This article appeared in Stanford Social Innovation Review.
Over the past several months, philanthropy has faced rising criticism for its lack of transparency or accountability, perpetuation of wealth inequality, and preservation of a system of exploitation. As Ford Foundation CEO Darren Walker reminds us, this critique is not new: Decades ago, Martin Luther King Jr. warned philanthropists not to “overlook the circumstances of economic injustice which make philanthropy necessary.”
One way in which these injustices have played out is in philanthropy’s failure to hire or fund people of color. Less than 5 percent of foundation CEOs are diverse leaders, and just 4 percent of grants and contributions go to diverse-led organizations.
These bleak statistics have many leaders—including ourselves—trying to do better. To find our way forward, we’ve convened dozens of funders over the past year to discuss how to improve our efforts around diversity, equity, and inclusion (DEI). Three guidelines have emerged:
1. Re-define Risk
“Grassroots doesn’t mean small, grassroots can be big and impactful.” –Solome Lemma, Thousand Currents
Funders often label funding applicants as risky because they lack data to show their impact or don't have a degree from certain universities. Such an assessment fails in a major way: It doesn't incorporate the value of a leader’s ties to the communities they serve and experience in the field. Philanthropy must acknowledge the extent to which bias and racism play a role in this risk calculation and create metrics that value experience and community connections. This has nothing to do with a so-called “lowering of the bar.” It's about valuing leaders from all backgrounds and their hard-won experience. For example, Segal Family Foundation launched its African Visionary Fellowship in 2017 to give weight to experiential capital in its portfolio and find ways to propel African leaders toward resources at the same rate as their Western peers. Similarly, Thousand Currents seeks to fund grassroots organizations in the countries where they work, combatting the trend that only 12 percent of international organizationsthat receive funding are actually operating in the developing world.
2. Emphasize Trust
“Philanthropists must shift from gatekeepers to allies.” –Katie Bunten-Wamaru, formerly of Segal Family Foundation
Trust is a key ingredient to building processes that favor diversity, equity and inclusion. Yet lengthy grant applications and extensive reporting requirements for nonprofits imply a lack of trust. They also disproportionately affect diverse leaders, who may lack connections or face a double standard due to implicit biases. Philanthropy must shift from the position of gatekeeper to the role of ally and partner. The Whitman Institute, for instance, employs “trust-based philanthropy,” a movement which seeks to address the power imbalance between funders and grantees by eliminating grant applications, reducing reporting requirements, and providing multi-year grants so that nonprofits don’t have to worry about losing funding if they are honest about both their successes and their failures. In another example, Heinz Endowments used grantmaking to get not just input from the community, but also engagement from community leaders to form strategic priorities for key areas of its philanthropy. Both organizations put those that they are serving—either grantee partners or the community—at the center of their approach, moving forward from a place of trust.
3. Reflect the Community
While there has been a push for nonprofits to be more transparent about their staff, philanthropy has remained mostly silent about the diversity of its teams and portfolios. According to D5 Coalition, 80 percent of foundation staff and 91 percent of foundation CEOs are white. Such uniformity goes a long way toward explaining inequitable funding outcomes; after all, staff, CEOs, and others with decision-making authority play a critical role in any changes to an organization. Foundations are already pushing themselves to reflect the communities they serve in a number of ways. The Rosenberg Foundation has an advisory committee of dozens of community-based leaders who help find underrepresented talent for the Leading Edge fellowship. And Tipping Point Community audited its staff and board, and surveyed its grantees, to discover ways that it could augment DEI in its work environment, staff, and grantmaking.
We have reached a moment when foundations must face the ways they may be reinforcing inequality. By re-defining risk, emphasizing trust, and reflecting the community, philanthropy can make great progress on diversity, equity and inclusion. Failing to do so may perpetuate the very inequities foundations seek to solve.
This article originally appeared in Fast Company.
Nearly 31% of all philanthropic giving happens in the month of December. Yet all too often, donors make decisions about their contributions based on their good intentions as opposed to rigorous research.
From increasing inequality to climate change, there is no shortage of social problems to solve right now, and the good news is there is no shortage of people who want to help solve them. But here’s the thing: Good intentions aren’t enough. If we want to be more impactful in our giving, we need to do a better job of teaching the best practices of social change–to students, to donors, and to nonprofit leaders themselves (you can hear more about this in my new TedX talk).
Here are three ways that you can be more effective in your end-of-year giving to maximize your impact.
1. Research an organization's performance
A recent study showed that while 85% of donors say a charity’s performance is important, only 35% conduct research on giving, and just 2% give based on a group’s performance. And yet, my research shows that one of the key indicators of whether an organization will be successful is whether the nonprofit tracks its performance. Taking a data-driven approach is important not only for nonprofits to prove that what they’re doing works, but to improve their programs as they grow. For example, New Door Ventures, a job-training organization in San Francisco, takes a rigorous approach to measuring how effective they are at providing a path for low-income young people into the workforce. When one of their technology training programs wasn’t demonstrating strong results, they closed that program and channeled their funding toward their T-shirt business, which was helping their youth get jobs faster. As a donor, one of the most important things you can do before giving is look at a nonprofit’s impact report to see if their programs are actually meeting their goals.
2. Make sure that you contribute unrestricted dollars
By some estimates, 80% of philanthropic contributions in the U.S. are restricted. What does this mean? It means the money is given on the condition that it’s only used for specific services. This would be like going into a restaurant and saying, “I’ll pay for the food, but I’m not paying for the time for the chef to prepare it, or the salary of the server to bring it to me.” The nonprofit sector is one of the only places where investors feel entitled to pick and choose what we pay for. Too often, we ask our nonprofit leaders–the people who have dedicated their entire lives to solving some of the most difficult challenges of our time–to fight these battles with one hand tied behind their backs. If you want to be effective as a donor, you have can’t just fund programming, you have to invest in the infrastructure required to make that programming successful.
3. Don't just give money, give time
Finally, one of the most effective ways that you can make an impact is by giving not just your money but your time. For example, 97% of millennials say they want to apply their work skills to volunteering. This is a huge opportunity for companies to harness their employees’ talents for good. Last year, Google committed $10 million to Goodwill, a job training organization, to help them teach technical skills to 1 million people. But they didn’t just give money, Google also gave the time of 1,000 employees to help with career coaching and digital skills training. Rather than just engaging employees in one-off volunteer days, companies should find ways to apply their talent and expertise to help the causes they care about.
This giving season, donors must ensure that they are putting in the time and effort to fund programs that work, invest in the critical infrastructure incredible leaders need to run effective programming, and give not just money, but time and skilled expertise to the causes they love. That’s how we turn good intentions into tangible results. That’s how we turn feel-good philanthropy into real-good philanthropy. The problems we face in this world are simply too big to wait.
This article originally appeared in San Francisco Chronicle.
With wildfires still ablaze in California, thousands of homes and dozens of lives lost, millions of Americans are asking how they can help. But, far too often in the wake of disaster, good intentions lead to misguided donations that do more harm than good.
Last fall, when the Wine Country fires ravaged my hometown of Napa, I visited Puertas Abiertas, a nonprofit that does outreach to the Latino community, to see how I could help. The executive director led me to their backyard to show me the mountain of dog food they had received from donors in the days after the fire. She said, “What can I do with this? Most of our clients don’t have dogs. They need money to buy groceries and deposits for new housing.”
She’s not alone.
In Newtown, Conn., when a gunman killed 20 children and six adults at Sandy Hook Elementary School in 2012, the community had to rent a warehouse to fit 67,000 stuffed animals donated from across the country, most of which ultimately got sent away.
In China, after a major earthquake shook Sichuan Province, leaving millions homeless, volunteers clogged the tiny mountain roads trying to donate blood and bring in donated items, preventing emergency supplies from reaching the people and organizations who needed them most.
As someone who has worked with nonprofits, time and again I’ve seen people get so obsessed with the idea of “helping” that they often fail to stand back and consider whether what they’re doing is effective. Good intentions simply aren’t enough.
If you truly want to help victims in the aftermath of disaster, then take the time to educate yourself before you give.
Consider donating cash instead of goods. During the 2017 Wine Country wildfires, just 1 to 2 percent of the donated goods were used. In less than a week since the outbreak of the California fires in Butte and Ventura counties, the same scenario is playing out: Camp Fire evacuation centers are filling up with used and unusable items. While donors mean well, they don’t realize that this stuff is taking up valuable space and requiring desperately needed volunteer time to clear.
Instead, in the aftermath of disaster, cash donations that benefit victims can be one of the most powerful ways to make impact. As one victim of the 2017 fires described, “Some people think that $10 isn’t a lot, but when 10 people donate just $10, that fire survivor now has $100 to buy new clothes and underwear for their kids.”
You can find victims to support directly on GoFundMe by searching the name of the disaster. Or find an evacuation center in the area to deliver gift cards from Visa, large grocery store chains, gas stations and drugstores.
Donate to local nonprofit organizations that provide crucial social services to victims. Emergency relief isn’t just about getting through the immediate aftermath of a disaster, it’s also about addressing long-term needs like housing, employment and mental health — in the months and years to come. This is especially true for those who were living close to the poverty line before the disaster, who are likely to be most adversely affected when tragedy strikes. Local poverty-fighting organizations are in the best position to support poor populations because they have close relationships and trust with the communities they serve.
If you aren’t familiar with nonprofits in the area, you can donate to community foundations — like the North Valley Community Foundation, based in Chico — that work directly with local nonprofits to serve the greatest needs.
Give collectively with your friends, colleagues and your own community to enlarge your contribution. Last year when fires struck, the Petaluma Mothers’ Club put out a call on Facebook that it was raising funds for $25 gift cards to distribute at local shelters, and money poured in from mothers around the country. The group raised nearly $45,000 for families that had lost everything.
Companies can play a role. In 2017, big tech companies including Salesforce and Twilio teamed up with a leading foundation — Tipping Point Community — to present a benefit concert and raise $33 million for nonprofits that were providing crucial support for those affected by the Northern California fires. The companies encouraged their employees to contribute by matching their donations.
If you do feel compelled to give goods instead of cash, make sure you are in direct communication with organizations distributing donations, and donate new as opposed to used items, to avoid sending useless items and creating costly cleanup. By taking the time to educate ourselves before we give, we can turn good intentions into desperately needed disaster relief for the most vulnerable among us.
9/14/2018 1 Comment
This article originally appeared in Lean Startup Co.
Failure, and knowing when to admit failure, are critical to the innovation process. Thomas Edison once famously said, “I have not failed. I’ve just found ten thousand ways that won’t work.” Thomas Watson, the CEO of IBM for over forty years, once said, “The fastest way to succeed is to double your failure rate.” But embracing failure is easier said than done.
In recent years, in the world of Silicon Valley innovation, there’s been a great deal of attention paid to the importance of teams having leeway to take more risks, and to fail more often. This is a critical step in the lean startup methodology, namely that companies must pivot or course correct when a product isn’t showing business results. But in the social sector – where there’s much more incentive to talk about your successes as opposed to your failures in order to continue to receive philanthropic funding – failing to produce the outcome a nonprofit has promised is still very taboo and puts organizations at risk of losing their funding.
In my extensive interviews with hundreds of the most successful nonprofit leaders for my new book, Social Startup Success, many breakthrough social entrepreneurs revealed that they embrace this failure ethos, and truly believe that failure has often been a critical element of their success. They realize that failure is a necessary corollary to innovation and that failures should be reframed as productive learning experiences. Adopting this ethic instills a culture of innovation that ultimately fuels faster growth.
Just as the most successful lean startup companies realize that continuous course correction is what leads to radically successful products, nonprofits must do the same. Organizations that want to do a better job of embracing failure, and using it as a strength that helps them pivot as opposed to a weakness, should be asking themselves the following questions:
Does your organization provide spaces in staff meetings, reports, blogs and/or funder meetings to have open conversations about failure?
You can’t expect your team to embrace failure if you don’t start by creating safe spaces to talk both about programs that are working as well as the ones that aren’t. For example, the Hewlett Foundation started a tradition of the “biggest failure competition.” where staff share and celebrate failures to reframe them as learning opportunities. Many organizations, such as D-Rev, a nonprofit medical device company focused on delivering quality care globally, also speak publicly about failures. When, after testing their “Brilliance” newborn phototherapy product in rural markets, they realized that there were challenges in these markets that made it impossible to continue the program, they wrote a public blog about the pilot emphasizing that was not a failure. As they wrote, “in design, everything is information for the next iteration.” This mentality of reframing failure as learning and willingness to be to publicly transparent about the innovation process is what has made D-Rev so successful as they regularly course correct and pivot toward what’s working and away from what’s not.
Does your organization regularly assess its programmatic priorities to ensure it is focusing on areas where it can have the most impact?
You can’t be in a position to assess programmatic priorities unless you have a strong system for measuring the impact of your work. Take the case of Last Mile Health, a Liberia-based organization focused on reducing mortality rates. When Raj Panjabi first started the program, he launched several projects including teaching better farming methods and opening a women’s center, all while simultaneously trying to support hospitals and rural clinics. Fortunately, Panjabi did something critical to the organization’s success from the start: he made sure it had a good system for gathering data about the effectiveness of the projects. After a year of operations, the data clearly showed what the organization was really good at was supporting HIV patients through community health workers. As Panjabi says, “None of those were necessarily bad projects.” But he perceived that the organization could have the most impact by focusing exclusively on the training of more community workers, and he was willing to take the dramatic step of transitioning ownership of all the other programs. By embracing this and turning its attention to the work having the most impact and gaining significant financial support, Last Mile Health became a major force in averting a global disaster in 2014, when the Ebola outbreak hit Liberia. The organization’s network of community health workers was critical to stopping the spread of the disease, something that might not have happened had Last Mile Health not had the courage to pivot away from their other projects and persevere with the community health worker trainings.
Does your organization have a process for discontinuing programs when they are not having the expected impact?
One of the hardest parts about honestly assessing whether your programs are having an impact is risking that you may have to shut them down. When Kiva – a crowdfunding platform to support microfinance projects globally – decided to test a new form of lending under the Kiva Zip program to allow small businesses to raise money directly from individual lenders online, they were excited about the prospect of cutting out the middleman. Their U.S.-based program showed early promise, but there were challenges such as internet connectivity and fundraising difficulties with their Kenya pilot. In a blog post about the closure, Kiva shared that “for the Kiva direct model to be sustainable, borrowers themselves must be digitally included at a level that is currently not common for low-income borrowers in developing countries.” Having the courage to discontinue programs – or pivot away from them – when they are not having the expected impact is a critical component of the path to success.
Ultimately, for nonprofits to truly embrace failure, funders are going to have to embrace the lean startup methodology too. Research shows that only 52 percent of nonprofits feel comfortable discussing problems that occur mid-grant with a funder. While it is important for organizations to establish a rigorous approach to learning from setbacks and take action to improve results, the process can only be effective if funders create space for nonprofits to talk openly about their challenges alongside multi-year grants so that nonprofits don’t have to worry they might lose funding if they are transparent.
This article originally appeared in the Stanford Social Innovation Review.
If there is one trend that sums up the next generation, it is that they want to make a difference in the world. For example, 66 percent of teens say they want their jobs to impact the world, and 26 percent of 16- to 19-year-olds are already volunteering. But despite caring more than ever before, so many young people remain ill-equipped to effectively do anything about the problems they see.
A couple of years ago, a junior at Stanford University was getting ready for the campus pitch competition when she approached me about her idea. She wanted to launch a nonprofit to help people in the slums of Cape Town. When I asked her how often she goes to South Africa, she responded, “Oh, I’ve never been, but I hope to go one day!” She had developed a solution without doing the work to gain a deep understanding of the problem. And she’s not alone.
Last fall, when the Northern California fires ravaged my hometown of Napa, California, thousands of well-meaning Bay Area residents wanted to help, but their efforts were often misguided. Puertas Abiertas, a nonprofit that does outreach to the Latino community, received a mountain of dog food from donors despite the fact that their community didn’t have dogs. And in Newtown, Connecticut, when a gunman killed 20 children and 6 adults at Sandy Hook Elementary School in 2012, the community had to rent a warehouse to fit 67,000 stuffed animals donated from across the country, most of which residents had to send away.
People get so obsessed with the idea of “helping” that they often fail to stand back and consider if what they’re doing is effective.
In my years of research on what makes a social startup successful, I poured over thousands of survey results and conducted hundreds of interviews with some of the top changemakers of our time. I kept expecting people to tell me that a truly remarkable idea or the charisma of the founder is what drives success, but no one did. Not one. This isn’t to say that factors like charisma and grit, along with a brilliant idea, don’t contribute significantly to success. Of course they do. But, I found that the strategies behind successful social change initiatives—things like innovation, fundraising, effective leadership, and measuring impact—are teachable. The problem is, we aren’t teaching them.
Higher-education institutions like Stanford’s Haas Center for Public Service, which houses the Stanford Program on Social Entrepreneurship where I teach, have increased community-engaged learning offerings—pairing more students to work with nonprofits through classroom projects—over the past few years. This means students are graduating with more skills-based experiences under their belts. Meanwhile, university-based social entrepreneurship programs are booming, with 148 social entrepreneurship programs in the United States alone.
This is all good news, but by the time kids get to college, we’ve already missed a huge opportunity. We must start seeding effective social change at younger ages than ever before. In the wake of this year’s school shooting in Parkland, Florida, the world marveled at how well-spoken and prepared the students from Marjory Stoneman Douglas High School were as they took on Congress and sparked a national youth movement on gun control. But what many people don’t know is that Broward County, where the school is located, is home to one of the largest debate programs in the United States. All the high schools, middle schools, and even some of their elementary schools in the county are teaching students how to argue both sides of an issue, digest differing viewpoints, and plead their case. Imagine a world where all young people got training on how to advocate for causes that they care about.
Parents and teachers shouldn’t just ask students, “What matters to you?” and “What are you prepared to do about it?” We must teach them to evaluate social causes for impact, and ensure that their efforts are both rich in both practical skills and of real value to partner organizations.
Any teacher or parent can instill ownership over problem-solving in our children’s lives by ensuring our kids are involved not just in feel-good, but real-good, service learning projects, and the onus is on nonprofits to ensure that they are facilitating meaningful relationships in return. For example, the Scott Center for Social Entrepreneurship at the Hillbrook School in Los Gatos, California, provides a K-8 educational experience with social entrepreneurship programs that help kids learn how to effectively address social challenges they talk about in class. Last summer, after meeting with the microlending organization Kiva and discovering how it helps small businesses get off the ground, students launched a Kiva Lending Club. Club members practice real skills like how to fundraise and evaluate different business models, and reflect on the systems that give access to capital in the Silicon Valley. If it weren’t for Kiva’s willingness to work with these students, they wouldn’t have been able to learn these important lessons.
Funders can also take the lead to help educate the next generation of changemakers. San Francisco-based funder Tipping Point Community, which focuses on alleviating Bay Area poverty, has developed a curriculum for families to talk with their children about the importance of giving back. Its workbook offers discussion questions about family values and strengths, and provides ideas for tangible ways to get involved with the community, such as hosting a donation drive, raising money to fight poverty, or volunteering with local organizations as a family.
Volunteering should be more than a plus on college applications; policymakers should make it a mandatory requirement for high school graduation. Instead of scattering light-touch efforts throughout the community, funders and nonprofits should support teachers and parents to build long-term relationships with their organizations. Everyone should learn the nuts and bolts of successful fundraising. And most importantly, no matter how smart, educated, and well-resourced you are, when it comes to problem-solving, nothing can replace the power of lived experience. Social sector leaders must help teach young people how to responsibly engage with communities in need as co-designers of solutions.
Today, that Stanford student who wanted to start her own organization is working for a social impact company, learning lessons that will serve her throughout her career. But I’ve talked to countless nonprofit CEO’s who spent 20 years learning practical skills on the job that we could be teaching right now. The problems we face are simply too big to wait.
As millions of young people across the country go back to school this month, we have an incredible opportunity to maximize their potential to create social change. Let’s give the next generation the tools they need to truly deliver on their intentions to do good.
This article originally appeared in the San Francisco Chronicle.
It’s June, and for millions of high school and college students across the country that means graduation. Hundreds of thousands of the world’s most talented, capable young people are heading out into the world to make their mark. Here in the Bay Area, the birthplace of the startup, creating your own company or organization can feel like the only true measure of success. I’m asking graduates to consider joining something first instead.
More people are committed to being active agents of change at younger ages than ever before. And yet, over the past five years in my quest to answer the question — “Why do some social startups succeed, while others don’t?” — I’ve heard countless stories of students graduating from college and starting organizations with very few tools in their toolkit to handle the challenges that starting an organization inevitably presents.
There’s an endless amount of passion upon graduation, but not a lot of seasoned leadership, fundraising experience, innovation, clear metrics and strong storytelling. As a result, the nonprofit sector, which is already so starved for resources, is wasting time and money while young people learn these lessons on the job.
Carolyn Laub was a recent college grad who had come out as bisexual when she started a support group for LGBTQ teens in the late 1990s. She was inspired by a gay-straight alliance club at Palo Alto High School that was vigorously standing up for LGBTQ students and training their teachers on how to address bullying. Laub realized that to really make a dent in the problem, she’d need to start an organization and build a movement. But she was 23, she hadn’t hired that many people before, let alone fired anyone, and she was lacking the contacts to raise the millions of dollars she’d need to build a nonprofit.
For years, the organization’s growth was hampered by her failure to build a strong upper management team. She worked herself to the bone to launch her organization, but her staff were dropping like flies because they couldn’t keep up with her pace. She grew the organization into a nationwide movement, and although she was a really good fundraiser compared to similar organizations, for the first five years she was operating the Gay-Straight Alliance Network on less than $500,000 per year with just a handful of staff.
This is the story of so many social entrepreneurs, who start their organizations in their 20s and realize very quickly that passion and charisma will only take them so far. The vast majority of nonprofits spend most of their time in survival mode. In fact, two-thirds of nonprofits in this country have $500,000 and below in annual revenue. They are on a treadmill to try to keep their organizations afloat when they should really be focusing on their mission and impact.
Education is changing the situation for the better. Stanford University has quadrupled its community-engaged learning offerings over the past five years, meaning that students are graduating with more skills-based opportunities under their belts. But, in general I believe our educational system is guilty of inspiring agents of social change without giving them the basic skills they need to succeed.
Last year, a junior at Stanford University approached me to ask for help with a nonprofit she wanted to start to help people in the slums of Cape Town, an idea she had hatched as a part of a class project and wanted to apply to launch at the campus pitch competition. When I asked her how often she goes to South Africa, she responded that she had never been but hopes to go one day. By encouraging students like this to start companies and organizations, universities are setting them up for failure, and putting communities at risk.
Seed funding is going to young college grads, often at the expense of community-based leaders who may not have access to Ivy League networks, but do have the lived-experience that makes them arguably more equipped to address the problem. While we all fall prey to the stereotype of the college dropout who founds a billion-dollar “unicorn” startup, research from Aileen Lee at Cowboy Ventures finds that inexperienced, 20-something founders are actually an outlier. In fact, companies with well-educated, 30-something co-founders who have history together have built the most success.
Once Laub invested in a growth strategy and hired seasoned management, the Gay-Straight Alliance Network began to take off within a year. Today it operates a thriving national organization (now called the Genders and Sexualities Alliance Network) with an annual budget of $2.6 million, but it took Laub and the organization’s senior leaders nearly 20 years to reach that level of impact.
After interviewing more than 100 social entrepreneurs about their path to success, I can attest that Laub is one of the smartest, hardest working and creative social entrepreneurs I’ve met. The fact that even she faced such huge challenges as a young person starting an organization is evidence that there is no substitute for life experience.
We should encourage our students to volunteer and work for effective organizations before running with their own ideas. With no shortage of urgent social problems to solve, we must find ways to ground the passion and potential our graduates promise to deliver with practical skills for success. Starting an organization, when nonprofits skilled in best practices desperately need fresh talent, has both a personal cost and a social one.
6/12/2018 4 Comments
This article originally appeared in Medium.
It’s officially been five months since the launch of my first book, Social Startup Success. The last several months have been a whirlwind. I’ve given nearly 50 speeches in 16 cities, recorded over 30 podcasts and written 25 long-form articles, not to mention hosting countless launch parties, Facebook lives and webinars, all while trying to somehow spend time my unconditionally supportive husband and three very patient young children in between. It’s been both exhilarating and exhausting to say the least!
When I first started this book project I thought the writing part would be the hardest. Don’t get me wrong, the writing was hard. But for me the real challenge came in trying to figure out the best way to spread the word about the book, so that I could get all of my amazing best practices research into the hands of the nonprofit organizations that desperately needed it.
Like any researcher, when it came time to launch the book, I asked all of the smartest authors I knew about their experiences with book marketing. I quickly learned that there is no single answer to every author’s biggest question: “What sells a book?” This is partly because media and marketing are changing at such a fast pace, and also because every book’s target audience is slightly different and will resonate with a different approach. Each author needs to figure out what outreach strategies will maximize their particular message so that they can reach as many people as possible.
In the spirit of sharing the wealth of knowledge that I’ve learned over the past year about what has been successful in spreading the word about my book, I wanted to share what I wish I had known in the six months leading up to my book launch. The following is a list of the various strategies that I used to market Social Startup Success, in no particular order:
There you have it! My most important advice is that launching a book is a marathon and not a sprint, so if you don’t have time to focus on all of these strategies, pick two or three and run with them. You can always come back to the rest later. After all, if you’ve written a great book that stands the test of time, you will have plenty of time to get it into readers’ hands.
This article originally appeared in the Harvard Business Review.
Far too many great ideas for solving pressing social problems are not being applied at the scale they deserve, because thousands of nonprofit organizations are teetering on the brink of collapse. Of the 300,000 nonprofits in the United States, two-thirds have an annual budget of $500,000 or below, which does not allow them to expand their operations or scale their solutions. Fundraising is by far the biggest challenge for the sector, even for the most successful organizations. In a survey I conducted of the leaders of over 200 top-performing social entrepreneurships, 81% of them identified access to capital as their most serious concern. If an organization can’t reach sustainability, which I define as reliably raising around $2 million in annual revenue, the chances are high that it will eventually stagnate or fold.
I wanted to know, what are the organizations that break through the $2 million barrier doing right? Is there some secret recipe for fundraising success? As I delved into the stories of the success and failure of a host of organizations, I discovered the answer is yes and no. I also found that the conventional wisdom about fundraising is largely off base.
The traditional advice is that organizations should diversify their funding sources, aiming for a roughly even mix of foundational and individual donors, government grants, and earned revenue. Such a portfolio management approach would seem to mitigate the risk of relying too heavily on one or another major source. But while that seems eminently logical, research shows that it’s not the approach of the most successful organizations.
William Foster and his team at The Bridgespan Group conducted a study that revealed that, of the 144 nonprofit organizations created since 1970 that have grown in size to $50 million a year or more, each has relied particularly heavily on one particular source: something Foster and his coauthors call the “natural match.” For example, the Sierra Club relies primarily on membership fees, while Susan G. Komen has concentrated its fundraising intensively on its race events. The organizations that succeed typically don’t begin to narrow their focus to a dominant funding source until they’ve grown to about $3 million in annual revenue. In the period leading up to that point, they test a range of fundraising approaches, not following preconceived formulas.
To learn more about how successful leaders engaged in this experimentation, I interviewed over 100 of them, and I found again and again that they had shown great flexibility and creativity as they tested a wide range of ideas. I also found that they were so open to discovery that they were willing to significantly alter their whole business model if that seemed advisable.
Consider the case of Hot Bread Kitchen, a training program for low-income women who want to work in the food industry in New York City. Chasing a dream of many social entrepreneurs eager to get off the fundraising treadmill, founder Jessamyn Rodriguez initially believed the organization could become self-funded by earning income from sales of its bread. She tested a variety of approaches, from sales at an on-site café to impressive larger-scale arrangements, such as selling to JetBlue and Whole Foods. When those sales weren’t adequate, she realized she needed a hybrid model that would rely partly on earned income and partly on philanthropic sources.
By being receptive to foundation support, Rodriguez not only achieved financial stability but also gained vital wisdom about developing her services. “I realized that there is actually a huge benefit that comes from philanthropic funding,” she told me, “because it allows us to do more for the women we serve.” She was able, for example, to add child care during the cooking classes. As of now, Hot Bread Kitchen is bringing in about 65% of its income from earned sources and 35% from foundations and individual donors, and Rodriguez and her team continue to test sources, such as government partnerships, in pursuit of an optimal model.
Prototyping Isn’t Only for ProductsIn their funding experimentation, many organization leaders are following the human-centered design process of conducting research with end users and then rapidly testing simple, low-cost prototypes. With fundraising, this involves research with donors in place of end users. That could start small, with even a couple of current donors, asking for no-holds-barred feedback about existing efforts and new ideas to try. Small-scale launches of recommended approaches can then be tested.
When Alejandro Gac-Artigas decided he wanted to create an organization devoted to increasing literacy rates among low-income kids by training their parents to better support them, he had no idea how he was going to pay for the program. He threw himself into researching possibilities, including calling as many superintendents and principals as he could to see how much they might be willing to pay for such a service. A number responded that they would be interested if he could prove that students’ reading improved as a result of his program. To make the case, he launched a pilot program at a single school. The results were impressive, and Springboard Collaborative now runs training classes nationwide, with the bulk of its $7 million annual budget coming from fees paid by schools.
Another founder who followed the method is Beth Schmidt, a former teacher who started Wishbone, a crowdfunding site that provides money for low-income high school students to pursue a career passion through a summer experience such as a camp or workshop. She didn’t start fundraising by launching an expensive website. Instead, she simply photocopied some of the top essays her students had written about their career dreams and sent those essays to her family and friends, asking for donations. She received thousands of dollars and realized that she was onto something. Only then did she begin the process of launching a formal platform.
In both of those cases, experimentation quickly helped to focus on an optimal solution, but often many disappointing, and costly, surprises appear. Take the example of an organization I cofounded, Spark, which engages Millennials in new forms of philanthropy to support gender equality. Early on, we invested significant resources in soliciting corporate sponsorships, developing a pitch package, working with our members to develop relationships with their companies’ foundations. After a couple of years of failed efforts, we realized that corporate sponsorships weren’t optimal for our organization’s model, and we doubled down on raising money from our members, who happily supported Spark’s work.
Interviewing donors and performing quick, inexpensive test runs goes against the grain of the conventional wisdom of fundraising, with its emphasis on highly polished media campaigns. But the new generation of social innovators is showing that experimentation rather than formulaic diversification is the best route to mitigating risk in developing a funding stream.
In this new interconnected world where hashtags have the power to spark movements overnight, social entrepreneurs often ask me things like “how can I get my cause to go viral?” or “how can we use social media to advocate policy change?” I have good news: there is a new playbook that will walk you through the answers to all of these questions and more!
In their new book, New Power: How Movements Build, Businesses Thrive, and Ideas Catch Fire in Our Hyperconnected World, Jeremy Heimans and Henry Timms help us all decipher new forms of power that democratize and equalize our capacity to create social change in the era of #blacklivesmatter and #metoo. Drawing on their deep experience developing online movements that have themselves caught fire (Heimans as the CEO of Purpose, a company that builds and supports social movements, and Timms as the co-founder of #GivingTuesday, an international day of philanthropy), the authors argue that new power can be both for good (crowd-sourced drug trials, fast-growing movements in the name of love and compassion) or for bad (ISIS or white-supremacists) and the choice is in our hands to ensure that we use these tools in a way that makes our world better.
New Power is a lively and engaging read that masterfully uses stories of social entrepreneurs, businesses and individual people to inspire readers to do more to spread ideas, lead movements, build careers or transform organizations. But Heimans and Timms don’t stop with the stories. They give readers a clear and easy-to-use 5-step framework that anyone can leverage for good: 1. Find your connected connectors, 2. Build a new power brand, 3. Lower the barriers, 4. Move people up the participation scale, 5. Harnessing the three storms.
As I have seen in my research for Social Startup Success, two-thirds of nonprofits in the United States are $500K and below in revenue, with so much grassroots potential to harness new power to support their causes. But as Heimans and Timms describe, they can’t do it without things like shifting their leadership approaches to allow for more open participation, and a deep understanding of how to leverage broader support. I’m so excited to share this amazing new playbook with all of my favorite social entrepreneur leaders so they too can maximize their potential for impact and turn hashtags into real social change!
This article originally appeared in Echoing Green.
Over the past five years, I have traveled the country talking with top-performing social entrepreneurs to learn about the secrets of successfully scaling an organization, as well as the leading causes of failure. When I asked over 250 nonprofit leaders to describe their biggest mistake, by far the most prevalent answer was hiring the wrong people. In interview after interview, they told me they’d had no clue how to make hiring decisions.
The costs are staggering. Research shows that the average cost of a single bad hire for a nonprofit is tens of thousands of dollars.
As business management guru Jim Collins wrote in "Good to Great", the first step in organizational success is “getting the right people on the bus.” But how? The successful leaders I interviewed shared these five vital lessons they learned:
1. Map out a multi-year hiring strategy.
Use your strategic growth plan to carefully consider your personnel needs not only in the present, or the next six months, but for several years to come. This gives you lead time to identify superior talent and assure you have the right skills at the right time.
2. Hire senior leadership early.
The organizations I studied that scaled the fastest hired senior leadership personnel, such as a chief financial officer or director of technology, at an earlier stage of growth than most other organizations. Too many leaders think this is putting the cart before the horse, when, in fact, this frees up a leader’s time to focus more on fundraising and strategic planning, and that propels faster growth.
3. Test skills in action.
Rather than relying only on interviewing, ask candidates to produce some work, such as a proposal for a fundraising strategy, or to make a presentation to your management team, which allows you not only to evaluate the actual quality of their work, but to tap the expertise of your team in making the decision.
4. Ask a key "culture add" question.
A good fit involves not only skills but whether a candidate will thrive within your culture. Take the time to define the underpinning values that make your organization tick. It is a good exercise to understand your culture, and when it comes time to hire, you can see what a candidate brings that can add to and continue to shape your organization. Many leaders I interviewed told me they always ask a particular question that helps them evaluate what their candidates value. For example, Kiva, the crowdfunding platform for global microenterprises, asks every employee “how many bad days a year do you have,” to sort through candidates who tend to be optimistic. Kiva has a very positive work environment, so they want employees who show up to work happy.
5. Fire quickly.
Mistakes are inevitable. You must recognize them and correct for them with alacrity. This is a hard truth for many nonprofit leaders, who tend to think of their staff as family. But keep in mind that when people are not performing well, they are usually relieved to move on, and poor performers put an undue burden on the rest of your team, who must compensate for their shortfalls. Quick action makes the outcome less painful for everyone.
Great organizations are comprised of great teams. The more astute a hirer you become, the more remarkable team you will build, and a great team can exceed even your greatest ambitions.