Building a Development Business Supporting Social Mission Organizations

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Facilitated by Scott Williams, Community IT Innovators, and Ryan Ozimek, PICNet.

Scott and Ryan will lead a discussion on how to structure a sustainable, scalable business providing development support for nonprofits and other social mission organizations.

straddling the line between capitalism and socialism

Topics / what we want to get out of it: effective models how do you do this socially ethical way fun place to be - cause they are underpaid in dollars, but overpaid in fun ideas about how to do business - what works how to make the leap without hitting the capacity trap / collapse how to be progressive in the way you do business working for social change - driven from the business (the business's theory of change) or driven from the constituents (the constituent's theory of change) how do you make money as a social enterprise ways people are working that are working for them ways people have worked that haven't worked for them how do you build a sustainable business model that is not exploitive who do you do this sustainably over the long term expanding the market from nonprofits to social enterprises... financial and social implications

value based pricing vs cost based pricing -- hourly based pricing is not really ethical -- consultant has the incentive to "spend" max hours

divorce the hours to execute a project and the money for the project daily rates instead of hourly rates

how do you charge the discounted rate -- seems arbitrary tiered pricing structures based on org revenue

scale is important -- larger shops have more scientific ways to mangage the problem

do you discount deeper for cause alignment.... things the consultant cares about

structure the business in a realationship/ family way. give the 1099 contractor an office and don't charge them rent. organized relationships... lunch etc. this is more for org using a bunch of 1099 contractors.

people work for social businesses cause they like the clients & causes. people get charmic value.

work life balance is an important additional benefit that can attract people

can't do custom project under a certain size... gets around the discounting / pricing issue

keep serving the smaller people you care about by creating products and methodologies that allow you serve the smaller clients

don't do custom coding for organizations that can't afford it

franchise model--- small bite size standard chunks vs 5 orgs get together and can afford the sophistocated solution two models

you can get 5 orgs to understand the concept practical issues derail -- different budget cycles, different requirements, different expectations

training is important... educated clients make better clients

how do you get the client to do the strategic thinking document the recomendation even when they don't take them

education of clients on new business models... social businesses get painted with the consumer culture... negotiate the price down, etc. -- use a membership model: allows you to socialize your customers to a new customer

how do you prepare dfor downturn NPOs fire techies, new opportunities hardware services solid strategy work goes away training might be an opportunity in the downturn-- cheap way to build capacity broad diversity of services cushions you from a down turn - full service shop for a client

Virtulize and green technologies as a cost savings

growth businesses vs. person centered organizations - different calculations

social mission services delivered to anyone. any service delivered to social mission customers. this might be a way to diversify an organization and achieve social change

Take aways 1 Sustainability - downturn... trainign and diversification of services, briding out from nonprofits to social enterprises 2 There are pricing models that support serving mission different --- pricing tiers, value pricing 3 Serving lots of small mission groups -- franchising allows you to get to scale or, for person scale organizations, allows you to deliver low margin, low prices products

Social Enterprise Alliance - Social Edge - SVN -