Join 3,494 readers in helping fund MetaFilter (Hide)


Know any charitably minded organisations that became commercially successful?
August 7, 2011 7:56 PM   Subscribe

Examples of organisations that begin with charitable motives that evolved into successful commercial enterprises?

I've been asked to speak at a creative enterprise event. My job is to represent the commercial angle and give some insights about how charitable organisations and/or organisations with more social-minded motives that relied on government or charitable funding could become run successfully as commercial enterprises.

Any industry or country or size is welcome. The purpose is just to inspire ideas about how to become financially sustainable. Examples from the creative industries particular relevant.
posted by zaebiz to Media & Arts (16 answers total) 3 users marked this as a favorite
 
Do you have any examples?

Most nonprofits are, in fact, financially sustainable - more so than for-profit businesses.
posted by Miko at 8:20 PM on August 7, 2011


I guess what I'm driving at is that there seems to be perceived hierarchy here in your approach, in which non-profits are somehow to be considered proto-for-profit organizations.

That's not the aim of most not-for-profits, and many leaders in the sector do not want to become for-profit organizations. That's not necessarily the goal - it's not even usually the goal. That doesn't represent success in the general terms of not-for-profit work. Most not-for-profits don't consider their funding model to be transitional to a commerical, market-based model; they are using government funding, direct donation, and earned revenue generation in the balance they've chosen because it is the best fit with their purpose and allows them to focus on the ends and not on serving marketplace.

I'm aware that in the realm of social entrepeneurship there are ventures which may begin as nonprofits or may be run as incubators in the full expectation that profitmaking - for themselves or others- may arise out of them one day. But those generally are focused on economic development as their mission, so there is a logical relationship. In general, not-for-profits don't necessarily aim to one day become for-profits.

I may just not be thinking of some obvious examples which is why I asked whether you have an example of an organization which moved from a NFP model to a for-profit model that you might already be using in your speech.
posted by Miko at 8:29 PM on August 7, 2011 [1 favorite]


Feel free to detail obvious examples. I am not familiar with the social enterprise or non-profit space at all.

When I say "sustainable", I mean sustainable without subsidisation by benefactors including government.
posted by zaebiz at 8:32 PM on August 7, 2011


I'm pretty sure the Monterey Bay Aquarium was originally intended to run in the black solely on admission fees plus private donations. I don't know what their funding sources are today, but the financial statements at that page can probably provide some detail.
posted by kristi at 8:40 PM on August 7, 2011


Children's Television Workshop
posted by Chocolate Pickle at 8:43 PM on August 7, 2011


Here is a socially oriented enterprise I've recently noticed, and I certainly don't mind spreading the word about their good work.

Sseko Designs

I really ought to know a lot more examples but my brain is drawing a blank right now.
posted by treehorn+bunny at 8:53 PM on August 7, 2011 [1 favorite]


City CarShare and Zip Car were founded at almost the same time -- not sure this meets the criteria of your question.
posted by salvia at 8:57 PM on August 7, 2011


Great examples. All fitting the bill in one way or another. Thanks. Feel free to add more if you think of any.
posted by zaebiz at 9:18 PM on August 7, 2011


Would privatizations count? Here's a huge list of 'em--from banks to postal services to railroads.
posted by mullacc at 9:24 PM on August 7, 2011


Examples of organisations that begin with charitable motives that evolved into successful commercial enterprises?

My job is to represent the commercial angle and give some insights about how charitable organisations and/or organisations with more social-minded motives that relied on government or charitable funding could become run successfully as commercial enterprises.


"Financial sustainability" != "successful commercial enterprise."

The primary purpose of a business is to generate profit for the owners; their motivation may be all sorts of warm and fuzzy things, but legally, profit is what a company is for. The primary purpose of a nonprofit is either philanthropy, a particular mission, or both; it can be a profitable enterprise, but there are legal restrictions on organization's assets.

When you get into programmatic expenses rather than operating costs especially, it gets philosophically murkier than "they need a handout to do this." Philanthropic and public funding have benefits that extend past the bottom line, like the facilitation of networks and cross-organization coordination that extends the reach of a program.

To directly answer your question, large museums (both fine art and science/aquarium/experiential) and large professional associations often have substantial revenue streams from products, fee-for-service, consultation, client-model, etc.
posted by desuetude at 10:46 PM on August 7, 2011 [1 favorite]


Mozilla Foundation/Corporation.
posted by mezamashii at 10:52 PM on August 7, 2011


Newman's Own food products.
posted by JohnnyGunn at 10:56 PM on August 7, 2011


Not exactly your criteria as it was basically a private company that became mostly a charity fund generator after its founders death, but you may be interested in the model of Robert Bosch and Robert Bosch Stiftung.
posted by Yorrick at 2:12 AM on August 8, 2011


I'm not sure if this answers your question, but Oxfam is a charity that runs a lot of shops. Money made goes to the work Oxfam carries out. This has become a common model for charities in the UK.

Also, maybe Toms?
posted by bibliophibianj at 3:07 AM on August 8, 2011


The Dans le Noir restaurant chain, according to its history page, began as dinners in the dark run by an organization for the blind in France. It looks like they saw that the dinners were successful and commercialized the idea.
posted by Net Prophet at 5:04 AM on August 8, 2011


I mean sustainable without subsidisation by benefactors including government.

So, without tax breaks or incentives too?

I think your answers are going to be more or less helpful only if you really understand what you're looking at here. There are a lot of misconceptions about what non-profits are and do and how they are funded, and those misconceptions are reflected in some of these answers and, indeed, in your question.

A lot of nonprofits have "earned revenue streams" like shops, restaurants, admission fees and product lines. That doesn't make them for-profits or transitioning into for-profits. They are ways to add another income stream to a complex funding pie that is carefully managed to keep these institutions serving the public.

The Monterey Bay Aquarium is a not-for-profit now and always has been. They do run in the black; they have to, as do all nonprofits (unlike for-profit businesses....) Taking in private donations is something only nonprofits can do. They are allowed exemptions from taxes and do accept federal and state grants. Like many museums and similar institutions, they have revenue streams which are run like internal businesses and make money to help support the mission, but their structure as a non-profit is fundamentally different from that of an aquarium run as a business.

Children's Television Workshop is a not-for-profit.

Seko Designs is a for-proft business, a social enterprise.

City Car Share is a not-for-profit. ZipCar is a publicly traded for-profit company.

Mozilla is a not-for-profit.

Newman's Own is a for-profit business.

Toms is a for-profit business.

Some people are confused by companies which sometimes or always perform activities which create social good, or maintain a division (or entire business model) that serves the social good. Those are nice things, but they are not in themselves nonprofits. Some companies have associated foundations which can be not-for-profits. Others give as companies through corporate philanthropy.

I am not familiar with the social enterprise or non-profit space at all.

I really suggest you read up on these terms and concepts pretty seriously if you are going to be addressing an audience that does know about them. Social enterprise usually refers to a business that exists to make a profit and expects to make a profit, usually for investors or shareholders or sometimes owner/operators (though in some rare cases it can be a not-for-profit). Not-for-profits don't exist to turn into businesses one day; they are structures created specifically by the government to ensure that some of the most important functions of civil society can get done even though they aren't likely to turn a profit, and even though government can't take them on. If you go before a group who is knowledgeable about these structures to talk about this topic, you really will want to study up.
posted by Miko at 6:23 AM on August 8, 2011 [1 favorite]


« Older What are textbooks actually li...   |  looking to move - can i afford... Newer »
This thread is closed to new comments.