Entrepreneurial Nonprofits Aren’t Necessarily Businesslike, and That’s a Good Thing

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October 30, 2011; Source: Huffington Post | A common refrain from certain camps is that nonprofits need to act more like businesses and their leaders more like entrepreneurs. The subtext of that conversation often implies that if nonprofits were more like businesses they could tap market forces more skillfully and be financially self-sufficient—and therefore more effective in meeting their missions. However, as a nonprofit founded by one of the nation’s leading advocates for social entrepreneurship celebrates its tenth anniversary, its success illustrates some fundamental ways that nonprofits, by their very nature, can add distinct value to addressing social needs in a substantively different way than do private businesses or the public sector.

The Campus Kitchens Project is a network of 31 campus-based, student-run organizations to recover unused food and prepare healthy meals for nearby community members in need. In the words of Campus Kitchens founder Robert Eggers (who’s also known for founding the lauded DC Central Kitchen nonprofit in 1989), it’s based on “a very simple idea that you can take existing resources (food, people, money and facilities) and re-organize then to feed more people, better food for less money.” Each month, the network transforms 18 tons of food that would otherwise be discarded to provide 37,000 meals. That’s the business model.

But the business model is not financially self-sufficient. The annual expenses for the organization in 2010 were slightly over $1.4 million, inclusive of in-kind donations, which accounted for 51.3 percent of organizational revenue. Still, grants (from both public and philanthropic services) were needed to make the lean business operation work even ten years after start-up. In 2010, grants accounted for 47.7% of revenue.

The long-range vision is to build more income-generating activities, such as contracts for locally sourced meals for elders, and sales of healthy to-go meals for busy working families. The overriding goal is not, however, financial sustainability for the nonprofit itself. According to Egger, the ultimate goal is to go out of business when the problem of hunger in the United States, which now affects one in seven households, no longer exists. He sees “audacious ideas about how food, time, money, commerce and community can be used in different ways to achieve powerful long lasting results” as the nonprofit sector’s key contribution to effect such meaningful social change. Entrepreneurial indeed, but with a nonprofit twist that’s anything but business as usual.—Kathi Jaworski

  • Vivienne Long-Speer

    Outstanding job! We are in year (7) with no grants, nor applied for any thus far. Wouldn’t it be fabulous to no longer need a place for ex-offenders to go to upon release from prison? Our “job” as we see it is to never return.

    Thanks for what you provide!