Tax Exempt organizations can and should be operating Profitably.

The widely held perception that Tax Exempt organizations are not supposed to realize a Net Profit from operations is a Fallacy. Without Positive Cash Flow, operations are hindered. Without Profitability, services and products cannot consistently be delivered.

So let's change our Mind-set about the operational performance and objectives of Tax Exempt organizations. To assist with the transition to our new Mind-set, we will no longer refer to Tax Exempt organizations as Non-Profit organizations; let’s change the reference to: NOT-FOR-PROFIT ORGANIZATIONS or NPO’s.

Not-For-Profit means no individual or entity should realize financial advantage or benefit from a tax exempt status or tax exempt operations. Not-For-Profit should also mean that a Tax Exempt organization can pay its own way and not depend on the kindness of public and private funding sources for its sustainability.

NPO’s are challenged, now more than ever before, to seek innovative strategies to achieve sustainability. The Prudent NPO aspires to realize self-sufficiency.

Drastic changes in community needs and in traditional NPO philanthropy and capital markets, dictate that NPO’s begin to broaden their funding base to enhance efforts to build Organizational Capacity.

Couple these unwelcome changes with the increasing need for services, decreasing funding and increasing competition, and NPO‘s are being forced to change how they operate and perceive themselves.

More and more, NPO’s are beginning to recognize that their entities should be operated as would any Business or Going-Concern, with Attention to the Bottom-Line.

NPO’s are beginning to appreciate the application of market-based programs to generate Revenue to support Social Missions, Programs and Services.

NPO’s are increasingly considering whether to go into Business to further Social Benefit purposes. NPO’s are tasked with identifying venture options that best support Organizational Culture and Organizational Capacity.

Social Entrepreneurism is defined as: The Art of simultaneously pursuing both a Financial Return and a Social Return on an Investment.

Social Entrepreneurism is the NPO matching its Core Competencies with Marketplace Opportunities to simultaneously generate more Earned Income and expand its Social Impact.

The NPO sector continues to explore strategies for generating earned income. The NPO sector seeks to reduce their dependence on traditional sources of funding and philanthropy and be able to maintain and expand programs and services.

With the long economic recession negatively impacting business support, corporate sponsorships and foundation investments, these NPO explorations have become critical to self-sufficiency. Social Entrepreneurism is a methodology and philosophy by which the NPO sector can become more self-sufficient.

Social Enterprise is generating interest globally. Some sources credit Peter Drucker, the renown management thinker, with energizing the organizational thought process in the NPO sector in the early 1990’s that has facilitated Social Entrepreneurism.

Regardless of with Whom or When the innovative thinking began, the What that has driven and still drives Social Enterprise thinking is the desire of the NPO sector to become more self-sufficient; Not having to rely on sources outside of the organization for its sustainability.

The primarily question that each NPO must address and answer is... How can our NPO effectively implement and profitably operate a Social Enterprise Venture.

The NPO sector has always been involved in business ventures. Goodwill Industries is the pioneer in NPO’s operating business ventures. For more than a century Goodwill has shown that business can be a source for Tax Exempt organizations to become self-sufficient. Goodwill is a multi-billion dollar NPO with close to 200 agencies worldwide.

Social Entrepreneurism can result in NPO’s having the resources to serve more clients and address increasing community needs, with less dependence on traditional sources of funding and philanthropy. NOT-FOR-PROFIT DOES NOT MEAN NON-PROFIT.