A Sea Change in The Social Sector

A SEA CHANGE IN THE SOCIAL SECTOR
Examining Earned-Income Ventures and Entrepreneurial Nonprofits in Rhode Island
By Seth J. Marbin
Brown University, May 2005
Thesis submitted as partial satisfaction of the requirements

for the degree of B.A. in Public and Private Sector Organizations
Advisor: Professor Ann Dill, Ph.D. | Reader: Dean Michael Plater, Ph.D.
Abstract
Nonprofits across the nation are increasingly launching earned-income ventures to
support their social missions. Even though this is not a new strategy for many nonprofits,
for the sector as a whole it is a fundamental shift from traditional sources of revenue.
This study identifies and evaluates significant factors associated with nonprofits
operating earned-income ventures in Rhode Island and compares these results to data
collected for a recently published national study. New data collected from a web-based
survey of over 325 Rhode Island nonprofits is analyzed along with data from over 375
nonprofits in a national sample. This study also examines the types of earned-income
ventures organizations are operating, the perceived impact, how nonprofits define
themselves as “entrepreneurial,” and the reasons why some organizations have never
operated ventures. Insights from Rhode Island nonprofit leaders, academics, and funders
are also included in this mixed-methods approach, to help understand the motivations of
nonprofits launching and operating earned-income ventures. The findings suggest that
Rhode Island organizations are operating earned-income ventures at a rate of three times
the comparable national sample. Additionally the majority of ventures are related to the
organizations’ social missions, and the impacts are overwhelmingly positive.
Key Words
Rhode Island, entrepreneurial, nonprofit, organizations, earned-income, ventures,
social enterprise, social entrepreneurship.
A Sea Change in the Social Sector: Examining Earned-Income Ventures and Entrepreneurial Nonprofits in Rhode Island
Seth J. Marbin | PPSO Senior Honors Thesis | Brown University | May 2005 | Page 1 of 104
Table of Contents
ACKNOWLEDGEMENTS ............................................................................................. 4
INTRODUCTION............................................................................................................. 5
OVERVIEW ....................................................................................................................... 5
STATEMENT OF PURPOSE ................................................................................................. 6
RESEARCH QUESTIONS .................................................................................................... 6
DEFINITIONS .................................................................................................................... 7
WHY RHODE ISLAND? ................................................................................................... 10
LITERATURE REVIEW .............................................................................................. 14
BACKGROUND ................................................................................................................ 14
DESCRIPTION OF THE TREND: FROM THE 1980S TO TODAY ........................................... 15
BENEFITS ....................................................................................................................... 16
CAUTIONS ...................................................................................................................... 16
OPPOSITIONS .................................................................................................................. 17
RELATION TO MISSION................................................................................................... 18
SPECTRUM ..................................................................................................................... 20
PREVIOUS RESEARCH FINDINGS ..................................................................................... 20
WHY THE SEA CHANGE IS OCCURRING .......................................................................... 23
METHODS ...................................................................................................................... 27
THE WEB-BASED SURVEY ............................................................................................. 27
OVERVIEW OF WEB-SURVEY QUESTIONS ...................................................................... 28
RECRUITMENT OF PARTICIPANTS ................................................................................... 29
SURVEY INCENTIVES ...................................................................................................... 30
COMPARISON ANALYSIS ................................................................................................ 30
INTERVIEWS ................................................................................................................... 30
DATA ANALYSIS PROCESS ............................................................................................. 31
RHODE ISLAND FINDINGS ....................................................................................... 33
DEMOGRAPHICS OF THE RI NONPROFIT SAMPLE ........................................................... 33
CHARACTERISTICS OF THE RI EARNED-INCOME VENTURES .......................................... 34
DESCRIPTION OF THE RI EARNED-INCOME VENTURES................................................... 36
PROFILES OF THREE RI EARNED-INCOME VENTURES .................................................... 37
Cookie Place Cafe, Providence - An EIV from the Start .......................................... 37
Edward King House, Newport - Recently Launched an EIV .................................... 38
Crossroads Rhode Island, Providence – About to Launch an EIV........................... 39
RELATION OF VENTURE’S GOALS TO ORGANIZATION’S MISSION .................................. 40
REASONS FOR LAUNCHING (AND NOT LAUNCHING) AN EIV ......................................... 41
PERCEIVED IMPACT OF OPERATING AN EIV................................................................... 44
HOW NONPROFITS DEFINE “ENTREPRENEURIAL” .......................................................... 45
USEFUL SUPPORT AND ASSISTANCE............................................................................... 49
RECENT RHODE ISLAND DEVELOPMENTS ...................................................................... 50
Amos House, Providence in National Business Plan Competition........................... 50
MBA Students Partnering with Nonprofits to plan EIVs .......................................... 51
Rhode Island Nonprofits Engaged in Learning Community..................................... 51
RHODE ISLAND COMPARED TO THE NATIONAL SAMPLE........................... 52
RHODE ISLAND DESCRIPTIVE STATISTICS ...................................................................... 53
NATIONAL DESCRIPTIVE STATISTICS ............................................................................. 53
BIVARIATE CROSS-TABULATIONS AND CHI-SQUARE TESTS .......................................... 54
“Entrepreneurial” Organizations ............................................................................ 54
Program Area ........................................................................................................... 54
Age of Organizations ................................................................................................ 55
Budget ....................................................................................................................... 55
LOGISTIC REGRESSION ................................................................................................... 56
“Entrepreneurial” Organizations ............................................................................ 57
Program Area ........................................................................................................... 57
Age of Organizations ................................................................................................ 58
Budget ....................................................................................................................... 58
LIMITATIONS ............................................................................................................... 59
ETHICAL CONSIDERATIONS ............................................................................................ 63
CONCLUSIONS ............................................................................................................. 64
SUGGESTIONS FOR FUTURE RESEARCH .......................................................................... 66
ATTACHMENTS ........................................................................................................... 67
1. INTERVIEW PARTICIPANTS ..................................................................................... 67
2. INTERVIEW GUIDE FOR NONPROFITS...................................................................... 68
3. INTERVIEW GUIDE FOR SUPPORTING ORGANIZATION ............................................ 68
4. INFORMED CONSENT FORM.................................................................................... 69
5. POSTCARD.............................................................................................................. 70
6. E-MAIL ................................................................................................................... 71
7. MEDIA RELEASE 1 ................................................................................................. 72
8. MEDIA RELEASE 2 ................................................................................................. 73
9. PROVIDENCE JOURNAL ARTICLE ............................................................................ 74
10. SOCIAL VENTURE PARTNERS OF RHODE ISLAND WEBSITE .................................... 75
11. TRANSCRIPT OF WRNI RADIO ANNOUNCEMENT ................................................... 76
12. E-NEWSLETTER - RI FOUNDATION ........................................................................ 76
13. E-NEWSLETTER - KNOWLEDGE EXCHANGE CENTER ............................................. 77
14. E-NEWSLETTER - PROVIDENCE DEPT OF ART, CULTURE & TOURISM .................... 77
15. SURVEY ................................................................................................................. 78
APPENDIX...................................................................................................................... 89
WORKS CITED.............................................................................................................. 99
Acknowledgements
The following is a partial list of those who have provided generous support,
advice, guidance and encouragement for this thesis.
Advisor: Professor Ann Dill, Ph.D., Brown University

Reader: Dean Michael Plater, Ph.D., Brown University
Deborah Schimberg, Social Venture Partners of Rhode Island
Kris Hermanns, David Karoff, and Rick Schwartz, The Rhode Island Foundation
Cynthia Massarsky, Samantha Beinhacker, and Betty Velazquez, The Yale School
of Management – The Goldman Sachs Foundation Partnership on Nonprofit
Ventures
The Research at Brown (RAB) Grant Committee
Ann Kim, Kristine Peterson, Morgan Grefe, and Caitlin Slodden, Brown
University Graduate Students
Victoria Ball, M.Ed.
Stephen Nelson, Ph.D., Brown University
John Tyler, Brown University
Lynn Carlson, Brown University
The Writing Center at Brown
Jyothi Nagraj Marbin
Bruce Marbin, Jana Zvibleman, and devora marbin
Alicia Young, Brown University
Joshua Tripp, Community Wealth Ventures
J. Gregory Dees, Ph.D., Duke University, The Fuqua School of Business
Rolfe Larson, Rolfe Larson Associates
William Foster, Bridgespan Consulting
Introduction
Overview
Nonprofits across the nation are increasingly launching earned-income ventures to
support their social missions (Frumkin, 2002; Massarsky & Beinhacker, 2002; W. Shore,
2003; Young & Salamon, 2002). Even though this is not a new strategy for many
nonprofits, for the sector as a whole it is a fundamental shift from traditional sources of
revenue. Instead of relying on donations, grants, and subsidies alone, nonprofits are
increasingly charging fees, contracting for services, selling products, leasing property,
and engaging in other income-generating activities.
Despite rapid growth in the availability of support services to assist nonprofits in
launching and sustaining earned-income ventures, popular opinion and previous research
are both divided on the merits of these commercial activities. Some praise the leaders of
these so-called “social enterprises” as innovative, forward-thinking, and entrepreneurial.
Others have voiced concerns about nonprofits straying from their social missions as they
attempt to generate financial capital in new ways, and in some cases, even earn profits.
This study presents a portrait of the earned-income ventures operated by
nonprofits in Rhode Island, and compares data collected from these organizations to a
recently published national study. It includes quantitative analysis of national sample
data1 gathered from over 375 organizations and of new data derived from a similar web-
based survey of over 350 organizations from across the state of Rhode Island. It also
incorporates qualitative findings from interviews with nonprofit leaders, academics, and
1
By Massarsky& Beinhacker (2002)
funders. This mixed-methods approach provides insight into the motivations, pressures,
successes, and challenges that organizations face in launching and operating earned-
income ventures. It concludes with recommendations relevant for social enterprises and
entrepreneurial nonprofits nationwide.
Statement of Purpose
The purpose of this study is to examine earned-income ventures across the state of
Rhode Island, identify and evaluate significant factors affecting their development and
compare these organizations to a national sample of nonprofits operating earned-income
ventures.
Research Questions
1. How widespread are earned-income ventures (EIVs) among Rhode Island

nonprofits?
2. How does operating an EIV impact a nonprofit organization (as perceived by

nonprofit leaders)?
3. What are the perceived barriers for organizations that are not operating ventures?
4. How do nonprofits in Rhode Island define and identify with the term
“entrepreneurial?”
5. What types of support and assistance would organizations interested in EIVs find
most useful?
6. How do factors (such as self-identification as “entrepreneurial,” program area,

budget, and size) of nonprofits relate to an organization’s likelihood of operating
an EIV?
7. How do the EIVs of Rhode Island nonprofits compare to the rest of the nation?
Definitions
Because of the wide variety of terms and phrases that are commonly used to
describe earned-income ventures and entrepreneurial nonprofits, the following is a
discussion of key concepts and terminology. Brief definitions, for the sake of this study,
are offered for each concept, followed by explanations of important distinctions, and a
few of the many related phrases that are used in both literature and practice. Because this
study focuses on organizations in the United States, these definitions are based primarily
on American usage of these terms.
For the sake of this study, the term “nonprofits” refers to organizations defined as
“private institutions serving public purposes and not organized principally to earn a
profit” (Salamon & Anheier, 1997, p. 15). This term is often described as a misnomer,
and is widely misunderstood, because nonprofits are not actually restricted from earning
profits, as the name suggests. They are instead restricted from distributing profits to
private owners or shareholders as profit-maximizing (also known as for-profit, business,
and corporate) firms do (Hansmann, 1980). The tax status of nonprofits is another
defining characteristic that is often misunderstood. While there are currently 35 different
tax classifications for nonprofit organizations, this study focuses exclusively on those
designated as 501(c)(3). This is the most common designation, and includes
organizations that are generally exempt from federal income tax and eligible to receive
tax-deductible contributions (Internal Revenue Service, 2002). As of 1950, organizations
classified as 501(c)(3) have been required to pay Unrelated Business Income Tax on
revenue from activities that are not significantly related to their missions (Hines, 1998).
Within the U.S., nonprofits are also commonly referred to as charitable, tax-exempt,
voluntary, not-for-profit, third-sector, and social-sector organizations.
The term “profit” is generally defined as the amount of money received (revenue)
subtracted from the money spent (costs) in a given time period. This definition is suitable
for the sake of this study. However, it is worth mentioning two other common definitions
of profit that highlight the complicated nature of this term. Accountants using the
“accrual basis of accounting” deduct explicit costs (those which can directly be
accounted for) from revenue that are “recorded in the period in which they are earned or
incurred regardless of whether cash is received or disbursed in that period” (Venture
Line, n.d.). Using this definition a firm can record a “profit” despite receiving less money
than they spent in a given time period. The economists of profit definition begins with the
general definition above, yet they deduct both explicit costs (the costs that accountants
use) and implicit (or opportunity) costs which are defined as the value of a course of
action as measured by the costs associated with alternative courses of action (Mankiw,
2004). Both the accountants’ and economists’ definitions highlight complicating factors
not taken into consideration in the general definition.
The phrase “earned-income ventures,” as it is defined for this study, refers to
activities initiated by nonprofits that generate revenue in direct exchange for products,
services, or privileges (Social Enterprise Alliance, 2005). While the phrase “social
enterprise” may be more commonly used today, Young (2001, p. 1) described it well
when he said social enterprise is an “imprecise concept in the United States.” To illustrate
this ambiguity, the term “social enterprise” can be found referring to a variety of
organizational forms in both the nonprofit and for-profit sector including: an earned-
income venture; a nonprofit organization that operates an earned-income venture; a for-
profit business which supports a nonprofit, has adopted a social mission or philanthropic
strategy; and the emerging sector made up of these various organizational forms. For
further reading, Alter (2004) offers a review of various definitions as well as a helpful
“typology” of social enterprises. The phrases: community wealth, mission-driven, and
social-purpose are also commonly combined with the words venture, enterprise, and
business, to describe income-generating activities within the nonprofit sector.
The related concept of “social entrepreneurship” is worth special consideration
because of the evolving debate about its true meaning. Some advocate for a definition of
social entrepreneurship that specifically includes earned-income as a defining
characteristic, emphasizing that innovation without income is not sustainable in either the
nonprofit or the for-profit sectors (Boschee & McClurg, 2003). Others advocate for a
more broad definition of social entrepreneurship, describing it as a “generic process not
specifically dependent on the profit seeking paradigm” (Young, 2003, p. 166) and a
method for creating social value that includes options “from pure philanthropy to the
commercial methods of the business sector” (Dees, 2001, p. 5). The working paper
“Social entrepreneurship: What are we talking about?” (Mair & Marti, 2004) highlights
many more definitions of this phrase currently in use and the evolution of this field of
study.
The label “entrepreneurial” is commonly used to describe specific innovative and
risk-taking behavior, activities related to earning money, or general approaches to
organizing a business. As one of the aims of this study is to better understand how Rhode
Island nonprofit leaders define and identify with the concept of “entrepreneurial” this is
further discussed in the Findings section. According to Drucker (1993, p. 21), since
“entrepreneur” was first used almost 200 years ago to describe leaders in the for-profit
sector, there has been “total confusion” about its definition. In the United States, it is
often used to describe “one who starts his [or her] own, new and small business,”
however Drucker (1993, p. 21) makes that case that, “not every new small business is
entrepreneurial.” Citing Drucker, Dees (2001) asserts that launching or operating an
earned-income venture does not necessarily make a nonprofit “entrepreneurial” either. He
also suggests that nonprofits can be entrepreneurial in ways that do not involve earning
income. One often-cited leader of an entrepreneurial nonprofit said, “becoming more
entrepreneurial is as much a shift in organizational culture as a broadening of economic
opportunity” (Strickland, 2003, p. 24).
This study focuses on Rhode Island nonprofits and compares these organizations
to a national sample. The following section discusses why Rhode Island is a good sample
for this comparison.
Why Rhode Island?

The nonprofit sector in Rhode Island provided a good sample for this study for
three major reasons: it has an interesting history in connection with earned-income
ventures, it is representative of the national nonprofit sector in two key revenue streams;
and despite rapid growth in recent years, the small geographic size of the state helps
foster a comparatively cohesive nonprofit community.
According to Beauchemin and Gallo (2003), organizations in Rhode Island report
key revenue streams in similar proportions to all U.S. nonprofits. For Rhode Island
nonprofits 63% of their revenue comes from programs and services and only 14% from
contributions (which include donations and foundation grants), while organizations
nationwide indicated 64% and 14% respectively. Other revenue streams including
investment income and government grants are also similar in proportions, although not
relevant for this study.
The nonprofit sector in Rhode Island has grown rapidly in recent years. From
1990-2000, the number of nonprofit organizations (with more than $25,000 in gross
annual receipts) grew by 71.4%, from 842 to 1,443 (Beauchemin & Gallo, 2003). By
comparison, the number of total business firms in Rhode Island grew by only .5%, from
25,110 to 25,243, in the same time period (U.S. Census Bureau, 2005). Yet, compared to
other states, Rhode Island’s small geographic size and resulting structural cohesion were
considered advantageous for this study. Because there is only one major newspaper, one
public radio station, and one community foundation for the entire state, news and
information are relatively easily shared among nonprofits in Rhode Island. This was
helpful in securing a higher response rate than previous national studies have achieved.
One example of Rhode Island’s history with earned-income ventures is illustrated
by the story of the nonprofit Rhode Island Hospital and its relationship to the for-profit
Rhode Island Hospital Trust Company. This relationship, as told by historian Joseph
Garland, provides an interesting example of the development of an earned-income
venture.2
The effort to build a hospital in Rhode Island started in 1851 with a traditional
nonprofit fundraising strategy. Recognizing a community need, a group of Rhode Island
doctors sent a letter to all citizens “paying more than $100 in taxes a year” asking for a
2
This illustrative anecdote of the Rhode Island Hospital is based on Garland (1963) and oral history
provided by Rick Schwartz of the Rhode Island Foundation.
contribution (Garland, 1963, p. 7). They then approached the City Council, asking them
to commit land to the hospital if the private funds could be raised. Neither the Council’s
support nor the private funds were secured, and to the frustration of many, the first
attempt to build a nonprofit hospital in Rhode Island met an untimely demise.
In 1857, upon observing “the desperate conditions under which his medical
friends attempted to treat the poor of Providence,” (Garland, 1963, p. 11) a young Brown
University graduate named Thomas Ives convinced his dying father to leave $50,000 in
his will to help establish a hospital. As wounded soldiers began to return from the Civil
War, the community need was magnified, and “sickness and suffering, wounds and death,
had become the common bonds of people in Rhode Island” (Garland, 1963, p. 11).
In 1863, the then Captain Thomas Ives returned from the war and revitalized the
effort for a hospital. Leveraging the bequest of his father, $25,000 from his uncle, and his
own donation of $10,000, Ives secured a state charter and 12 acres of land from the City
Council. Over the next year, a committee of Trustees raised $305,000 in donations, which
was “by far the largest amount that [had] ever been raised for any single object of charity
in the State,” according to Ives (Garland, 1963, p. 14). Despite the record-breaking
fundraising, and an additional $50,000 bequest from Captain Ives when he passed away
two years later, rising costs and shortages of labor and materials left the trustees wanting
for money to finish the construction so that the hospital could open.
In 1867, the trustees developed an arrangement to “the mutual benefit of the
hospital and their own financial interests” (Garland, 1963, p. 15). They leveraged the
community support of the hospital (as well as its cultural capital) to create a for-profit
bank known as the Rhode Island Hospital Trust Company.3 This bank was required to
make annual payments to the nonprofit Rhode Island Hospital (equaling one-third of its
net profits above six percent), in lieu of normal taxes. Thus, over 135 years ago, a bank
was created as an earned-income venture to help subsidize a nonprofit hospital.
The Hospital Trust Company has since been acquired (and no longer operates
under its original name) but in its time, it “proved to be a substantial source of income for
the hospital” (Garland, 1963, p. 16). The Hospital Trust Company also proceeded to
found the Rhode Island Community Foundation, the only community foundation serving
the state, and one of the collaborators on this research. The Rhode Island Hospital is now
a part of a nonprofit healthcare partnership which controls over $1.4 billion in assets,
provides over $50.4 million in uncompensated care, and employs more than 10,000
people (Lifespan, 2003).
As demonstrated, Rhode Island has an interesting history of earned-income
ventures, is comparable to the national nonprofit sector in key revenue areas, and the state
cohesion makes it a good population from which to sample. The following Literature
Review section will discuss previously published work in the field to help highlight the
national history and context of earned-income ventures.
3
The profit sharing structure of the Rhode Island Hospital Trust Company was based on a model
established by the Massachusetts General Hospital in 1814.
Literature Review
Background
Most of those who have written about earned-income ventures in the U.S. start
with a reminder that “earning” income is not a new strategy for all nonprofits. Hospitals
and universities, which are recognized as the two largest revenue generators in the sector
today, have both historically “earned” income by charging fees for their services. Human
service organizations such as Goodwill Industries have operated retail stores for over 100
years (Goodwill, 2005), the National Geographic Society has been underwriting their
educational mission with magazine sales since 1888 (National Geographic, 2003), and
the Girls Scouts of the U.S.A. have been selling cookies for almost 90 years (Girl Scouts,
2004). The Cistercian Abbey, a religious congregation in Wisconsin, recently received
national media attention for their earned-income venture LaserMonks.com. As they
describe it, monks used to survive by copying manuscripts by hand and today they carry
on this tradition by selling toner and ink cartridges on the internet. They date the history
of revenue-generating activity in their religious order back 900 years (McCoy, 2004).
Today, the range of nonprofits launching earned-income ventures, the types of
ventures they are operating, the resources available for guidance and support, and the
attention focused on these enterprising activities are all growing exponentially. The
following section describes how the trend has evolved over the last 25 years.
Description of the Trend: From the 1980s to Today
During the 1980s, in one of the earliest studies seeking to understand the trend of
nonprofits turning to enterprise as an alternative to traditional funding sources, Crimmins
and Keil (1983) described a “sense of explosive activity in the sector.” Five years later,
Skloot (1988, p. 3) described a small yet growing “interest in and trend toward nonprofit
enterprise.” Government cutbacks in the 1980s, that caused both funding shortages and
increased demand for nonprofit services, are cited as the primary reasons that nonprofits
began adopting earned-income ventures in such large numbers during this decade
(Crimmins & Keil, 1983; Salamon, 1996).
In the 1990s, Shore (1995) outlined a strategy for a “revolution” among nonprofit
leaders to create rather than simply re-distribute wealth. Speaking about the growth of
job-training ventures, Emerson and Twersky (1996, p. 211) reported, “increasing
numbers of non-profits are developing enterprises to employ formerly homeless and other
low-income people.” Dees (1998, p. 55) described a growing number of nonprofits,
“turning to the for-profit world to leverage or replace their traditional sources of
funding.” Weisbrod described a “commercial transformation” and declared, “massive
change is occurring in the nonprofit sector” (1998, p. 1).
In the new millennium, Massarsky and Beinhacker (2002, p. 13) observed, “the
trend to venture has increased significantly over the past twenty years,” and Shore (W.
Shore, 2003, p. 7) reported that “generating resources through profitable enterprise to
promote social change, has expanded far beyond what has previously been reported, or
could even be imagined.” Just this year, Foster and Bradach (2005, p. 92) declared,
“today it seems routine… earned-income initiatives are becoming accepted -- even
expected -- throughout the nonprofit world.”
Benefits
Much of the previous literature focuses on benefits of operating earned-income
ventures. Advantages, often labled “halo effects” (Massarsky & Beinhacker, 2002) or
“halo benefits” (Hochberg, 2002) are described as positive influences on an
organization’s culture, current and prospective staff, reputation in the community, and
ability to achieve their mission. In addition, earned-income ventures can help
organizations “accomplish much more than they could by relying only on the limited
philanthropic and government resources…” (Dees, 2004, p. 3).
For those who describe earned-income ventures as beneficial to their parent
organizations, the level of importance varies. Some describe ventures as valuable in
moving an organization towards self-sufficiency (Burns, 2003; King, 2003), while others
describe earned-income ventures as “essential” for the survival of their organizations
(Strickland, 2003; Walls, 2003). Boschee (2001, p. 1) stated that “entrepreneurship in the
delivery of social services is not only legitimate, but necessary.”
Cautions
The majority of those who have discussed the benefits of earned-income ventures
also emphasize that these ventures are not right for all nonprofit organizations. Many
caution organizations interested in adopting earned-income ventures as a quick fix. Over
twenty years ago, Crimmins and Keil (1983, p. 32) predicted, “no matter how successful
enterprise ventures become in the sector, they will not be able to cure all of its financial
ills.” That same year, in a book generally dedicated to promoting earned-income
ventures, Haycock (1988, p. 147) published ten case studies highlighting “pitfalls of
earned income for the small nonprofit.”
Through a mostly economics-based approach, Weisbrod and his colleagues
(1998a) highlighted some benefits and numerous challenges of running earned-income
ventures including: goal displacement, competition with the for-profit sector, and
mission-drift that can accompany earned-income ventures. Bradley (2004, p. xvi)
described earned-income ventures as “risky business.” And Dees (1998, p. 56) warned of
“many dangers for nonprofits” and said, “in the best of circumstances, nonprofits face
operational and cultural challenges in the pursuit of commercial funding. In the worst,
commercial operations can undercut an organization's social mission.”
Oppositions
While many have expressed hesitation about nonprofits launching earned-income
ventures, Costello was one of the early voices of active opposition. In her review of
Shore’s call on nonprofit leaders to seize earned-income opportunities, Costello (1996,
para 16) voiced concerns about a potential increase in nonprofits’ “dedication to feeding
the bottom line rather than the bread line.”
Two articles that appeared within the last six months have raised similar concerns.
In “The Pitfalls of Profit,” Weisbrod (2004, p. 46) highlights case studies of ventures
gone bad, and encourages a “rebalancing of the tax-code” to provide more incentives for
donations and to discourage nonprofits from engaging in commercial activity. “Should
Nonprofits Seek Profits?” (Foster & Bradach, 2005) tells the stories of a few incredibly
unprofitable and mission-detracting ventures, while casting doubts about the accuracy of
financial accounting throughout the sector and questioning the “profitability” claims and
methodology of previous studies.
Relation to Mission
Foster and Bradach’s (2005) conclusion to “Should Nonprofits Seek Profits?”
calls for organization to put “mission first” when considering earned-income ventures at
the risk of harming “society itself.” While few have used such strong cautionary
language, the idea that ventures are better off when they are related to an organizations’
mission seems to be the one point about which almost everyone who has studied the topic
can agree. Yet determining what exactly relates to an organization’s mission is far from
easy or clear, and the current fundraising alternatives can have similar mission-detracting
effects. Froehlich (1999) wrote, “we worry and speculate about mission dilution and
legitimacy erosion as distractions emerge from the [nonprofit’s] necessary economic
endeavors. Yet, these are and always have been the facts of life for a nonprofit
organization.”
DiMaggio (1988) raised the question of mission-drift related to enterprise in arts-
related organizations, and Frumkin (2002, p. 30) found that despite the worries of some
previous observers of nonprofits’ commercial activities, “there is no clear evidence that
the new form of financing fueling the sector’s growth has significantly undermined the
ability of nonprofit organizations to fulfill their missions." Weisbrod (2004, p. 46) added
that it is difficult to determine what distorts an organization’s mission. It is also worth
noting that it is difficult to determine if the mission has in fact been “distorted,” given
that missions often evolve and change over time.
As discussed in the Definitions section, the extent to which earned-income
ventures relate to an organization’s mission is important for tax purposes because
nonprofits are required to pay taxes on income “not substantially” related to their
missions. The “relation to mission” question is also crucial in examining the diffusion of
earned-income throughout the sector because the missions of nonprofits are one of the
key justifications for their differential tax and legal status. As Brown and Slivinsky
(2003) wrote, “it is hard to overstate the importance of mission in shaping the economic
study of nonprofits.”
Weisbrod concluded that, “increased commercialization is not ideal,” but
identified the more important question: is it preferable to alternative options? He
identified the alternative options as increased “dependence on government” or “decreased
output of collective goods” (1998a, p. 298). Further complicating matters, Weisbrod
wrote, “the precise nature of sacrifices that nonprofits make to raise money is seldom
clear-cut” (1998a, p. 298). This was reiterated recently by Shuman and Fuller (2005),
who discussed the paradox of many fundraising efforts that nonprofits now engage in that
require catering to those with abundant resources, to shift small amounts of those
resources to organizations attempting to redistribute resources. Shuman and Fuller (2005)
concluded with a call for nonprofits to embrace the power of entrepreneurship for social
change. After a thorough examination of a group of nonprofits operating earned-income
ventures, Emerson and Twersky (1996, p. 13) reported, “our experience has been that,
when managed appropriately, sound business practice can help drive the realization of the
organization’s social mission.”
Spectrum
Recognizing the vast array of program areas in which nonprofits operate, the
ambiguity of missions and the variety of activities that are considered earned-income
ventures, previous authors have tried to make sense of social enterprises along
continuums. Dees (1998) offers a “Spectrum of Social Enterprise” that relates venturing
activity to an organization’s mission, and Crimmins and Keil (1983) developed the
“Spectrum of Nonprofit Enterprise” that relates enterprises to an organization’s
programmatic area. Both highlight the wide range of activities that any individual
nonprofit organizations can undertake related to earned-income ventures.
Previous Research Findings

Massarsky and Beinhacker (2002, p. 1) set out to “survey the landscape of
enterprise in the nonprofit sector.” Through a national survey of 519 nonprofit
organizations they discovered 42% of the organizations in their sample were currently
operating earned-income ventures (EIVs); a clear majority of ventures were service-
related; organizations operating EIVs tended to be older than those not operating EIVs;
and “arts and culture” organizations were more likely to operate EIVs than organizations
focused on other program areas. The study “Enterprising nonprofits: Revenue generation
in the nonprofit sector” by Massarsky and Beinhacker was the basis and inspiration for
the quantitative portion of this thesis. Through comparison to their results, this thesis
seeks to extend their exploration of organizational characteristics related to nonprofits
operating earned-income ventures.
Massarsky and Beinhacker suggested that, “future research might answer the
question as to whether the differences [in the program area of organizations operating
EIVs] stem from inherent properties of the kinds of goods and services produced in these
varied sectors, or whether they relate more to cultural and organizational differences
among the organizations” (Massarsky & Beinhacker, 2002, p. p3). They also identified
business planning as one of the key success factors of earned-income ventures and found
only 55% of the organizations operating EIVs had written business plans. They
concluded that this could be improved though focused attention and resources, which led
to the development of the first National Business Plan Competition for Nonprofit
Organizations (now in its third year).
In 2002, Community Wealth Ventures conducted a national survey of 72
nonprofits operating business ventures, defined as “a business that generates revenue
from the sale of products and/or services to the customers beyond the organization’s
immediate constituents” (2003, p. 112). In their sample, the organizations operating
business ventures tended to be: social service organizations with employment and
training missions; at least 9 years old; and operating multiple ventures. Thrifts stores
were the most common ventures represented in their sample, 89% of respondents
indicated that their venture related directly or nearly-directly to the mission of their
organization, and 69% reported either making a profit or breaking even (Community
Wealth Ventures, 2003).
In industries such as day care, nursing homes, and hospitals, nonprofits are
already in direct competition with for-profit firms. Previous research suggests that
although the nonprofit organizations in these industries might appear to be “highly
commercial” they continue to offer a variety of benefits which characterize them as more
mission-related than profit maximizing. Weisbrod (Weisbrod, 1998a) found that when
compared to their for-profit counterparts, nonprofits continue to offer: higher-quality
services, lower prices, and continued access to services for those who can not afford to
pay.
A common concern of those in the nonprofit sector is how operating earned-
income ventures might impact their ability to continue to attract donations and other
resources. Herman and Redina (2001) sought to answer this question through a
situational analysis study of 70 volunteers. They measured how donors would respond to
nonprofit organizations engaging in commercial activities and discovered evidence to
suggest that donors would be more likely to support “mission-related commercial income
activities” than those that do not advance the organization’s mission.
Because self-identification as “entrepreneurial” was shown to be interrelated with
operating earned-income ventures by Massarsky and Beinhacker (2002), the question of
how nonprofits define entrepreneurial is an important one. A study of the personal
characteristics of women entrepreneurs in the nonprofit sector in India found agreement
with characteristics previously identified with women entrepreneurs in the for-profit
sector including, “they are risk takers, come from financially secure backgrounds, have
access to childcare and support for household duties, and place a high premium on
independence” (Handy & Ranade, 2000, p. 2). And Dart (2004a) constructed a typology
of the related concept of being “business-like” which is used as a starting place for this
study’s examination of how nonprofits in Rhode Island identify with and define
“entrepreneurial.”
Why the Sea Change is Occurring
As this study suggests, there is a sea change, or fundamental shift, occurring in
the nonprofit sector: nonprofits are operating earned-income ventures and social
enterprises at increasingly high rates. While there has been little empirical research about
why this change is occurring, Weisbrod (1998a, p. 305) offers one compelling reason: in
the nonprofit sector, “expanded commercial activities are the most promising revenue
sources.” Dees (1998) explained the “rising tide of commercialism” in the nonprofit
sector as a combination of five forces: a world-wide “pro-business zeitgeist,” attempts by
the organizations to model the independence they seek to instill in their clients, the search
for financial sustainability, the influence of funding agents, and competition among
nonprofits for limited funding. Dart (2004b) explored the emergence of social enterprise
through “legitimacy” and “institutional theories.” This section continues this exploration
of change through sociological theories and discusses some economic theories of
organizations and the market-based environment in which they operate to add to these
explanations of the emergence of earned-income ventures.
The sociological theory of “resource dependency” suggests that all organizations
exchange resources with their surrounding environments as a condition for survival
(Scott, 1992, p. 114). Most of the resources that nonprofits need to operate are similar to
those needed by for-profits, including staff, electricity, and meeting space; yet, some are
more unique. Legitimacy, as defined by Suchman (1995, p. 574) as “a generalized
perception or assumption that the actions of an entity are socially desirable, proper or
appropriate...”, can be seen as one resource which has a distinctive value for nonprofit
organizations. Because most nonprofits rely on donations for at least one source of
funding, and people are less likely to donate money to an organization whose legitimacy
they have reason to question, nonprofits have a unique need to be seen as “legitimate” in
order to successfully raise donations. This is particularly true for nonprofit organizations
that do no produce outputs that are easily quantified or measured.
“Resource dependency” is premised on the theory of “scarcity” (Robbins, 1932)
which suggests that all resources are in limited supply. While some resources might be
easily quantified and measured, most of what nonprofits produce (or provide as a service
to the community) are not. Because the price of these resources is the primary means of
measuring their value, the symbolic value of money itself is also important. As Smith
observed, “We say of a rich man that he is worth a great deal, and of a poor man that he
is worth very little money” (Smith, 1776, para. 1). In this sense, money is not only a
measure of assets; it is often a measure of “worth” as well. This can also be observed in
evaluations of organizations. Regardless of its ability to deliver on its social mission, a
nonprofit that was unable to pay its bills would generally be thought to have little value
and ones that have more resources are often assumed to be “worth” more.
“Institutional” theories of organizations assert that an organization’s life chances
improve when its behaviors are aligned with the norms and social expectations of the
larger society (Tucker & Baum, 1992, p. 62). These are grounded in “open-systems”
theories which suggest that the environments in which organizations operate influence
their structure (Handel, 2003). These environments have been characterized as primarily
“institutional” or “technical.” “Institutional” environments are those in which cultural
symbols and belief systems are of primary importance (Meyer & Rowan, 1977), while
“technical” environments place importance on characteristics such as an organizations
speed of production, and specific quality or financial metrics. Most nonprofits operate in
institutional environments. These “institutional” organizations are characterized by “a
more symbolic ‘bottom line,’ represented by prestige, support, and legitimacy” (Dill,
1994, p. 351). This is in contrast to organizations operating in technical environments
which “look to profit margin and market share as indicators of success” (Dill, 1994, p.
351).
The theory of “institutional isomorphism” (DiMaggio & Powell, 1983) suggests
that organizations adapt their structure as a result of forces which can be characterized as:
mimetic, coercive, or normative. “Coercive” forces are attempts by outside agencies to
influence organizations’ structure or activities. “Normative” forces are described as those
that spread through professional networks or trade associations, and “mimetic” forces
arise as a result of perceived benefits to the organization for adopting a particular
structure or set of activities.
Though there is strong evidence of isomorphism within the nonprofit community
in Rhode Island, the drivers of the institutionalization of earned-income ventures are far
from clear. There is little evidence to suggest that nonprofits are being formally
“coerced” to engage in income-generating activities, however for some, informal
“coercion” (in the sense of influence across an unequal power structure) may be a factor.
Level-funding from the state was cited by multiple organizations as a specific reason for
developing ventures or increasing the scope of their ventures.
The work of Social Venture Partners of Rhode Island and the Rhode Island
Foundation (both partners in this research) may also be having influencing effects on
local nonprofits. Both organizations have offered funding specifically for social
enterprises and they have worked together to host several workshops and forums on
topics related to social enterprises and earned-income ventures. The chance that some
organizations might be adapting their structure to include earned-income ventures to be
seen in a good light by these funding agents should not be overlooked, yet the data from
this study suggests that “mimetic” forces are the primary motivators of nonprofits
adapting earned-income ventures. Nonprofits in Rhode Island appear to be launching
earned-income ventures largely because they view it as a way to attract positive
community relations and thus legitimacy.
Methods
This study was conducted in three parts: a web-based survey, semi-structured
interviews, and a comparison analysis. The survey was available online from February
1st -15th, 2005. The interviews were conducted in March and April, 2005 and the results
were then analyzed and compared to national data that was collected through a separate
initiative in 2002. The following section provides more detail about the methods used to
collect and analyze the data.
The Web-Based Survey

The survey [attachment 15] was hosted online by Zoomerang.com, and was
accessible through a link on the Social Venture Partners of Rhode Island website
[attachment 10]. The questions were based on those developed by Massarsky and
Beinhacker of the Yale School of Management – the Goldman Sachs Foundation
Partnership on Nonprofit Ventures.
The survey consisted of 80 possible questions and skip-logic was used to reduce
the number of questions asked of any given respondent. Based on previous answers each
respondent was asked a minimum of 18 and a maximum of 48 questions. These were a
mix of multiple-choice, yes-no, open-ended, and ranking-type questions. The eight
questions used in the skip-logic sequence were mandatory, and the other 72 were
optional.
The primary change between the survey used in this study and that of the previous
one was the result of a technical limitation of the software. The Massarsky-Beinhacker
survey asked detailed side-by-side questions about the two ventures that provided the
greatest benefit to the organization. This survey only asked details about the one most
successful venture because the side-by-side method was not possible, and asking the
questions separately would have resulted in 15-20 additional questions. Other changes
involved very limited re-wording of questions, removal of answer choices, and the
addition of a few questions such as: What is the mission of your organization? Who
manages your venture? What is the manager’s formal business training?
Overview of Web-Survey Questions

The first seven questions were identical for all respondents and addressed the
Informed Consent Statement and issues such as program area, mission, general budget,
organizational scope and size. As an example of how the skip logic worked, question #9
asked: “Do you consider your organization to be entrepreneurial?” If the respondent
chose “yes” they were asked question #10: “In what ways is your nonprofit
entrepreneurial? What entrepreneurial strategies are you using?” If they chose “no” to
question #9, they skipped question #10.
The answer to question #11 was the primary determinant in the length of the
survey and types of questions for each respondent. It provided a definition of earned-
income and then asked:
Has your organization ever operated an earned-income venture?

Yes, currently operating 1 or more earned-income venture
Not currently, but operated 1 or more in the past
Never operated an earned-income venture
Respondents who chose answer #1 or #2 were asked up to 37 more detailed
questions about their organizations, the earned-income venture(s) they were operating
and the effects of the ventures on their organization. Those who indicated that they had
never operated an earned-income venture were asked up to 10 more questions.
The final questions, asked of all organizations, address issues including: plans to
start any ventures in the next year, types of support that might be helpful in doing so, how
participants heard about the study, and personal and organizational contact information.
Recruitment of Participants
The web-based survey was open to all 501(c)(3) organizations operating within
the state of Rhode Island. This population is estimated to be about 5000 organizations,
but because many smaller and religious nonprofits are not required to file tax returns the
exact size of this population is unknown. The mailing addresses for these organizations
were collected from one public database (Internal Revenue Service, 2005a) containing
4564 records, and two private databases. Duplicates, charitable trusts, and scholarship
funds were removed and the remaining 4652 addresses were then verified through the
National Change of Address (NCOA) and Coding Accuracy Support System (CASS)
services provided by Melissa Data Services. The final list consisted of 4342 organizations
that were each mailed a postcard [attachment 5] on 2/28/05 inviting them to participate.
Five of these postcards were returned as undeliverable. An email invitation [attachment
6] was sent directly to 1691 organizations on 3/2/05. A total of 370 of these emails were
returned as undeliverable.
On 3/7/05 media releases were distributed from the Rhode Island Foundation
[attachment 7] and the Brown University News Service [attachment 8] to all local
newspapers, television and radio stations. As a result, a brief article [attachment 9]
appeared in the Providence Journal on 3/12/05, and announcements [attachment 11]
were also made on the WRNI radio station on the last day of the study, 3/15/05. E-
newsletters from three separate organizations [attachments 12, 13 and 14] contained
descriptions of the survey and links to the website.
Survey Incentives
As incentives, recruitment materials highlighted that each participant who filled
out the web-based survey was eligible to receive:
A link via email to download an electronic copy of the final report;

A chance to be profiled in the report (if selected for a follow up interview);
A chance to win one of 5 certificates for $25-off the next “New Business
Ventures for Nonprofits Workshop” hosted by Social Venture Partners of Rhode
Island and run by The Grantsmanship Center;
A chance to win one of 3 copies of “Generating and Sustaining Nonprofit Earned
Income: A Guide to Successful Enterprise Strategies” Edited by S. Beinhacker, C.
Massarsky, and S. Oster (List Price: $45).
Comparison Analysis
The results from the Rhode Island web-based survey were compared to data
collected by Massarsky and Beinhacker for their report “Enterprising Nonprofits:
Revenue Generation in the Nonprofit Sector” (Massarsky & Beinhacker, 2002). The
Rhode Island sample includes 329 organizations collected over a two-week period in
2005, and the national sample includes 519 nonprofits from across the country, collected
over a two-and-a-half-month period in 2001.
Interviews
A series of 22 interviews were conducted in March and April, 2005 [attachment
1]. Of these, 11 interviews were conducted with nonprofit leaders, most of which were
currently operating earned-income ventures. Interviewees were selected to participate
based on attempts to balance a diverse set of organizational demographic considerations
including, size, location, budget, program area and venturing status. These interviews
were conducted over-the-phone, lasted about one half hour, and used a nine-question
guide [attachment 2].
Eleven interviews were conducted with individuals recommended by partnering
organizations as supporters of the Rhode Island nonprofit sector. These interviews used a
separate question guide [attachment 3] that asked questions about their observations and
opinions of nonprofits operating earned-income ventures. These interviews consisted of 2
funders, 3 supporting organizations, 2 academics and 3 representatives from state offices.
As incentives, all interview participants were eligible to receive a link to an electronic
download of the report, and were considered for the Profiles section and quotes in the
final report.
Data Analysis Process

The quantitative data from the Rhode Island web-survey was first examined
through Zoomerang.com’s cross tabulation function. The Rhode Island and national were
data were then analyzed with STATA 8, the general-purpose statistical software package.
The open-ended responses were analyzed using the ThoughtSCAN keyword analyzer and
then through manual content analysis. The interviews were primarily treated as brief
exploratory case-studies.
The quantitative data analysis involved five steps. First, the research questions
were established and outcome and control variables were identified. Next the variables
were examined and collapsed into categories making sure not to distort the distribution of
the raw data.4 Next the relationship of each independent variable was compared to the
dependent variable with Bivariate Cross Tabulations and Chi Squared Tests (on both the
Rhode Island and national data). The data was then pooled and compared for statistical
significance. And finally, logistic regression was run on the Rhode Island, national and
pooled sample, regressing the dependent (dichotomous) variable on the collapsed
independent variables.
4
e.g. on the survey there were originally nine sub-categories for the program variable “human services”
These included “human services-employment and jobs” and “human services-youth development.” For
analysis, these were all collapsed into the one “human service” category.
Rhode Island Findings
Demographics of the RI Nonprofit Sample

The following is a description of the 329 Rhode Island nonprofit organizations
that responded to the Web-Based Survey. The largest groups of respondents had program
areas focused on “Human Services” (21%), had been in operation for at least 20 years
(52%), and had budgets less than $250,000 (44%). The majority of organizations self-
identified as “entrepreneurial” (53%), and they were currently operating one or more
earned-income venture (62%). [Table 23]
The two program areas least represented in the sample were “International
Foreign Affairs” and “Miscellaneous and Mutual Membership Benefit Organizations”
with 1% and 2%, respectively. There were noticeably fewer organizations that had been
in operation for six to ten years, and they constituted only 13% of the sample.
Organizations with larger budgets, greater than $5 million, only constituted 12% of the
sample.
Organizations that self-identified as “entrepreneurial” (53%) were the majority of
respondents, yet there was almost an equal number that identified as “non-
entrepreneurial” (47%). [Table 1] The clear majority of organizations (61.8%) in this
sample are currently operating at least one earned-income venture. Those which have
never operated an EIV constitute 32.3% and those that are “not currently, but operated
one or more in the past” only make up 6% of the sample. [Table 2]
Table 1: Self-Identification as “Entrepreneurial” (of Full RI Nonprofit Sample)
60%
Entrepreneurial % 40%
1. Yes 53
2. No 47 20%
N=298 100
0%
Yes No
Table 2: Operation of Earned-Income Ventures (of Full RI Nonprofit Sample)
80%
Operating EIV %
60%
1. Yes currently 62
2. Never 33 40%
3. Not currently but did 20%
6
so in the past
N=285 100 0%
Currently Never In Past
Characteristics of the RI Earned-Income Ventures

The following sections describe the 142 organizations surveyed that are currently
operating earned-income ventures. As shown in [Table 3], 58% of these organizations
are operating more than one venture. Forty-Six percent of all the ventures (N=220) in
operation are “service-related / fee-for-service” and fifty-six percent of the organizations
(N=140) report that service-related ventures are bringing the “greatest social and
financial benefits” to their nonprofit organization. As [Table 4] shows, the vast majority
of these ventures (80% of N=138) are structured as “in-house” operations, which means
they are operated within the parent nonprofit organization, as opposed to being operated
as separate for-profit or nonprofit entities.
Table 3: Number of EIVs in Operation (of RI Nonprofits Operating 1 or More)
60%
Number of EIVs %
40%
1. One 43
2. Two 23 20%
3. More than Two 35
N=142 101 0%
One Two > Two
Table 4: Characteristics of the EIVs

Characteristics Count %
2. Types of EIV in Operation

Service-related (fees for service) 102 46%
Product-related sales/manufacturing 49 22%
Cause-related marketing/licensing 11 5%
Renting/leasing property
40 18%
(e.g., building rentals)
Other 18 8%
N=142 Total 220* 100%
3. EIVs that Provide the Greatest Social and Financial Benefits

Service-related (fees for service) 79 56%
Product-related sales/manufacturing 21 15%
Cause-related marketing/licensing 4 3%
Renting/leasing property
21 15%
(e.g., building rentals)
Other earned-income ventures 15 11%
N=140 Total 140 100%
4. Legal Form of the EIV

In-house operation 111 80%
Separate nonprofit entity 13 9%
Separate for-profit entity 6 4%
Other 8 6%
N=138 Total 138 100%
Note: * Total count is greater than N because respondents were

asked to “check all that apply.”
Description of the RI Earned-Income Ventures
Earned-income ventures provide products and services across a wide range of
categories. These ventures can be broadly grouped as products, services, marketing/
licensing, and property-related. Examples of products include magazine subscriptions and
houses constructed and then sold at-cost directly to home owners with an interest-free
mortgage. Examples of services include on-site medical and dental services for a
residential vocational program for underprivileged young adults and a confidential
document destruction business providing pick-up, destruction and disposal of paper.
More sample descriptions of these ventures can be found in [Table 5] and [Table 6].
Table 5: Sample Descriptions of Product and Service-Related EIVs

Products Services
Banners on the website for local restaurants and
Collaborative energy purchasing
retailers
Fresh farm produce sold at farmers markets and
Confidential document destruction business providing
through a sliding-scale community supported
pick-up, destruction and disposal of paper.
agriculture (CSA) program
Houses constructed and then sold at-cost directly to Consulting fees and trademark licensing royalties for
home owners, with an interest free mortgage. organizing events across North America.
Culinary and nutrition education program designed to
promote locally grown produce and improve the nutrition
Magazine subscriptions
of low-income families through outreach and education
at RI farmers markets.
Graphic design studio that provides services for
Mailing house companies such as logo design, annual reports, and
stationery design.
Manufacturing various sewn products for the federal

HIV case management services
government using visually disabled labor.
Paintings, t-shirts, clocks, cards and poetry chap books Low-cost sterilization surgery for community pets
Publications, curriculum and other programmatic Marketing and box office service for arts and cultural
materials groups
On site medical and dental services a residential,

Sales of t-shirts and baseball hats
vocational program for underprivileged young adults
Thrift store, and bulk clothing sales Restaurant and piano bar
Revolving loan fund
Special educational licensed facilities for IEP -

behaviorally disordered middle and high school youth.
Victim training for staff and allied professionals in justice
related fields
Table 6: Sample Descriptions of Property, Marketing/Licensing-Related, and Other EIVs
Property Marketing/Licensing
Apartment rentals Point of purchase candy sales @ banks
Production of items (t-shirts, magnets, mugs, etc) with

Commercial space for medical professional practices
organization-related images
Leased space to a theatre Staging or 'piggybacking' on concert events

Low income housing units
Own and operate apartment housing complexes for the
physically disabled
Own the building and rent space to a deli business Other

Recovery and sober housing program Advertising Income
Rent rooms at-cost to other nonprofits Government Contracts
Rent two units of a four-story building to residential
Membership Fees
tenants.
Rental of affordable housing for families and elderly Special Events
Rental of facility for social events
Rental of part of building as office space.
Rental of residential dwelling to a family
Rental of space to community development corporation,
Town Civic organization and a regional school.
Profiles of Three RI Earned-Income Ventures
Cookie Place Cafe, Providence - An EIV from the Start
“Most customers don’t know we are a nonprofit. We don’t usually market
ourselves as a nonprofit,” says Cookie Place Cafe Executive Director William Monahan.
What Cookie Place is best known for is great cookies! For the last 23 years, Cookie
Place, located in downtown Providence, has provided employment and training for
“persons with psychiatric disabilities.” Cookie Place operates a cafe, which serves
breakfast and lunch, as well as a catering business that supplies pastries, sandwiches and
beverages to local companies and private events. They have been recognized by Rhode
Island Monthly Magazine for the “Best Cookies in Rhode Island” for four years.
Cookie Place was founded as a nonprofit with government grants. Currently it
earns about half its operating budget through product-related revenue and the other half
from state grants through the department of Mental Health, Retardation and Hospitals.
For the last 6 years, as costs have risen, Cookie Place has received level funding from the
state. As a result, it has diversified its product line, with whoopee pies and birthday
cakes, to generate more revenue, and is developing a web site to raise awareness of the
organization.
Edward King House, Newport - Recently Launched an EIV
The Edward King House is an historic mansion that was given “to the people of
Newport” as a gift in 1912 by George Gordon King. It has operated as a nonprofit library
and park, as well as a senior center with the mission “to provide program activities to
seniors.” It has a diverse revenue stream which includes six different sources of income:
donations from individuals, government and foundation grants, membership dues,
service-related revenues, and endowment income. [Table 7] shows more details of the
funding mix, of which government grants constitute 40%. According to the director,
David Dean, “level funding from the state” has served as an incentive for Edward King
House to develop an earned-income venture. He recently launched a venture to rent the
historic landmark building for weddings and events on weekends when it is not in use as
a senior center.
Table 7: Funding Streams of the Edward King House
50
40
30
20
10
0
Foundation Government Donations Endowment Membership Service-
grants grants from income dues related
% of Funding 10 40 10 10 5 20
Crossroads Rhode Island, Providence – About to Launch an EIV
Providing crisis intervention, housing, health care, and vocational services,
Crossroads Rhode Island, formerly known as Travelers Aid of Rhode Island, is the
largest homeless services organization in the state. According to Joe Potenza, the Director
of Vocational Services, while Travelers Aid operated some fee-for-service programs
throughout their 115 year history, they have never operated any “real” earned-income
ventures (which he distinguishes as ventures that seek to make money, rather than just
cover costs). Opening this spring, the Crossroads Copy Shop will provide bulk
photocopying, electronic printing, and publishing services, and possibly an offset press.
According to Executive Director, Ann Nolan, this “micro-business,” which will operate
as a program of the parent nonprofit, will enhance the organization’s ability to achieve its
mission. "We've learned that the chances for [our clients] success are greatly enhanced
when access to affordable housing is combined with social service intervention and
vocational training for a period of six months to a year," said Nolan ("Crossroads Rhode
Island," 2005).
Relation of Venture’s Goals to Organization’s Mission

Previous literature has raised the potential for “mission drift” as one of the central
questions when examining the impact of earned-income ventures. Because missions are
often general, and evolve over time, it is difficult to examine how they may have drifted
as a result of operating an earned-income venture. In examining what Rhode Island
nonprofit leaders have to say about the topic, it appears that the ventures they are
operating are highly related to their mission. As [Table 8] shows, eighty-seven percent
said that the goals of their venture are related “a lot” or “to a great extent” (4 or 5 out of a
5 point scale) to the mission of their organization.
Table 8: How Related the Goals of the EIV are to the Mission of the Organization
80%
Relation to Mission %
1. Not at all 3 60%
2. A little bit 4 40%
3. Somewhat 6
4. A lot 24 20%
5. To a great extent 63 0%
N=134 1 2 3 4 5
Reasons for Launching (and Not Launching) an EIV
In order to fully understand the diffusion of earned-income ventures throughout
the nonprofit sector this study captured the perceptions of those that are currently
operating ventures as well as those that have never operated ventures. Sixty-six percent of
organizations currently operating an earned-income venture (N=119) indicated that
generating “income/surplus for programs” was a “very important” reason for launching
their earned-income venture. As [Table 9] shows, the second most important reason is
generating “positive community relations,” (58% of N=118) followed closely by moving
the organization towards “self-sufficiency” (56% on N=115) and “diversifying” the
organization’s revenue stream (48% on N=117). The least important reason among the
fixed-answer choices, was providing “employment/ training/ therapeutic opportunities to
constituents” which 50% (N=111) of the respondents indicated was “not important.”
Table 9: Reasons for Launching an EIV by Category and Level of Importance

Not Somewhat Very
Category N=
Important Important Important
1. Generate income/surplus for programs 8% 27% 66% 119
2. Generate positive community relations 12% 30% 58% 118
3. Move organization towards self-
13% 31% 56% 115
sufficiency
4. Diversify revenue stream 21% 32% 48% 117
5. Help revitalize the
32% 28% 40% 116
neighborhood/community
6. Provide employment/training/therapeutic
50% 17% 33% 111
opportunities to constituents
The following typify the range of responses about other reasons organizations
have for operating earned-income ventures:
Our agency is dedicated to providing information, direct client services,

professional development and system change... Some of these activities fit nicely
within the guidelines of public and/or private funding sources. Others do not, yet
must be provided to accomplish our mission. We really had no choice except to
develop fee-for-service programs.
Part of our mission is to provide space to arts non-profits at below-market rates.

We are doing so through a separate for-profit entity so that we can take advantage
of federal historic tax credits during our multi-year process of renovations.
People value things more if they have to pay for them.
As [Table 10] shows, there seem to be many organizations that are interested in
starting ventures, yet have not done so because of a lack of resources. Among those
organizations that have never operated an EIV, two of the most commonly identified
reason are the lack of “personnel resources to develop and manage the venture” (36% of
N=93), and the “lack financial resources” to start a venture (26%). Of particular interest
are the 22% that are concerned about “exemption status and/or tax issues.” It is also
surprising that 30% of this group “have never considered the idea.”
Table 10: Reasons for Not Launching an EIV (by Organizations That Have Never Operated)
Reasons %
1. Lack personnel resources to
develop and manage the 36
venture
2. Never considered idea 30 40%
3. Venturing not part of our
29
mission
4. Lack financial resources to 30%
26
launch
5. Concerned about exemption 20%
22
status and/or tax issues
6. Concerned about
13 10%
operational/financial risks
7. Restricted by funding 13
0%
8. Lack board interest/support 8
1 2 3 4 5 6 7 8 9
9. Other (please specify): 14
N=93
Note: Does not total to 100% because
respondents were asked to choose all
that apply.
Perceived Impact of Operating an EIV
Overall, the leaders of nonprofits operating earned-income ventures perceive the
impact of the ventures to be very positive. This is consistent across the nine different
categories of impact addressed by the survey. Eighty-two percent of the respondents
(N=116) report that operating an EIV has had a positive or very positive impact on the
“reputation” of their nonprofit organization; 78% (N=117) indicate a positive or very
positive impact on their “organization’s mission;” and 73% (N=115) indicate that
operating an EIV has had a positive or very positive impact on their “service and program
delivery.” Only 2% of respondents indicate any negative impact across the nine
categories of questions. See [Table 11] [Table 12] and [Table 23].
Table 11: Perceived Impact of Operating an EIV on Nonprofit Organizations (Collapsed

Across Nine Categories)
80%
Impact % 60%
Negative 2 40%
Neutral/No Impact 25
Positive 73 20%
Average N=115 0%
Negative Neutral Positive
Table 12: Perceived Impact of Operating an EIV on Nonprofit Organizations
70%
60%
50%
40%
30%
20%
10%
0%
very somew hat neutral/no somew hat very
negative positive
negative negative impact positive positive
Reputation 0% 0% 1% 8% 9% 23% 59%

Mission 0% 0% 2% 9% 12% 30% 48%
Service Program 0% 0% 1% 10% 17% 33% 40%
Self-Sufficiency 2% 0% 4% 17% 24% 27% 26%
Attract Donors 1% 1% 0% 29% 22% 29% 19%
Entrepr. Culture 1% 0% 1% 33% 26% 19% 19%
Attract Volunt 2% 0% 2% 40% 16% 25% 16%
Attract Staff 0% 0% 0% 44% 18% 22% 16%
Board Leaders 0% 0% 2% 35% 25% 25% 13%
How Nonprofits Define “Entrepreneurial”

There were almost equal numbers of respondents that self-identified as
“entrepreneurial” (53%) versus “non-entrepreneurial” (47%). Seventy-four percent of the
organizations that identified as entrepreneurial (N=140) are currently operating one or
more earned-income venture as show in [Table 13]. Interestingly, the majority of those
that said they were “not-entrepreneurial” (56% of N=129), also indicate they are
currently operating one or more venture.
Table 13: The Relationship between "Entrepreneurial" and Operating an EIV
80%
60%
40%
20%
0%
Currently operating Never operated
1 or more EIV an EIV
Yes 74% 26%
No 56% 44%
According to Dart’s typology (Dart, 2004a), nonprofits engage in “business-like”
behavior in terms of four distinct categories: goals, service delivery, management, and
organizational rhetoric. While some use “business-like” and “entrepreneurial” to mean
the same thing, there appears to be an important distinction between these two concepts
when applied to nonprofit organizational behavior.
The primary value of Dart’s framework for the sake of this study is the concept of
business-like “rhetoric.” When examining the responses to the open-ended survey
questions, there are inherent limitations to distinguishing entrepreneurial “rhetoric” from
behavior. Nonetheless, the following themes emerged from the 140 responses collected.
The clearest theme of what it means to be “entrepreneurial” relates to the act of
operating or managing an earned-income venture. This includes activity which Dart’s
topology would classify as “service delivery,” yet also includes activities outside of the
nonprofits’ typical programs and services.
When asked about entrepreneurial strategies, nonprofit leaders cited a wide range
of ventures that involve outputs of goods ors services in exchange for money, including:
selling products retail and wholesale (such as souvenirs, food, poinsettias and art),
purchasing and renting property, staging concerts and events, licensing, and charging fees
(often on a sliding scale). A small group of respondents also included planning for an
EIV as “entrepreneurial.” Examples of these entrepreneurial planning responses included:
“looking into marketing a specialty food product,” “looking into construction and
management of an office building,” and “planning to sell teacher training programs to
schools and districts.”
The second theme consistent with Dart’s framework is the use of
“entrepreneurial” as a more general approach to work and managerial decision making.
Responses were exemplified by the following: “remaining flexible so that we may
quickly and effectively address new opportunities and needs,” “always improving,”
“developing and implementing innovative programs based on market and demographic
trends and customer feedback,” and “moving swiftly and adroitly, using the materials we
have at hand, outsourcing services… using the internet to our advantage.”
The third theme is related to entrepreneurial activities described as “innovative”
or “unique” behavior. This seems to be the key distinction of business-like and
entrepreneurial and thus has no direct relation in Dart’s framework. For those that used
entrepreneurial in the “unique” sense, they described their organizations as the only one
in the state, or the country to focus on doing what they do or working with their specific
population. For others it involved a unique approach to partnering and collaborating with
other nonprofits, with businesses, or with the government.
Typifying how some consider their organizations as entrepreneurial, despite never
having operated an earned-income venture, one leader said her nonprofit was:
entrepreneurial as a grassroots organization when it originated over 30 years

ago…[and] it continues to be entrepreneurial under the current leadership
emphasizing business and financial strategies which includes honest evaluation of
program effectiveness, resource usage and collaboration to deliver both efficient
and innovative programs.
Another in the same “never-ventured” category described his organization as
entrepreneurial because it: “uses grant funds and specified donations as 'venture capital'
to try and test new program ideas.” Although he went on to say, “we are not
entrepreneurial in the more traditional sense of developing small business opportunities
or impacting economic conditions.”
At the other end of the spectrum, the leader of an organization that is currently
operating more than two earned-income ventures, said:
Even if we could, we would not offer our programs completely for free because
people would not value them. Earning money from programs is just a matter of
fact…We don't think of it as being entrepreneurial at all. But we would fail if we
didn't charge for programs because we do not have enough un-earned income to
sustain operations and because donors would be less supportive if they thought
everyone was getting a free ride.
Examination of the ways in which nonprofits use “entrepreneurial” indicates that
earned-income strategies are the primary definition of what it means to be
entrepreneurial. Yet for some, as evidenced by the last quote, earning income alone is not
necessarily entrepreneurial. There are at least three other distinct ways that nonprofits
characterize their behavior as “entrepreneurial.” These include: planning to operate an
earned-income venture, a general approach to work and decision making, and “unique”
and “innovative” behavior. Thus in the nonprofit sector, as in the for-profit sector (as
discussed in the Definitions section) there still appears to be significant debate about
what it means to be truly “entrepreneurial.”
Useful Support and Assistance

As shown in [Table 14] and [Table 15] both organizations currently operating
ventures (65% of N=118) and those that have never, but are interested in operating
ventures (86% of N=64) indicate that “access to capital / financial resources” would be
the most useful types of support and assistance to help them launch and sustain their
ventures. Peer support, mentoring and workshops/seminars rate last for both groups.
Table 14: How Useful Various Types of Support and Assistance Would Be to
Organizations Currently Operating EIVs
80%
60%
40%
20%
0%
Capital/ Technical Business
Market Peer Workshop/
financial assist/ plan Mentoring
research support seminars
resources consulting assistance
not 2% 8% 6% 5% 11% 13% 9%

somewhat 13% 22% 30% 37% 38% 41% 44%
very 86% 70% 64% 58% 52% 47% 47%
Table 15: How Useful Various Types of Support and Assistance Would Be to Organizations
That Have Never, But Are Interested In Operating an EIV
80%
60%
40%
20%
0%
Capital/ Business Technical
Market Workshop/ Peer
financial plan assist/ Mentoring
research seminars support
resources assistance consulting
not 15% 15% 15% 14% 18% 29% 23%

somewhat 21% 31% 40% 44% 45% 36% 45%
very 65% 54% 45% 42% 37% 35% 32%
Recent Rhode Island Developments

Three recent developments in Rhode Island’s nonprofit sector are worth
mentioning as they relate to earned-income ventures. One organization has emerged as a
finalist in a national business plan competition, a group of business students recently
helped write business plans for five earned-income ventures, and other nonprofits have
joined together to form a learning community on the topic of social enterprise. The
following section outlines the story of each of these developments.
Amos House, Providence in National Business Plan Competition
Amos House is a social service organization located in Providence that provides
“hospitality and direct services to the homeless and poor of Rhode Island”(Amos House,
2005). Amos House recently launched a “new micro business” called Amos House
Works that that provides job training programs for clients and healthy meals for area
schools and other customers. Their catering venture was recently selected as a finalist
from over 450 entrants in the National Business Plan Competition for Nonprofit
Organizations organized by the Yale School of Management – the Goldman Sachs
Foundation Partnership on Nonprofit Ventures.
MBA Students Partnering with Nonprofits to plan EIVs
While most of their business school peers were focused on learning how to
maximize profits, this spring, a group of University of Rhode Island MBA students spent
their final semester learning how to apply financial ratios and marketing techniques to
help nonprofit organizations. Five teams of students from Professor Deborah Rosen’s
Marketing course teamed up with local nonprofits to write business plans for their
earned-income ventures. These ventures include: a rest-stop cafe which will be opening
up along the state’s busiest bike trail operated by Corliss Institute, a service and job-
training organization focused on Rhode Island’s deaf community; and a plant design and
care service for corporations that may be launched soon by GroundWork Providence.
Rhode Island Nonprofits Engaged in Learning Community
A group of seven Rhode Island nonprofit organizations have joined together to
form a learning-community to jointly explore issue of social enterprise. “We anticipate
that through shared research, reflection, and analysis we will be able to embark on more
successful enterprises ourselves thereby strengthening our organizations and ultimately
better serving our clients and meeting our missions” writes the facilitator, MJ Kaplan, of
Kaplan Consulting (2005). Led by Carol Malysz, Director of the Center for Women and
Enterprise, and coordinated by Deborah Schimberg of Social Venture Partners of Rhode
Island, the group recently applied for a planning grant through Third Sector New
England.
Rhode Island Compared to the National Sample
In order to compare Rhode Island to the rest of the nation, bivariate cross-
tabulations, chi-square tests, and logistic regressions were run on both the Rhode Island
sample and the raw data from the national Massarsky-Beinhacker (Massarsky &
Beinhacker, 2002) study. Both data sets were coded to match the variables described in
[Table 16] and responses that had missing data for any of these variables were removed.
The resulting samples were comprised of 260 cases for Rhode Island and 389 cases for
the national sample.
Table 16: Description of Variables
Variable Name Description Answer Choices

EIV (dependent) operating an earned-income Never = never operated an EIV5
venture Currently = currently operating 1 or more
EIV
Entrepreneurial does respondent consider Yes
organization to be No
“entrepreneurial”
Program organization’s primary arts = Arts/Culture/Humanities
program area educ = Education
enviro = Environment/Animals
health = Health
hservice = Human Services
pub = Public/Society Benefit
relig = Religion
Other
Budget total budget size for the < $250K
organization $250–$999K
$1-$5M
>$5M
age total number of years <5 years
organization has been in 6-10 years
operation 11-20 years
>20 years
5
Note: The data associated with the answer choice, “operated one or more earned-income ventures in the
past, but not currently” was excluded from this model.
Rhode Island Descriptive Statistics
Of the relevant Rhode Island sample, 66% (N=260) of the organizations report
that they are “currently operating an EIV” and only 34% report that they have “never
operated an EIV.” There are an almost even number of those organizations that identify
as “entrepreneurial” (53%) as those that indicate they are not (47%). “Human services”
organizations make up the largest program area category (22%), and “religious”
organizations only comprise 2% of the sample. Organizations that are at least 20 years
old account for 51% of the population, and organizations that are 6-10 years old make up
only 13% of the sample. Organizations with budgets less than $250,000 are the most
represented category of budget size with 44%, and organizations with the largest budgets,
over $5 million, only account for 12% of the sample.
National Descriptive Statistics

Of the comparable national sample (N=389), 48% of the organizations report that
they are “currently operating an EIV” and 52% report that they have “never operated an
EIV.” Organizations that identify as “entrepreneurial” are the clear majority (75%) as
compared to only 25% that indicated they are not “entrepreneurial.” As with the Rhode
Island sample, “Human services” organizations make up the largest program area
category (32%), and “religious” organizations comprise the smallest group at 4% of the
sample. Also similar to the Rhode Island sample, organizations that are at least 20 years
old account for the largest age category, 36% of the national sample, and organizations
that are 6-10 years old comprise the smallest group in the national sample at only 17%.
Organizations with budgets less than $250,000 are the most represented category of
budget size with 33%, and organizations with the largest budgets, over $5 million, only
account for 20% of the sample.
Bivariate Cross-Tabulations and Chi-Square Tests
Before using logistic regression to control for the effects of independent variables,
Cross-Tabulations and Chi-Square tests were used to examine the influence of the each
question variable on the outcome variable, and test for statistical significance. The
following descriptions are grouped by variable, and include explanations of the Rhode
Island and national samples.
“Entrepreneurial” Organizations
Among the Rhode Island organizations in this sample, 75% of those that identify
as “entrepreneurial” report currently operating an EIV compared to only 55% of those
that are not “entrepreneurial. Pearson chi2(1) = 10.7208 Pr = 0.001 indicates that this is a
significant difference, greater than would be observed by chance alone.
In the national sample, only 57% of those that identify as “entrepreneurial” report
currently operating an EIV and only 20% of those that are not “entrepreneurial.” This is
also a statistically significant difference as indicated by a Pearson chi2(1) = 42.4184 Pr =
0.000.
Program Area
In the Rhode Island sample, organizations with either program areas focused on
“Arts / Culture / Humanities” and “Public / Society Benefits” are the most likely to be
operating earned-income ventures with 78% of N=37, and 77% of N=26 respectively.
Organizations with “religious” program areas are the least likely to be operating EIVs,
33% of N=6, and religious organizations are the only organizations with more that have
“never” operated an EIV than those that they are “currently” operating an EIV. Pearson
chi2(7) = 10.9145 Pr = 0.142 indicates that the difference of an organizations’ likelihood
in operating an EIV across program areas is no greater than might be observed by chance
alone.
Nationally, there is also no statistically significant difference across program area
as indicated by the Pearson chi2(7) = 12.9835 Pr = 0.073. However, “arts / culture /
humanities” organizations are again the most likely to be operating EIVs with 75% of
N=40, and “religious” organizations are the least likely with 75% of N=20.
Age of Organizations
From the Rhode Island sample, the age of an organization appears to be a
significant factor in their likelihood in operating a venture. Even among the youngest
organizations, those that are less than 5 years old, 41% (N=44) report that they are
currently operating an EIV. Of the organizations which are over 20 years old, almost 75%
(N=135) report that they are currently operating an EIV. Pearson chi2(3) = 21.2400 Pr =
0.000 indicates that this difference is significant.
In the national sample, only 32% (N=146) of the organizations that are less than 5
years old, report currently operating an EIV. This is also a statistically significant
difference as indicated by a Pearson chi2(3) = 13.9045 Pr = 0.003.
Budget
Among the Rhode Island organizations, those with medium-sized budgets
($250,000-$999,000 and $1-4.9 million) are the most likely to be operating EIVs, with
76% of N=78 and 68% of N=38). Organizations with the smallest budgets, of less than
$250,000 are the least likely to be operating EIVs with 58% of N=115. Pearson chi2(3) =
7.1203 Pr = 0.068 indicates that there is not a significant difference across budget
categories.
In the national sample, there appears to be a linear relationship between budget
size and likelihood of operating an EIV. Organizations with the smallest budgets, of less
than $250,000 are the least likely to be operating EIVs with 45% of N=170.
Organizations with the largest budgets are the most likely to be operating EIVs, with
64% of N=94 currently operating EIVs. Pearson chi2(3) = 38.8190 Pr = 0.000 indicates
that there is a significant difference across budget categories at the national level.
Logistic Regression
The advantage of logistic regression is the ability to control for certain factors to
determine if other factors still have significant effects on an organization’s likelihood of
operating an earned-income venture. The following section discusses the results of the
regression tests and run on the Rhode Island [Table 31] and national [Table 32] samples
by variable categories. With only one exception, the findings at the national and Rhode
Island levels were directionally identical.6 While the magnitude varied, once controlling
for other variables, the factors associated with operating an EIV at the Rhode Island and
national level appear to be similar. Once the results were pooled, and all variables were
controlled for, Rhode Island organizations appear to be significantly more likely to be
operating earned-income ventures than the national comparison group. As shown in
6
In the case of directional variance, the organizations with the largest budgets (over $5 million) in Rhode
Island were actually the least likely of the budget categories, to be operating earned-income ventures.
However, this finding was not statistically significant. [Table 32] and [Table 33]
[Table 33] national organizations were only .33 times as likely to be operating earned-
income ventures and this finding was statistically significant at the p<.01 level.
“Entrepreneurial” Organizations
In both the Rhode Island and the national samples, organizations that identified as
“entrepreneurial” were more likely to be operating earned-income ventures, once we
controlled for program area, age, and budget size. In Rhode Island, “entrepreneurial”
organizations were 2.8 times more likely to be operating an EIV than “non-
entrepreneurial” organizations. At the national level, organizations that self-identify as
“entrepreneurial” were 5.6 times more likely. Both of these findings are statistically
significant at the p<.01 level.
Program Area
As shown in [Table 17], compared to “Arts / Culture / Humanities” organizations
all seven other program areas are less likely to be operating earned-income ventures at
both the Rhode Island and National Level. This is only statistically significant for four
out of the seven categories at the national level, and two out of seven at the local level,
yet the consistency of the directional finding is noteworthy.
Table 17: Program Area - Odds of Operating an EIV at the National and Rhode Island Level
(Reference Category = Arts / Culture / Humanities)
1.0
0.5
0.0
Education Enviro Health Hum Serv Pub Ben Religion Other
National 0.2 0.5 0.4 0.3 0.4 0.2 0.4
Rhode Island 0.4 0.4 0.3 0.4 0.8 0.1 0.2
Age of Organizations
In general, older organizations are more likely to be operating earned-income
ventures as shown in [Table 18]. At the national level, none of the age categories are
significantly different, but in the Rhode Island sample, there is a linear trend and the two
oldest categories are significantly more likely to be operating EIVs than the youngest
group (used as the reference category).
Table 18: Age - Odds of Operating an EIV at the National and Rhode Island Level
(Reference Category = < 5 years)
5.0
4.0
3.0
2.0
1.0
0.0
6-10 years 11-20 years >20 years
National 1.0 1.6 1.3
Rhode Island 1.2 3.0 5.0
Budget
Similar to age, as budget size increases, organizations are more likely to be
operating ventures, as shown in [Table 19]. This is particularly true at the national level
where organizations with budgets of less than $250,000 are significantly less likely to be
operating ventures. Organizations with budgets of $250-$500,000 are 2.5 times more
likely to be operating EIVs and those with over $5 million budgets were 4.6 times more
likely to be operating ventures than the organizations with the smallest budgets. At the
Rhode Island state level, the relationship between budget and likelihood of operating an
EIV were not statistically significant.
Table 19: Budget - Odds of Operating an EIV at the National and Rhode Island Level
(Reference Category = < $250k)
5.0
4.0
3.0
2.0
1.0
0.0
$250-$999K $1-$5M > $5M
National 2.6 2.5 4.6
Rhode Island 1.5 1.1 0.9
Limitations
This study has several limitations that should be considered when interpreting the
results. The primary limitations are threats to internal validity concerning sample bias,
and the reliability of the instrument. Caution should therefore be used when attempting to
generalize these findings to the larger population of nonprofit organizations.
Sample biases may have resulted from the use of the open-invitation method,
rather than stratified or random sampling techniques. While a random sampling technique
may have had some advantages, as discussed in the Methods section, the entire
population of nonprofits in Rhode Island could only be estimated. Therefore, even a
random sample of this population would have resulted in a biased population, specifically
excluding those organizations that are not in any of three databases used for outreach.
Stratification sampling of this population along relevant demographics, such as budget
size and program area might have also been preferable, however, there is no known
database that has accurate records of this information.
The relatively short amount of time the survey was active may have also biased
the sample. A previous national study on nonprofits suggested that “older, larger, and
organizations more reliant on contributions take longer to return a survey” (Hager, 2002,
p. 9). Additionally, as [Table 20] shows, there was a small surge in responses during the
last two days the survey was available online. This suggests that with more time there
might have been more responses.
Table 20: When Respondents Completed the Web-Based Survey
30%
20%
10%
0%
3/2 3/3 3/4 3/5 3/6 3/7 3/8 3/9 3/10 3/11 3/12 3/13 3/14 3/15
% 26% 9% 9% 3% 1% 7% 18% 6% 3% 4% 1% 1% 6% 5%
As shown in [Table 21], 54% of respondents found out about the survey through
email. This suggests that all participant recruitment efforts were not equally effective.
Because email invitations were available for less than half of the total population, this
could have significantly biased the results towards those organizations which received the
email invitation. The web-based nature of the survey may have also biased the results
towards organizations with greater access to technology.
Table 21: How Respondents Found Out About the Survey
60%
40%
20%
0%
Friend/
Email Postcard Website Newspaper Other
Colleague
56% 33% 3% 1% 3% 4%
Additionally, the reliability of the survey instrument has not been empirically
tested. As discussed in the Methods section, the survey instrument for this study was
based on an instrument used in the Massarsky & Beinhacker (2002) national study which
to the knowledge of the researcher has not been tested.
As [Table 22] shows, there was a high rate or respondents that started, yet did not
fully complete the Web-Based Survey (43% of N=370). In this case “complete” meant
that the respondent reached the end of the survey, as opposed to actually providing an
answer to every question. Some the “completes” therefore included questions that were
left blank at the respondents’ discretion. The “incompletes” are assumed to be unfinished
as a result of the length of the survey rather than any meaningful difference between the
organizations that completed the survey and those that did not complete the survey. For
the descriptive statistics, the “incompletes” were included with the “complete” responses,
which explain the varying sample size. For the statewide and national regression models,
any cases with blank answers for the question variables were systematically excluded.
Table 22: Complete vs. Incomplete Responses to the RI Web-Based Survey
60%
“Complete” %
1. Yes 57 40%
20%
2. No 43
0%
N=369
1 2
The relatively low number of respondents that indicated they were “not currently
but had operated 1 more ventures in the past,” (6% of total N=285) lends credibility to
the assertion that “failing organizations are less likely to volunteer [for this type of study]
than successful ones -- and ventures that have already closed their doors never do
[respond to surveys]” (Foster & Bradach, 2005, p. 95). While information was collected
on these organizations, it was not analyzed for this study.
While some inferential statistics were used, the value of this study is largely in the
descriptive power of the findings as a benchmark for future research. Recommendations
for future studies concerning this topic include: systematically testing the reliability of the
survey instrument, considering random or stratification sampling techniques, and
identifying a way to empirically test “complete” vs. “incomplete” responses.
Some of the results reported here appear to support and extend previous research
findings. At the very least, the consistency of these findings suggests that earned-income
ventures and entrepreneurial nonprofits merit further systematic exploration. However,
because of the limitations outlined here, the findings in this report should be interpreted
and generalized with due caution.
Ethical Considerations
The protocol for this study received approval through the Institutional Review
Board (IRB) at Brown University on February 2, 2005. It was determined to be exempt
(category two) from the regulations at 45CFR46 regarding the use of human subjects in
research. According to the IRB, the other methods of data collection, including the
Interviews with Supporting Organizations and the Web-Based Survey did not warrant
review. However, in accordance with common ethical research guidelines, informed
consent forms [attachment 4] were used to explain issues of confidentiality to all
interviewees and survey participants. Detailed measures were taken to ensure the privacy
and confidentiality of all subjects for the wed-based survey, including password
encrypted files and secure storage. According to IRB ethical guidelines for internet
research, “online survey instruments must explain at the outset what options are
available, if any, for retrieving and discarding responses, and must allow “no response”
as an option for every question” (Hicks, 2004). While the technology of skip-logic
required a few specific questions to be mandatory, all other questions were optional.
For the interviews, each participant was made aware that the purpose of the
interviews was to collect profile information which could be specifically attributed to
individuals and organizations, and therefore the interviews were not considered
confidential. At the time of this publication, there are no known or anticipated risks to
any of the research subjects or their organizations as a result of their association with this
study.
Conclusions
A fundamental shift is occurring in the nonprofit sector. This examination of 329
Rhode Island nonprofits demonstrates that a wide variety of them are operating earned-
income ventures to support their programs, generate positive community relations, and
help move their organizations towards self-sufficiency. It is also noteworthy that Rhode
Island organizations are operating ventures at three times the rate of a comparable
national sample. These organizations generally self-identify as “entrepreneurial” and are
engaged in a variety of ventures as diverse as selling farm produce, operating a graphic
design studio, running a restaurant and piano bar, managing a revolving loan fund, and
leasing commercial and residential property.
This study extends the work of previous research by focusing on one state, using
statistical analysis to determine how organizational factors are related to an
organization’s likelihood of operating an earned-income venture, and then compares the
statewide results to a national sample. Across 17 out of 18 categories, the Rhode Island
and national samples indicate similar trends in characteristics such as the age, program
area, and budget size of organizations operating ventures.
For some nonprofits earned-income is nothing new, and like the rest of the nation,
Rhode Island has a long history of nonprofits operating earned-income ventures. This
study demonstrates the remarkable extent to which nonprofits are currently adopting this
form of revenue creation, characterizes the breadth of the organizations now operating
these ventures, and highlights support needed to continue to grow the social enterprise
sector.
Many organizations that are not currently operating ventures are interested in
doing so, yet are limited by access to resources. One survey respondent contacted the
researcher to add:
We all could use money, but in this day and age… grants are hard to come by. Is
there any way that non-profits could apply for low-interest loans to
cover initial start-up expenses…? If the income generating proposals are strong
enough to be worthy of a reasonable loan, repayment of the loan is a given.
This suggests that targeted funding in the form of loans and grants could help nonprofits
interested in developing ventures.
Survey respondents also indicated that they generally lack information regarding
the potential implications of venturing on their legal and tax status. This suggests that
educational literature, programs and workshops could be beneficial to organizations
interested in venturing.
An example of one local resource addressing both the education and funding
issues is the Rhode Island Economic Development Corporation (EDC). Michael
McMahon, the Executive Director, indicates that the EDC has recently provided two
ventures with seed capital, and he also notes that the EDC has a largely untapped “talent
pool to help write business plans, and a staff with a wealth of managements expertise
who can help advise [nonprofits interested in venturing]” (McMahon, 2005). This type of
support and partnership has the potential to dramatically affect the way nonprofits
operate.
While it may be too soon to tell if the sea change towards earned-income is
ultimately a good thing for the nonprofit sector - or society as a whole - this study
demonstrates promising signs that this shift is being embraced by nonprofits. Staff
members from the organizations operating these ventures indicate that they are having
overwhelmingly positive effects on their organizations. According to former nonprofit
director and current Rhode Island Secretary of State, Matt Brown, “it is a good thing that
people are exploring [earned-income ventures]. The work that the nonprofit sector does is
so important…. as a society we have to figure out a sustainable way to fund it” (M.
Brown, 2005).
While this research is exploratory, it provides the first comprehensive glimpse
into the trend of social enterprise within a state’s nonprofit sector. What is occurring in
Rhode Island appears to be sea change in the way nonprofits operate. Hopefully this data
can help enhance our understanding of the development of this vital sector and serve as a
guidepost for future research about nonprofits and earned income ventures.
Suggestions for Future Research

The value of this data will only grow as it can be compared to similar activities of
nonprofits in other states. Thus, the primary suggestion for future researchers is to
conduct similar surveys in other states and then compare across states. Other suggestions
include: empirically test the reliability of the survey instrument used in this study;
analyze mission drift vs. natural evolution of an organization’s mission as a result of
earned-income ventures; and continue to survey stakeholders other than nonprofit staff
members about the perceived benefits of earned-income ventures.
Attachments
1. Interview Participants
Category Name Title Organization
Associate Professor of
Academic Sandra Enos, Ph.D. Rhode Island College
Sociology
University of Rhode Island
Academic Deborah Rosen, Ph.D. Kingston MBA Director
Business School
Director of Retail
Funder Peter Walsh Lending and Community Bank Rhode Island
Relations
Funder Tony Maione President / CEO United Way of Rhode Island
President/ South Providence Development
Nonprofit Joe Newsome
Executive Director Corporation
Nonprofit Brenda J. Clement Executive Director Housing Network of Rhode Island
Arts & Business Council of

Nonprofit Peter Bramante Executive Director
Rhode Island
Nonprofit David Dean Executive Director Edward King House
Wood Pawcatuck Watershed
Nonprofit Lori Urso Executive Director
Association
Director, Funds
Nonprofit Michele R. Berard, CFRE Butler Hospital
Development
Director of Vocational
Nonprofit Joseph Potenza Crossroads RI
Services
President/CEO/ Creative Television of Rhode
Nonprofit Dennis K. Evans
Webmaster Island, Inc.
Acting President & CEO;
Nonprofit David Piccerelli WSBE-TV
CFO
Nonprofit William Monahan Executive Director Cookie Place Inc.
Nonprofit Daniel Vellucci Project Leader Scene Teens
Nonprofit Loriana De Crescenzo Executive Director Opera Providence
Jewelry District Association/ New

Support / Board Member / CEO,
Robert Leaver Commons / Entrepreneurship
Nonprofit Sr. Consultant
Forum of New England
Support / Knowledge Exchange Center of
Milinda Butterworth Executive Director
Nonprofit Rhode Island
Support /
Eileen M. Moser Advisory Board Member The Nonprofit Institute
Nonprofit
State Matt Brown Secretary of State State of Rhode Island
Housing Resources State of Rhode Island Housing

State Ray Neirinckx
Coordinator Resources Commission
Rhode Island Economic

State Michael McMahon Executive Director
Development Corporation
2. Interview Guide for Nonprofits
For nonprofit organizations currently operating (or planning to operate) 1 or more earned income venture(s).
Note to all interviewees: The primary objective of this interview is to gather information on the story behind your
organization’s experiences operating (and/or planning) an earned-income venture in Rhode Island.
The interview will last about 30 minutes and will focus on the following:
1. Primary motivations for starting an earned-income venture

2. Alignment of venture with the mission of organization
3. Impact (real or anticipated ) on the organization as a whole
4. Unexpected outcomes (positive or negative)
5. Measurement and Reporting of success of the venture
6. Most challenging and rewarding experiences in planning/operating venture
7. Resources (books, websites, workshops, conferences, supporting organizations, colleagues, etc.) that
helped launch/sustain the venture
8. Resources not currently available that would be helpful
9. Advice for other nonprofits considering launching an earned- income venture
3. Interview Guide for Supporting Organization
For supporting organizations (local funders, consultants, and academics in the field).
Note to all interviewees: The primary objective of this interview is to gather information on the entrepreneurial
strategies and earned-income ventures undertaken by nonprofit organizations within Rhode Island.
The interview will last about 30 minutes and will focus on the following:
1. Your experiences with nonprofits in Rhode Island, and specifically:

a. any operating earned-income ventures
b. any you consider to be entrepreneurial
2. The impact earned-income ventures or social enterprises have on the organizations operating them
3. Characteristics of the organizations which you feel are succeeding
4. Characteristics of the organizations which you feel are struggling
5. Any unexpected outcomes you might have observed for the organizations, their stakeholders or the
community as a whole as a result of operating an earned-income venture
6. Resources you know of (books, websites, workshops, conferences or supporting organizations) that have
helped organizations launch or sustain earned-income ventures
7. Resources not currently available which you think might be helpful
8. Any advice you have for nonprofits that are considering launching an earned-income venture
4. Informed Consent Form
Rhode Island Nonprofit Survey

Informed Consent Statement for Interviews
Last updated: 3/10/2005
This is a Brown University research study in collaboration with Social Venture Partners
of Rhode Island and the Rhode Island Foundation.
The purpose of this interview is to learn more about your organization’s efforts operating and/or supporting social
enterprises. Information you provide in this interview may be attributed to you and your organization in our final
report which will be publicly distributed. If you do not wish to have your statements attributed to you or your
organizations, please let the interviewer know.
Participation in this research study is entirely voluntary, and you are under no obligation to participate.
There are no known or anticipated risks to you from participating in this research. Refusing to participate or
discontinuing the interview, will involve no penalty or loss of benefits to you which you are otherwise entitled and
will not affect your relationship with any of the organizations conducting this research. You may discontinue the
interview at any time, and you may choose not to answer any questions.
Each interview participant will receive:

1. A link via email to download electronic copy of the report;
2. A chance to be profiled in the report.
The full transcript, notes, and/or any recording of this interview will be kept confidential. All personally and
organizationally identifiable information will be removed, coded, and stored separately from your responses. These
data and codes will be stored in separate locked files accessible only to the principal investigator.
If at any time you have questions about your rights related to this research, please contact: Susan Toppin or
Dorinda Williams at the Office of Research Administration, Brown University, Box 1929, Providence RI, 02912.
Phone: 401-863-2777.
For any other questions about this research project, please contact the Principal Investigator, Seth Marbin of Brown
University by email at Seth_Marbin@brown.edu.
Do we have your permission to create an audio recording of this interview to assist in accurate note-taking?
( ) Yes ( ) No
By signing below you indicate you are over 18 years old, and that you have read and understood this information.
Print Name ___________________ Signature __________________ Date _______
5. Postcard
6. E-mail
From: Seth Marbin

Sent: Tuesday, March 01, 2005 11:00 PM
To: RI Nonprofit Leaders
Subject: An invitation for RI Nonprofit Leaders
RI Nonprofit Leaders:
You are invited to participate in a statewide survey for all 501(c)(3) organizations.
To join in, visit our website before March 15, 2005: http://www.rifoundation.org/svpri/survey.asp
This research study is being conducted by Brown University in collaboration with Social Venture Partners of
Rhode Island and The Rhode Island Foundation, and with assistance from The Yale School of Management –
The Goldman Sachs Foundation Partnership on Nonprofit Ventures.
This survey is for you, if you have ever:

> Thought about diversifying your funding base
> Tried to generate revenue to support your social mission
> Operated an earned-income venture or social enterprise
The purpose of this research is to learn about the entrepreneurial and revenue-generating activities of nonprofits
in our state. This study will be the first of its kind comparing one state's efforts to a national research study.
If you want your organization to be represented and possibly highlighted in our final report, complete the
brief online survey by March 15th at 5 pm.
All respondents have a chance to win valuable prizes!
For more information, visit our website: http://www.rifoundation.org/svpri/survey.asp
If you know of a RI nonprofit leader who did not receive this invitation, please help spread the word by forwarding
this email to your colleagues.
For any questions about this research study, please contact the Principal Investigator, Seth Marbin via email at:
smarbin@alumni.brown.edu or reply to this message.
This email is intended for leaders of nonprofit organizations operating within the state of Rhode Island who have
an established relationship with one or more organizations named above. If you are no longer affiliated with a RI
nonprofit or if you do not want to receive any more information about this study, please reply with "no thanks" in
the subject line and your address will be cleared from our list.
7. Media Release 1
The Rhode Island Foundation

One Union Station - Providence, RI 02903
401.274.4564 - www.rifoundation.org
MEDIA RELEASE: Monday, March 7, 2005
For more information: Rick Schwartz, 401-274-4564; 401-331-8085 (fax); jcohoon@rifoundation.org
Wanted: a few good nonprofits that have started – or are thinking of starting – business enterprises
Survey underway through March 15 seeks to compare statewide efforts to a national study
A Rhode Island survey hopes to uncover a growing entrepreneurial spirit among the state’s nonprofit
organizations.
“We’re looking for nonprofits at all stages of entrepreneurial thinking and development: some are just
exploring the idea of launching a social enterprise, and others already have successful business models. But we
also want to know why some nonprofits are not participating in this growing national trend!” says Brown University
Senior Seth Marbin, who is leading the research.
The Rhode Island Foundation and Social Venture Partners of Rhode Island (SVPRI) are also
collaborating on this study. SVPRI is a group of philanthropists committed to investing time, expertise, and money
in innovative nonprofits to strengthen their organizations and promote social enterprises.
“This study will be the first to focus on the revenue-generating activities of an entire state,” explains
Deborah Schimberg, Executive Director of SVPRI. “And we will be comparing the data from Rhode Island to
results from a national study,” adds Kris Hermanns, Program Officer of The Rhode Island Foundation.
The national data is being provided by The Yale School of Management – The Goldman Sachs
Foundation Partnership on Nonprofit Ventures, which runs the National Business Plan Competition for Nonprofits
Organizations and is also providing assistance for this research.
All tax-exempt organizations with 501(c)(3) status are eligible to take the survey currently available on
the web at www.rifoundation.org/svpri/survey.asp and “participants can even win prizes,” promises Marbin. “We
sent out invitations to 4,000 nonprofit organizations across the state, but there are more out there we haven’t
reached yet,” explains Marbin.
As an example of a local entrepreneurial nonprofit, Marbin points to Amos House, a Providence social
services agency which recently launched a catering business that provides job training programs for clients and
healthy meals for area schools and other customers. “What distinguishes Amos House is their detailed strategy to
use profits from the new catering business to support their established social programs,” says Marbin. Amos
House was recently selected as a finalist from over 450 entrants in the National Business Plan Competition for
Nonprofit Organizations.
“The findings of this study could help support entrepreneurial nonprofits like Amos House throughout
Rhode Island and nationwide,” says Marbin.
Marbin says he first learned about “social entrepreneurship” as an AmeriCorps member with City Year,
a national nonprofit recently cited by Fast Company Magazine as one of the top “25 organizations using creativity,
business smarts, and hard work to invent a brighter future.”
“I was surrounded by proactive leaders applying entrepreneurial skills and strategies to create positive
social change,” he remembers. After four years with City Year, Marbin came to Brown to study “social change
from an academic perspective,” he says. The vision for this research study was developed through conversations
between Marbin and his academic advisor Ann Dill, Director of the Public and Private Sector Organizations
program and Associate Professor at Brown University.
“Our report will be valuable if it increases understanding and awareness of entrepreneurial nonprofits,”
says Marbin. “They represent an alternative to what we have in America right now: businesses which are expected
to focus almost completely on financial profits, and nonprofits asked to solve our toughest social issues relying on
donations alone. ‘Social enterprises’ could be the best of both worlds, creating both social and financial value.”
Nonprofit leaders are invited to fill out the survey before it closes at 5 pm on March 15 and the final report
will be available in May on the SVPRI website at www.rifoundation.org/svpri/survey.asp.
###
The Rhode Island Foundation was founded in 1916 and is one of the nation’s largest and oldest charitable
organizations serving a specific geographic area.
8. Media Release 2
The News Service

38 Brown Street / Box R
Providence RI 02912
401 863-2476
Fax 863-9595
A second Media Release was sent out through the Brown University News Service on March 7th. This release
was identical to Media Release 1, with three exceptions: The main headline was replaced with “Nonprofit Leaders
Revealing Secretes of Business Enterprises;” the references to the Rhode Island Foundation were replaced with
references to Brown University; and the Foundation’s contact information was replaced with that of the principal
investigator: Seth Marbin, (phone) 401-465-0411 (email) smarbin@alumni.brown.edu
9. Providence Journal Article
Sunday, March 13, 2005

Entrepreneurial nonprofits invited to take part in study
The Rhode Island Foundation and Social Venture Partners of Rhode Island are collaborating on a study of
nonprofit agencies in the state that have started or are thinking of starting business enterprises.
All tax-exempt organizations with 501(c)(3) status are eligible to take the survey, available on the Web at
www.rifoundation.org/svpri/survey.asp. However, nonprofit leaders have only until 5 p.m Tuesday to complete the
survey.
An example of an entrepreneurial nonprofit is Amos House, a Providence social services agency which recently
launched a catering business that provides job training for clients and healthy meals for area schools and other
customers.
Brown University senior Seth Marbin is leading the research effort. He said that after four years as an AmeriCorps
member with City Year, he came to Brown to study social change. He believes social enterprises, such as Amos
House, can have social and financial value.
Available in print version and published online at:
http://www.projo.com/news/content/projo_20050313_nonprofit.2342ff7.html
10. Social Venture Partners of Rhode Island Website
Hosted online at: http://www.rifoundation.org/svpri/survey.asp
11. Transcript of WRNI Radio Announcement
Read by Mark Degon - March 15, 2005
Researchers are completing a survey of nonprofit organizations in Rhode Island today as part of an effort to
find out how they raise funds. Brown University researcher Seth Marbin says there are a growing number of
organizations that are supported by more than donations. "There is an assumption that nonprofits are only
looking for donations but many are now expanding and looking for ways to sell products and generate the
revenue they need." Researchers next plan to compare the results from Rhode Island to a national study.
12. E-Newsletter - RI Foundation
From: The Rhode Island Foundation [jcohoon@rifoundation.org]

Sent: Tuesday, March 08, 2005 11:33 AM
Subject: E-News from The Rhode Island Foundation
Wanted: business-minded nonprofits, to take an online survey by March 15
A Rhode Island survey underway through March 15 hopes to uncover a growing entrepreneurial spirit among
the state's nonprofit organizations.
"We're looking for nonprofits at all stages of entrepreneurial thinking and development. But we also want to
know why some nonprofits are not participating in this growing national trend," says Brown University Senior
Seth Marbin, who is leading the research. The Rhode Island Foundation and Social Venture Partners of
Rhode Island (SVPRI) are collaborating on the study.
All tax-exempt organizations with 501(c)(3) status are eligible to take the survey by clicking
www.rifoundation.org/svpri/survey.asp and "participants can even win prizes," promises Marbin. "We sent
out invitations to 4,000 nonprofit organizations across the state, but there are more out there we haven't
reached yet," explains Marbin.
As an example of a local entrepreneurial nonprofit, Marbin points to Amos House, a Providence social
services agency which recently launched a catering business that provides job training programs for clients
and healthy meals for area schools and other customers.
Take the survey before it closes at 5 PM on March 15.
Looking for additional resources? Check out the Foundation's Nonprofit Consultant Directory and our newest
resource, the Directory of Rhode Island's Nonprofits .
Want to learn more about the Foundation? Go to www.rifoundation.org.
To unsubscribe to this newsletter, click the link below: http://enewsletter.embolden.com/users/unsub.php?

Mem=48094&ConfirmCode=8123d3154a3a147e7070ac3cac56a30e
13. E-Newsletter - Knowledge Exchange Center
From: Knowledge Exchange Center of Rhode Island [executivedirector@kec.necoxmail.com]

Sent: Wednesday, March 09, 2005 2:49 PM
Subject: E-Newsletter for RI Non Profit Agencies
RI Nonprofit Leaders:
This research study is being conducted by Brown University in collaboration with Social Venture Partners of
Rhode Island and The Rhode Island Foundation, and with assistance from The Yale School of Management
– The Goldman Sachs Foundation Partnership on Nonprofit Ventures. This survey is for you, if you have
ever: > Thought about diversifying your funding base > Tried to generate revenue to support your social
mission > Operated an earned-income venture or social enterprise. The purpose of this research is to learn
about the entrepreneurial and revenue generating activities of nonprofits in our state. This study will be the
first of its kind comparing one state's efforts to a national research study. If you want your organization to be
represented and possibly highlighted in our final report, please complete the brief online survey by March
15th at 5 pm. For any questions about this research study, please contact the Principal Investigator, Seth
Marbin via email at: smarbin@alumni.brown.edu All respondents have a chance to win valuable prizes! To
join in, visit our website before March 15, 2005: http://www.rifoundation.org/svpri/survey.asp
14. E-Newsletter - Providence Dept of Art, Culture & Tourism
From: Lynne McCormack [lmccormack@providenceri.com]

Sent: Thursday, March 10, 2005 9:33 AM
Subject: This Week from the Dept. of Art, Culture & Tourism - March 10, 2005
Attention RI Nonprofits:
This survey is for you, if you have ever: thought about diversifying your funding base; tried to generate
revenue to support your social mission; or operated an earned-income venture or social enterprise. To
participate in the survey, visit the website here before March 15. The purpose of this research is to learn
about the entrepreneurial and revenue-generating activities of nonprofits in our state, and comparing them to
a national study. For more information contact Seth Marbin at smarbin@alumni.brown.edu
15. Survey
Informed Consent Statement

Participation in this research study is entirely voluntary. There are no known or anticipated risks to you from
participating. Refusal to participate or discontinuing participation will involve no penalty or loss of benefits to which
you are otherwise entitled, and you may discontinue participation at any time.
Each participant who fills out this web-based survey completely by March 15th, 2005 will be eligible to receive:
> A link via email to download an electronic copy of the report;
> A chance to be profiled in the report (if selected for a follow up interview);
> A chance to win one of 5 certificates for $25-off the next "New Business Ventures for Nonprofits Workshop";
hosted by SVPRI and run by The Grantsmanship Center;
> A chance to win one of 3 copies of "Generating and Sustaining Nonprofit Earned Income: A Guide to Successful
Enterprise Strategies" Edited by S. Beinhacker, C. Massarsky, and S. Oster. (List Price: $45)
Winners will be chosen at random from all eligible respondents and will receive their prizes by May 1, 2005.
Any information you provide on this survey will be kept confidential. Responses will be password protected,
separated from personally and organizationally identifiable information, and coded. These codes and passwords will
be accessible only to the Principal Investigator. Your answers will only be reported collectively with other responses
or quoted anonymously.
This survey is hosted by Zoomerang.com which will not collect or record your IP address. A standard cookie may be
placed on your computer for faster page loading. For a description of Zoomerang's privacy policy, please see:
Privacy Policy
If at any time you have questions about your rights related to this research, please contact: Susan Toppin or Dorinda
Williams at the Office of Research Administration, Brown University, Box 1929, Providence RI, 02912. Phone: 401-
863-2777 or Toll-Free: 1-866-309-2095.
For any other questions about this research project, please contact the Principal Investigator, Seth Marbin, of Brown
University by email at smarbin@alumni.brown.edu
# Question Answer Choices
Have you read and understood this Yes

1
Informed Consent Statement? No
Sorry!
In order to participate in this survey you must indicate that you have read and understood the Informed
Consent Statement.
Please use your browser's "back" button, or right click and choose "back" to return to question # 1.
For any questions about this research project, please contact the Principal Investigator, Seth Marbin, of Brown
University by email at smarbin@alumni.brown.edu
Arts/Culture/Humanities
Education
Environment/Animals - Environmental Quality, Protection &
Beautification
Environment/Animals - Animal Related
Health – General & Rehabilitative Services
Health – Mental Health, Crisis Intervention
Health – Multipurpose Associations/Services Associated with
Specific Diseases/Disorders/ Medical Disciplines
Which of the following best describes
Health – Medical Research
your nonprofit organization's program
2 Human Services - Public Protection: Crime & Delinquency
area? (please check the one category
Prevention, Legal Administration, Legal Services
that best applies.)
Human Services - Employment/Jobs
Human Services - Food, Nutrition, Agriculture
Human Services - Housing/Shelter
Human Services - Public Safety, Disaster Preparedness &
Relief
Human Services - Recreation, Leisure, Sports, Athletics
Human Services - Youth Development
Human Services - Multipurpose & Other
International Foreign Affairs
Public/Society Benefit - Civil Rights, Social Action, Advocacy
Public/Society Benefit - Community Improvement/Economic
Development/ Capacity Building
Public/Society Benefit - Philanthropy/Grantmaking
Foundations
Public/Society Benefit - Volunteerism
Public/Society Benefit - Science and Technology Research
Institutes/Services
Public/Society Benefit - Social Sciences, Research
Institutes/Services
Public/Society Benefit - Multipurpose & Other
Religion
Miscellaneous Mutual/Membership Benefit Organizations
Other (please specify):
Less than 1 year

1-5 years
How many years has your organization
3 6-10 years
been operating?
11-20 years
More than 20 years
0-10
11-20
Please indicate the number of full time 21-30
4 equivalent (FTE) staff in your 31-40
organization. 41-50
51-99
More than 100
What is your organization's mission?

5
(please describe below)
Less Than $50,000

$50,000 - $149,999
$150,000 - $249,999
$250,000 - $499,999
What is the size of your organization's $500,000 - $999,999
6
annual budget (from this fiscal year)? $1,000,000 - $2,499,999
$2,500,000 - $4,999,999
$5,000,000 - $11,999,999
$12,000,000 - $24,999,000
More than $25,000,000
An independent organization (with no chapters/affiliates)

A chapter/affiliate of a statewide organization
A chapter/affiliate of a regional organization
7 Which best describes your organization? A chapter/affiliate of a national organization
A chapter/affiliate of an international organization
The headquarters for an organization with chapters/affiliates
Local
Statewide
What is the geographic scope of your
8 Regional
organization?
National
International
Do you consider your organization to be Yes

9
entrepreneurial? No
In what ways is your nonprofit
entrepreneurial? What entrepreneurial
10
strategies are you using? (please
describe using the space below)
Has your organization ever operated an

earned-income venture?
Earned-income includes service-related

fees or tuition, product-related sales or
manufacturing, government contracts,
membership dues, cause-related Yes, currently operating 1 or more earned-income venture
marketing or licensing, renting or leasing Not currently, but operated 1 or more in the past
11
property, and other income generating Never operated an earned-income venture
activities.
Earned-income does not include

sources such as corporate, foundation or
government grants or subsidies,
contributions from individuals, or in-kind
donations of products or services.
Less Than $50,000

$50,000 - $149,999
$150,000 - $249,999
$250,000 - $499,999
What was your organization's total
$500,000 - $999,999
12 revenue (from all sources) in the last
$1,000,000 - $2,499,999
fiscal year?
$2,500,000 - $4,999,999
$5,000,000 - $11,999,999 $
12,000,000 - $24,999,000
More than $25,000,000
Foundation grants
Government grants
Corporate grants
Donations from individuals
What percentage of that total revenue Endowment income
came from the following sources: Investments
13 (Please enter a number in each box Government contracts
below to add up to 100%) Membership dues
(For any source which does not apply, Service-related revenue
please enter a "0"). Product-related revenue
Cause-related marketing or licensing
Renting or leasing property
Other
If you entered "Other" revenue please

14
specify the source
1
How many earned-income ventures is
15 2
your organization currently operating?
more than 2
Service-related (fees for service)

Please indicate the type(s) of earned- Product-related sales/manufacturing
16 income venture(s) your organization is Cause-related marketing/licensing
currently operating. (check all that apply) Renting/leasing property (e.g., building rentals)
Other, Please Specify
Please indicate the type of earned- Service-related (fees for service)
income venture which you are currently Product-related sales/manufacturing
17 operating which provides the greatest Cause-related marketing/licensing
social and financial benefits to your Renting/leasing property (e.g., building rentals)
organization (check one only) Other, Please Specify
Please briefly describe this earned-

18
income venture.
In-house operation
Separate nonprofit entity
19 What is the legal form of this venture?
Separate for-profit entity
Other (please specify)
How important are the following reasons Generate income/surplus for programs
for operating this earned-income Move organization towards self-sufficiency
venture? Please rate each reason on the Provide employment/training/therapeutic opportunities to
20 scale from 1 to 3 below. constituents
1= not important Generate positive community relations
2 = somewhat important Diversify revenue stream
3 = very important Help revitalize the neighborhood/community
If there are other reasons for operating

21
your venture, please specify.
To what extent do the goals of your

not at all
earned-income venture relate to the
a little bit
mission of your nonprofit organization?
22 somewhat
Please rate using the following scale
a lot
where 1="not at all" and 5="to a great
to a great extent
extent."
Executive Director
Who is responsible for managing your
23 Business Manager
Other (Please specify):
Masters in Business Administration (MBA)

Bachelor’s degree in business (B.A. or B.S.)
24 Associate’s degree in business (A.A. or A.S.)
this person's formal business training?
No formal business training
less than 1 year

1-2 years
For how long has your earned-income
25 3-5 years
venture been operational?
6-10 years
more than 10 years
Surplus from nonprofit's operating budget

Grant(s) from foundation(s)
Program-Related Investment(s) (PRI)
Board support (loan(s)/grant(s))
How was your venture initially funded?
26 Government grant(s)
(Please check all that apply)
Government loan(s)
Bank loan(s)
Corporate funding
Sale of property/assets
Private venture capital
Other (Please Specify):
Are you currently seeking additional Yes

27
funding for your venture? No

What sources of additional funding are Government grant(s)
28 you considering for your venture? Government loan(s)
(please check all that apply) Bank loan(s)
Corporate funding
Loss of $1 - $5,000
Loss of $5,001 - $10,000
Loss of $10,001 - $15,000
Loss of $15,001 - $20,000
Loss of $20,001 - $25,001
Loss of $25,001 or greater
For the last fiscal year, what was your $0 (Broke Even)
29
venture's financial net gain or loss? Gain of $1 - $5,000
Gain of $5,001 - $10,000
Gain of $10,001 - $15,000
Gain of $15,001 - $20,000
Gain of $20,001 - $25,001
Gain of $25,001 or greater
Don't know

If it ever operated at a net loss, which of
Government grant(s)
following sources were used to subsidize
30 Government loan(s)
your earned-income venture (check all
Bank loan(s)
that apply)
Corporate funding
N/A - venture never operated at a net loss
Please briefly describe how you

31 measure the financial impact of your
earned-income venture
How do you measure the social impact

32
of your venture?
Monthly
Quarterly
How often do you calculate the financial
33 Yearly
Return on Investment (ROI)?
Never
Do you formally calculate the Social

34 Yes
Return on Investment (SROI)?
No
If YES, please briefly describe how you
35
calculate SROI:
To what extent has your earned-income

venture had an impact on the following
Ability to attract and retain donors
aspects of your nonprofit organization?
Ability to attract and retain staff
Please rate each aspect using the scale
Ability to attract and retain volunteers
from 1 to 7 below.
Board leadership
1= very negative
36 Entrepreneurial culture
2 = negative
Mission of organization
3 = somewhat negative
Reputation of organization
4 = neutral/no impact
Service/program delivery
5 = somewhat positive
Self-sufficiency of organization
6 = positive
7 = very positive
How valuable would you find the

following types of support and Business planning assistance
assistance to help implement and Access to capital/financial resources
sustain your earned-income venture? Market research
37 Please rate each option from 1 to 3 on Mentoring
the scale below. Peer support
1= not valuable Technical assistance (hands-on consulting)
2 = somewhat valuable Workshops/seminars on earned-income venturing
3 = very valuable
Please describe any other type of

support or assistance that you would find
38
valuable to help implement and sustain
your earned-income venture
Less Than $50,000

$50,000 - $149,999
$150,000 - $249,999
$250,000 - $499,999
In your last complete fiscal year, what
$500,000 - $999,999
39 was your organization's total revenue
$1,000,000 - $2,499,999
(from all sources)?
$2,500,000 - $4,999,999
$5,000,000 - $11,999,999 $
12,000,000 - $24,999,000
More than $25,000,000
Foundation grants
Government grants
Corporate grants
Donations from individuals
What percentage of your total revenue Endowment income
came from the following sources: Investments
40 (Please enter a number in each box Government contracts
below to add up to 100%) Membership dues
Service-related revenue
Product-related revenue
Cause-related marketing or licensing
Renting or leasing property
Other
41 If you entered "Other" revenue please

specify the source
1
How many earned-income ventures has
42 2
your organization operated?
more than 2

Please indicate the type of earned- Product-related sales/manufacturing
43 income venture(s) your organization has Cause-related marketing/licensing
operated. (check all that apply) Renting/leasing property (e.g., building rentals)
Other, Please Specify
The following questions will ask you to comment on the 1 earned-income venture your organization operated
which provided the greatest social and financial benefits to your organization.
Please indicate the type of earned- Service-related (fees for service)

income venture which you operated Product-related sales/manufacturing
44 which provided the greatest social and Cause-related marketing/licensing
financial benefits to your organization Renting/leasing property (e.g., building rentals)
(choose one only) Other, Please Specify
Please briefly describe this earned-

45
income venture
In-house operation
Separate nonprofit entity
46 What is the legal form of this venture?
Separate for-profit entity
How important were the following

Generate income/surplus for programs
reasons for starting this earned-income
Move organization towards self-sufficiency
venture?
Provide employment/training/therapeutic opportunities to
Please rate each reason on the scale
47 constituents
from 1 to 3 below.
Generate positive community relations
1 = not important
Diversify revenue stream
2 = somewhat important
Help revitalize the neighborhood/community
3 = very important
If you had any other reasons for

48 operating your earned-income venture,
please briefly describe them
To what extent did the goals of your

not at all
earned-income venture relate to the
a little bit
mission of your nonprofit organization?
49 somewhat
Please rate using the following scale
a lot
where 1="not at all" and 5="to a great
to a great extent
extent."
Executive Director
Who was responsible for managing your
50 Business Manager
Other (Please specify):
Masters in Business Administration (MBA)

51 Bachelor’s degree in business (B.A. or B.S.)
this person's formal business training?
Associate’s degree in business (A.A. or A.S.)
No formal business training
less than 1 year ago

1-2 years ago
How long ago did you stop operating
52 3-5 years ago
your earned-income venture?
6-10 years ago
more than 10 years ago
less than 1 year

1-2 years
For how long was the venture
53 3-5 years
operational?
6-10 years
more than 10 years
Lacked personnel resources to develop and manage the

venture
Lacked financial resources to operate
Please indicate the reasons your Lacked board interest/support
organization is no longer operating any Decided venturing not part of our mission
54
earned-income ventures. (Check all that Concerned about exemption status and/or tax issues
apply.) Concerned about operational/financial risks
Restricted by funding
Never considered idea
Other reasons (please specify):

Government grant(s)
How was the venture initially funded?
55 Government loan(s)
(Please check all that apply)
Bank loan(s)
Corporate funding
Loss of $1 - $5,000
Loss of $5,001 - $10,000
Loss of $10,001 - $15,000
Loss of $15,001 - $20,000
Loss of $20,001 - $25,001
Loss of $25,001 or greater
For the last fiscal year it operated, what $0 (Broke Even)
56
was the venture's net gain or loss? Gain of $1 - $5,000
Gain of $5,001 - $10,000
Gain of $10,001 - $15,000
Gain of $15,001 - $20,000
Gain of $20,001 - $25,001
Gain of $25,001 or greater
Don't know

If it ever needed subsidy, which of the
57 following sources were used to subsidize
Government grant(s)
the venture (check all that apply)
Government loan(s)
Bank loan(s)
Corporate funding
N/A - venture never operated at a net loss
Please briefly describe how you

58 measured the financial impact of your
earned-income venture
How did you measure the social impact

59
of your venture?
Monthly
Quarterly
How often did you calculate the financial
60 Yearly
Return on Investment (ROI)?
Never
Did you formally calculate the Social Yes

61
Return on Investment (SROI)? No
If YES, please briefly describe how you

62
calculated SROI
To what extent has your earned-income

venture had an impact on the following
Ability to attract and retain donors
aspects of your nonprofit organization?
Ability to attract and retain staff
Please rate each aspect using the scale
Ability to attract and retain volunteers
from 1 to 7 below.
Board leadership
1= very negative
63 Entrepreneurial culture
2 = negative
Mission of organization
3 = somewhat negative
Reputation of organization
4 = neutral/no impact
Service/program delivery
5 = somewhat positive
Self-sufficiency of organization
6 = positive
7 = very positive
How valuable would you have found the

following types of support and Business planning assistance
assistance to help implement and Access to capital/financial resources
sustain your earned-income venture? Market research
1 = not valuable Technical assistance (hands-on consulting)
2 = somewhat valuable Workshops/seminars on earned-income venturing
3 = very valuable
What types of support or assistance not

65 listed above would have also been
valuable?
Did you write a Business Plan before

Yes
66 you launched your earned-income
No
venture?
Less than 3 months

How long did it take your organization to
67 3-6 months
develop the Business Plan?
7-12 months
More than 1 year
Organizational consultant(s)
Funder(s)
Lawyer(s)
In developing your Business Plan, who Accountant(s)
68 did you receive advice or feedback Volunteer(s) from the corporate sector
from? (check all that apply) Other nonprofit organization(s)
College/university faculty or student(s)
Current or potential clients/customers
Are you planning to launch any

Yes
69 additional earned-income ventures
No
within the next year?

70 income venture(s) you plan to launch Cause-related marketing/licensing
(Check all that apply.) Renting/leasing property (e.g., building rentals)
Lack personnel resources to develop and manage the

venture
Lack financial resources to launch
Please indicate the reasons your Lack board interest/support
organization has never operated an Venturing not part of our mission
71
earned-income venture (Check all that Concerned about exemption status and/or tax issues
apply.) Concerned about operational/financial risks
Restricted by funding
Never considered idea
Are you planning to launch any earned- Yes

72
income ventures within the next year? No

73 income venture(s) you plan to launch Cause-related marketing/licensing
(Check all that apply.) Renting/leasing property (e.g., building rentals)
Yes
Are you interested in starting an earned-
74 No
income venture?
Not Sure
How valuable would you find the

following types of support and
assistance to help implement and Business planning assistance
sustain your earned-income venture? Access to capital/financial resources
Market research
Technical assistance (hands-on consulting)
1= not valuable Workshops/seminars on earned-income venturing
2 = somewhat valuable
3 = very valuable
76
Please briefly describe any other ideas
for support or assistance that would be
valuable?
Email
Postcard
How did you learn about this survey? Website
77
(Please check all that apply) Newspaper
From a friend/colleague
Organization Name
So that we may verify we have received
Address
only one response per organization and
78 City
tabulate results by geographic location,
State
please provide the following:
Zip
We plan to follow up with a limited

number of organizations for brief
interviews. Organizations selected for an
79 interview may be highlighted in our final Do NOT consider my organization for an interview!
report. If you are NOT interested in
being considered for an interview,
please check below:
Social Venture Partners of Rhode Island

is compiling a directory of nonprofits
80 operating earned-income ventures. If Do NOT consider my organization for the directory!
your organization would NOT like to be
considered, please check below:
In order to be eligible for a free copy of

the report, a chance to be interviewed
and possibly highlighted in the report, a
chance to win the gift certificates and
books, we need to know how to reach
Your Name
you.
Title
Email Address
This contact information will NOT be
81 Phone
reported anywhere and will be removed
from your survey responses.
Please provide the following contact

information:
Appendix
Table 23: Demographics of the Full Sample of RI Nonprofit Organizations
Demographic Factor Count %
1. Program Area
Arts/Culture/Humanities 46 14
Education 48 15
Environment/Animals 16 5
Health 40 12
Human Services 70 21
International Foreign Affairs 2 1
Misc. Mutual/Membership Benefit Orgs 5 2
Public/Society Benefit 32 10
Religion 9 3
Other (please specify): 61 19
N=329 Total 329 102*
2. Years in Operation
Less than 5 years 49 17
6-10 years 39 13
11-20 years 55 19
More than 20 years 152 52
N=295 Total 295 101*
3. Total Budget
Less than $250,000 126 44
$250,000 - $999,999 84 29
$1,000,000 - $4,999,999 42 15
More than $5,000,000 35 12
N=287 Total 287 100
4. Self-Identification as “Entrepreneurial”
Yes 158 53
No 140 47
N=298 Total 298 100
5. Operating an Earned-Income Venture

Yes, currently operating 1 or more EIV 176 62
Never operated an earned-income venture 92 32
Not currently, but operated 1 or more in the past 17 6
N=285 Total 285 100
Note: * Does not equal 100% due to rounding
Table 24: Perceived Impact of Operating an EIV by Organizations Currently Operating 1 or

More
Attract Attract Attract Board Entrepreneurial
Donors Staff Volunteers Leadership Culture
Very negative 1 0 2 0 1
Negative 1 0 0 0 0
Somewhat negative 0 0 2 2 1
Neutral/no impact 33 50 46 40 38
Somewhat positive 25 21 19 29 30
Positive 33 25 29 29 22
Very positive 22 18 18 15 22
N= 115 114 116 115 114
Perceived Impact (Continued)

Mission Reputation Service and Self-
of organization of organization Program Sufficiency
Very Negative 0 0 0 2
Negative 0 0 0 0
Somewhat
2 1 1 5
Negative
Neutral/No Impact 10 9 11 20
Somewhat Positive 14 11 19 28
Positive 35 27 38 31
Very Positive 56 68 46 30
N= 117 116 115 116
Table 25: Rhode Island Sample Descriptive Statistics
Variable Obs Mean Std. Dev. Min Max
Entrep 260 .5269231 .5002375 0 1
Program 260 4.553846 2.384187 1 8
Years 260 3.053846 1.134312 1 4
Budget 260 1.938462 1.022933 1 4
Eiv 260 .6576923 .4753971 0 1

1. Program Area
Education 36 14
Health 32 12
Religion 5 2
Other** 54 21
N=260 Total 260 101*
6-10 years 34 13
11-20 years 52 20
N=260 Total 260 100
3. Total Budget
Less than $250,000 114 44
$250,000 - $999,999 78 30
$1,000,000 - $4,999,999 38 15
More than $5,000,000 30 12
N=260 Total 260 101*
Yes 137 53
No 123 47
N=260 Total 260 100
5. Operating an Earned-Income Venture***

N=260 Total 260 100
Notes: * Does not equal 100% due to rounding error

** "Other" includes the categories: "Misc. Mutual/Membership Benefit Orgs" and "International Foreign Affairs"
*** The category "Not currently, but operated 1 or more in the past" was not included for the logistic regression
Table 26: Rhode Island Sample Bivariate Cross-Tabulations and Chi-Square Tests
| entrep
eiv | no yes | Total
-----------+----------------------+----------
no | 57 35 | 92
| 44.19 25.18 | 34.33
-----------+----------------------+----------
yes | 72 104 | 176
| 55.81 74.82 | 65.67
-----------+----------------------+----------
Total | 129 139 | 268
| 100.00 100.00 | 100.00
Pearson chi2(1) = 10.7208 Pr = 0.001
| program
eiv | arts educ enviro health hservice | Total
-----------+-------------------------------------------------------+----------
no | 8 12 4 12 20 | 91
| 21.62 32.43 26.67 37.50 35.71 | 34.60
-----------+-------------------------------------------------------+----------
yes | 29 25 11 20 36 | 172
| 78.38 67.57 73.33 62.50 64.29 | 65.40
-----------+-------------------------------------------------------+----------
Total | 37 37 15 32 56 | 263
| 100.00 100.00 100.00 100.00 100.00 | 100.00
| program
eiv | public relig other | Total
-----------+---------------------------------+----------
no | 6 4 25 | 91
| 23.08 66.67 46.30 | 34.60
-----------+---------------------------------+----------
yes | 20 2 29 | 172
| 76.92 33.33 53.70 | 65.40
-----------+---------------------------------+----------
Total | 26 6 54 | 263
| 100.00 100.00 100.00 | 100.00
Pearson chi2(7) = 10.9145 Pr = 0.142
| years
eiv | <5yrs 6-10 11-20 >20 | Total
-----------+--------------------------------------------+----------
no | 26 17 15 34 | 92
| 59.09 50.00 28.85 25.19 | 34.72
-----------+--------------------------------------------+----------
yes | 18 17 37 101 | 173
| 40.91 50.00 71.15 74.81 | 65.28
-----------+--------------------------------------------+----------
Total | 44 34 52 135 | 265
| 100.00 100.00 100.00 100.00 | 100.00
Pearson chi2(3) = 21.2400 Pr = 0.000
| budget
eiv | <$250K 250-999 1-4.9 <5mil | Total
-----------+--------------------------------------------+----------
no | 49 19 12 10 | 90
| 42.61 24.36 31.58 32.26 | 34.35
-----------+--------------------------------------------+----------
yes | 66 59 26 21 | 172
| 57.39 75.64 68.42 67.74 | 65.65
-----------+--------------------------------------------+----------
Total | 115 78 38 31 | 262
| 100.00 100.00 100.00 100.00 | 100.00
Pearson chi2(3) = 7.1203 Pr = 0.068
Table 27: National Descriptive Statistics
Entrep 389 0.745501 0.43614 0 1
Program 389 4.722365 2.063437 1 8
Years 389 2.619537 1.239067 1 4
Budget 389 2.298201 1.127684 1 4
Eiv 389 0.48072 0.500272 0 1

1. Program Area
Education 54 14
Health 34 9
Religion 17 4
Other** 52 13
N=389 Total 389 100
6-10 years 67 17
11-20 years 70 18
N=389 Total 389 100
3. Total Budget
Less than $250,000 127 33
$250,000 - $999,999 98 25
$1,000,000 - $4,999,999 85 22
More than $5,000,000 79 20
N=389 Total 389 100
Yes 290 75
No 99 25
N=389 Total 389 100

N=389 Total 389 100
Notes:
* "Other" includes the categories: "Misc. Mutual/Membership Benefit Orgs" and "International Foreign Affairs"
*** The category "Not currently, but operated 1 or more in the past" was not included for the logistic regression
Table 28: National Bivariate Cross-Tabulations and Chi-Square Tests
| entrep
eiv | no yes | Total
-----------+----------------------+----------
no | 81 125 | 206
| 80.20 42.66 | 52.28
-----------+----------------------+----------
yes | 20 168 | 188
| 19.80 57.34 | 47.72
-----------+----------------------+----------
Total | 101 293 | 394
| 100.00 100.00 | 100.00
Pearson chi2(1) = 42.4184 Pr = 0.000
| program
eiv | arts educ enviro health hservice | Total
-----------+-------------------------------------------------------+----------
no | 14 43 13 24 79 | 269
| 35.00 64.18 54.17 51.06 54.11 | 55.35
-----------+-------------------------------------------------------+----------
yes | 26 24 11 23 67 | 217
| 65.00 35.82 45.83 48.94 45.89 | 44.65

-----------+-------------------------------------------------------+----------
Total | 40 67 24 47 146 | 486
| 100.00 100.00 100.00 100.00 100.00 | 100.00
| program
eiv | public relig other | Total
-----------+---------------------------------+----------
no | 42 15 39 | 269
| 54.55 75.00 60.00 | 55.35
-----------+---------------------------------+----------
yes | 35 5 26 | 217
| 45.45 25.00 40.00 | 44.65
-----------+---------------------------------+----------
Total | 77 20 65 | 486
| 100.00 100.00 100.00 | 100.00
Pearson chi2(7) = 12.9835 Pr = 0.073
| years
eiv | <5yrs 6-10 11-20 >20 | Total
-----------+--------------------------------------------+----------
no | 99 45 41 89 | 274
| 67.81 57.69 47.67 49.44 | 55.92
-----------+--------------------------------------------+----------
yes | 47 33 45 91 | 216
| 32.19 42.31 52.33 50.56 | 44.08
-----------+--------------------------------------------+----------
Total | 146 78 86 180 | 490
| 100.00 100.00 100.00 100.00 | 100.00
Pearson chi2(3) = 13.9045 Pr = 0.003
| budget
eiv | <$250K 250-999 1-4.9 <5mil | Total
-----------+--------------------------------------------+----------
no | 125 62 53 34 | 274
| 73.53 51.24 50.00 36.17 | 55.80
-----------+--------------------------------------------+----------
yes | 45 59 53 60 | 217
| 26.47 48.76 50.00 63.83 | 44.20
-----------+--------------------------------------------+----------
Total | 170 121 106 94 | 491
| 100.00 100.00 100.00 100.00 | 100.00
Pearson chi2(3) = 38.8190 Pr = 0.000
Table 29: Pooled Descriptive Statistics
Program (art = ref category) 649 4.654854 2.197321 1 8
Educ 649 0.138675 0.345874 0 1
Enviro 649 0.050848 0.219856 0 1
Health 649 0.101695 0.30248 0 1
Hservice 649 0.278891 0.4488 0 1
Public 649 0.12943 0.335934 0 1
Relig 649 0.033898 0.181107 0 1
Other 649 0.163328 0.36995 0 1
Years (< 5 = ref category) 649 2.793529 1.216104 1 4
6 – 10 649 0.155624 0.362778 0 1
11 – 20 649 0.187982 0.390999 0 1
> 20 649 0.420647 0.494044 0 1
Budget (< $250k = ref category) 649 2.154083 1.100359 1 4
$250 k – 999 k 649 0.271186 0.444915 0 1
$1 mil – 4.9 mil 649 0.189522 0.392225 0 1
> $5 mil 649 0.167951 0.374111 0 1
Entrep 649 0.657935 0.474767 0 1
EIV 649 0.551618 0.497712 0 1
Sample 649 0.599384 0.490401 0 1

1. Program Area
Education 90 14
Health 66 10
Religion 22 3
Other ** 106 16
N=649 Total 649 99*
6-10 years 101 16
11-20 years 122 19
N=649 Total 649 101*
3. Total Budget
Less than $250,000 241 37
$250,000 - $999,999 176 27
$1,000,000 - $4,999,999 123 19
More than $5,000,000 109 17
N=649 Total 649 100
Yes 427 66
No 222 34
N=649 Total 649 100

N=649 Total 649 100
Notes: * Does not equal 100% due to rounding error

* "Other" includes the categories: "Misc. Mutual/Membership Benefit Orgs" and "International Foreign Affairs"
** The category "Not currently, but operated 1 or more in the past" was not included for the logistic regression
Table 30: Pooled Bivariate Cross-Tabulation and Chi-Square Test
| sample
eiv | 0 1 | Total
-----------+----------------------+----------
no | 89 202 | 291
| 34.23 51.93 | 44.84
-----------+----------------------+----------
yes | 171 187 | 358
| 65.77 48.07 | 55.16
-----------+----------------------+----------
Total | 260 389 | 649
| 100.00 100.00 | 100.00
Pearson chi2(1) = 19.7335 Pr = 0.000
Table 31: RI Logistic Regression Predicting Organizations Currently Operating 1 or More
EIVs (Reference Category = Never)
Predictor Odds Ratio Std. Err.
Budget (Reference category = < $250K)
$250-$999K 1.48 0.56
$1-$5M 1.14 0.54
> $5M 0.88 0.48
Age (Reference category = < 5 years)
6-10 years 1.23 0.65
11-20 years 3.02* 1.52
>20 years 4.96** 2.29
"Entrepreneurial" (Reference category = No)
Yes 2.85** 0.86
Program Area (Reference category = Arts/Culture/Humanities)
Education 0.41 0.24
Environment 0.39 0.29
Health 0.28 0.18
Hum Service 0.38 0.21
Public Benefit 0.82 0.55
Religion 0.09* 0.10
Other 0.21** 0.11
*p < .05 **p < .01
N = 260
Table 32: National Logistic Regression Predicting Organizations Currently Operating 1 or

More EIVs (Reference Category = Never)
$250-$999K 2.58** 0.81
$1-$5M 2.48** 0.87
> $5M 4.61*** 1.77
6-10 years 1.04 0.37
11-20 years 1.62 0.60
>20 years 1.33 0.45
Yes 5.59*** 1.70
Education 0.22** 0.12
Health 0.37 0.21
Hum Service 0.30* 0.14
Public Benefit 0.43* 0.22
Religion 0.17* 0.13
Other 0.35 0.18
*p < .05 **p < .01 ***p < .001
N = 389
Table 33: Pooled Logistic Regression Predicting Organizations Currently Operating 1 or
More EIVs (Reference Category = Never) controlling for Budget, Age, Entrepreneurial, and
Program Area
$250-$999K 2.05** 0.47
$1-$5M 1.69 0.46
> $5M 2.47** 0.74
6-10 years 1.17 0.33
11-20 years 1.94* 0.56
>20 years 2.15** 0.56
Yes 3.91*** 0.80
Education 0.29** 0.11
Health 0.31** 0.13
Hum Service 0.33** 0.12
Public Benefit 0.50 0.19
Religion 0.15** 0.09
Other 0.26*** 0.10
Sample (Reference category = Rhode Island)
National 0.33*** 0.07
*p < .05 **p < .01 ***p < .001
N = 649
Works Cited
Alter, K. (2004). Social enterprise typology. Retrieved April, 10, 2005, from
http://www.virtueventures.com/setypology.pdf
Amos House. (2005). Retrieved May 5, 2005, from

http://www.amoshouse.com/home.htm
Beauchemin, J., & Gallo, R. (2003). Rhode Island’s non-profit sector: More than charity.
Retrieved April 1, 2005, from
http://www.rifoundation.org/matriarch/d.asp?PageID=155&PageName2=PDFss&
p=&PageName=Non%5FProfit%5FReport%281%29%2Epdf
Boschee, J. (2001). The social enterprise sourcebook: Profiles of social purpose

businesses operated by nonprofit organizations. Minneapolis, MN: Northland
Institute.
Boschee, J., & McClurg, J. (2003). Toward a better understanding of social

entrepreneurship: Some important distinctions. Retrieved Jan 12, 2005, from
http://www.se-alliance.org/better_understanding.pdf
Bradley, B. (2004). Forward. In S. M. Oster, C. W. Massarsky & S. L. Beinhacker (Eds.),

Generating and sustaining nonprofit earned income: A guide to successful
enterprise strategies (1st ed., pp. xiii-xvii). San Francisco, CA: Jossey-Bass.
Brown, E., & Slivinski, A. (2003). Nonprofit organizations and the market. Retrieved
April 25, 2005, from
http://www.ssc.uwo.ca/economics/faculty/Slivinski/workingpapers/tdcdraft3.pdf
Brown, M. (2005). Personal interview: Seth Marbin.
Burns, M. J. (2003). Self-sufficiency: How important is it? In Powering social change:

Lessons on community wealth generation for nonprofit sustainability (pp. 30-33).
Washington, DC: Community Wealth Ventures.
Community Wealth Ventures. (2003). Powering social change: Lessons on community

wealth generation for nonprofit sustainability. Retrieved November 9, 2004,
from www.communitywealth.org/Powering%20Social%20Change.pdf
Costello, K. (1996). We review [a review of the book: A revolution of the heart: A new
strategy for creating wealth and meaningful change]. Retrieved April 1, 2005,
from http://www.nonprofits.org/misc/rev.html
Crimmins, J. C., & Keil, M. (1983). Enterprise in the nonprofit sector. Washington, DC:
Partners for Livable Places.
Crossroads Rhode Island receives $50,000 grant from Bank of America Foundation.
(2005). Retrieved May 1, 2005, from
http://crossroadsri.org/News/jan_05_bank_america.htm
Dart, R. (2004a). Being “business-like” in a nonprofit organization: A grounded and

inductive typology. Nonprofit and Voluntary Sector Quarterly, 33(2), 290-310.
Dart, R. (2004b). The legitimacy of social enterprise. Nonprofit Management and

Leadership, 14(4), 411-424.
Dees, J. G. (1998). Enterprising nonprofits. Harvard Business Review, 76(1), 54-67.
Dees, J. G. (2001). The meaning of “social entrepreneurship”. Retrieved October 7,

2004, from http://www.fuqua.duke.edu/centers/case/documents/dees_SE.pdf
Dees, J. G. (2004). Putting nonprofit business ventures in perspective. In S. M. Oster, C.

W. Massarsky & S. L. Beinhacker (Eds.), Generating and sustaining nonprofit
earned income: A guide to successful enterprise strategies (pp. 3-18). San
Francisco, CA: Jossey-Bass.
Dill, A. (1994). Institutional environments and organizational response to AIDS. Journal

of Health and Social Behavior, 35(December), 349-369.
DiMaggio, P. J., & Powell, W. W. (1983). The iron cage revisited: Institutional
isomorphism and collective rationality in organizational fields. American
Sociological Review, 48, 147-161.
Drucker, P. F. (1993). Innovation and entrepreneurship: Practice and principles (1st

HarperBusiness ed.). New York: Harper & Row, Publishers, Inc.
Emerson, J., & Twersky, F. (1996). New social entrepreneurs: The success, challenge and
lessons of non-profit enterprise creation. Retrieved April 1, 2005, from
http://www.redf.org/publications-nse.htm
Foster, W., & Bradach, J. (2005). Should nonprofits seek profits? Harvard Business
Review, 83(2), 92-100.
Froelich, K. A. (1999). Diversification of revenue strategies: Evolving resource

dependence in nonprofit organizations. Nonprofit and Voluntary Sector Quarterly,
28(3), 246-268.
Frumkin, P. (2002). On being nonprofit: A conceptual and policy primer. Cambridge,

MA: Harvard University Press.
Garland, J. E. (1963). To meet these wants; the story of the Rhode Island Hospital, 1863-
1963. Providence, RI: Rhode Island Hospital.
Girl Scouts. (2004). Girl Scout cookie® history: Early years. Retrieved April 1, 2005,
from
http://www.girlscouts.org/program/gs_cookies/cookie_history/early_years.asp
Goodwill. (2005). 100 years of history. Retrieved April 1, 2005, from

http://www.goodwill.org/index_gii.cfm/1636/
Hager, M. A. (2002). An introduction to the overhead costs study: Method and data.
Annual Conference of the Association for Research on Nonprofit Organizations
and Voluntary Action Retrieved April 18, 2005, from
http://nccsdataweb.urban.org/kbfiles/522/survey%20methods%20paper.pdf
Handel, M. J. (2003). Organizations as open systems: Organizations and their

environments. In M. J. Handel (Ed.), The sociology of organizations (pp. 225-
231). Thousand Oaks, CA: Sage Publications.
Handy, F., & Ranade, S. (2000). Entrepreneurs in the nonprofit sector: A study of women
entrepreneurs of NGOs in India. Retrieved April 10, 2005, from
http://www.jhu.edu/~istr/conferences/dublin/workingpapers/handy.pdf
Hansmann, H. B. (1980). The role of nonprofit enterprise. Yale Law Journal, 89(5), 835-
901.
Haycock, N. E. (1988). Stepping out into the marketplace: The pitfalls of earned income
for the small nonprofit. In E. Skloot (Ed.), The nonprofit entrepreneur: Creating
ventures to earn income (pp. 147-161). New York, NY: Foundation Center.
Herman, R. D., & Rendina, D. (2001). Donor reactions to commercial activities of

nonprofit organizations: An American case study. Voluntas, 12(2), 157-169.
Hicks, L. (2004). Collaborative IRB training initiative (CITI): Internet research.

Retrieved March 15, 2005, from https://www.citiprogram.org/
Hines, J. R., Jr. (1998). Nonprofit business activity and the unrelated business income
tax. NBER Working Paper Series Retrieved March 7, 2005, from
http://www.nber.org/papers/w6820
Hochberg, E. (2002). Business ventures go beyond the bottom line. Chronicle of

Philanthropy, 14, 35-37.
Internal Revenue Service. (2002). Appendix of types of exempt organizations: IRC

section, description of organization, and general nature of activities. Excel ver. 4.
Retrieved April 1, 2005, from http://www.irs.gov/pub/irs-soi/eoappdix.xls
Internal Revenue Service. (2005a). Publication 557: Tax-exempt status for your
organization. Retrieved April 1, 2005, from http://www.irs.gov/pub/irs-
pdf/p557.pdf
Kaplan, M. J. (2005). TSNE letter of intent to plan capacity building fund (pp. 4): Rhode
Island Social Entrepreneurship Learning Group.
King, C. (2003). The need for a new paradigm: Social entrepreneurship. In Powering
social change: Lessons on community wealth generation for nonprofit
sustainability (pp. 20-23). Washington, DC: Community Wealth Ventures.
Lifespan. (2003). Lifespan annual report. Retrieved April 1, 2005, from

http://lifespan.org/about/Reports/Annual/2003/LS_AR_03.pdf
Mair, J., & Marti, I. (2004). Social entrepreneurship: What are we talking about? A
framework for future research. Retrieved April 1, 2005, from
http://www.iese.edu/research/pdfs/DI-0546-E.pdf
Mankiw, N. G. (2004). Principles of economics (3rd ed.). Mason, Ohio: Thomson/South-

Western.
Massarsky, C. W., & Beinhacker, S. L. (2002). Enterprising nonprofits: Revenue

generation in the nonprofit sector. Retrieved November 11, 2004, from
http://www.ventures.yale.edu/docs/Enterprising_Nonprofits.pdf
McCoy, B. (2004). Laser monks, real monks. Real savings. Supporting real people.
Retrieved April 1, 2005, from
http://www.lasermonks.com/index.php?main_page=lasermonks_story&zenid=6ab
082da48fddf760875fb9a149f368a
McMahon, M. (2005). Personal interview: Seth Marbin.
Meyer, J. W., & Rowan, B. (1977). Institutionalized organizations: Formal structure as

myth and ceremony. The American Journal of Sociology, 83(2), 340-363.
National Geographic. (2003). Fact sheet. Retrieved May 6, 2005, from

http://press.nationalgeographic.com/pressroom/index.jsp?pageID=factSheets_deta
il&siteID=1&cid=1052839802576
Robbins, L. (1932). An essay on the nature & significance of economic science. London:
Macmillan & Company.
Salamon, L. M. (1996). The crisis of the nonprofit sector and the challenge of renewal.
National Civic Review, 85(4), 3-17.
Salamon, L. M., & Anheier, H. K. (1997). The challenge of definition: Thirteen realities
in search of a concept. In L. M. Salamon & H. K. Anheier (Eds.), Defining the
nonprofit sector: A cross-national analysis (pp. 11-28). New York: Manchester
University Press.
Scott, W. R. (1992). Organizations: Rational, natural, and open systems (Third ed.).
Englewood Cliffs, NJ: Prentice-Hall, Inc.
Shore, B. (1995). Revolution of the heart: A new strategy for creating wealth and
meaningful change. New York, NY: Riverhead Books.
Shore, W. (2003). Powering social change. In Powering social change: Lessons on

community wealth generation for nonprofit sustainability (pp. 7-11). Washington,
DC: Community Wealth Ventures.
Shuman, M. H., & Fuller, M. (2005). Profits for justice. The Nation, 280(3), 13-20.
Skloot, E. (Ed.). (1988). The nonprofit entrepreneur: Creating ventures to earn income.
New York, NY: The Foundation Center.
Smith, A. (1776, 9/18/04). The wealth of nations. Retrieved April 20, 2005, from
http://wikisource.org/wiki/Chapter1:Of_the_Principle_of_the_commercial%2C_o
r_mercantile_System
Social Enterprise Alliance. (2005). Social enterprise lexicon. Retrieved April 1, 2005,
from http://www.se-alliance.org/resources_lexicon.cfm
Strickland, W. E., Jr. (2003). Entrepreneurship and the nonprofit world. Powering social
change: Lessons on community wealth generation for nonprofit sustainability,
from www.communitywealth.org/Powering%20Social%20Change.pdf
Suchman, M. C. (1995). Managing legitimacy: Strategic and institutional approaches.

Academy of Management Review, 20(3), 571–610.
Tucker, D. J., & Baum, J. A. C. S., Jitendra V. (1992). The institutional ecology of
human service organizations. In Y. Hasenfeld (Ed.), Human services as complex
organizations (pp. 47-72). Newbury Park, CA: Sage Publications.
U.S. Census Bureau. (2005). 1988-2002 county business patterns. Retrieved April 18,
2005, from http://www.census.gov/csd/susb/Totals88-02.xls
Venture Line. (n.d.). Accounting terms - accounting dictionary - accounting glossary.

Retrieved April 25, 2005, from http://www.ventureline.com/glossary_A.asp
Walls, J., Jr. (2003). A successful social enterprise responds to the market. In Powering
social change: Lessons on community wealth generation for nonprofit
sustainability (pp. 26-29). Washington, DC: Community Wealth Ventures.
Weisbrod, B. A. (1998). Conclusions and public-policy issues: Commercialism and the

road ahead. In B. A. Weisbrod (Ed.), To profit or not to profit: The commercial
transformation of the nonprofit sector (pp. 287-305). New York: Cambridge
University Press.
Weisbrod, B. A. (2004). The pitfalls of profits. Stanford Social Innovation Review,
Winter 2004, 40-47.
Weisbrod, B. A. (Ed.). (1998a). To profit or not to profit: The commercial transformation

of the nonprofit sector. New York: Cambridge University Press.
Young, D. R. (2001). Social enterprise in the United States: Alternate identities and
forms. EMES Conference: The Social Enterprise: A Comparative Perspective
Retrieved 2005, April 1, from http://www.nationalcne.org/papers/italypap.htm
Young, D. R. (2003). Entrepreneurs, managers and nonprofit enterprise. In H. K. Anheier

& A. Ben-Ner (Eds.), The study of the nonprofit enterprise: Theories and
approaches (pp. 161-168). New York: Kluwer Academic/Plenum Publishers.
Young, D. R., & Salamon, L. M. (2002). Commercialization, social ventures, and for-
profit competition. In L. M. Salamon (Ed.), The state of nonprofit America (pp.
423-446). Washington, DC: Brookings Institution Press.

A Sea Change in The Social Sector - FULL THESIS FINAL

Transféré par

Informations du document

Titre original

Copyright

Formats disponibles

Partager ce document

Partager ou intégrer le document

Options de partage

Avez-vous trouvé ce document utile ?

Ce contenu est-il inapproprié ?

Droits d'auteur :

Formats disponibles

A Sea Change in The Social Sector - FULL THESIS FINAL

Transféré par

Droits d'auteur :

Formats disponibles

Examining Earned-Income Ventures and Entrepreneurial Nonprofits in Rhode Island

Thesis submitted as partial satisfaction of the requirements

advice, guidance and encouragement for this thesis.

 Advisor: Professor Ann Dill, Ph.D., Brown University

and engaging in other income-generating activities.

Despite rapid growth in the availability of support services to assist nonprofits in

these so-called “social enterprises” as innovative, forward-thinking, and entrepreneurial.

This study presents a portrait of the earned-income ventures operated by

recently published national study. It includes quantitative analysis of national sample

entrepreneurial nonprofits nationwide.

compare these organizations to a national sample of nonprofits operating earned-income

1. How widespread are earned-income ventures (EIVs) among Rhode Island

2. How does operating an EIV impact a nonprofit organization (as perceived by

6. How do factors (such as self-identification as “entrepreneurial,” program area,

describe earned-income ventures and entrepreneurial nonprofits, the following is a

on American usage of these terms.

private owners or shareholders as profit-maximizing (also known as for-profit, business,

designated as 501(c)(3). This is the most common designation, and includes

tax-deductible contributions (Internal Revenue Service, 2002). As of 1950, organizations

voluntary, not-for-profit, third-sector, and social-sector organizations.

incurred regardless of whether cash is received or disbursed in that period” (Venture

not taken into consideration in the general definition.

The phrase “earned-income ventures,” as it is defined for this study, refers to

“typology” of social enterprises. The phrases: community wealth, mission-driven, and

business, to describe income-generating activities within the nonprofit sector.

The related concept of “social entrepreneurship” is worth special consideration

social entrepreneurship that specifically includes earned-income as a defining

more broad definition of social entrepreneurship, describing it as a “generic process not

The label “entrepreneurial” is commonly used to describe specific innovative and

risk-taking behavior, activities related to earning money, or general approaches to

entrepreneurial.” Citing Drucker, Dees (2001) asserts that launching or operating an

earned-income venture does not necessarily make a nonprofit “entrepreneurial” either. He

income. One often-cited leader of an entrepreneurial nonprofit said, “becoming more

entrepreneurial is as much a shift in organizational culture as a broadening of economic

opportunity” (Strickland, 2003, p. 24).

for this comparison.

Why Rhode Island?

three major reasons: it has an interesting history in connection with earned-income

foster a comparatively cohesive nonprofit community.

According to Beauchemin and Gallo (2003), organizations in Rhode Island report

relevant for this study.

One example of Rhode Island’s history with earned-income ventures is illustrated

Garland, provides an interesting example of the development of an earned-income

nonprofit fundraising strategy. Recognizing a community need, a group of Rhode Island

attempt to build a nonprofit hospital in Rhode Island met an untimely demise.

In 1867, the trustees developed an arrangement to “the mutual benefit of the

was created as an earned-income venture to help subsidize a nonprofit hospital.

people (Lifespan, 2003).

As demonstrated, Rhode Island has an interesting history of earned-income

national history and context of earned-income ventures.

2004). The Cistercian Abbey, a religious congregation in Wisconsin, recently received

national media attention for their earned-income venture LaserMonks.com. As they

Today, the range of nonprofits launching earned-income ventures, the types of

nonprofits turning to enterprise as an alternative to traditional funding sources, Crimmins

(Crimmins & Keil, 1983; Salamon, 1996).

job-training ventures, Emerson and Twersky (1996, p. 211) reported, “increasing

low-income people.” Dees (1998, p. 55) described a growing number of nonprofits,

“turning to the for-profit world to leverage or replace their traditional sources of

funding.” Weisbrod described a “commercial transformation” and declared, “massive

change is occurring in the nonprofit sector” (1998, p. 1).

Shore, 2003, p. 7) reported that “generating resources through profitable enterprise to

expected -- throughout the nonprofit world.”

Advisor: Professor Ann Dill, Ph.D., Brown University