Generating and Sustaining Nonprofit Earned Income: A Guide to Successful Enterprise Strategies

"This book will provide you with important information on the prerequisites for success, including fit with your organization’s mission and distinctive expertise, a skilled management team, board and staff buy–in, market demand, and many other elements. Whether you are a nonprofit practitioner, academic or student, funder or investor, I believe that this information will help you make the right decision for your organization and give you access to the expertise and knowledge you need to get going." –From the Foreword by Bill Bradley, former U.S. Senator Generating and Sustaining Nonprofit Earned Income is the essential hands–on guide for helping your organization achieve greater financial stability through a diversified stream of revenue. In collaboration with the Yale School of Management—The Goldman Sachs Foundation Partnership on Nonprofit Ventures, this important resource identifies best practices for generating a reliable earned income stream and ultimately freeing your organization from excessive dependence on foundations and other donors. In this book, editors Sharon M. Oster, Cynthia W. Massarsky, and Samantha L. Beinhacker collect the best thinking from the business, nonprofit, and government sectors on how to establish and manage an earned income venture. Generating and Sustaining Nonprofit Earned Income is filled with concrete lessons and sound business strategies that can significantly benefit your organization’s internal capacity and financial health. The book covers a wealth of topics, including: Leadership strategies for managing a nonprofit enterprise Targeting the market and developing a marketing plan Techniques for pricing goods and services Legal and tax considerations Securing financial capital Pitching your venture Forming strategic alliances The fundamentals of implementation Deploying resources effectively Assessing social impact and financial return Taking your venture to the next stage of development If your organization has done its pre–testing and feasibility analysis and is ready to start operating an earned income venture, this is the book for you.

Tables, Figures, and Exhibits xi Foreword xiii Bill Bradley Preface xvii Sharon M. Oster, Cynthia W. Massarsky, Samantha L. Beinhacker Acknowledgements xxiii The Editors xxv The Contributors xxix PART ONE: KEY ISSUES IN BUSINESS PLANNING FOR NONPROFIT ENTERPRISE 1 1 Putting Nonprofit Business Ventures in Perspective 3 J. Gregory Dees 2 Building Organizational Capacity 19 Paul Connolly 3 Leadership Strategies for Managing a Nonprofit Enterprise 29 Jeffrey A. Sonnenfeld and Maxwell L. Anderson 4 Targeting the Market and Developing a Marketing Plan 42 Christopher Lovelock 5 Pricing Goods and Services 61 Sharon M. Oster 6 Legal and Tax Considerations 77 William H. Heritage Jr. and Timothy J. Orlebeke 7 Nonprofit Ventures and Governance Issues 96 Katherine M. O′Regan PART TWO: FINDING AND ATTRACTING CAPITAL 111 8 Securing Financial Capital 113 David Bornstein and The Goldman Sachs Foundation 9 Pitching Your Venture 130 Amy Solas and Adam M. Blumenthal 10 Forming Strategic Alliances 147 Richard Steckel 11 Growing Your Business with a High–Engagement Funder 161 Kristin Majeska 12 Supporting Nonprofit Enterprise in Emerging Markets 181 Lee Davis and Nicole Etchart PART THREE: THE BUSINESS PLAN IN ACTION 205 13 Fundamentals of Implementation 207 Patricia Caesar and Thomas Baker 14 Real World Challenges of Implemention 224 Kim Alter 15 Deploying Resources Effectively 247 Dennis R. Young 16 Using Performance Metrics to Assess Impact 269 Stephanie Bell–Rose 17 Taking Your Venture to Scale 281 Rick Aubry Index 303

Sharon M. Oster is the Frederic D. Wolfe Professor of Management and Entrepreneurship and director of the Program on Social Enterprise at the Yale School of Management, and serves as the co–faculty director for the Yale School of Management—The Goldman Sachs Foundation Partnership on Nonprofit Ventures. Cynthia W. Massarsky is co–deputy director of the Yale School of Management—The Goldman Sachs Foundation Partnership on Nonprofit Ventures, and president of CWM Marketing Group, a consulting firm specializing in enterprise for nonprofit organizations. Samantha L. Beinhacker is co–deputy director of the Yale School of Management—The Goldman Sachs Foundation Partnership on Nonprofit Ventures and managing partner of Langbaum Associates, a management consulting firm specializing in new business development and organizational capacity building.