IA/LM 240 Social Entrepreneurship
Spring 2007

-Home
-Outline
-Definitions
-Resources
-Books
-Funding and Budgets
-Creating Effective Enterprise Pitches
-Enterprise Goal Creation
-Enterprise Concept Plan Contents

Some General info on Funding and Budgets

Funding

• Donors:

            - Are stake holders/customers, their interest must be met.

            - Often are looking for a short term relationship and degree of sustainability of your enterprise

• Grants:

            - Come with strings attached

            - Are usually time consuming to get and maintain, especially government grants

            - Generally are for non -profits, but not always

            - Can be tempting to alter mission to fit grantor guidelines

• Sales of service and/or products

            - Must be clear what value the customer is getting

            - Promotion and advertising are key

            - Products and services must stay relevant

• Angle and/or Venture capital

            - Generally require that you give up a fair sized portion of your enterprise

            - Generally are looking for a good sized return on investment, due to high risk

            - Angles and V.C.s usually want to see personal and often family investment in the enterprise

              before they invest 

• Loans

            - Family loans often are sought, but have to be handled carefully so as to avoid conflicts and                                hurt feelings

Budgets

Generally are done as a list and include in one column what your expenses are and one column with what your income is over a period of time.   This period of time can range from a few months to few years.  As the time frame of the budget gets longer, it’s accuracy decreases.  Budgets often contain fixed costs (these are expenses that don’t change much from one year to the next), one time costs such as the purchase of a building or other long lived asset, and variable costs which are expenses that fluctuate over the time span of the budget.

Sample simple budget chart

Acme Enterprise Year One Expenses and Income

Expense                                   Amount            Income                                                 Amount

Director’s salary                       30,000             Fund U Foundation grant                      40,000

Program manager’s salary         17,000             Donations from internet campaign          21,000

Advisory Board expenses           2,200             Speaking fees                                         2,000

Office lease                                7,000             Sales of Acme political posters                1,300

Office supplies                           4,000            

Promotional materials                 2,300                                         Total Year One         64,300

Pay Role Taxes                          6,600                                      

Personal liability Insurance          3,300

                 Total Year One       62,400