This chapter discusses the life cycles of organizations and focuses on the life cycle of nonprofit organizations. Daft. R. L. argues that life cycle of an organization includes four stages: entrepreneurial, collectivity, formalization, and elaboration. Stevens. S. K. argues that nonprofit organizations evolve from vitality to regeneration, through seven stages, encompassing idea, start-up, growth, maturity, decline, turnaround, and terminal. The chapter identifies factors affecting organizational transformation process of nonprofit organizations and discusses the elements of an organizational transformation initiative. The organizational transformation of a nonprofit organization includes factors that are antecedent to the process and other elements that are part of the process. Organizational transformation is the consequence of other factors or elements, which must be taken into consideration in future plans of action. These factors include, but are not limited to, life cycles, internal environment, and external environment. The chapter explains the relationship between organizational transformation and financial sustainability.
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This chapter describes the concept of social enterprise and explains the term ‘social entrepreneurship’. The term ‘social enterprise’ refers to a business activity intended to generate profit to finance a social, educational, cultural, religious, or charitable cause. A social enterprise is a for-profit business whose primary purpose is to reinvest its profits in not-for profit activities. There can be various types of social enterprises such as small-business entities, co-operative, social firm, credit union, trading arm to charity, and public sector spin-outs. The chapter explores the steps needed to develop a social enterprise and describes the key components of a business plan. The development of a social enterprise requires an investment, which implies some costs. The costs will be fixed and variable. The chapter emphasizes social entrepreneurship as a mission-driven enterprise and a strategy for financial sustainability in nonprofit organizations.