Galeforce Capital

End of the Rainbow: Increasing the sustainability of LGBT organizations through social enterprise

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End of the Rainbow introduces social enterprises as an opportunity for some LGBT* organizations to diversify their funding base, contribute to their financial sustainability and increase their social impact. We explore the growing interest in LGBT social enterprise around the world and the myriad of social enterprise models LGBT organizations are undertaking. We also explore the experiences and lessons learned by LGBT organizations — and the challenges they face — in developing and managing social enterprises. Finally,end of the rainbow recommends some ways that LGBT social enterprise can be fostered and supported in order to realize its full potential.

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Background

LGBT organizations are the independent voice and champions of the interests of marginalized LGBT people around the world. These organizations play a critical role in advocating for LGBT rights and promoting social inclusion, providing services and support to LGBT people, their families and communities. However, despite their important work, most LGBT organizations remain vulnerable as financial resources are scarce.

In 2007, NESsT began a collaboration with COC Netherlands to explore alternative revenue-generating activities for LGBT organizations. Our collaboration comes at a time when LGBT organizations worldwide find it increasingly difficult to raise sufficient resources from traditional philanthropic sources alone. Our initiative is intended to bring together entrepreneurial LGBT organizations and donors to promote and support alternative financing streams that enable LGBT organizations to increase their long-term financial sustainability and to increase their impact in the community.

The goal of End of the Rainbow is to introduce social enterprise as an additional option for contributing to the sustainability of LGBT organizations. End of the Rainbow includes many cases and examples of LGBT organizations that are operating entrepreneurial activities that generate income through the sale of products or services while also fulfilling other important social change goals.

As the many cases and profiles in End of the Rainbow demonstrate, LGBT organizations are pursuing social enterprises of all types for a variety of purposes. For some, social enterprise represents a new horizon — an opportunity to generate both financial and social change through an entrepreneurial approach. For others, social enterprise represents the last of few options: “We really have run out of ideas for sustainability,” says one director of an LGBT organization in South Africa. Says another in Europe: “It’s so frustrating to get money for our work. We’re so pressed we’re even thinking of taking money from companies we never would have before.” Says another in the USA: “We need our own money.”

Whether out of choice or necessity, the LGBT organizations in End of the Rainbow are motivated to pursue social enterprise for one (or a combination) of the following reasons:

- to remain independent and autonomous: For some (particularly advocacy) LGBT organizations, social enterprise represents power: an opportunity to generate and control resources of their own, to allocate them to priorities they identify as most critical or urgent, and to plan more strategically and long-term, unbeholdened to outside interests;

- to generate financial resources: LGBT organizations are desperately seeking ways to pay for activities currently not (or under) funded, for those particularly difficult to finance (e.g., advocacy), or for basic operations, salaries or other “overhead” expenses typically unattractive to donors;

- to further social objectives: some LGBT organizations have found that an entrepreneurial approach in fact furthers their social purpose itself, for example, by expanding existing activities to benefit more beneficiaries, by offering new products or services to reach a new beneficiary group, or by reaching completely new (i.e., straight) audiences through the market;

- to create income-generating opportunities for marginalized constituents: LGBT organizations are launching social enterprises for the express purpose of creating employment or other economic benefits to marginalized LGBT people themselves, e.g., transitional or full-time employment, job skills and training, supplemental income.

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Contents

End of the Rainbow is divided into five chapters:

Chapter 1 examines the current challenge that exists in philanthropic financing for LGBT organizations and the growing interest in entrepreneurship;

Chapter 2 presents a veritable “yellow pages” of LGBT social enterprise, examining hundreds of examples from around the world and the lessons learned from LGBT organizations selling products and services, investing in and utilizing real estate, and the growing interest in LGBT income-generating activities to extend economic benefits to marginalized LGBT communities.

Chapter 3 explores the key challenges LGBT organizations face in developing and implementing social enterprises.

Chapter 4 includes perspectives of LGBT donors on social enterprise and examines the role they can or should play in helping their grantees and partners to diversify their funding through social enterprise;

Chapter 5 concludes with recommendations for fostering LGBT social enterprise and opportunities for further development of the field.

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End of the Rainbow doesn’t present all the answers but we hope it will stimulate creative thinking and open up the LGBT community to the potential and power of social enterprise.

*LGBT: For the purposes of this book, NESsT uses “LGBT” as an acronym to refer collectively to the great diversity of people who identify as Lesbian, Gay, Bisexual, Transgender/Transsexual, Queer and Intersex.