BMT 550 Notes
Management for Non-Profit and Social Enterprises
Scope of the NP (Non-Profit) sector in Ontario and Canada
- Often called the third pillar (Public and Private Enterprise)
- Type of organizations by purpose and source of funds
1) The non-profit organization can be any organization that does not have any private profit
making as its mission. (Private profit refers to profit generated to be disbursed to the owner(s) or
o No single owners or shareholders to distribute
o Has no private profit motive
o Exists for public benefit social mission
o Funds are sourced through donations, gov funds, sponsors (corporate or
other), grants, membership fees.
o Goods and services can be sold.
Must be incorporated and registered to receive ‘tax exempt’ status.
‘Purely’ social mission – do not operate in the market selling goods and services
Limited ability to generate revenue must be subordinated to the mission.
Heavily rely on unpaid labour
Funds are sourced from donations, sponsorships (corporate), and grants from
Can own & operate social enterprises.
3) Social Enterprises –eg. Habitat for Humanity owns the “ReStore”
o Have a both social mission and an economic impact
o Revenues from selling and/ producing and selling goods and services in the
market go toward the mission.
o Since it competes within the market, it tries to gain competitive advantage.
o Operate in the free market
o Often hire and train the people they serve in their social mission
4) Social Purpose Business
o For profit businesses that have a social environmental mission
o Concept of ‘Blended value.’
o Social return on Investment (SROI) AND Economic Return on Investment
5) Community Organizations or ‘Civil Society’ organizations
o Associations, Clubs, Sef-help groups, Community economic development
o Are fond in every sector of the economy.
o Either serve their members or serve the larger community or subsection of
the population eg. Food bank, religious organizations
o Generate revenue: membership fees or dues, donations, social events
(fundraising), partial gov’t funding. 6) Co-operatives organizations
o Can be non-profit or for profit organization, operate in the market.
7 Principles of Co-op
- Voluntary and open membership
- Democratic member control
- Member economic participation
- Autonomy and independence
- Education, training and information
- Co-operation among co-operatives
- Concern for community
Three mains types
1) User or consumer co-ops found in all sectors – housing, finance, agriculture
a. Financial co-ops, credit unions e.g Van-City
2) Marketing Co-ops members are engaged in similar production of goods who
use the marketing to broker their products.
Eg. Agriculture, dairy farmers, egg farmers.
3) Worker owned co-ops purpose/mission is to provide employment for its
Eg. Big Carrot Common (organic health food store)
Differences between a Co-op and a for-profit publicly traded corporation.
1 member = 1 vote Number of shares = determines the value of your vote
Egalitarian decision making
No individual can assume control
“Creating Shared Value article”
What is the vicious circle that business is caught in?
How can “business” become legitimate again?
How can “business” create shared value?
1) The more B engages in CSR the more it is blamed for societal problems.
- The perception of value is limited to maximizing short term financial performance while ignoring
long term sustainability
- The depletion of resources w