Doctor Doom's Free Fall for Social Enterprise

Doctor Dooms Free Fall at Island of adventure, originally uploaded by andrewsteeleuk.

If you were unfortunate enough to hear me give a talk over the past couple years, chances are at some point you heard me predict that when--not if--the latest market bubble collapsed, it would have serious implications for the social enterprise movement. Two things in particular: a resurgence of resistance to nonprofit business and a tightening of viable low-margin ventures.

Ta daaaaaaah!

A couple news stories that came across my virtual transom today illustrate the problems:

The first one is truly sad, as a jobs & socialization program for the mentally challenged loses its employment contract with a local warehouse, which decided to cut costs by taking the work in-house. If a replacement isn't found, the rehabilitation services charity may have to shut down. When social enterprise rah-rah types exult in how the economic crisis will lead to a boom in socially responsible business, remember this, will you?

And from the Pottstown, PA Mercury (Berks County represent!), an op-ed on why nonprofit hospitals aren't really nonprofit. Its point: that nonprofits use high salaries and expensive projects as an accounting trick to net out expenses and revenues. Lawyer types will say the writer gets the law wrong, but that misses the article's potential effect, particularly on legislators--critiques like this are what gets the law changed in ways that make it harder for nonprofits to survive.