The Mission-Profit Continuum: A Lesson from Executive Shadowing

By Stephen Huie

This past Friday, I visited Community Wealth Ventures and Share Our Strength as part of the Smith Net Impact Club's Executive Shadowing Program.  Other students visited Noblis, a non-profit scientific and engineering research center.

I learned a lot, especially about the role of mission in circumscribing the limits of earned income social ventures.

Community Wealth Ventures

Community Wealth Ventures is  a for-profit firm that  provides management and strategy consulting for non-profits.  CWV was created as a social enterprise by Share Our Strength to assist other non-profits in developing earned income ventures.  Examples include homeless shelters providing gardening services, Goodwill creating a janitorial service firm, and environmental groups creating wood certification and verification.  These social ventures must deal with the competition and managerial challenges of running a business.
Amy Celep, CWV's President and CEO, explained that when advising clients on the type and structure of earned income ventures, the organizations must understand where on they want to be on the "mission-profit continuum."  Just like for-profits, non-profits also have core competiencies - those unimitatable capabilities and resources that can be leveraged across various areas.

The decision to start a venture that is not related to the mission of the originating non-profit may often preclude the new firm from taking advantage of the inherent knowledge, organization, networks, and skills of the originating non-profit.  On the other hand, the profit margins for ventures more closely related to the firm's mission are sometimes below the cost of capital.  According to Celep, emperical evidence suggets that social ventrues that stray too far from their progenitor's mission are more likely to fail, often because of internal misunderstandings and disconnects about the management and nature of both organizations.

In recent years, CWV has refocused on general managerial and strategic consulting and executive coaching for nonprofits and for foundation grantees.  Although incubation funding (e.g. below market rate loans, foundation program related investment) for social ventures does exist, there has been a dearth of demand from non-profits wanting to expand into earned income ventures.  Celep described CWV's shift as moving from focusing on social enterprise as the means to focusing on sustainable organizations as the goal.

Share Our Strength

Share Our Strength is a non-profit foundation that uses culinary events, social media, and cause marketing to end childhood hunger.  Share Our Strength magnifies fundraising by connecting critical industry players with each other through charitable events and joint marketing.  The organization collects this funding and then grants it out to the direct service providers.

Tamra McCraw, Director of Business Development, called this trading of "creative leveraging rights" that allow companies to gain access to resources that enhance their core mission.  For example, A Tasteful Pursuit, hosted by Share Our Strength, unites top celebrity chefs for dinner fundraisers and builds matching dollar for dollar sponsorship relationships with food manufacturers who want access to the chefs.

What was most impressive is that Share Our Strength drives hard bargins and is not afraid to step away from a partnership that does not fit the core mission of ending childhood hunger.  In other words, you can't just buy the Share Our Strength brand name or its relationships; it refuses to be just an advertising channel for food companies.

Stephen Huie is an MBA candidate at the University of Maryland Robert H. Smith School of Business