Why We Chose to Operate as a Social Enterprise

What is a Social Enterprise?

A social enterprise is an organization that applies commercial strategies to maximize improvements in financial, social and environmental well-being. For our nonprofit this means that we can eventually obtain a level of financial resources where we fund our own organization without the need of any further fundraising. If we decide to fundraise, it will go toward growing our scholarships or giving employees a competitive raise.

We learned in the pandemic that when a nonprofit is soley dependent on outside fundraising, they run the risk of losing so many donors that they have to either cut services or cut employees. Or, worse, they end up shutting their doors because the money dries up. What we are trying to accomplish as a Social Enterprise is to alleviate these worries by making sure that when a student begins their studies we have enough resources on hand that their education is never at risk of running out of money. The same with an employee. We make sure that we have enough resources on hand to ensure their salary is funded into perpetuity. The only reason we need to add money through fundraising is for their annual pay increases or bonuses. But, their primary salary is guaranteed for as long as they are employed with us. Employee turnover is the largest risk nonprofits incur.

Now, with this said, one of the largest expenses for every nonprofit is fundraising. This expense can run anywhere from 30% of the annual budget to as high as 90% of the annual budget. By using a Social Enterprise structure, our fundraising expenses are zero dollars. That is correct. We are the only nonprofit in the world, that we are aware of, whose fundraising expenses are zero percent of our annual budget. You read that correctly. We spend no money on fundraising. By taking advantage of our joint venture with Philanthropy Financial, their organization funds our entire fundraising costs. This is unheard of in the nonprofit world.

In my doctoral research, I discovered that the nonprofit community’s fundraising efforts are archaic. They are old and outdated. Fundraising is one of the largest expenses for every nonprofit. By eliminating this part of the budget, not only are we almost doubling the number of students we help, we have eliminated employee worry over ever losing their jobs.

As a Social Enterprise, our organization cannot be sold for profit. All profits from Philanthropy Financial are regulated by our By-Laws. Our By-Laws require that all profits must be reinvested into the nonprofit. This means that after salaries and expenses are paid, the remaining portion of our income goes into funding the nonprofit’s fundraising efforts. None of our profits are used to enrich the owners above the salaries which they earn.

We create financial security for ALL of our nonprofit employees as well as our beneficiaries. No student will ever have to worry that their education scholarship will run out of money in the middle of their educational journey. Then, after each student graduates, their scholarship remains into perpetuity. This means they could pursue a graduate degree or their scholarship will be used to fund another student following in their path.

If you see the benefit of what we are doing, I hope you join us in our effort of using education to Unite the Americas.