Social enterprise is replacing charity and that is great news! Given the space TACK10 Strategy works in and the audience reading this right now, I know that statement ruffles more than just a few feathers. Before getting too alarmed, understand that this represents an amazing opportunity for the charitable sector and all of us who have made it our life’s work.

Slow economic growth is the new normal in Canada. Overwhelmingly, most economists agree that the ten year outlook for growth is going to be much slower and lower than we have been used to over the past few decades. Led by uncertainty in the stock markets and political unknowns, Canadian businesses and Canadian families will continue to have more pressures on them when it comes to making financial decisions, inclusive of their philanthropic support for the causes that matter to them.

Sounds like a lot of bad news

All of this leads to the underlying factors contributing to The Paradigm Shift (covered in a CharityVillage article in February). Giving trends are changing. Younger audiences are increasingly supporting the causes that matter to them through their daily buying decisions. Daily choices have become a fundamental component of the giving lexicon. These same audiences are placing less value on what you do and are more interested in how you allow them to engage. They want you to allow them to contribute in a manner that is relevant, feels personally meaningful and makes them feel part of a larger community. Writing cheques or making direct financial contributions does not feel authentic or relevant to them… heck, they do not even have cheques!

The Evolution

The major output of The Paradigm Shift that we are now seeing is The Evolution. Social enterprises have emerged as the new model of engagement for consumers who wish to have cause impact. Charities are trying to solve the same issues as these social enterprises but have been slow to adopt this new model of fund development and stakeholder engagement themselves. That needs to change and the change needs to happen now as the current path has been identified as unsustainable to deliver on organizational impact goals.

Sustainable funding, sustainable businesses

The charities we all work for, with, or represent are in the business of delivering cause impact. Through their missions and working their visions, they are having significant positive impact, but funding this work is a looming dark cloud that seems to seldom pass. Funding for charities generally comes by way of three revenue sources; philanthropy, government funding and earned income. By now, every one of us should be accepting of the fact that philanthropy and government funding are on the decline or at risk and only earned income represents a model for sustainable fund development.

Social enterprise replacing charity

Going back to my opening statement, social enterprise is replacing charity and that is great news! It is great news as it means social enterprises have found dedicated audiences and they are building engaged communities. Businesses have taken the risk and have proven for charities that there is demand for this type of offering. Our focus now becomes creating an authentic and relevant in-house social enterprise model within the organizations we represent. The second thing these successful social enterprises give us are some great examples to learn from and if desired, even mimic their business practices and positioning. In so many ways, they have done much of the heavy lifting. It is now on the charitable sector to create their own earned revenue channels that support and advance the brand value they have built over the years.

Six steps to conquer the evolution

To successfully identify and build out an in-house social enterprise model, charities should follow these steps:

  1. Define the charity’s unique value proposition to its stakeholders
  2. Determine which audience segments the charity is best positioned to deliver value to
  3. Define that audience’s needs
  4. Ideate product or service offering that deliver on the charity’s unique value proposition and deliver on target audience needs
  5. Complete competitive analysis & develop the product or service offering
  6. Create the communications and partnerships plans that will support the charity’s launch of its social enterprise offering

As a charity, you have an advantage over new social enterprise businesses as you have already established relationships with your supporters. These individuals and/or companies represent the early adopters you will seek to engage as supporters of your social enterprise. While this is a distinct advantage, it also comes with great responsibility as that audience has defined expectations of how you as a cause brand will act. This is where authenticity and relevance come in. Own who you are as a charity when you look at options to create an in-house social enterprise and be authentic above all else. If you read the 6 steps and still feel overwhelmed or want further support to investigate this opportunity, reach out to us for a complimentary consultation as part of our 5% Pledge.

The final bell

The Evolution represents the opportunity of a generation for leaders of traditional organizations to think and act like entrepreneurs to disrupt the status quo and deliver long term, sustainable revenue models and engagement for their organizations. An in-house social enterprise model may not be right for every organization, but we would implore every leader to at minimum explore the possibility today of how The Evolution could apply and deliver value to advancing your cause mission.

James Chalmers is the Group President and CEO at TACK10 Strategy. “Manifesto: TACK10 is an award-winning professional consultancy focused on building and delivering products, tools, services and training in the areas of Growth Strategy, Performance Management and Partnership Portfolio Optimization. We work across four business groups; Brand, Cause, Property and SME to deliver unparalleled measurable results against organizational objectives. As a for profit business, TACK10 believes it is our role to have a positive impact in the communities in which we operate. In 2017, TACK10 made the bold decision to become a Certified “B” Corporation. The ethos of this manifests through a commitment to: People, Purpose and Profit. 5% Pledge: Annually TACK10 invests 5% of the previous year’s total revenue in providing complimentary services to organizations who themselves are having a positive social, environmental and economic impact in the communities in which they operate.” They can be reached at