Tag Archives: Social entrepreneurship

Social Enterprise – Learn from an Expert!

There is currently a lot of buzz around social enterprise and earned revenue as ways for non-profit organizations to increase their financial resources. Some of these efforts are well-known, such as Good Will which generates 95 percent of its revenue from Good Will stores. Others are lesser known, such as SHOP, a social enterprise of A Miner Miracle in San Francisco, California.

SHOP is a clothing boutique that offers women and men designer fashions at greatly discounted prices. It opened its doors for business in 2003. The clothes are new, current, in season and sold at 50-80% below retail. The revenue from SHOP funds A Miner Miracle, a non-profit that provides professional clothing and image counseling to low-income to women and men seeking employment. Take a peek at their new video now showing on closed circuit television at select hotels in San Francisco. And take a look at how ABC TV covered SHOP in the evening news.

In order to learn more about what it has taken to grow this social enterprise we spoke with founder Kathy Miner.

Saad & Shaw – tell us a little about yourself, why you founded A Miner Miracle, and how SHOP came about?

Kathy Miner: I have a long history in the clothing industry, especially off-price, high-end clothing. Like many people, there came a point in my life where I wanted to combine my skills and passion with doing good. In 1995 I founded A Miner Miracle as a way of helping people who needed to dress for work for but didn’t have the clothes or money to do so. Things went well, and in 2001 I was recognized by Oprah Winfrey’s Angel Network. Then came the 2002 recession and I had to seek out new funding sources. I couldn’t continue to rely on foundation grants. I started hosting special shopping events – these were clothing sales where people could buy beautiful clothes at drastically reduced prices. All the money went to A Miner Miracle. With my background in clothing I went on a buying trip to Los Angeles and found designer label clothing and some financial donations.  I hosted four special clothing events before I finally decided to open a permanent store. I was lucky enough to be given a great location as a donation. That meant I didn’t have to pay rent. I tried many different concepts over a four year period before things really started to click.

In my fourth year I realized that I was going to have to go to New York to buy high end quality clothing and brand names. With this change SHOP became a fundraising vehicle for our agency and our target customer became anyone who likes a discount of 50-80% below retail for brands such as Ann Taylor, Calvin Klein, Michael Kors.

Saad & Shaw: A few questions about details. Is SHOP a part of A Miner Miracle or is it a separate 501c3 or is it a privately held business? And how does SHOP operate? What percentage of A Miner Miracle’s budget comes from SHOP revenue?

Kathy Miner: The name is “A Miner Miracle SHOP where giving is always fashionable.” We operate under one 501(C)3. SHOP operates like any retail store. I have a full staff who are hired with retail clothing experience. I also have an intern retail program to assist with some of the needs of processing and tagging the clothes. We train our interns in all areas of retail where we need help. At this point in time about 80% of the budget is supported by SHOP. Our goal is to have almost all the budget come from our store(s). In times like this, it has allowed us to continue serving over 600, men, women, young adults a year including those who have “aged out” of foster care and veterans who are homeless.

Saad & Shaw: What have been some of your biggest challenges and how have you overcome these?

Kathy Miner: The biggest challenge has been funding for SHOP. We started very slow with clothing events and then built up. We were only open three days a week in the beginning and built up to six days. That took four years and it was not easy by any means. Having a social enterprise support our agency means that really I am running two businesses at the same time. In our case it also meant doing it all with one small staff at the beginning. We have a line of credit and I also invested in the business. I don’t recommend doing that, but desperate times call for desperate measures.

Saad & Shaw: What role does in-kind services and donated merchandize play in SHOP’s success?

Kathy Miner: I have one great label donating all their samples to us. However, the shipping from NY costs over $50,000 alone. I have made relationships with many of the big brand names and they sell to SHOP at really good prices. Remember I sell everything at 50-80% below retail so I have to keep my buying price very low to make a profit. Having donated products is always preferable but for my concept not something that I could depend on. You have no choice when you get donations and many times it is hundreds of the same garment in one color. If you want a high quality store you have to choose – and often times buy – high quality merchandise.

Saad & Shaw: It seems as though you depend upon a great number of people to provide SHOP with in-kind goods and services or greatly reduced prices. How do you keep these businesses and individuals engaged with SHOP?

Kathy Miner: I keep as many people as I can engaged in our non-profit and the success of the business. I have a fashion advisory board, a business sponsor partnership, and I make sure that everyone gets recognition for helping us. It has been harder in this economy because the clothing business has been hit so hard it and many vendors have closed. I send photos, news pieces, and videos to keep them connected. I make sure I visit when I am back east and take San Francisco chocolates, sour dough bread and California wines. I let them know how much I appreciate all they do for us and make my success their success. People want to give. I do not ask anyone to donate except once a year for our big SHOP for Charity event. This means they don’t hide when I call or come to town. It is a win-win situation for all of us.

Saad & Shaw: What guidance would you offer to other organizations who would like to build a social enterprise to support their organization or institution?

Kathy Miner: Do something you know very well and love. If you can find something that ties into your service that is good. Don’t train on the job. Pick a service or product that is needed to a large population. Have a good board and do your due diligence and market research before starting anything.  Get as much donated as possible but consider your social enterprise a business and not a non-profit. Social enterprise is not necessarily the answer to your money problems and could in fact take more resources than you receive. Go slow, test every idea first.

Visit SHOP (and purchase wonderful clothes at a great price and help change the lives of others!)

A Miner Miracle SHOP
441 Sutter St (between Powell and Stockton)
San Francisco, CA 94108
(415) 398-2155

A Miner Miracle/ SHOP

 Be sure to tell them Mel and Pearl sent you! And as always, remember to have a FUNdraising Good Time!

Creating an earned revenue stream

CJ Hayden

CJ Hayden

Over the past few weeks we have featured a question and answer session with C.J. Hayden, a social venture advisor to entrepreneurs, nonprofits, and activists. This week C.J. offers suggestions for how to grow your own earned income stream and resources for more information.

Saad & Shaw: What suggestions  would you offer to non-profit leaders who are seeking to develop an earned income revenue stream?

CJ Hayden: Look first at business models that would align well with your organization’s primary mission. For example, it makes sense for an organization like Delancey Street to operate a restaurant, because it provides employment and job skills training for the population they serve. But if you operate an animal shelter, running a café would have little to do with your mission. You might want to consider offering veterinary services instead.

It’s not always possible to develop an earned income stream that also directly serves your mission. But if you are considering an unrelated business, look carefully at whether you have – or can afford to hire – the type of expertise you’ll need. Succeeding with enterprises like a thrift store or print shop will require knowledge and experience you may not have in your organization.

Also, your enterprise is more likely to become a success if your existing audience includes many people who are potential customers for your products and services. An animal shelter that decides to offer veterinary services would have a built-in customer base made up of their animal-loving donors and people who adopt from the shelter. But if they chose to open a café instead, they would have to expand their outreach considerably in order to turn a profit.

One word of caution – while social enterprise can be an excellent option for long-term funding, launching a venture is not a wise solution for an immediate funding crisis. Just as with a for-profit business, your enterprise will require some level of startup funding and may take time to become profitable.

Saad & Shaw: What resources are available for people who want to learn more about social enterprise?

CJ Hayden: Social Enterprise Alliance, www.se-alliance.org. SEA also has a Bay Area chapter, and their annual conference is coming to San Francisco in April 2010.

Social Edge, www.socialedge.org. A project of the Skoll Foundation designed to support social entrepreneurs and social enterprise.

Venture Forth: The Essential Guide to Starting a Moneymaking Business in Your Nonprofit Organization, by Rolfe Larson. A practical, step-by-step guidebook to selecting, planning, and launching a social enterprise.

Find out more about C.J. at www.cjhayden.com.

And as always, have a FUNdraising Good Time!

What is social enterprise?

CJ Hayden

CJ Hayden

Our recent blog entry addressed the topic of social entrepreneurism. This week the topic is social enterprise. We talked again with C.J. Hayden  the author of three books and over 300 articles on marketing, entrepreneurship, and social change. She serves as a social venture advisor to entrepreneurs, nonprofits, and activists.

Saad & Shaw: How do you define social enterprise?

CJ Hayden: A social enterprise is an organization or project dedicated to a social mission which uses business methods to generate revenue, regardless of whether the entity is for-profit or nonprofit. A nonprofit that operates a business to fund its mission is a social enterprise. A business that exists for the primary purpose of achieving a social mission, and which funnels a significant percentage of profits toward that mission, is also a social enterprise.

A business with the primary purpose of generating profits for its owners or stockholders, which also happens to donate a percentage of its profits to social causes, is not a social enterprise.

Saad & Shaw: Can you share some examples of businesses or non-profit organizations that are social enterprises?

CJ Hayden: One of the earliest and best-known examples of a social enterprise is Goodwill Industries, which since 1902 has been operating thrift stores to fund its mission of providing employment and job skills training for disadvantaged populations. Another well-known social enterprise project is Girl Scout Cookies, which provides funding for the operations of local Girl Scout councils and troops. Cookie sales also help the Scouts to achieve their mission by giving girls an opportunity to learn life skills like goal-setting, teamwork, and money management.

Both Goodwill and the Girl Scouts are nonprofits, but there are many for-profit social enterprises, for example:

  • Newman’s Own – Manufactures and sells salad dressing and other food products, donating all after-tax profits to charity
  • Working Assets – Provider of long distance and credit card services that donates a percentage of each call or transaction to charities selected by its customers
  • Tom’s Shoes – Shoe company that gives a new pair of shoes to a child in need for every pair they sell

Saad & Shaw: What differentiates a traditional non-profit organization from a social enterprise?

CJ Hayden: Traditional nonprofits rely on grants, donations, sponsorships, or government funding, while social enterprises make substantial use of earned income strategies. Many nonprofits have small social enterprise projects, such as selling t-shirts or books. But these usually generate only a minor portion of the organization’s funding. A full-scale social enterprise aims to provide a significant percentage of funding for their mission through business activities.

Find out more about C.J. at www.cjhayden.com.

And as always, continue to have a FUNdraising Good Time!

What is social entrepreneurship?

CJ Hayden

CJ Hayden

Social entrepreneurship is a new buzz word amongst people who want to make positive social changes locally and/or globally. But what does it mean? To find out we posed a few questions on your behalf with C.J. Hayden  the author of three books and over 300 articles on marketing, entrepreneurship, and social change. She serves as a social venture advisor to entrepreneurs, nonprofits, and activists.

Saad & Shaw: How do you define social entrepreneurship?

CJ Hayden: There probably as many different definitions for this term as there are people who use it. Some define a social entrepreneurship venture as one operated by a nonprofit organization that earns a substantial portion of its income by selling products and services. Others define social entrepreneurship more broadly as any enterprise dedicated to the public good that uses business methods to generate revenue, regardless of whether the entity is for-profit or nonprofit. And some define the term more broadly still, labeling as a social entrepreneur anyone who uses innovative strategies to address social problems on a replicable scale, regardless of whether they are using an income-earning model at all.

This last definition is the one that I favor. Just as a business entrepreneur creates monetary value by applying creative solutions to problems in the marketplace, a social entrepreneur creates social value by introducing changes with the potential to produce a lasting benefit to society.

Saad & Shaw: Can you share some examples of individuals or organizations that are social entrepreneurs?

CJ Hayden: Examples of well-known social entrepreneurs in history include Florence Nightingale, who established nursing as a respected profession, and launched the first-ever nursing school. Another example would be conservationist John Muir, who established the National Park System and helped found the Sierra Club. Social entrepreneurs active today include:

  • Muhammad Yunus, winner of the Nobel Peace Prize for founding the Grameen Bank, which provides collateral-free microloans to impoverished people in Bangladesh
  • Wendy Kopp, founder of Teach for America, which brings new college graduates into low-income schools as full-time teachers
  • Fabio Rosa, whose innovations have brought affordable electric power to rural Brazil
  • Nicholas Negroponte, founder of One Laptop per Child, which provides durable, solar-powered laptops to children in the developing world

Saad & Shaw: What resources are available for people who want to learn more about social entrepreneurship?

CJ Hayden: Ashoka, www.ashoka.org, provides resources and support for social entrepreneurs and people who wish to assist their efforts.

SocialEdge, www.socialedge.org, a project of the Skoll Foundation. Their website and newsletter provide a wealth of free information.

How to Change the World: Social Entrepreneurs and the Power of New Ideas, a book by  David Bornstein

Find out more about C.J. at www.cjhayden.com.