WEEK 6:  Revenue Generation

 

Main Ideas and Topics of the Week:

Social entrepreneurs have a hard time finding and keeping funding when seeking to grow or scale. 

This week we learned about options for funding. Some funding is external in the marketplace, it can be internal within an organization, there are also new ideas like crowd sourcing and classics like grants and donors. 

Entrepreneurs have too much to do and limited time in which to do it so making good choices based upon understanding priorities and trade-offs is valuable in order to pursue best matched capital sources. “For example, bank relationships take time to build and the money can seem expensive at first, especially for start-ups, but might be a best choice over the long term. Socially responsible investors / Impact investors may have closer mission alignment and more attractive rates, but might be difficult to access, require extensive documentation, which carries a cost, as well.” 

I learned this week that organizations sometimes overlook sources of capital within their own finances. “Controlling expenses, increasing cash turnover, and leveraging the balance sheet improve cash flow.“ To develop and secure the money needed to grow a social venture, social entrepreneurs must understand what financiers’ value, establish long-term networks, build their credit history over time, formally register the enterprise, and have contingency back-up plans. There are financial tools that are becoming available to support social enterprises and community betterment. Some of these include: community guarantees, cross collateralization, and social investment bonds. 

 

Reflection:

This week I thought about all the different ways my parents tried to supplement their income while raising their family.  My father grew up on a farm; he was two years shy of buying the farm from his father when multiple years of drought and a slow economy in the early 1980’s prevented him from the purchase and even pushed his father into selling the farm out of fear of bankruptcy.  My father continued working for the new owner, but at very low wages and with no benefits or retirement.  To make ends meet my dad did everything from invest in ostriches (a hot commodity during the 1990’s), to buying tabletop pay phones that we installed in public places such as golf resorts, bowling alleys and bars.

I wonder if he had taken this class or even another business class, he could have had more success and understood more about options, investments, and entrepreneurship.  He worked super hard and I don’t think any of those investments ever really paid like he had hoped.   


Writing Prompt:

Does money buy happiness? Can money change the world? Explain.

 

Money does not buy happiness, but money does earn money which can change the world one dollar at a time if used wisely.  As we learned this week the most common roadblock in social innovation is funding.  When funds are hard to find and run out quickly even the best ideas can die and not become reality.  

 

A new study by the Warton School out of the University of Pennsylvania found that money affords people autonomy to make choices about how they live their lives. (https://www.cnbc.com/2021/01/22/new-wharton-study-people-are-happier-when-they-earn-more-money.html)

This finding directly correlates to social innovation.  Many social innovators either have money to begin with or have parents or family money to fall back on if an idea doesn’t pan out.  People who have money don’t shy away from risk, they are confident they can earn it back or make it some other way.  Whereas those who live pay check to pay check can’t fathom the idea of loss or more instability. 

 

 

Comments

Post a Comment

Popular posts from this blog

  WEEK 9:   What is    Main Ideas and Topics of the Week: Nonprofit organizations are a main source addressing social issues. However, they are expected to solve these issues without using resources for anything except the specific problem leaving no money for overheard. Many non-profits have had to shut their doors because of the lack of growth or bad press for using for profit tactics to generate more revenue. This leaves the nonprofit sector at a pivotal crossroad: innovate or die. Dan Pallotta explained, “The for-profit sector, the more value you produce, the more money you can make. But we don't like nonprofits to use money to incentivize people to produce more in social service. We have a visceral reaction to the idea that anyone would make very much money helping other people. Interestingly, we don't have a visceral reaction to the notion that people would make a lot of money not helping other people.” Using the ideas and practices of social innovation, nonprofits can so
Read more

Week 11: What is Impact Investing

WEEK 11:  What is Impact Investing   Main Ideas and Topics of the Week: This week we learned about impact investing, which is the practice of investing money in companies that not only generate a profit, but also have social or environmental benefits.  We learned that such investments are a growing focus for investors and have the potential to match other classes of investments in terms of return, but with the added benefit of serving real needs and addressing real challenges. Market watchers expect that the demand for impact investing will continue to grow as people decide to take a long-term vision of the market and use money to influence companies’ direction.  Reflection: One video that I found particularly interesting this week was a TED talk by Kevin Peterson of the New Hampshire Charitable Foundation. Mr. Peterson laid out the case for impact investing and explained what his Foundation was doing to change and better the world around them. But most importantly, this video laid out
Read more
  WEEK Four:   Design Thinking   Main Ideas and Topics of the Week: This week we focused on creating solutions to social innovation problems.  Solutions focus on the root cause and create sustainable, long-term change.  Long-term change is daunting, but the method of design thinking has the power to create or redefine complicated systems.  Instead of thinking outside the box, design thinking empowers us to rethink how we use the box.   Design thinking consists of four key elements:   1.      Define the problem or defining the right problem to solve (most important of the four stages) a.      Starts with observation- discern what people actually do rather than what you are told that they do. b.      Requires cross functional insight into each problem by varied perspectives as well as constant and relentless questioning. c.       Requires the suspension of judgement in defining the problem statement. d.      The goal of the definition stage is to target the right problem to solve and the
Read more