Social entrepreneurship is a hot topic around here. The whole idea of a sustainable social enterprise is compelling. While not every charitable organization can be self sustaining, many can be, and can transform whole communities for a long time.
With that as a background, I was at a meeting the other day with a participant who was not "verbally challenged." One group member offered the suggestion that many of our local foundations offer planning grants to help the proposed self-sustaining social enterprise get up and running and learn, statistically, if the proposed model might work. If it did, sustainability was a real possibility.
Our friend weighed in with the insightful comment that "planning grants aren't sustainable," and that when they run out, the enterprise "wouldn't have them anymore." One wonders why they call them planning grants?
What's the point of this? We often think the same way in startups. We don't think much about how much money we need - usually from investors - to gain information that increases knowledge and lowers the risk of the business. In the same way that the appropriate use of a planning grant is planning to learn how to make this enterprise sustainable, early seed funds are best spent reducing business risk and increasing the likelihood of success through the process of testing and measurement.
