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Charity Entrepreneurs - Do They Exist?

03/04/2014 12:08 BST | Updated 02/06/2014 10:59 BST

In a changing economic context, most charities are being asked to be more entrepreneurial, but I'm coming across more and more CEOs that are tired of hearing the term and Chairs of Trustees that don't seem to know where to start. So what does 'entrepreneurial' really mean in the charity sector?

The best definition of entrepreneurship that I have come across is that it is the 'pursuit of opportunity beyond the resources currently controlled', from Harvard's Professor Howard Stevenson. So in terms of the leadership of charities we're looking for those change-motivated leaders that seem to be able to spot and create opportunities where none currently seem to exist.

In an increasingly competitive market place, if charities want the edge, they need to segment and analyse their target markets like any other business. And of course we can't shy away from the commercial aspect, the entrepreneurial leader will also make sure that the new opportunities created support sustainability within the organisation. After all, those that are really successful will combine a passion for their charitable cause with an eye for where they will get the best return.

The main areas where I see charities competing in an entrepreneurial space are as follows:

1. Ethical spending - The Co-operative's latest annual Ethical Consumer Markets report tells us that the UK is close to breaking the £50bn barrier in terms of ethical spending, and that half of all consumers avoid products based on a company's reputation for "responsibility". Every time we spend - we have a choice. As such, social enterprise trading arms are a great way for charities to commercialize and become more sustainable in the process. Organisations like Age UK Enterprises are seeing great multi-million pound returns by building their brand and goodwill and developing quality products for over 50s, such as travel insurance and mobility aids.

2. Recognising data and its value - Many charities hold valuable data that can easily be monetized or made available as open data to attract investment, such as the medical charities that have recently launched the 'Sharing data saves lives' campaign. For those charities that know the value of their data, they'll be able to use it to address some of the most critical social issues facing our local and global communities. Or alternatively, initiatives using data linked to a cause are becoming more popular, such as Unicef's partnership with Facebook, which sees Unicef being part of the solution to support Facebook as a commercial entity to reach more customers whilst doing good.

3. Partnership and collaboration - But the most entrepreneurial charities in my mind are those that are not scared of joining up and collaborating. We're seeing great strides from those charities focused on improving a place, such as the 'Making a Difference in Burnley' that see's the Prince's Charities teaming up with local Government and employers to provide joined up support across issues for the community as diverse as employment, heritage, regeneration and education. The entrepreneur will play to his or her strengths, in just the way that these initiatives seek to establish - and the size of charity doesn't matter, it's the intervention that can make a difference.

Entrepreneurship also extends to charitable donors. Like with any investment donors are wanting to see more efficient and smarter giving. They don't want to give to charities that are not transparent, or that have high administrative or overhead costs. Front of mind for the entrepreneurial donor or investor, is being certain that a charity is making an impact. This is more important than the means by which a charity might build its income - from charitable, to investment, to commercial.

Like with any enterprise, charities need to play to their strengths. They need to build new business around what they uniquely know and the markets that they can uniquely reach. Any business launched by a charity should have a head start on any commercial business in the same field, because of its core work. If it doesn't, it's not leveraging its assets.

Finally, the charitable sector needs to support culture change and new strategic programmes to survive in a new context. We need to reward the best and give charities, large and small, the chance to shift their mindset to one that is more entrepreneurial. Whether it's through specific funding streams or awards that reward the best charitable collaboration or innovations, it's in creating a new and broad-minded culture that we'll encourage the truly entrepreneurial.