As we emerge from the Great Recession, not-for-profit organizations have multiple challenges to face.
Increased demand for social services, but decreased funding. Decreased attendance and funding for arts and cultural programs. Decline in religious giving and church attendance. Pressure from federal, state and local government on tax exempt status and direct competition from government on funding for services.
Dwindling tax revenue has pushed government into direct competition with nonprofits to fund essential social services. And in Washington, DC, lawmakers' talk of tax reform increasing includes discussions on the tax exempt status of nonprofits.
Banks are renewing their call for elimination of tax exempt status for credit unions. For-profit hospitals pressure Congress to "level the playing field" and eliminate tax exemption for nonprofit hospitals. And so it goes.
Churches and religious institutions are safe, for now. But nonprofit educational institutions, membership organizations, mutual associations --- all may see their tax exempt status disappear, or at least, see the charitable deduction disappear.
Many organizations will not survive, if this occurs. Others will embrace entrepreneurial ventures to support their missions, creating a new revenue stream based on delivery of goods or services for pay.
"Social Enterprise" has been around for some time. Not-for-profit organizations engaging in for-profit enterprises to support their missions. Goodwill sells second hand clothing. Girl Scouts sell cookies. These are Social Enterprises.
More organizations are looking at this model, finding ways to support their mission by competing in the marketplace, without risking their mission.
Some money-making ventures can be a part of a 501c3 organization's programs, others may require a separate for-profit venture to be formed. For revenue streams that are not part of an organization's core mission, Unrelated Business Income Tax (UBIT) must be paid. Sales tax must be collected and paid, the same as any small business.
But Social Enterprise may be a sustainable revenue opportunity for many organizations.
A valuable resource is the Roberts Enterprise Development fund (www.redf.org). This organization helps nonprofits determine if they should start a Social Enterprise, and how to go about doing it.
The Small Business Development Center at the University of North Florida is offering a fundraising workshop on August 24th from 1 p.m. to 4 p.m. at the UNF University Center, Bldg. 43, 12000 Alumni Dr. Jacksonville, FL 3222. Call 904.620.2476 for more information, or register on their website at https://www.sbdc.unf.edu/register-workshop-series.php?workshop_groups_id=4#w74.
Nonprofits must rise to the challenge by asserting themselves into the marketplace, and understanding their economic impact and value. Social Enterprise may be part of the answer.
Increased demand for social services, but decreased funding. Decreased attendance and funding for arts and cultural programs. Decline in religious giving and church attendance. Pressure from federal, state and local government on tax exempt status and direct competition from government on funding for services.
Dwindling tax revenue has pushed government into direct competition with nonprofits to fund essential social services. And in Washington, DC, lawmakers' talk of tax reform increasing includes discussions on the tax exempt status of nonprofits.
Banks are renewing their call for elimination of tax exempt status for credit unions. For-profit hospitals pressure Congress to "level the playing field" and eliminate tax exemption for nonprofit hospitals. And so it goes.
Churches and religious institutions are safe, for now. But nonprofit educational institutions, membership organizations, mutual associations --- all may see their tax exempt status disappear, or at least, see the charitable deduction disappear.
Many organizations will not survive, if this occurs. Others will embrace entrepreneurial ventures to support their missions, creating a new revenue stream based on delivery of goods or services for pay.
"Social Enterprise" has been around for some time. Not-for-profit organizations engaging in for-profit enterprises to support their missions. Goodwill sells second hand clothing. Girl Scouts sell cookies. These are Social Enterprises.
More organizations are looking at this model, finding ways to support their mission by competing in the marketplace, without risking their mission.
Some money-making ventures can be a part of a 501c3 organization's programs, others may require a separate for-profit venture to be formed. For revenue streams that are not part of an organization's core mission, Unrelated Business Income Tax (UBIT) must be paid. Sales tax must be collected and paid, the same as any small business.
But Social Enterprise may be a sustainable revenue opportunity for many organizations.
A valuable resource is the Roberts Enterprise Development fund (www.redf.org). This organization helps nonprofits determine if they should start a Social Enterprise, and how to go about doing it.
The Small Business Development Center at the University of North Florida is offering a fundraising workshop on August 24th from 1 p.m. to 4 p.m. at the UNF University Center, Bldg. 43, 12000 Alumni Dr. Jacksonville, FL 3222. Call 904.620.2476 for more information, or register on their website at https://www.sbdc.unf.edu/register-workshop-series.php?workshop_groups_id=4#w74.
Nonprofits must rise to the challenge by asserting themselves into the marketplace, and understanding their economic impact and value. Social Enterprise may be part of the answer.
