Trading companies

 

 

Some non-profit enterprises set up for-profit trading companies specifically to supply their products, which the non-profit then distributes.

 

 

• Often this model is adopted after the enterprise has developed the product as a non-profit and become successful enough selling it that it has the potential to deliver a return on private investment.
• In this case, the non-profit may want to remain a non-profit focused on its less-profitable activities, but also want to use the profitability of its product to generate revenues to subsidize these activities.
• Creating a separate company can allow the new company to access private capital without compromising the non-profit’s social goals.
• Some enterprises, such as Lifeline Energystarted as the non-profit arm of a product manufacturing company.  Lifeline has since become independent and started its own supply company, Lifeline Technologies Trading Limited.
• Other enterprises were created as non-profits and for-profit trading companies simultaneously and The Sun Shines For All in Brazil).

 

Case: ECCA/FutureNow Environmental Camps for Conservation Awareness (ECCA) is a Nepalese non-profit focused on the wise use of environmental resources in Nepal.

• In 2004 ECCA introduced a solar lantern, the Solar Tuki, as a means of creating access to an alternative to kerosene lamps, since a large percent of the population is off-grid and fixed solar panels are far out of most people’s price range.
• In 2007, ECCA established Future Now (Future Technology Now) Pvt. Ltd., a private limited company which has since been responsible for product development and sales while ECCA continues to focus on promoting social mobilization and environmental benefits.
• As a private company, FutureNow was eligible to receive an interest-bearing loan from the ERM Foundation as a means of capitalizing future product development and expanded distribution.