Does your organization identify as one of the following?
- A Centre of Excellence,
- A knowledge hub,
- A network of practice,
- A think tank.
In today’s world, managing information is one of the biggest challenges. Great ideas, proven practices, academic research and innovative social ideas come from diverse sources. When good people have their heads down and are doing good work, silos naturally develop; sharing knowledge between the brains of the most progressive from all sectors has become a job in itself.
The problem is that nobody wants to pay for it.
Actually, that is not entirely true. Any rational person wants to see great ideas being shared. Groups like Ashoka, MaRS, or those offering collective workspace all know that when you mix ideas from different actors in different sectors you often get something new, and frequently something truly remarkable. Governments, large foundations and generous philanthropists in the last 15 years appear to like to invest in starting these “convening” activities and organizations.
However, if you are in the business of knowledge brokering, you are likely facing funding challenges after an initial 3-5 years in operation. (maybe 10 if you have a generous benefactor, or if you are housed at a university) There appears to be an expectation that once the infrastructure is built with the initial funding, then the knowledge sharing organization should have a sufficiently robust history, experience and brand to be able to generate revenues to sustain its staff and operations.
The problem is that financial sustainability is actually elusive.
Invariably, at the end of the funded start-up honeymoon is when I get a call. In the last two years or so, I’ve worked with several of these organizations. They each have exceptional staff committed to convening the best ideas and practices to address vital social issues: environment, child welfare, voluntarism, the threat of invasive species, human rights. Each has approached me wanting to sell their knowledge to those who need it most…the network of practitioners in their respective fields.
The problem is that practitioners can’t pay for it.
In each case, I’ve worked with my clients to document various options to generate revenues. There is an alarming pattern emerging, outlined in the following six mission-driven “opportunities” path:
- Membership: We first investigate new (or audit existing) membership approaches, fees, and benefits. For those knowledge brokers who charge membership fees, most are struggling to maintain those programs in an era of the members’ limited resources and the organizations’ escalating costs. Actually, in every case I’ve scrutinized, once the cost of maintaining, renewing, servicing and recruiting members has been accurately accounted for, these program have generated negative financial returns, thus being a tax on the organization. Admittedly, membership programs offer other benefits—gravitas needed for advocacy, accountability, strategic planning direction, board membership, and often a constituency—but these benefits are “soft” and frequently only indirectly help the bottom line, if at all.
- Conferences: The next revenue generating option suggested is invariably conferences and/or workshops. For organizations that have never run a conference, they are a lot of work, with very little financial reward. They typically rely on sponsorship to break even (ie fundraising work) and although they certainly support the knowledge brokering mission, they burn out staff, they take resources from other programming, and they can, in worst case scenarios, lose money. In fact, my observation in the last 10 years is that governments are not only providing less money for conferences as sponsors, but they are also sending fewer delegates to conferences as paying registrants. The conference business is slowly decaying except for private sector companies that use them to market new services and products.
- Books and White Papers: Many knowledge broker organizations are either housed at universities, or at least affiliated with university programs. It is natural, then, to revert back to the possibility of producing books, articles, guides, handbooks, or white papers or some other form of printed materials. This effort is only a minor step in logic from the traditional form of knowledge sharing, but the increasing costs of research, production, and distribution are rarely covered by the price paid for these items. The smaller the publication, the cheaper it is to create and share, but the less anyone is willing to pay for it, especially if distribution is in a PDF format online. Oh, and printed documents (and even online documents for download) need to be continually updated, and this cost of “maintaining” the resource is difficult to recoup in the price the community will pay for it.
- Training: the next logical step is to consider charging for training. Community based social change staff and volunteers who work daily to address social challenges can benefit from training on great techniques, tools and approaches. The knowledge broker organization—all that I’ve worked with—want to be able to give that information to everyone for free (to improve the social outcomes), but will reluctantly admit that they can’t give it away, they need to charge. A long discussion (and often primary research) ensues, only to discover that those who most want the training are the least able to pay for it. There is a last ditch effort to develop a prorated fee scale, hoping to use this technique of price discrimination to maintain accessibility for those who most need it. Financial viability is dicey with these sliding fee schedules, however.
- Webinars: (actually, this is really idea 4b, but they are a different product from standard in-person training…). The logical argument made for webinars is that if the costs of training can be lowered, then the price can be low enough for practitioners to afford. The problem is that good online training actually costs a lot to produce, and in spite of its apparent easy of delivery, it is very hard to sell. A simple “shot on my cell phone” video may work for YouTube, but it is not sufficient for fee-based training products. Sound, lighting, script, and editing are all required to create training folks *might* pay for. There is an irony in our modern world; folks believe that if it is online information, it SHOULD be free. Indeed, there is a lot of free information on every subject out there, and practitioners often prefer to spend an hour (or five) using a search engine to find an array of non-curated content than to spend $100 on a hour of top notch content. This may be ironic, but it is also frustrating if you are trying to generate revenue.
- Consulting: Inevitably, the discussion eventually evolves to consider bespoke consulting or a fee-for-service mentoring program. After all, knowledge broker organizations know things that other people don’t fully know, and that is a logical precondition for consulting or mentorship. After a raft of market research (both primary and secondary) for each of my past clients, in many cases it appears that there may be a “niche” non-profit consulting practice that might be of value. In most social issues there are individuals, corporations and governments who may need (read: are willing to pay for) curated information to make it possible for them to do their work. Short term consulting fees can make sense, especially if they remain relatively small contracts that might allow some purchasing autonomy for a branch office or a municipal bureaucrat.
After following this logical path, you may also consider the possibility of transforming your (currently funded) knowledge hub into a consulting business. However, be aware that consulting is a difficult way to make a living. Cash flow can be irregular, and balancing client timelines can be challenging. Many knowledge broker organizations realize that one way to minimize overhead costs is to create a roster of Associates; these Associates are experts, often drawn from the network of members or contributors, who can be called upon when needed, and then left off the payroll during slack consulting times.
If you are interested in learning more about how to structure a consulting social enterprise, please feel free to contact us for a free initial consultation.
The marketplace of social deficits
Most social enterprises start because an individual or an organization sees a problem in society—a social deficit—and they want to find a sustainable way to improve that deficit.
Just as inventions historically have helped to address perceived personal needs—from the radio to the steam iron—so too are innovations required to address social deficits, and if those innovations can be commercialized, then they are fodder for a strong social enterprise.
In the last few years, I’ve met an increasing number of people—both seasoned and young—who want to pursue social enterprise as a meaningful career path. However, many haven’t necessarily taken into account the marketplace of social deficits. In the last decade or more, there are some clear, growing areas of need in our society for which a social enterprise might be the right tool.
Below is my quick list of the challenges facing our society; this list describes a fertile field for social enterprise development to start.
Ageing populations will create needs for new financial tools, intergenerational wealth transfer, housing, urban design, mobility and new methods of countering isolation in a world of technology, fading social structures (like the church) and greater longevity.
A diversified global citizenry requires new approaches to schooling, language and cultural training, housing and ways to address conflict.
New health care needs for chronic illnesses and afflictions, including diabetes, arthritis, depression, obesity. Even some of those diseases which were considered acute (and typically life threatening) such as cancer and heart disease are increasingly being considered chronic, as survivors may require ongoing supports to live well.
Our energy needs are extraordinary. With a technologically advancing society, all our lives are affected by available electricity and locomotion. Our shelter, our food, our lifestyle, and even our money are all perilously threatened if we loose power, or if energy costs spurred by limited supply and increasing demand become unaffordable.
Water and other environmental challenges are also looming concerns of the next generation. Clean water is an ecosystem requirement and a threatened resource as the population grows, and as our continued polluting contaminates the limited freshwater reserves on the planet.
Increases in gambling, poor diets and inactivity, violence (gang, domestic, and other abuse), and the (mis)use of both illegal and prescription drugs are requiring us to reconsider the way the society must address social behavioral problems.
Crime appears to be on the increase, although statistics prove otherwise. Of course, we need not be complacent, as preventing crime is worth our vigilence at the local, national, international, and even the metaphysical space of the internet. Identity theft, concerns of privacy and even fears of falling victim to fraud pervade our news, and thus our response to the world around us.
The nature of work is changing and this creates many social challenges. Increased wealth is not translating in to increased welfare. Communal workplaces, telecommuting, and decreases in manufacturing and skilled labour are affecting our communities and exacerbating wealth gaps.
It also appears that the next generation is losing purpose, faith and hope in the structures of past generations (marriage, work, universities, religious institutions, government, etc).
Poverty and income inequality is also a global challenge. Our interdependent world means that poverty across the world will directly affect us all. Wars, famine, refugees, human rights abuses, and criminal activity are all reinforced by poverty, if not initiated by the curse of income inequality and injustice.
This list of social deficits should not drive us to despair. Statistically, global improvements to health, transportation, work, and international relations have enjoyed incredible gains over the last decades (“Factfullness” by Hans Rosling, will help reaffirm your faith in humanity).
Nevertheless, the traditional solutions to social deficits that have got us this far have often been direct interventions through the development of a new product or new service (or law!) by governments, non-profits, or private sector actors motivated by profits. However, the current multifaceted, systemic challenges are in need of more systemic solutions by engaging different sectors, different actors, new ideas, revised expectations, and new organizational structures.
Social enterprise is a tool—when done well—that can house systemic solutions that embody democratic (or collective) ownership, the focus of business thinking, the scale of the public sector and the compassion of the non profit and charitable world. By taking the best of all thinking, social enterprise is a vehicle to tackle both the new and intractable social deficits in our society.