Nonprofit Enterprise and Self-sustainability Team (NESsT)
Grupo para la Autosustentación de las Organizaciones del Sector Civil
Groupe d'Autofinancement des Organisations Non Gouvernementales
CASE STUDY: NESsT Performance Management TOOL
BACKGROUND NESsT is an international, nonprofit, nongovernmental organization dedicated to finding lasting solutions 1 to systemic poverty and social injustice through the development of social enterprises – mission-driven businesses that increase the financial sustainability and social change impact of civil society 2 organizations (CSOs) . NESsT works as a social enterprise catalyst worldwide through three priority initiatives: NESsT Venture Fund, NESsT University and NESsT Consulting. NESsT achieves its mission by combining the tools and strategies of business entrepreneurship with the mission and values of nonprofit entrepreneurship to support the development of social enterprises in emerging democracies worldwide. The first of the three priority initiatives is the NESsT Venture Fund (NVF). This is a philanthropic investment fund that provides financial and capacity-building support to a select portfolio of social enterprises owned and operated by CSOs in Central Europe and Latin America. All of the social enterprises in the NVF portfolio are intended to generate revenues to help diversify the financing base and to further the mission of the parent non-profit organization. The NESsT Venture Fund was launched in 2001 as a response to two challenges that NESsT identified in the non-profit capital market of Central / Eastern Europe and Latin America: 1) CSOs have insufficient capital and lack access to mainstream financing sources to capitalize their social enterprises; 2) CSOs lack the capacity and skills to develop their social enterprise ideas. The NVF has two very distinct portfolio stages in which CSOs fall into: Early-Stage Portfolio and LaterStage Portfolio. The Early-Stage Portfolio deals primarily with preparing the organization to launch a social enterprise and assessing the feasibility of a social enterprise idea. During five to seven months of intense cooperative work, NESsT provides on-going technical assistance and consulting advice (capacity-building) to guide CSOs through the evaluation of their prospective social enterprises. The amount of assistance provided is approximately 30 consulting days per organization. CSOs are provided with tools and training in organizational readiness for social enterprise, business plan development and sustainability planning. This assistance both helps to professionalize the CSO, and to evaluate the feasibility of the proposed enterprise. Each step in the process builds upon the previous one to deepen the level of analysis, culminating with the development of a business plan. CSOs are assessed at the end of each stage to determine if they will advance to the next and are expected to take the initiative to push through the entire process. The Later-Stage Portfolio consists of CSOs which are ready to launch, and then implement, their social enterprises. Organizations that are selected to join the NVF Later-Stage portfolio receive tailored multi1
NESsT uses the term “self-financing activities” to refer to diverse strategies used by civil society organizations to generate their own revenues (sale of products, service fees, use of hard or soft assets, and dividends or investment income). NESsT uses the term “social enterprise” to refer to self-financing activities that are designed by a CSO to significantly strengthen the financial sustainability and the mission impact of the CSO. 2 NESsT uses the term "civil society organization" (CSO) to refer to a wide range of formally registered nonprofit, non-state organizations or community-based associations and groups that fall outside the sphere of the government and business sectors. United States: 563 Garden Gate Way Turlock, CA - USA • Tel: +1 (209) 988-9604 Latin America: José Arrieta 89 Providencia, Santiago - CHILE • Tel: +(56 2) 222-5190 Fax: +(56 2) 634 2599 Central Europe: Kalvin ter 2 .1/2 H -1053 Budapest - HUNGARY • Tel: +(36 1) 267 0231 Fax: +(36 1) 266 0206 Email: nesst@nesst.org • http:// www.nesst.org