Could your not-for-profit start a side business?

Before yesterday, I'd never considered the idea of a not-for-profit running a business in order to fund a mission. It's just not an idea that had ever crossed my mind. But on February 18th, in the Globe and Mail, Toronto's own Craig and Marc Kielburger (of Free the Children) produced an article on the subject, in answer to the following question:

"We are a small non-profit organization with few funding sources, but recently one of our members developed a marketable product that would help boost our revenue stream. Should we take on this project within the existing organization, or start a second social-enterprise company for it?"

The Kielburgers responded to the latter idea with a resounding yes .

"For Canada’s 180,000 not-for-profit groups, competition is tight for scarce funding from individual and corporate donors, foundations and governments," read the article. "So a social enterprise – a business with a social or philanthropic mission in addition to (or instead of) profit – expands the pool of donors. These people may have reached their personal limit of charitable giving but can still contribute to a cause by buying a socially conscious version of a product or service they would have otherwise bought with no positive social impact."

The idea, in general, is to run a business that funnels profits back to the not-for-profit and its initiatives. And, in a way, the two organizations (which is to say, the not-for-profit organization and the business organization) don't have to have anything in common. The Kielburgers cited the example of Eva’s Phoenix (a transitional housing and training facility for at-risk youth in Toronto), which runs a commercial print shop on the side and channels the surplus funds from that business back to the charity. The business is related to the charity in the sense that it's run in-house and also in that the business is used to train residents of the housing facility, but your own not-for-profit and business don't necessarily have to be linked in such a direct way.

I highly recommend you take a look at the Kielburgers' article and examine some of the other examples of charities and not-for-profits that are doing business on the side. Do you have any marketable ideas for businesses you could run in relation to your own not-for-profit? Come up with a good idea and you may soon be tapping into this new funding resource.

_{Header image by lraine, SXC. Body image from the Free the Children website.}