Fresno Economic Opportunities Commission

Developing a Social Enterprise Process

California Community Economic Development Association

Annual Conference May 8, 2014

Radisson Hotel @ LAX

Gary Joseph Food Service/Transit Systems/Enterprise Officer

3100 W. Nielsen Ave. Fresno, CA. 93706 gary.joseph@fresnoeoc.org (559) 266-3663

mailto:gary.joseph@fresnoeoc.org

Agenda

• About Fresno EOC • What is a Social Enterprise • Can Non-Profits make a profit? • Strategic Planning and the Financial

Independence goal • Desired outcomes of Social Enterprise • Community needs and Agency Capacity • Set the oversight on Social Enterprise

Activities • Document Social Enterprise Criteria • Working through the process • Developing the Business Plan • Structuring the right entity • Fresno EOC Social Enterprises

About Fresno EOC

• Private Non-Profit 501(c)3 Community Action Agency

Vision Statement: “As an Entrepreneurial Agency, we bridge the gap to

self- sufficiency by providing opportunities and resources, as we initiate

and partner in shared community efforts to improve the quality of life”.

• Programs • Education, Energy Services, Health, Youth and Young Adult, Nutrition and

Social Enterprise

What is a Social Enterprise?

Social enterprises are businesses whose primary purpose is for common good.

Social enterprise applies an entrepreneurial approach to addressing social issues and creating positive community change.

Businesses that trade in order to achieve a social objective, reinvesting their profits in the business and in achieving their social mission.

Broadly encompasses ventures of non-profits, civic-minded individuals, and for-profit businesses that can yield both financial and social returns.

Social enterprise is the pursuit of opportunity without regard to resources currently controlled .

• Numerous definitions

What are the Common Themes ?

Social Enterprise is a business; it trades something

It takes on an entrepreneurial approach

It addresses social issues and achieves a social mission

Reinvests profits back into the business and community

Promotes positive community change

Pursues business opportunities

Uses new resources to sustain the business

Can Non-Profits Make a Profit?

• Despite how the name sounds, non-profits can and do sometimes make a profit.

• Non-Profit Corporations, unlike other forms of business, are not designed to make money for it’s owners, partners, or shareholders.

• Non-Profits are formed to serve a government approved purpose, and are accorded special tax treatments as a result.

• Whether or not the profit a non-profit makes is taxed, is based on whether the profit was generated from activities that are “related” or “unrelated” to the non-profits purpose.

What led Fresno EOC to consider Social Enterprises

• Shrinking government funds

• Reduction in CSBG funding

• Downturn in Economy

• Enterprising staff eager to bring in new revenue streams

Strategic Planning and the Financial Independence goal

• Needs assessment Identify gaps in service

Situation, Background, Assessment, Recommendation (S-Bar)Standardized Communication Forum.

• Strategic Goals Identified Job Readiness

Education

Health

Culture

Financial Independence

Social Justice

• Financial Independence “Expand and diversify revenues and generate greater financial

freedom.”

Desired outcomes of Social Enterprise

• Infuse a culture of entrepreneurship Buy-in from employees

Clients become part of the solution

• Generate new streams of revenue Look for Enterprise opportunities

Generate income for business

• Create profitable enterprise Must meet strict criteria and follow the process

• Increase discretionary funding Flexibility to respond creatively to economic and human need

of community

• Create jobs and training opportunities Jobs resolve community and family issues

• Take inventory of assets, skills, and experience • Realistic inventory of:

o Personnel skills expertise, passion and energy

o Intellectual capacity

o Assets: buildings, space, tools, vehicles, etc.

• Survey and determine economic needs • Interview stakeholders

• Involve community leaders

• Listen to program staff

• Assess job readiness and skills • Train in those areas of opportunity

• Reevaluate if training is in the right areas.

• Redirect job training if necessary

• List agency passions • Housing, Nutrition, Health, Substance Abuse, Gangs, Veterans,

the Elderly, Youth Services, Neighborhood Revitalization, Education, Child Care, or Employment and Training, etc.

• Engage Board, stakeholders, staff, and community • Understand community goals and how they align with your

agencies' goals

• Determine the needs of the community

Recognize the need, Recognize the capacity

Setting the Oversight on Social Enterprise Activities

• Establish social enterprise oversight Develop Financial Independence Committee

Discuss and list enterprise ideas, generate enthusiasm o Dinner Theatre

o In-Home Care Service

o Refurbish old computers

o Establish a print shop

o Develop Culinary school

• Schedule meetings Quarterly meetings

Monthly meetings

As necessary

• Establish ground rules of the meetings Time limitation

All ideas are heard

Committee may accept, reject, or send idea back for more work

Document Social Enterprise Criteria

• Must have a realistic chance of sustained profitability within a reasonable time frame

• Must have a positive social and community impact

• Must be aligned with Fresno EOC goals, values, priorities and vision

• Must balance risk, versus reward

• Must create jobs

• Must utilize existing resources wherever possible

• Must ensure the integrity of Fresno EOC’s 501 (c)3 status

Establish a Process to Create an Enterprise

• Develop an enterprise idea

• Evaluate the idea to see if it fits the criteria

• Decide if it is sustainable

• Develop financial projection

• Decide who approves the venture

• How does the venture get started

• Develop a process to move the plan from idea to start-up

Fresno EOC Process Idea Developed

Business Concept Paper submitted to Financial Independence

Committee and vetted. Introduction, Purpose of Business, Description of Business, Social Benefit , Likelihood of Financial Success,

Start-Up Costs, Estimated Revenues

Financial Independence Committee Accepts Rejects Requires additional information or action

Leadership Team Concept Paper

Accepts Rejects Requires additional information or action.

Financial Independence Committee develops and submits Business Plan

Leadership Team Reviews Business Plan Accepts • Rejects • Requires additional information or action

Planning and Evaluation Committee Business Plan

Accept and moves to Board of Commissioners Rejects Requires additional information or action

Board of Commissioners Business Plan

Accepts Rejects Requires additional information or action

Start-Up

Developing the Business Plan

• Executive Summary

• Agency Description

• Market Analysis

• Organization and Management

• Service or Product Line

• Financial Projections years 1-5

• Marketing and Sales

• Operation and Logistics

Structuring the right entity

• Operate as a Program or division of Agency

• Consider Single-member limited liability company LLC

• Consider Non-Profit Subsidiary

• Consider For-Profit Subsidiary

• Consider Other Structure : LLC? Joint Venture? Co-op?

• Consult Legal Advisor

Fresno EOC Social Enterprises

Community Development Financial Institution (CDFI)

Fresno EOC

• Transit Systems Detail Shop

Fresno EOC Transit Systems Detail Shop

Before

After

Fresno EOC Food Preparation Center

Fresno EOC Social Enterprises

Food Services-Catering

Fresno EOC

Nielsen Conference Center Training Room

Nielsen Conference Center – Events Room

Fresno EOC Cafe

Dakota Diner

Local Conservation Corps

Sanctuary Program