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Social Enterprise Challenge-1: Lack of Funding

As with any other business enterprise, social enterprises suffer the most from not having enough liquid funds to start their venture. Usually, there is plenty of goodwill and support from friends, family, or community. But no one would like to donate money, only time. Formal channels of crowdfunding or bank loans are not yet available as there is limited reputation and consistent track record. Investors don’t see a social enterprise as a fast vehicle to return their investments. Government or non-government funders want impact reports to limit the risks.

In our experience there are multiple sources of funding though…

1. One of our non-profit clients started with a Constitution and Board of Directors with extensive network and personal track record. They could quickly involve a few corporations as sponsor partners.

2. Another non-profit organization applied with their Annual Plan to a Government Ministry to get them as main funder.

3. A for-profit social startup used their previous employment redundancy pack as a nest egg until external funding arrives.

4. Another for-profit social startup borrowed money from a bank on their personal securities.

5. But the most common way is to “Bootstrap” from startup to scaleup by delivering value to the beneficiaries and reinvesting part of the revenue into growth.

It means that RESROUCEFULLNESS, relying on the PERSONAL/PROFESSIONAL NETWORK, CO-DESIGN, CO-OPERATION and RENTING rather

Which 𝗼𝗻𝗲 would 𝘆𝗼𝘂 choose?