?
Another critical piece of the social enterprise puzzle is Board support. Launching a social enterprise is a strategic shift that requires buy-in from your Board of Directors. Their backing is essential to navigate potential risks, secure initial investments, and ensure the enterprise aligns with your nonprofit’s broader impact goals.
For Elevation Outdoors, early conversations about launching a social enterprise raised questions among board members about whether adding earned income could put the organization’s charitable status at risk. Through candid discussions, relevant case studies, and exploring an initial pilot, the board ultimately saw the potential for sustainable revenue generation and rallied behind the initiative. Their social enterprise, Kelowna Bike Rentals, now provides an important stream of revenue in the summer months.
Mike Greer, Executive Director, Elevation Outdoors
“In the early stages of our social enterprise journey there were some real misconceptions around what we could and could not do as a charity,” remembers Elevation Outdoors’ Executive Director Mike Greer.
“The real key is education and helping stakeholders, be it Board Members or partner organizations, understand that earned revenues are allowable and that they are an incredibly impactful component of any funding mix. As we have progressed we can see the impact that stable revenues are able to create and they have allowed us to continue to grow and further our impact with the confidence that the growth is sustainable.”
Purppl Tip: Plan for impact-centered discussions with your board, showing how a social enterprise can strengthen and extend your mission. Securing early buy-in can pave the way for smoother, more strategic implementation.
After careful due diligence Elevated Outdoors launched its social enterprise, Kelowna Bike Rentals – which now provides an important stream of revenue in the summer months.
Question: Who on your team will take the lead in selling and marketing your social enterprise?
Equally important is identifying someone to lead sales and marketing efforts. Unlike traditional nonprofit activities, social enterprises require proactive marketing to attract customers. This shift can feel uncomfortable for teams without experience in sales, but embracing it is essential to success. Assess your team’s strengths to see who might bring the entrepreneurial mindset and relationship-building skills needed for the role.
Islamic Family, for instance, developed a case management software that showed remarkable outcomes for their internal teams and beneficiaries alike. Recognizing its broader potential, they decided to offer the software to other social service agencies. Although they had technical talent in-house, they needed dedicated sales expertise. Rather than hiring a senior salesperson immediately, they brought on a fractional sales leader through Purppl who could quickly establish a marketing and sales strategy with reduced risk.
Purppl Tip: Find team members with adaptable skills to lead sales and marketing, or consider fractional roles to accelerate the process with less overhead.
Islamic Family hired sales and marketing expertise to support sales of Transform, the case management software they built through their social enterprise, Flourishing Systems.
Curious What Else You Need to Consider Before Launching a Social Enterprise?
Download the full workbook to access all 10 essential questions and prepare your organization to launch a resilient, mission-driven social enterprise.
Download the Free Workbook:
10 Essential Questions for Nonprofit Leaders Considering Social Enterprise
Take the Next Step
Are you ready to explore the possibilities of social enterprise for your nonprofit? Whether you’re looking to brainstorm ideas, test out new revenue-generating models, or get guidance on where to start, our team of experienced social entrepreneurs are here to help.
- Book a free 30-minute Social Enterprise Development consultation
We’ll talk through your vision and start to map out your social enterprise ideas using a tool called the Social Business Model Canvas. - Download our free workbook
Walk through these 10 essential questions with your team and Board to build awareness and alignment around the potential for social enterprise in your organization.
