Matt Overton, Author at Ministry Incubators

Matt Overton: Should your social enterprise be for-profit, nonprofit or a hybrid?

October 26, 2017 by Matt Overton

This article was first published in Faith & Leadership on September 5th. You can find the original article here.

This week’s post comes from our friend Matt Overton, associate pastor for youth and family ministry at Columbia Presbyterian Church in Vancouver, Washington and founder of Mowtown Teen Lawn Care and Columbia Teen Enterprises. In this article, he talks about why he started a social enterprise in his church. You can find more of his thoughts on his Entrepreneurial Youth Ministry website and blog.

I was recently cutting some branches with the students who work in my landscaping business. We were in the back of my truck when a larger truck with a wood chipper drove by. One student said, “Man, this would go a lot faster if we could just chip the wood with one of those. Why don’t we buy one?”

It was a great question. For the next hour, we discussed the nature of business and profit, the basics of charging customers ethically, and the value of building all things in life slowly. I even had the students doing fairly complicated math in their heads to figure out how long it would take us to recover the cash investment for a commercial-grade chipper.

But eventually, I heard that nagging voice in my head reminding me that we didn’t have time for this much conversation on a job. If we don’t work hard and fast, my social enterprise goes belly up.

It’s this difficult tension of mission and profit that I live in every day.

Social enterprise is essentially using a business model to pursue (and often fund) a mission.

In my case, I’m trying to help the church see that it can use the power of business to fuel its efforts to live out the kingdom of God, transform its communities, and mobilize the gifts and talents of its people more effectively. I think that social enterprise in all possible forms has the ability to help the church experiment with new ways of being the church.

What unites all social enterprises that engage the marketplace is the idea that regardless of structure, the mission comes first. But as I have discovered, that tension between mission and profit is not always easy to manage.

One of the most difficult leadership decisions I have faced since beginning a social enterprise-based ministry out of my church has been trying to resolve whether it will function as a for-profit, a nonprofit or a hybrid entity.

The for-profit model

When I began my landscaping business three years ago, I started it as a for-profit, because it was faster to set up. I didn’t need a board or bylaws, and the revenue provided a cash flow to build the mentoring program.

At the time, my church was in the middle of a capital campaign, and I knew my business needed to generate its own revenue, because the church didn’t have the funds to support it.

In addition, part of my idea was to test the concept. I began with the question, Could a 20-hour-a-week youth worker own a small business that would help pay his bills and at the same time facilitate better relational ministry?

It’s important to remember that both for-profits and nonprofits can generate net revenue. All that separates them is what is done with the money.

A for-profit entity passes it on to its owners and shareholders.

In my case, we began as a for-profit social enterprise with what is known as a “double bottom line.” We balance our profit making with our mission’s social impact.

There are advantages to the for-profit model. First, decisions can be made much more quickly without the regulations and laws that govern a nonprofit.

Second, a for-profit social enterprise can capitalize mission and scale more quickly, because investors get a return.

Third, a for-profit is driven to work faster and solve problems more quickly, because it has no safety net. Without donors, there’s no margin for error.

Finally, without donors, a for-profit is unencumbered by the time-heavy demands of fundraising — hosting events, tending to numerous individual contributors, publishing newsletters, managing complex grant requirements and the like.

The nonprofit model

But our enterprise has also bumped up against the limitations of the for-profit model, and we’ve discovered that being a nonprofit has advantages, too.

For instance, when we started, people were so inspired by our concept that they kept donating equipment to us. While this seemed great at first, I quickly realized that we couldn’t receive the equipment without taking a tax hit.

I also recognized that in order to accomplish our mission of mentoring teens, it would be great to have an extra crew boss on each job to increase relational opportunities. But our for-profit business couldn’t use unpaid workers.

Most of the advantages of a nonprofit lie in its tax status and liability. Nonprofits can receive donations and can give tax credit for them. A nonprofit pays no federal income tax, is exempt from property tax and can apply for some pretty large grants. The nonprofit board structure also heavily reduces personal liability.

Finally, over the past three years, the IRS has made it much easier for nonprofits to receive 501(c)(3) status with its new 1023-EZ form, which can often get your organization its status in just a few months or even weeks.

We don’t have it all figured out yet

Can I tell you which model is best? No, because my own organization hasn’t even resolved this yet.

Every time I’m on the job site with my teens, shoveling dirt or trimming bushes, I’m figuring out how to maximize my organization’s efficiency. We want our time and resources to be focused on our mission — getting our students ready for life and work.

So we’ve developed a hybrid model. We still have our for-profit landscaping company called Mowtown Teen Lawn Care. But we also created a 501(c)(3) called The Columbia Future Forge, which manages the mentors and student training.

In the past several months, we’ve been thinking about our nonprofit buying out and owning our landscaping company. This could simplify things and open up some possibilities, but it will have its costs, too.

I have about $20,000 of my own money invested in this company, as well as sweat equity. For a number of reasons, if our nonprofit buys out our landscaping business, I may not get that investment of time and money back.

If I’m honest, I have to admit that I sometimes question whether the mission is worth the personal sacrifice.

There is a lot of blood, sweat and tears, no matter how you structure this kind of kingdom work. Every day I pray and wrestle spiritually with whether this is a calling worth engaging for the sake of God’s church.

Yet I continue to believe that some form of social enterprise is the future of the church. I think it represents a more sustainable engine for fueling our kingdom work out in our communities and in the rest of the world.

Each option — for-profit, nonprofit or the accidental hybrid structure my team and I seem to occupy at the moment — has its own ministry tensions.

But in the midst of these tensions, I’m excited to see what creative models the church will foster as it engages social enterprise.

My sense is that whatever the model, social enterprise offers the people of God a feast of hopefulness about their future mission rather than a diet of fear that the institution is passing away.

Matt Overton: Why I started a social enterprise at my church

October 12, 2017 by Matt Overton

This article was first published in Faith & Leadership on April 18th. You can find the original article here.

Many people who learn about the social enterprises at our church ask me why I started them.

The simple answer: I was tired.

Mostly, I was tired of doing ministry in the same old ways. I was tired of pretending that our programs were accomplishing what they claimed to when so many of them seemed hollow. (Any youth pastor who has ever come crashing down from the post-mission-trip high can attest to this.)

I was tired of reading books by experts that framed the problem but offered no solutions beyond theological generalities, slight adjustments to existing techniques or ideas feasible only for wealthy congregations.

I saw that social enterprise — essentially, a business with a social good in mind — represented a new kind of experiment that offered a truly new way forward in ministry. The church needs more of those.

My experiments focused on jobs training with enterprises called Mowtown Teen Lawn Care and The Columbia Future Forge,(link is external) as well as Youth Ministry Innovators, a website and blog designed for writing about the church as a vehicle for social enterprise.

But a church could try any number of business models.

There’s more to it, of course.

When I arrived at my church seven years ago, I knew that the gospel was about risk. I knew that if the American church was ever going to be born again in the 21st century, it would need people willing to risk everything for kingdom ideas that were worth their very blood, sweat and tears. The church needed to start swinging for the fences.

So I started a social enterprise, first, because I wanted to attempt something great — something risky — for God.

The gospel is, at its core, a risky proposition by God in behalf of human beings. It promises no security, despite our best attempts to deify security and regularity in our worshipping communities.

I wanted to find a way to give myself more fully to the gospel and justice of Jesus Christ — something more than doing the same thing over and over again expecting a different result. I wanted something bolder than the staid mainline missions efforts I had grown up with.

Second, I started a social enterprise because I was tired of perpetuating disengaged faith. I wanted to help my congregation — both youth and adults — figure out what their Sunday faith has to do with their Monday life.

Social enterprise allows participants to engage a myriad of life gifts and professional gifts every time they show up. To be a part of a social enterprise-based ministry, participants must be fully engaged in whatever the enterprise is. They are essential to the success or failure of the mission.

Too often, our churches make people passive recipients of ministry and even of faith itself. When they don’t get a call from anyone at church when they haven’t been there in four months, they think the show simply goes on without them. They feel excluded or ancillary to the mission of God. They think their presence, passion, talents and dollars aren’t really needed. I wanted my congregation to discover the value of each member’s engagement.

Third, I started a social enterprise because I was tired of our acts of charity and mission taking away people’s dignity. So many of our charitable works place us in positions of power and influence over those we serve.

I had been offering the typical camperships and canned-food drives to the low-income youth in my group so they could be part of our middle-class model — only to see those students drift away, weary or embarrassed of being the focus of our love and charity. I wanted them to be a part of a ministry where they were full, vital participants.

People hear the Jesus story and want to be involved. They don’t want simply to be helped.

We need ministries that actually enable people to move forward with their lives. Social enterprise allows us to do that in creative ways.

At our church, we offer job skills, training and experience. We talk about faith and about people coming fully alive (John 10:10), but we don’t give our participants much of anything. Their dignity remains intact, and they are given a chance to move forward.

Finally, I started a social enterprise because I was tired of losing our middle- and upper-class youth and families to outside activities.

I didn’t blame them. In the current culture, parents are afraid for their children’s economic future and feel pressured to enroll them in activities they believe will enhance that future.

It’s hard for a low-accountability and low-participation youth ministry model to compete with a state robotics tournament or a soccer club in which a family has invested thousands of dollars and hours.

But I was convinced that the church could compete. What we needed was something that the kids wanted to be a part of. Something that would engage their passions and invigorate their faith.

I figured that if we used employment as our model, kids from a variety of backgrounds might actually show up. I was right.

In addition, this model required heavy adult commitment and involvement. Social enterprise gave my adults an essential role in our youth ministry. They weren’t consuming church. Kingdom work began to consume them. It was enlivening dry bones and scratching itches they didn’t know they had.

We have adults investing unbelievable amounts of time and energy and their personal gifts. We think it might be the zephyr of God, and I am gobsmacked with emotion every time I think about what I am seeing.

Social enterprises have to compete in the agora at marketplace speed. They demand risk taking, commitment, empowerment and passion. People want something to lay down their lives for. If we want to compete for people’s precious time, we are going to need to give them that.

That’s why I started a social enterprise.

The Three Phases of Launching a Church-based Social Enterprise

August 10, 2017 by Matt Overton

This article was first published in Faith & Leadership on June 13th. You can fine the original article here.

This article is the last in our summer blog series aimed at those who are either starting a missional enterprise or thinking about starting one. During this series, we have looked at theological and practical concerns of missional entrepreneurs.

This week’s post comes from our friend Matt Overton, associate pastor for youth and family ministry at Columbia Presbyterian Church in Vancouver, Washington and founder of Mowtown Teen Lawn Care and Columbia Teen Enterprises. In this article, he talks about the various phases of launching a social enterprise through a church. You can find more of his thoughts on his Entrepreneurial Youth Ministry website and blog.

The Three Phases of Launching a Church-based Social Enterprise

Starting a Christian social enterprise is difficult and passion-filled work. It comes with a ton of setbacks and self-doubt. And a ton of excitement.

I believe that social enterprise — a business with a social good in mind — can offer a new way forward for the church.

But I realize as I evangelize about this new model that people will have questions about how to get started. How can a local congregation or minister launch a social enterprise that maximizes missional impact in a community?

I have identified three initial phases for this work: habitation and discernment; consulting with the community; and testing.

The advice here is aimed at ministers and congregations interested in starting a small-scale enterprise that has a relatively low bar for entry into the marketplace. Launching a large-scale idea for social innovation requires much more capital and risk.

Habitation and discernment

As Christians, we have an obligation to prayerfully inhabit a place in order to do this work in ways that honor God and neighbor.

I have participated in several programs that help launch social enterprises, and one problem I’ve seen is that they often encourage people to ideate quickly.

This worries me. We Christians have a long history of doing things to others in unhealthy and wasteful ways. I think we have a theological obligation to take the time to inhabit a place, to listen well and to pray, and only then, after a period of discernment, to come up with an idea.

Ideally, I think would-be social entrepreneurs should live in a community at least three and a half years to discern the context and to build up leadership capital and trust within the local church before formulating ideas. That time is also important for discerning whether the needs of the context and the specifics of a potential enterprise line up with a leader’s God-given gifts.

I happen to love physical labor and mentoring teens, and I know something about lawn care. So launching a teen landscaping company made sense for me. It was also something that our state’s highly restrictive teen labor law would allow.

It’s critical for churches preparing to launch a social enterprise to understand the social needs and marketplace of their particular community. And since the purpose of social enterprise is to place the mission ahead of the profit, it is crucial to think about the mission thoroughly.

Consulting with the community

The next step is to look at the cloud of witnesses.

One of my favorite lines in the book of Acts is when the apostles and the elders at the Jerusalem Council, trying to discern how Jewish and Gentile converts are to interact with one another and the standards of faith, arrive at their answers and say, “It seemed good to the Holy Spirit and to us …” (Acts 15:28 NIV).

The idea here, at least in my Reformed mind, is that the discernment of God’s will seems to have been a group, rather than an individual, process. This is an important ethic in starting a Christian social enterprise.

That’s why I began by talking with the leadership at my church.

My initial conversation was with my head of staff. I made sure he understood why I was trying to do this and what the potential implications were in time, energy and dollars.

I also shared a couple of books to help explain the concepts behind my project, such as asset-based community development and social enterprise in general.

What was critical, in my case, was that my head of staff understood missional theology, allowed the staff a good deal of autonomy and was not opposed to marketplace-based thinking. We also had trust in each other.

My next step was to inform our Session, which is our church’s governing body. I worried that they would find my idea confusing or frightening, so I prepared a presentation on my own ministry journey, my idea for the enterprise, the financial implications for them and a critical FAQ.

I wanted to make clear that I wasn’t proposing to detonate their existing youth ministry. I also was not planning to leave the church. I made sure to help them understand how my idea linked directly to my job reaching out to teens in our county.

I also framed it as a six- to 12-month experiment and asked for four to eight hours per week to work on it during the initial phase.

To my utter amazement, they really liked the idea and thought it fit well with the stated mission and vision of our church.

I gathered eight key people on an informal team. I invited people who had run their own businesses, people who would be good mentors and people who were trusted by the church. I also consulted with folks who had legal and tax experience.

For a church that doesn’t have folks with particular experience, I’d recommend exploring congregants’ connections to people in the community who support the idea and consulting with the local community foundation.

Testing

The last phase is experimentation and testing.

I started small. I hooked up my V-6 to a church trailer and mowed a few clients’ properties each week. I also shadowed a local landscaping company’s crews and paid close attention to people I saw out working.

The point is to start with a manageable volume of business to see whether the ministry leader is cut out for the work. This also provides a glimpse of what the actual market looks like in the area — sort of like an informal market survey.

But most importantly, this phase offers a test of what ministry looks like in this setting.

Is it possible to do effective ministry within the context of this business? What is the actual potential of kingdom impact on customer and employee? This is essential.

At the heart of Christian social enterprise is the mission. Whatever shape it may take, the mission must be the focus in a church-based business.

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