Volume 2 • Issue 2

IN THIS ISSUE:

3

8

10

EXPLORING SOCIAL ENTERPRISE: Why it should beon the top of any nonprofit's strategic agenda

BOOK REVIEW: “The Way of Tea and Justice” byMagdalene & Thistle Farm's Becca Stevens

SOCIAL ENTERPRISE IN NASHVILLE: Project Returnand PROemployment

In today's nonprofit landscape, where there is more competition for funds

that can at times be scarce, more agencies are looking for ways to

diversify their revenue. One common concept that continues to

reverberate throughout the sector is the idea of social enterprise.

Social enterprise is everywhere these days in the nonprofit news, but can

leave some organizations with more questions than answers. What is it?

How can an agency begin? How can a nonprofit determine if it's the right

fit for the organization's mission and vision?

This issue of the Nashville Nonprofit Review is all about social

enterprise. Read from two experts, Dave Parker and Sean McGee, as

they discuss the process and the reasoning behind why you should

consider social enterprise. Next, read the story of one Nashville nonprofit

that saw an opportunity to offer an extension of its current services and

add a new revenue source. Lastly, read a review of a book from the

founder of a wonderful example of a social enterprise.

We hope you enjoy this issue!

Welcome to this issue of NNR

PUBLISHER

ADVISORY TEAM

CONTRIBUTORS

Susan KingCenter for Nonprofit Management

Lewis LavineCenter for NonprofitManagement

Brad GrayCenter for NonprofitManagement

Keel HuntThe Strategy Group

Rich RhodaTennessee Higher EducationCommission

Linda SchactNelson and Sue Andrews Institueon Civic Leadership atLipscomb University

Dave ParkerCauseImpact

Sean McGeeCauseImpact

Patricia SheaYWCA

Susan KingCenter for Nonprofit Management

37 Peabody St.Nashville, TN 37210

(615) 259-0100cnm.org

For content suggestions,

contact Susan King at

susan@cnm.org or

(615) 259-0100 ext. 304

Volume 2 | Issue 2

2

About the Center for Nonprofit Management

Our mission: To

create and sustain

nonprofit excellence

Our vision: Better

communities through

extraordinary

nonprofit services

For 28 years, the

Center for Nonprofit

Management has

been a home to Middle Tennessee’s nonprofit leaders. Located in the

historic Trolley Barns near downtown, it offers a place to relax, share

triumphs and find solutions to problems. At CNM, nonprofit board

members, executives and staff have the opportunity to learn how to

enhance their services through our comprehensive calendar of skill-

building workshops, our consulting services and our annual Bridge to

Excellence conference. CNM celebrates and recognizes the enormous

positive impact made by its nonprofit members through the annual

Salute to Excellence awards dinner.

Fall 201 4

Consider these two statements: “The intention of

social entrepreneurship is to build sustainable

income – a very laudable intention. However,

the road to hell is paved with good intentions.”

“You have hundreds, thousands of causes in this area

alone. How can you say ‘Give to us and not them?’ To

just rely on traditional fundraising is, to me, not being

proactive.”

These are actual opinions expressed by two nonprofit

chief executives in the same market. Which statement

most resonates with you and the leadership of your

organization?

Our belief is that the exploration of social enterprise

opportunities should be a top priority on any nonprofit

organization’s strategic agenda. Thousands of

entrepreneurial nonprofit organizations have

demonstrated that social enterprise can be an effective

long-term solution for addressing more community

issues, while also achieving greater economic self-

determination. The collective experience of these

pioneering nonprofits has helped to refine processes

that greatly increase the chances of success for

nonprofit organizations of any size. By systemically

applying a process that works, nonprofits can become

more financially self-reliant and strategically positioned

for growth.

What is social enterprise?

Before we address the question ofwhat constitutes a

social enterprise, a few words about definitions: Our

belief is that definitions can sometimes be overly

simplified. In the case of social enterprise, the most

important factors are the underlying concepts that

3

Exploring Social Enterprise:Why it should be on the top of any nonprofit's strategic agendaby Dave Parker & Sean McGeeCauseImpact

Nashvil le Nonprofit Review

inform the understanding of

possibilities for a given

organization.

When we ask nonprofit executives

or board members if being more

entrepreneurial is a key to being

more successful, the response is

uniformly “Yes, now more than

ever.” When asked if having more

unrestricted earned revenue is a

good thing, these same audiences

will reply, “Yes, no question.” And

when asked if it is important to be

more aware of the markets they

serve and of competitive forces, the

reply is “Yes, this is essential.”

However, when these same

individuals are asked if social

enterprise is a good thing, the

answers are far more varied and fall

somewhere between the two poles

expressed in the quotes above.

The Social Enterprise Alliance,

having adopted different, though

related, definitions over the years,

currently posits the following:

“Social enterprises are businesses

whose primary purpose is the

common good. They use the

methods and disciplines of business

and the power of the marketplace to

advance their social, environmental

and human justice agendas.” Our

feeling is that is a pretty good

definition to work from, partly

because the Alliance goes on to

provide the following characteristics

as guidelines to distinguish a social

enterprise from other types of

businesses, nonprofits and

government agencies:

• It directly addresses an intractable

social need and serves the common

good, either through its products and

services or through the number of

disadvantaged it employs.

• Its commercial activity is a strong

revenue driver, whether a significant

earned income stream within a

nonprofit's mixed revenue portfolio,

or a for-profit enterprise.

• The common

good is its primary

purpose, literally

“baked into” the

organization's

DNA, and

trumping all

others.

We consider this

definition

sufficiently broad

enough to allow

for a number of

mission and

money

outcomes,

which should

always be

tailored to the

individual organization.

Our case for social enterprise

A common thread within current

discussions about and approaches to

social enterprise is that earned

income — whether through ventures

separated from the parent

organization or derived from

commercialized core programs —

has few, if any, strings attached. It is

unrestricted and, therefore, is a

“good thing.”

An effective process for exploring

social enterprise opportunity is

likely to uncover earned income

opportunities, however small, that

can financially strengthen the

organization. Is your organization

aware of its earned income

potential? Is there a gap between

your current earned income

generation and your full potential?

And, if so, are you optimizing this

potential in as brisk a fashion as

possible?

To be sure, this primary is focus on

financial return is not to minimize

other “softer” results from working

an effective process. These results

include:

• Increased efficiency: You’re able

to produce the same mission results

with fewer resources.

• Amplified mission impact:

You’re able to produce more

mission results with the same or

fewer resources.

4

Thistle Farms and the Thistle Stop Cafe are both social

enterprises ofNashville-based nonprofit Magdalene House.

Read the book review in this issue to learn more about

Magdalene and its founder Rev. Becca Stevens.

Improved quality of services:

You’re better able to accommodate

your customers’ preferences.

• Organized abandonment of

peripheral programs: You’re able

to recognize and act upon

marketplace realities, shifting

resources away from obsolete or

underperforming programs in order

to better focus your resources on

those programs and activities that

yield maximum mission results.

A process that works

We’re big advocates of this process,

and have successfully introduced it

to markets all across the United

States. This approach greatly

enhances an organization’s chances

for success by helping to develop an

entrepreneurial mindset within the

organization, guided by a sequence

of actions to isolate, investigate, and

implement a plan for venture

success.

1 . Establish a Strategic FrameworkA strategic framework ensures that

the organization and its stakeholder

groups have clarity of purpose and

alignment around desired mission

and money results. This framework

answers the question: “What results

would we have to see to make any

social enterprise endeavor worth the

effort?”

To establish this strategic

framework, your organization

should:

• Undertake a culture check, which

addresses attitudes and perceptions.

Are you and all of your stakeholders

comfortable with idea of being more

entrepreneurial? Are you

comfortable with the idea of seeking

out social enterprise opportunities?

Are you committed to adopting a

more innovative and entrepreneurial

management style and creating a

stronger, customer-driven culture?

• Delineate your driving forces.

What is causing you to consider

social enterprise as a strategy? What

are you hoping to get from this

approach? What pressures or

expectations are you hoping to

address?

• Explore your expected outcomes.

What mission results

and net financial return

will constitute success

for your organization?

These expectations are

personal to each

organization, and could

vary widely from one

organization to another.

What are the results

your organization

expects from becoming

more innovative and

entrepreneurial? Your

organization can best

determine its objectives

for entrepreneurship by

addressing these

questions:

What will you achieve to further

your mission?

What will you achieve to increase

your financial self-reliance? By

when?

What will success look like and how

will you measure it?

• Examine your assets. What core

competencies underlie your work?

What physical assets do you have?

What do you do very well? Who do

you know? The answers to these

questions, individually and in

combination, are fertile ground for

good ideas.

• Establish an team. This group will

guide your process of new venture

development, and provide counsel

and insight during your

investigation.

• Perform rigorous brainstorming

and selection. Only after the

5

«An effective

process for

exploring social

enterprise opportunity is

likely to uncover earned

income opportunities,

however small, that can

financially strengthen

your organization.

Fall 201 4

Scrape Made Art, or smArt!, is the social enterprise

ofProgress Inc. , which just launched in 2014 in

Berry Hill.

Nashvil le Nonprofit Review

preceding steps have been attended

to should your organization begin

collecting revenue-generating ideas.

You may already have quite a few

ideas in hand, but it is critical to

refrain from evaluating these ideas

until the preceding steps have taken

place.

Once your planning team has done a

culture check, clarified driving

forces, done an asset inventory and

defined your desired mission and

money outcomes, the team can use

this work to winnow the list of

ideas. Those ideas that are most

consistent with your mission, that

make use of existing assets, and will

meaningfully contribute to your

expected outcomes, are the ones that

you should focus on. The team can

be involved in the scrutiny of ideas

and prioritization of the relative few

that merit a more involved

investigation.

2. Conducting FeasibilityIn our experience, like their for-

profit counterparts, many nonprofit

organizations like to dive right into

scrutinizing a favorite idea rather

than doing the work described

above. Resist this impulse! Once a

strategic framework is

in place, the feasibility

investigation becomes

much more

straightforward,

because you have

already established

what your venture will

need to accomplish to

make it worth starting.

The feasibility portion

of the process

involves an

investigation of external and internal

considerations of the initiative being

considered.

External, or market, considerations:

Who wants what?

What value are they seeking?

How do they define value?

How do they want to receive the

value?

What is most important to them?

How else can they get it?

What do they perceive to be

alternatives?

How else can they get this value?

What will they pay?

Internal considerations:

Can we do it?

Do we have the assets?

Competencies? Expertise?

What does it take to acquire a

customer?

Can we do it better than the

alternatives the customer has

identified?

Why would the customer choose us

over the alternatives?

What will it cost us to deliver this

value?

Are all of our activities accounted

for?

How has overhead been allocated?

Does the amount that the customer

will pay exceed our cost?

At what point do we realize break-

even?

How much volume can we do?

At what point do we run out of

capacity?

What is the cost to gain additional

capacity?

How much net profit can we realize?

Does the profit potential help us

realize the money objective we’ve

established?

Will the initiative help us realize the

mission objective we’ve established?

All of these questions – and more –

must be addressed in order to make

an informed ‘go / no go’ decision on

the venture in question.

3 . Planning, Implementation,

6

Employees are busy sorting merchandise at ThriftSmart

Review and AdjustmentsWhen feasibility has been thorough

and yields a ‘Go’ decision, the

fruits of the feasibility work can be

rolled into a more detailed plan for

a successful social enterprise. No

plan, however, goes exactly as the

planning team envisions, so it’s

worthwhile to keep the social

enterprise team engaged in order to

effectively adapt the plan as

needed.

John Rush, CEO ofCleanTurn, a

workforce-development social

enterprise in Columbus Ohio, puts

it thus, "In the entrepreneurial

phase of a social enterprise you are

not satisfied with what you see but

you have to remain patient and

diligent realizing nothing beautiful

is created overnight. A social

entrepreneur must embrace the

ambiguity, the messiness, the

apparent sloppiness and all of the

real blemishes and wrong stitch

patterns so as to see, in time, the

realization of something inspiring,

engaging, sustainable, impactful

and beautiful."

When do we begin?

We find that most organizations

consider a social enterprise for of

three reasons: Crisis, Chance or

Choice:

• Crisis: For example, the

organization might be losing a

substantial source of funding in the

near term, and considers social

enterprise as a way to right the

ship.

• Chance: An opportunity has

presented itself, perhaps from the

outside but oftentimes because a

Board member or key stakeholder

has an idea they believe the

organization should pursue.

• Choice: In this case, the

organization is seeking to broaden

its financial resource base and

increase its impact, and believes a

social enterprise approach can help.

An organization should always look

to optimize its earned revenue

across all programs. However, if an

organization is in the midst of a

major organizational endeavor –

such as a strategic plan, leadership

transition, capital campaign or the

like – it is better to wait until that

endeavor is complete before

launching a new social enterprise.

Why? The energies and focus

required to successfully launch a

social enterprise are substantial,

and those organizations that split

resources and attention tend to have

less success.“When is the best time

to plant a tree?”The answer to this

Japanese proverb? “Twenty years

ago.” Our human nature oftentimes

pulls us toward regret for what we

should have done previously. The

proverb, though, continues. It

asks,“When is the next best time to

plant a tree?” The answer? “Right

now.”

Happy venturing!

«Those ideasthat are mostconsistent with

your mission... and willmeaningfullycontribute to yourexpected outcomes,are the ones that youshould focus on.

7

Fall 201 4

Opportunities at CNM

SocialEnterpriseCatalystInterested in exploring a social

enterprise for your organization?

CNM is partnering with CauseImpact

for the Social Enterprise Catalyst: a

one-year project for organizations to

develop a launch-ready social

enterprise. Applications will be

available in early December and will

be due in mid-January.

Learn more about this opportunity on

Wednesday, Dec. 1 0 at the Generating

New Revenue from Mission-Related

Ventures half-day session with Dave

Parker and Sean McGee from

CauseImpact.

Register or learn more at cnm.org.

Thank you to our Social EnterpriseCatalyst sponsors:

Nashvil le Nonprofit Review

8

For 35 years, Project Return

has offered support and

employment services to

those convicted of felonies or

serious misdemeanors during their

first 1 2 months after release from

incarceration, when they are at their

most vulnerable.

With seed funding from the Office

ofCriminal Justice Programs in

place, the time was right to start a

social enterprise: PRO

Employment, said Bettie Kirkland,

executive director.

“[PRO Employment] was not only

on mission, but completely aligned

with what we do,” she said. PROe

is a transitional jobs initiative

through which participants gain

employment opportunities across

the community. The majority of

the work happens beyond the walls

of Project Return’s offices just

south of downtown Nashville.

Because the program is not

constrained by physical space or

number of employees, Kirkland

said its growth “feels limitless and

untethered by size constraints and

therefore very scalable.”

Darrell Hawks, business

development director, joined

Project Return two years ago to

help develop and launch PROe,

which was a natural enhancement

to the services already offered by

Project Return, which connects

hundreds of formerly-incarcerated

people to employment each year.

Employment is the major focus at

Project Return, and program

participants are given the

opportunity to learn how to write

résumés, market their skills and

talk with potential employers

during a three-day intensive job

readiness training program. In

addition to employment services,

Project Return participants are

given food bags and referrals for

services as needed, access to

counseling services, work clothes

and equipment as needed, and the

identification required for

employment, such as state-issued

IDs, driver’s licenses and birth

certificates. Perhaps, most

importantly, they’re specifically

coached on how to answer the

“felony question.” Participants are

taught how to prepare an honest

answer that highlights what they

have learned from their experience.

PRO Employment was modeled

after the Center for Employment

Opportunities (CEO), an existing

transitional employment program

in New York. The team at Project

Return started by working with

CEO closely for six months to get

technical assistance and learn more

about how they operate and

function.

Transitional employment agencies

contract with businesses in the

community—whether they’re

private, public, local or

national—and essentially act as a

third-party staffing company to get

those that they serve, the formerly

incarcerated in the case of Project

Return, working. The organization

then takes on the task of screening,

hiring, training, transporting,

supervising, coaching and paying

job-ready motivated workers to

work on sites throughout the

community. The transitional

Social Enterprise in Nashville:Project Return and PROemploymentby Susan KingCenter for Nonprofit Management

«[PROemployment]

was not only on

mission, but completely

aligned with what we do

9

employment partner gains access

to a motivated, job-ready

workforce plus administration

and supervision support.

To begin building relationships

with potential transitional

employment partners, the team

began what Hawks called a

marketing campaign in May

2013. They started by reaching

out to the dozens of businesses

Project Return had already been

partnering with for their

employment referral program,

and continued to be active with

the Nashville Chamber of

Commerce and other places they

were likely to find businesses

with staffing needs.

“When we’re talking to

employers, we’re open to

whatever opportunity they have,”

Hawks said. “How that happens

for us is cold-calling. We do what

we teach our participants to do,

which is to reach out to

businesses with information about

ourselves.”

PROe received its first contract in

July 2013 with a local call center.

It was a small, local operation

that gave Project Return the

chance to put the model they had

designed to work and to execute

the in-house system for screening,

hiring and placing workers on the

job, invoicing and working with

the employer to meet their needs.

Over the course of the next few

months, they received a couple of

more contracts, including a

manufacturer in Wilson County.

The geographic aspect of

this presented an

opportunity to amplify

the transportation

component of their

enterprise. One of the

key elements of PROe is

that they provide

transportation to and

from the work site for

the largely Davidson

County-based

employees.

“We rented a van and

picked up workers starting at 4:30

a.m. and were at work at 6 a.m.

for six days a week,” Hawks said,

regarding the early weeks of the

Wilson

County work.

That

transitional

employment

partner

requested

more workers

just before

Christmas, which increased the

crew to an average of 12 people,

sometimes requiring two vans for

transport. Since then, through

support from various

organizations, Project Return has

acquired three vans which they

operate today.

In July of 2014, Project Return

signed their sixth transitional

employment contract with a

manufacturer in Portland, Tenn.

Today they have 27 workers on

various PROe work crews. Since

PROe launched in July 2013,

nearly 100 formerly-incarcerated

people have been employed, of

those 100 workers, 39 have

transitioned to long-term jobs,

which is a primary objective of

the program. Collectively, those

participants have been transported

55,000 miles to and

from work, and paid

more than$165,000

in wages.

“We are preparing

them to find that

long-term

employment even

while they’re on our transitional

work crew,” Hawks said. “We’re

working with them to acquire

long-term positions on the

transitional job site, which

happens regularly, and they’re

working with our counselors to

pursue other long-term

employment. All the while,

they’re gaining a recent work

experience, reference base, and

income.”

One way Project Return coaches

the participants is with “van talk.”

Transportation coordinators are

more than just drivers, they’re

passionate about the mission and

«In most cases, our

folks have little or

no work experience —

or at least no recent

experience or current

reference base

Project Return and PROemployment

Fall 201 4

PROemployment, a social enterprise ofProject Return,provides jobs for those who have been released fromincarceration for a felony and serious misdemeanor in

the past 12 months.

Nashvil le Nonprofit Review

1 0

about mentoring their passengers,

so they are providing coaching

and advice to them on the ride to

and from the job. Coaching is also

available during worksite visits

and via phone.

Looking forward, Hawks and the

Project Return team see great

opportunity for growth and

expansion.“Thousands of folks

are returning to our community

from incarceration each year,

looking for work,” he said. “And

there are many jobs in the

community, especially during

these growing times, for which

they qualify.”

One key area for expansion,

Hawks sees, is in the public

sector. “CEO [their New York-

based peer] works largely with

public agencies. They’re

providing janitorial services for

public buildings or they’re

working on clean-up of streets or

parks for local government.” As

Nashville is currently seeing

tremendous growth, Project

Return also sees new

opportunities for PROe and

continues to pursue expansion

into other growing industries, like

construction and hospitality.

“It’s ever-important for nonprofits

to think creatively and

innovatively about how they do

their work, meet their mission,

and generate

resources—specifically

funds—for continuing to do that

work,” Hawks said.

"Project Return’s transitional jobs initiative isfunded in part under an agreement with the State ofTennessee, Department ofFinance andAdministration, Office ofCriminal JusticePrograms and is supported by Award #2012-DJ-BX-0280 awarded by the Bureau ofJusticeAssistance, Office ofJustice Programs, USDOJ."

TheWay ofTea and Justice

provides a delicious invitation

to learn more about tea while

highlighting our continued need, as a

society, to demand justice for

women and girls. Using her

exceptional storytelling skills, the

Reverend Becca Stevens ties the

traditions and trade of tea to the

injustices experienced by women

living in Nashville and around the

world.

Through both beautiful and harsh

stories, the founder of the

Magdalene and Thistle Farms

reminds the reader of our

connectivity to our own past, present

and future, as well as to each other.

With each word (or sip of tea) we are

asked to pause and

connect to the history

of tea, the importance

and beauty of its

traditions, while

allowing ourselves to

realize that tea can be

a source of oppression

for women as well as

an opportunity for economic

independence.

From the book: “Thus tea becomes a

beautiful symbol of the theological

truth that we are all connected, and

although each kind of processed tea

has different effects and flavors, it’s

like love: It all comes from the same

source but can be expressed a

thousand ways.”

Patricia Shea,Executive Directorofthe YWCA

BOOK REVIEW

The Way of Tea and Justiceby Rev. Becca StevensReview by Patricia Glasser SheaYWCA

Fall 2014

11

The Way ofTea and Justice details

the journey from concept to reality,

and woven throughout is the belief

that one small group of people can

make a big difference. “It seems

crazy sometimes to think that

any of us can try to change the

world by our small inspirations

of justice, but it is crazier to

think that the world will change

ifwe never try.”

I smiled when Becca shares her

“blissful ignorance” in the first

chapter. “Let’s open a beautiful

café with tea and serve a

million cups to friends and

strangers, and start a new tea

revolution to help end trafficking.

How hard can it be?”

We find out how difficult it truly was

in the pages that followed. As Becca

explains, trafficking is a direct result

of silence and ignorance by

communities. It is rooted in the

desire to keep the sickness of

addiction and child abuse secret.

The more light we can shed…the

safer our whole community will be.

The Way ofTea and Justice and the

Thistle Stop Café are shining the

light on injustices, while embodying

the following guiding principles:

hospitality, chado (harmony), story,

and healing.

I appreciated Becca’s description of

growing and preparing a cup of tea

and likening it to a spiritual

opportunity to grow and develop

ourselves and get closer to paradise.

Through the act of serving tea, she

reminds everyone that serving is

truly a gift one gives to oneself.

Service is joy, not work. “Living in

paradise means looking for every

opportunity to serve. When we live a

life full of service in love, we are

there already.”

As a nonprofit leader,

one ofmy favorite

quotes comes from

Becca’s description of

tea gardens, where she

shares her belief that the

sweetest paths we create

are those that are carved

for others to walk.

Whether she is thinking

about her work at

Magdalene, in the Episcopal Church

or our work at the YWCA, I couldn't

agree more.

Becca’s book has made me excited

to incorporate the delicacies and

rituals of tea into my own work at

the YWCA and my own life.

I encourage everyone reading this to

visit the Thistle Stop Café, have a

cup of tea, and pick up a copy ofThe

Way ofTea and Justice.

We all can take a lesson from this

inspirational social justice leader and

author who so perfectly imparts,

“Not knowing what lies ahead is no

reason not to start walking. Ifwe

stay where we are, we will never get

anywhere.”

Thank you Becca!

Rev. Becca Stevens is the founder of

Magdalene and it's social enterprise,

Thistle Farms. The Nashville

nonprofit also operates a second

social enterprise: Thistle Stop Cafe.

Continue the conversation

Inspired by this issue to learn more

social enterprise and how it might fit

with the vision and mission of your

organization?

Below are some websites and

LinkedIn groups to help you get

started in joining the conversation.

LinkedIn Pages and Groups

Center for Nonprofit Management

Social Enterprise Alliance

Taproot Foundation

Business Prof for Nonprofit

Websites

Center for Nonprofit Management

Social Enterprise Alliance

Nashville Entrepreneur Center

Opportunities at CNM

Generating New Revenue from

Mission-Related Ventures

Dec. 1 0; 8:30 a.m.-noon

Register at cnm.org

Social Enterprise Catalyst

(see page 7)

Resources