Don’t Start Yet Another Nonprofit

start a nonprofit

“If you’re the kind of person who tends to succeed in what you start, changing what you start could be the most extraordinary thing you do.”

I previously featured this quote in a post about why society needs great marketers. If you’re a marketer interested in or working in the public and social sectors, maybe you’ve wanted to start a nonprofit of your own. As someone who has started his own business and worked at startups and nonprofits, I advise you to think long and hard before you start a nonprofit. It might not be the best way to have the impact you desire.

What Facebook and Nonprofits Have In Common

Dustin Moskovitz, one of the founders of Facebook, gives a great talk about why you should start a company. I think it’s just as applicable to nonprofits.

Moskovitz hears budding entrepreneurs cite several common reasons for starting a company: financial gain, massive social or commercial impact, lifestyle, and control. Most of the time, Moskovitz says, these are pipe dreams.

He also hears passion and aptitude as reasons to start a company. These are better reasons.

Moskovitz goes on to make the case that if you have passion and aptitude, and want financial gain, massive impact, and even the founder’s lifestyle, you may be better off joining an established but growing organization.

The same goes for nonprofits.

It’s Hard Work To Start a Nonprofit

Nonprofits may have a lower failure rate than businesses. Getting volunteer labor and donated capital may make it easier for small organizations to hang on. This article on FactCheck.org gives reliable statistics about 10-year survival rates for nonprofits. The rates are lower than the proverbial 80 percent failure rate for startup businesses.

Still, you probably want to accomplish more than merely hang on.

There is fierce competition for donations, as well. The top three percent of large nonprofit institutions account for more than 90 percent of nonprofit revenues. According to Charity Navigator, nearly half of all charitable giving goes to religious and education groups. Unless you’re starting a church or a university, your pool of available funds just shrunk by half.

Even if you can get funding, a lot of hard work lies ahead. As a marketer, you know that design, distribution, pricing and promotion are fundamental activities for any organization. You’d need a vision for these four core areas for your nonprofit. In addition, consider the other necessary-but-time-consuming tasks in founding an organization, such as

  • Legal compliance
  • Facilities
  • Human resources
  • Accounting

If you lack passion or aptitude for these tasks, or feel they will detract from what you want to accomplish, maybe you shouldn’t start a nonprofit. And that’s okay.

If I Don’t Start a Nonprofit, Then What?

Don’t start yet another nonprofit, unless you have the passion to wade through all the heavy lifting without losing sight of accomplishing your vision. There are plenty of ways to contribute to our social good. Consider these choices:

  • Give money directly to those how need it. Research is demonstrating the power of direct cash payments.
  • Donate your time and money to an established nonprofit that aligns with your goals. They already have the infrastructure you need to support your work.
  • Change careers to join an established nonprofit. This is harder to pull off, but nonprofits are always looking for experience professionals with new perspectives.
  • Start a business, instead. There’s good support for a business solution to poverty, for instance.

If you’ve read this far and aren’t deterred, here are a couple next steps:

  • Visit the National Council of Nonprofits for resources on how to start a nonprofit.
  • Consider franchising a nonprofit from another community.  Instead of starting from scratch, adopt the model of a nonprofit already succeeding in another community. You’ll help them scale while building on the work they’ve already done.

 

(Image courtesy of Wikimedia)

Three Ways To Eliminate Low-Quality Charitable Products

low-quality charitable products

Are you designing and distributing low quality charitable products? How do you know? Just because your clients may benefit from, and even rely on, products that are free to them doesn’t mean you can give them crap. It also doesn’t mean they stop becoming savvy consumers just because something is free to them. Your products and services may be free to your clients, but in areas like healthcare and water they can also a matter of life and death.

Here are three lessons from two cautionary tales of low-quality charitable products.

Low Quality Threatens Healthy Babies

Low-quality charitable products can threaten healthy babies.

In India, TED Fellow Zubaida Bai encountered a midwife who used a small farming implement to cut umbilical cords after delivery. The sight stunned Bai. After delivering her own child in a modern hospital, Bai spent a year trying to shake an infection. What were women in villages going through?

She made it her mission to offer a low-cost kit of medical tools for delivering babies in the developing world. At first, she was thrilled to find that such a kit already existed. Her excitement faded when she final received a kit. Its contents were unhygienic, did not follow medical best practice, and turned off expectant mothers and midwives. Also, the kits were only available when there was charitable funds to support them.

Bai worked with midwives, mothers, and medical experts to design a better kit. For just $3, which was $1 more than the old kit, Bai’s company ayzh created the Jamma clean birth kit with proper and hygienic tools packaged in a purse that mothers could keep and use. So far, the kit has helped more than 600,000 mothers and babies.

Low Quality Threatens Clean Water

low-quality charitable products

Low-quality charitable products can also threaten access to clean water.

In Ghana, Kevin Starr saw the pioneering work of Saha providing clean water in arid, rural areas. The Saha nonprofit business model, supported by both donations and affordable client fees, was thriving in multiple locations. Saha’s ongoing testing at the water source and in client homes showed that their system consistently delivered bacteria-free water.

In one village, though, the local Saha provider was struggling after two years in business. During that time, three different charity programs came to the village, distributed free water filters, and left. While the filters worked, clients stopped using Saha. That’s not to say the filters were effective at removing harmful bacteria. Eventually, the filters clogged or broke, and there was no way to repair or replace them. If free solutions kept arriving and not working, they would kill the one effective method for delivering clean water.

Three Lessons About Low-Quality Charitable Products

Lots of lessons spring from these two stories, but in the context of this blog, three items stick out.

Design matters

Both Saha and ayzh invested effort to design products that were affordable, met measurable standards, and appealed to clients. Both organizations designed products with, and not just for, their clients. For both these companies, competing products that were poorly designed promoted infections that were harmful and potentially deadly.

Business model matters

Saha providers charge pennies for clean water, but compete against free water filters. ayzh charged $1 more for their clean birth kit than the competing charity version. Both companies have build business models with products that cost clients more than all-out charity. However, that additional cost fit within clients’ means and assured quality products with ongoing benefits.

Designing affordable solutions with self sustaining business models is the business solution to poverty and the best way to scale.

Sustainability matters

As Kevin Starr said, there’s an opportunity cost to failure. People in poverty have much less ability to absorb that cost. Solutions for vital services like clean water and health need to work reliably and continually.

Saha’s clean water solution works because it relies on local products and labor, receives revenue in exchange for water, and performs ongoing measurement to ensure quality. Clients don’t get sick and possibly die from infection. One-time interventions with products that wear out can’t match this.

ayzh’s clean birth kit keeps mothers and babies safe from infection. It might sound crass, but this helps sustain the market. ayzh receives revenue for the kit, which ensures ongoing support and product improvements.

Probably the kit’s most clever sustainability aspect is packaging the kit in a purse that the mother could keep. One, the packaging is reusable, making the product more environmentally sustainable. Two, it made the kit more appealing to mothers, sustaining interest in the product. Three, after the birth the purse became a promotional tool when the new mother carried it with her. That helps spread word-of-mouth about the product.

In the end charitable work, like business, requires dedication to a market. Anything less is a disservice and potentially harmful.


Read more about The Business Solution to Poverty.

 

(Images courtesy of Flickr and WikiMedia)

Impact Investing: Return on Investment From Marketing Social Goods

Impact Investing Return on Investment From Marketing Social Goods

Can you do well while doing good? This is the ultimate question for a marketer in the public and social sector. Doing well in the public and social sector means more than just money. Earning money leads to sustainability and scale, two qualities that communities desperately need and funders desperately seek.

Continue reading Impact Investing: Return on Investment From Marketing Social Goods

Design Thinking: Asking the Right Questions to Address the Five Villains of the Social Good

Design Thinking Questions Address Villains Social Good

The American Marketing Association definition of marketing centers on the concept of offerings: “Marketing is the activity, set of institutions, and processes for creating, communicating, delivering, and exchanging offerings that have value for customers, clients, partners, and society at large.” A prime design question for this blog then becomes what should public and social sector organizations offer that has value for both clients and society at large?

Continue reading Design Thinking: Asking the Right Questions to Address the Five Villains of the Social Good

Business solution to poverty: Hello Tractor

Hello Tractor

The book The Business Solution to Poverty argues against non-profit development and for scalable, business-like approaches to end poverty. When I reviewed the book, I saw a lot of practical wisdom in the argument, but also wondered how many such approaches could live up to the challenge. I think Hello Tractor could make the grade.

Continue reading Business solution to poverty: Hello Tractor

Distribution as a product to combat poverty: JITA

Bangladeshi woman

Distribution is most often considered something that a business does with its product. But distribution itself can be the product, as well. In remote, impoverished areas, distribution can also be a solution to poverty, illness, and other problems.

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The Business Solution to Poverty: design for scale

Business Solution to Poverty

I like how Paul Polak and Mal Warwick start The Business Solution to Poverty: Designing Products and Services for Three Billion New Customers focused on their target customer, the global poor who live on less than $2 per day. This is a massive customer segment: 2.7 billion people.

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The Business Solution to Poverty: marketing and design

Business Solution to Poverty

So far, my posts have been somewhat critical of  The Business Solution to Poverty: Designing Products and Services for Three Billion New Customers, by Paul Polak and Mal Warwick, and I can think of at least a couple more critical points. However, I really appreciate their approach to marketing and design.

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