3. Identifying Your Value Proposition /

3.2 Defining your financial success


We describe our recipe for long-term financial success.

To meet the standard in full, you can show how you are achieving your mission in a financially sound, sustainable, and largely self-sufficient way (in other words, how you keep your finances healthy and avoid relying heavily on others for funding). You can explain how you use funding from others effectively, and in ways that encourage self-reliance and not dependence.

Like traditional companies, social enterprises need to make money in order to sustain their activities, pay workers, and grow as a business.

One way to measure the success of a social enterprise is therefore its ability to deliver social impact in a financially sustainable way.

This is not to say that financial goals are as important as social outcomes, simply that they must go hand-in-hand and can form an important part of the story you communicate to others.

Funders, donors and investors all want to ensure that their money is used effectively and efficiently, and used in ways that foster reliance rather than dependence.

The success of social enterprises in financial terms can be communicated in various aspects of financial performance, health and sustainability. For example:

  • Earned income growth
  • Financial efficiency
  • Financial liquidity
  • Financial self-sufficiency
  • Sustained profitability

You can find out more about financial success for social enterprises in Course 3 of the Impact Practice series, and associated performance indicators in Course 5 (Using Performance Indicators).

For more information, see also the guidance for social enterprises on financial ratio analysis from the Demonstrating Value project.