Building a Self-Funding Nonprofit Through Social Impact Investment

Stephen’s Village is a nonprofit in Stamford, Connecticut with a focus on revitalizing marginal neighborhoods by supplying low-cost housing to early-career individuals. NESC was engaged by Stephens Village for the development of an expansion plan to attract social impact investors to Stephens Village II, which will become a real estate investment model that can be easily scaled and replicated, spreading to other cities and communities across the nation.

“We regard this as a ‘proof of concept’ situation” says Joe Townsend, NESC Senior Vice President of Social Enterprise.  “Many nonprofit organizations are moving toward social enterprise activities to monetize their assets—broadly defined—and maintain financial viability.  Attracting outside investors to finance some of these projects is the next big step in the process.”

Joe adds “Social impact investors, with either social or financial return motives—or a combination of both—will provide funds for nonprofit social enterprises, which allow those organizations to scale and sustain themselves.”

The funding pool for nonprofits dependent on donations is shrinking. Implementing a system to systematically measure social performance can set a nonprofit ahead of others and, in conjunction with a solid business plan, increase attractiveness to social impact and alternative investors.

With NESC’s assistance, Stephens Village has updated its mission statement, formulated a statement of future vision and is preparing a business plan—including an updated financial model—that will be presented to prospective social impact investors.  These entities require a proposition that demonstrates the need, viability, and sustainability of the project under funding consideration.

Lisa Bratt, founder of Stephen’s Village, states “Joe Townsend, Deborah Brennan, NESC Regional Director of Southwest Connecticut, and the other NESC consultants worked diligently over the six months engagement to achieve goals designated at the outset.  Stephen’s Village now has a revised mission statement, vision and strategic plan to transition into a profitable social enterprise.  Situational analysis completed by the NESC created a detailed body of research on the project, opportunities and its internal and external contexts.

Lisa adds, “Joe and Deborah went above and beyond to understand the case-specific problems at hand and find resources necessary to achieve our goals.  Idea generation and planning sessions were extensive, detailed and impressively comprehensive in nature.  Stephen’s Village received the utmost attention and commitment from the NESC and its consultants… The value of NESC’s Social Enterprise department far exceeds the money expended to retain them.”

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About National Executive Service Corps

National Executive Service Corps is a nonprofit dedicated to empowering nonprofits since 1977.
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