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How to combine profit with purpose to start a social enterprise

Socially conscious companies benefit from improved employee and customer engagement – here’s how you can start a non-profit business

Having achieved massive wealth, industrialist Andrew Carnegie famously wrote, “I propose to take an income no greater than $50,000 per annum! Beyond this I need never earn, make no effort to increase my fortune, but spend the surplus each year for benevolent purposes! Let us cast aside business forever, except for others.”

This promise gave birth to museums, public libraries, cultural institutions, universities, trusts, and foundations that continue to this day. You don't need to be a billionaire to share Carnegie's noble sentiments. Increasing numbers choose to spend their careers working for worthy causes.

In 2015, 11% of the U.S. workforce was employed by charities, public interest organisations, and trade associations. In the UK, while the figure is under 3%, it has seen a 37% increase in just over a decade.

If you have a strong philanthropic calling and moreover feel compelled to chart your own path, founding a social enterprise may be just the outlet for your energies.

Companies that operate on a socially-conscious basis enjoy greater employee and customer engagement. This means not only is it easier to attract passionate and committed individuals to run the organisation, their enthusiasm translates into well-articulated brand values and attracts partners who share the company's ethos, acting as its early ambassadors.

Starting a social enterprise

While a fair degree of business savvy is required to start any successful venture, social enterprises operate under a very specific set of rules to establish and maintain charitable tax status. The government has some excellent resources that lay out the process, and you can find tips for everything from marketing to fundraising online.

However, a key component needs to be in place before you get down to any of these, as important as they are. In order to raise funds, sign up volunteers, devise a publicity campaign, or convince community leaders to join your board, vision, value and mission statements as well as a written business plan or case for support are essential.

Creating a business plan: your case for support

A case for support is a prospectus for a major donor considering an investment in your organisation. It should make for compelling reading, laying out the reasons for your organisation's existence in both emotional and statistical terms. Donors want to know how their investment funds will be used, so the costs of achieving goals need to be clearly laid out.

With the above in mind, it's most effective for a single writer to create the document rather than parcelling it out section by section. Although since the document should reflect the organisation's entire constituency, it's key to gather input from stakeholders and assemble statistical and financial details before starting.

Case for support checklist

Telling your organisation's story in its case for support should include:

  • What's the problem? A description of the societal problem your organisation seeks to solve including an explanation of why it is a problem. i.e. Why should the donor care? What is the extent of the problem? This should be expressed in concrete but emotional terms.
  • What's the solution? How does your organisation address the problem? Describe its current programmes and what impact they have had, using specific examples. (A new organisation can lay out the goals of what impact it aims to have and how it will achieve this.)
  • Back up your claims: Use statistics, visual aids, and testimonials to demonstrate your programmes' effectiveness.
  • Disclose the financials: Show what running your programmes costs and how much of your budget directly serves the organisation's beneficiaries.

The greater the preparation, the more likely the document's effectiveness. Crafting a case for support can be daunting, but finding the right resources to support you in the process is half the battle.

Joining a professional fundraisers' association such as the Institute of Fundraising is a great way of gathering examples of case statements as well as building a network of mentors.

The investment of time in devising a well-articulated vision and case for support during a not-for-profit's early days will pay dividends in the future, giving you the wherewithal to fulfil your organisation's mission with a powerful story to tell.

Henry Williams
Henry Williams

Henry has been writing for since 2015, covering everything from business finance and web builders to tax and red tape. He’s also contributed to many of our industry-renowned annual indexes, including Startups 100 and Young Guns, and created a number of the site’s popular how to guides. Before joining the team, he reviewed films for a culture website, and still harbours ambitions of being a screenwriter.