For-Profits for Nonprofits
A New Kind of Support for Nonprofits
There is a myriad of consulting firms offering services to nonprofits – from compliance issues to event development to volunteer recruitment and management. But what if your nonprofit wants to form a for-profit enterprise that will, once profitable, return some or all of those financial proceeds back to the nonprofit to support the mission of the organization? That requires a different kind of expertise with a premium put on how to make the new venture as appealing as possible to investors and customers.
An increasing number of nonprofits are recognizing the need to develop sustainable business models to ensure financial viability and reduce donor fatigue by promoting a new and exciting story. Select nonprofits may be well-positioned either due to industry-insider knowledge or relationships, volume of member or volunteer support, a trusted brand, established position within the industry, or key assets or resources that would put the nonprofit’s new venture at a clear advantage in the marketplace.
What Kind of Nonprofit are You?
LOHAS speaks with nonprofits regularly that are contemplating starting a for-profit:
Nonprofit with deep sector knowledge and relationships contemplating starting their own venture fund to invest in early stage enterprises in their area of expertise
Nonprofit with well-established regional insight and relationships developing a business to sell products from that region to support the nonprofit’s mission there
Nonprofit with substantial member resources and valuable assets developing a for-profit venture to expand the use (and profitability) of those assets
Nonprofit with a unique public-private profile and a brand that reflects their track record of success starting a venture fund to invest in some of the same companies that they were already supporting as part of the nonprofit’s current activities
Nonprofit with specialized skills and relationships that cannot fully extract the value from those assets through only its nonprofit model
Inspire and Grow your Donor Network
LOHAS supports impact investors and organizations to develop strategies for success. In almost every instance, the vision for the new for-profit enterprise aligns well with the mission of the nonprofit organization. Impact investors are attracted not only to the unique positioning and financial upside of the nonprofit’s new venture but also its mission-aligned impact. Existing donors may even be excited to invest, allowing their relationship with the organization to evolve. LOHAS is well-positioned to work with nonprofit clients pursuing these specialized expansions because of our firm’s combination of legal, strategic, marketing, and impact investor engagement insight.
Key questions LOHAS helps investigate and address:
What are the resources your nonprofit brings to the new venture?
How can the nonprofit brand be best leveraged in the new enterprise?
Does the nonprofit possess specific insight or relationships that will make the for-profit more competitive?
How do you best position the new venture to appeal to impact investors that value not only the for-profit’s financial returns but also the nonprofit’s mission?
Are there strategies (such as the use of donor-advised funds) to engage the nonprofit’s existing donors and convert them into investors for the for-profit?
How can the new venture help overcome donor fatigue while also reinvigorating the nonprofit’s current internal organization and beneficiaries?
LOHAS then tackles the issues essential to a successful fundraising campaign:
What is the best campaign strategy for engaging investors for the new enterprise?
How can you most effectively execute that strategy?
Should nonprofit members or beneficiaries be included in the campaign as investors or supporters?
Could the campaign be used to engage new customers as well as investors?
Sustainable Models for Impactful Organizations
Interested in learning how to develop and jump-start your new for-profit venture and position it for success?