Bringing Small Nonprofits to Scale

English at Work could be a poster child for social innovation in the nonprofit sector. An Echoing Green fellow, founder Maile Broccoli-Hickey is a social entrepreneur, but like most of them, she doesn’t even know it. Her tireless work to build an organization that can effectively and efficiently transform the English language skills of hotel and restaurant workers is a model to other nonprofits who have a great solution, but lack the capacity and strategy to grow it.

Maile started English at Work in 2004 when she was a waitress in an Austin, Texas restaurant. She realized that her co-workers needed customized English language instruction to ensure their and their employers’ success. Why not bring customized English classes to the workplace in a focused and systematic way? These courses, paid for largely by restaurant and hotel owners who see the value in having a more fluent workforce, get dramatic results. English at Work creates greater proficiency and fluency gains in a shorter amount than their closest ESL instruction rivals. The program works so well because it is a win-win. Students become more fluent and successful at work, paving the way for promotions and a way out of poverty. Employers get more productive, loyal and customer-service oriented employees.

But like most nonprofit organizations hit hard by the recession, a year ago English at Work was struggling to make ends meet. Although employers paid for the classes, those fees didn’t cover all organization costs. The additional necessary revenue came from individual donations and foundation grants, both hit hard by the recession. At the same time Maile knew that the program had the potential to transform the lives of so many more people. Despite financial troubles, she had big visions for growth.

With funding from a couple of key donors who understood the value of investing in infrastructure, capacity and planning, Maile enlisted Social Velocity to determine what was holding the organization back and to create a comprehensive revenue plan to get the organization on firm financial footing. Over the first two months of the engagement we interviewed board and staff members and reviewed all organization policies, by-laws, finances, collateral, plans and documents. We then created a detailed analysis of each area of the organization (strategy, program, finances, marketing, staffing, board, etc.) with recommendations in each area for how the organization could be more effective. Once completed, we worked closely with Maile over the next 3 months to create a detailed plan for increasing how money flowed to the organization from individuals, foundations, corporations and earned revenue. Finally, we trained English at Work staff and board on raising money.

Now that English at Work is on much firmer financial ground, they are ready to plan for growth, and so we are in the midst of creating a strategic plan for significant growth of the program. The hope is to take this great solution and bring it to scale.

English at Work is a great example of the many little-known nonprofit organizations that toil away under the radar. They may have a fabulous model for creating real change, but lack the infrastructure, capacity and strategy to grow their impact to scale. Although the Social Innovation Fund and other venture philanthropy funds that exist to bring solutions to scale are great, no ecosystem exists for the smaller nonprofits that may have equally important solutions. But there is a way. By combining a few key donors who understand the bigger picture, a smart strategy for growth and sustainability, and a determination to execute effectively, even the smallest nonprofits with a great solution and a vision for growth can get there.

Photo Credit: English at Work

Tags: Echoing Green, English at Work, Maile Broccoli-Hickey, nonprofit capacity building, nonprofit growth strategy, Social Innovation Fund, venture philanthropy funds

A New Kind of Nonprofit Leader

In his New York Times column this week Bob Herbert strongly criticized America and its leaders for not stepping up to the plate to guide us through these very troubling times.  As he put it:

As a nation, we are becoming more and more accustomed to a sense of helplessness. We no longer rise to the great challenges before us. It’s not just that we can’t plug the oil leak, which is the perfect metaphor for what we’ve become. We can’t seem to do much of anything.

Although his column is perhaps a bit too bleak, he does make the point that we have forgotten how to lead ourselves out of a mess, and the messes are getting larger and larger.

The messes of the American system are often cleaned up by the nonprofit sector. Nonprofits are usually borne out of some disequilibrium that the market creates (poverty, homelessness, poor education, lack of healthcare).

However, lately the messes have been too much for even the nonprofit sector to bear. And at the same time a deep recession, government’s increasing off-loading of social services to the sector, donors growing desire for measurement, and a more wired world are all combining to demand dramatic changes to how nonprofits operate. As a result, nonprofit leaders need to adapt.

The day has come for a new kind of nonprofit leader, one who has the confidence, ability, foresight, energy, and strength of will to really lead. This new nonprofit leader:

• Embraces the idea of a networked nonprofit and is willing and able to break down the walls of control and risk aversion and let the world in as fully engaged partners in the work they are doing.
• Works toward completely integrating money into the impact they are trying to create, understanding that big plans for impact are not enough, you also must finance them.
• Realizes that it is no longer enough to just “do good work.” They must find a way to measure, in some form, the work that they are doing and be able to demonstrate results to the external market.
• Looks to the social entrepreneurship movement for inspiration and new ideas for accelerating social impact.
• Recognizes the importance of strong infrastructure and works to recruit and keep top talent and create effective technology and systems by fundraising for those real operating costs every year.
• Refuses to play nice with funders who want to undermine the mission and impact of the organization, competitors who are providing an inferior service, and board members who won’t contribute.
• Maintains an external view on how their organization can continue to add value in the outside marketplace of community problems.
• Constantly forces themselves, and their high-performing team of board, staff, funders and volunteers to ask hard questions, make bold goals, push themselves harder, and deliver more and more impact.

It’s a tall order, but true leadership always is. We no longer have the luxury of so-so leaders. These times demand confident, capable, engaging leaders who are a beacon to a society whose mounting problems are overwhelming at best.

Photo Credit: 3n

Tags: Bob Herbert, networked nonprofit, nonprofit innovation, nonprofit leadership

Financing Not Fundraising: Aligning Money and Mission

In our ongoing series “Financing Not Fundraising,” we are exploring the argument that nonprofits need to stop fundraising and start financing social impact. The idea is that nonprofits have to break out of the narrow view that traditional FUNDRAISING (individual donor appeals, events, foundation grants) will completely fund all of their activities.  Instead, they must work to create a broader approach to securing the overall FINANCING necessary to create social change.

The previous posts in this series include an overview of the idea and how to create a financial plan.

The next piece of the puzzle is to create alignment in your nonprofit organization between mission (your reason for existing), core competencies (what you do better than anyone else in the world), and money (how you sustain yourself financially).

An organization in alignment looks like this:

The mission is supported by the organization’s core competencies which both feed into how it brings money in the door.

When one or two of these three elements are out of alignment, chaos can ensue.  For example:

Mission is misaligned: An organization that can generate money and operates great programs, but can’t bring it all together in a coherent single purpose, this is otherwise known as “mission creep.”

Core competencies are misaligned: An organization that has a great, clear idea of what they do (mission) and can raise money around it, but can’t deliver. This is reminiscent of the dot com era when there were countless businesses with fabulous ideas that successfully raised VC or angel money, but didn’t really have a core competency or product to deliver and eventually went bust.

Resource engine is misaligned: This final misalignment is the one nonprofits are most familiar with.  An organization has a great mission and can produce great results, but they can’t find a way to make the organization financially sustainable.

And it is this money misalignment where Financing Not Fundraising comes into play. Traditional nonprofit fundraising is often an example of money misalignment. It looks like this:

• The development staff (money) and program staff (mission) sit in separate parts of the building, rarely ever talk to each other, and make their respective decisions without consulting the other
• The board and non-fundraising staff disdain money and refuse to participate in bringing it in the door
• A nonprofit creates fundraising events that have nothing, or very little, to do with the mission of the organization
• A nonprofit raises money around gimmicks and donor benefits instead of around the mission and impact of the organization
• The organization’s strategic plan only contains goals for program delivery (mission), not how to finance that delivery (money)

And that’s just a beginning list. Shoving money to the side and ignoring it is the equivalent of a business owner saying they don’t need to pay attention to sales. “Nonprofit” means that individuals (private owners or shareholders) don’t gain financial benefit, it doesn’t mean that the entity doesn’t make money.

To get money back in alignment with mission and competencies nonprofits need to do several things:

1. Embrace the idea that money is not a necessary evil to your organization, but rather an equal and supportive partner to your mission
2. Train your entire board and staff on money in the nonprofit sector in general, and how money comes in the door at your specific organization
3. Make sure that your strategic plan has a realistic and thoughtful financial plan attached to it
4. Move fundraising activities and special events away from convoluted ways to extract money from people and towards celebrating and educating the community about the impact you are achieving
5. Be up front with board members, donors and staff about how much it costs to fund every aspect of the organization’s operations and the various ways that money offsets those costs

Instead of sequestering fundraising away from the “true work” of the organization, nonprofits must fully integrate financing into their mission. It’s the only real way to create social impact.

If you want to learn more about how to apply the concepts of Financing Not Fundraising to your nonprofit, check out our Financing Not Fundraising Webinar Series.

To download the 27-page Financing Not Fundraising e-book, click here.

Tags: align mission and money, development staff, financing not fundraising, fundraising events, nonprofit core competencies, nonprofit fundraising, struggle to raise money

Can You Really Wave Goodbye to Fundraising Forever?

There’s a new, or perhaps it is very old, idea kicking around the blogosphere that is probably a dream of many nonprofit leaders. The idea, put forward by Appropriate Infrastructure Development Group (AIDG) founder Peter Haas, is that there could be a company to which nonprofits completely outsource fundraising. Although the idea is intriguing, its underlying assumption that money and mission can, and should be, separated is a potentially destructive one.

Peter proposes a new business idea that takes the burden of fundraising off the backs of nonprofit Executive Directors. A fundraising contractor would solicit donations and take a 10% cut of the revenue:

This is an industry that is waiting for its day…There are incredibly talented development people with strong contacts who raise hundreds of millions of dollars for big organizations…who could do a lot of good in the world by going solo and helping smaller organizations…There need to be more contractors and less consultants in this field, people who will treat it as their job to do the work and the heavy lifting of the fund raising task instead of just offering advice.

Peter’s post set off a string of mostly positive comments and a response blog post by Change.org blogger Nathaniel Whittemore, who thinks it’s a “pretty fascinating idea.”  Nathaniel’s post similarly drew comments, which were largely positive.

I completely agree that we need innovation in how nonprofits fund their impact (read my series on Financing not Fundraising), but I don’t think Peter’s justified frustration has developed a valid idea. First, there are legal and ethical challenges, for example the Association of Fundraising Professionals, the largest association of fundraisers in America, calls fundraiser commissions unethical because they inject personal financial gain into a charitable transaction, and the IRS frowns on parts of charitable donations benefiting individuals.

But in any innovation there are hurdles to overcome, so these issues are not what really bothers me. Where Peter’s idea gets dangerous is in his underlying assumption that fundraising can somehow be separated from mission, as he argues:

If the mission of the NGO is the service to the community, and fund raising is truly something administrative (as most donors like to classify it in costs analysis), then it should be something an NGO can easily subcontract. NGOs subcontract back end services all the time, book keeping, accounting, payroll. I don’t hire somebody to tell me how to reach into my heart and find my inner book keeper, I hire a book keeper. Why not fund raising?

But, fundraising is NOT simply an administrative aside that can be tossed to someone else. The money that supports a nonprofit is integral to, not distinct from, the organization’s impact. Unlike a for-profit company that has one customer group, a nonprofit has two: 1) those who benefit from their services and 2) those who fund those services. To separate an organization from one of their customer groups is unthinkable. Not many successful for-profit companies outsource their sales function. Indeed, the most successful companies are those who integrate feedback that their sales team gathers as they meet with current and potential customers (the marketplace). So too should a nonprofit integrate ideas and feedback it gets from its second customer group: its funders.

Ah, I can hear the screaming now. In some nonprofit circles it is close to blasphemy to consider that those with the money should be able to influence a nonprofit program.

But funders (love them or hate them) provide a very necessary input to an organization’s theory of change. An organization can have a phenomenal solution, but if that organization is not able to articulate and demonstrate why a community as a whole should care and how that solution provides a positive return on investment, the solution is pointless.

Nonprofits cannot outsource the absolutely critical function of understanding, building relationships with, and gathering feedback from funders. To separate financing from impact would be to wave goodbye to half your business model and the customers who support it.

Tags: AIDG, Association of Fundraising Professionals, Change.org, Executive Directors, IRS, Nathaniel Whittemore, NGOs, nonprofit fundraising, nonprofit mission, Peter Haas

A Revolution in Nonprofit Finance: An Interview with Clara Miller

Last month we kicked off a new, monthly Social Velocity blog interview series where I interview leading thinkers and doers in the social innovation space. Our inaugural interview was with Kevin Jones co-founder of both Good Capital, one of the first venture capital funds that invests in social enterprises, and the Social Capital Markets Conference (SoCap) which marks its third year with the upcoming October event.

This month’s Social Velocity interview is with Clara Miller, President, CEO and founder of the Nonprofit Finance Fund, a national leader in nonprofit, philanthropic and social enterprise finance. Directly and with others, NFF has leveraged $1 billion of capital investment into nonprofits, and  provided over $200 million in direct loans. Clara Miller was named among The NonProfit Times “Power and Influence Top 50″ four years in a row and is a board member of GuideStar and Grantmakers for Effective Organizations.

Nell: You and the Nonprofit Finance Fund have initiated this idea of equity capital for nonprofits, or money to “build” organizations rather than the tradition funding to “buy” services. Do you think the idea of equity capital for nonprofits is catching on?

Clara: First of all, I should say that many people have contributed to the idea of a nonprofit version of equity over the years.  My NFF colleague George Overholser has been a field leader.  He focuses almost exclusively on the version we call “growth” capital, which is used to rapidly build organizations, changing what they do through major investment undertaken around a single set of metrics, business plan, and ideally, with all funders acting in concert.

And yes, I do think the broader notion of “equity”—and for that matter, the importance of the balance sheet in its entirety—is catching on, especially among major foundations, capital campaign veterans and those familiar with these concepts in the for-profit world.  The broader concepts of “building” organizations and “buying” services, and how financial roles differ, are resonating strongly with both organizations and funders.  We have a foundation partner that has simply put the question, “is this a “buy” grant or a “build” grant?” on the program officers’ intake checklist.

Nell: How do traditional nonprofit capital campaigns, which are predominantly focused on raising money for new buildings, fit into all of this?

Clara: We think these “growth capital” and “equity” principles comprise an ideal way to think about (and operate) a successful capital campaign.  Our early work in the 1980s (when we were Nonprofit Facilities Fund, and exclusively financed  “community facilities” with loans) revealed that a rash of problems would almost invariably follow capital campaigns for facilities: cash crises, burnout, funder fatigue, “night of the living dead” program operations, the need to lease excess space at below-cost rent…you get the idea.  It was a real eye opener. We learned a lot about the need for truly unrestricted “growth capital,” in addition to funds focused (and often restricted) to build and fit out the facility.  Among the NFF-documented  lessons: that facilities projects typically need 3 to 4 times the bricks and mortar cost for working capital to cover program and administrative growth needs; that the building frequently changed the business model radically, but planning never covered the whole enterprise; and that putting large amounts of cash into an illiquid asset while expanding operations was problematic on a number of levels.  Also, many of these building projects came with opportunity costs: organizations weren’t investing in new technology, upgrading skill sets, or replenishing cash reserves.

Beyond facilities projects, capital campaigns frequently focus on other (typically illiquid) parts of the balance sheet: building an endowment, or on the acquisition of, for example, a program asset (such as a painting or piece of medical equipment). Thinking holistically about improving or acquiring illiquid assets, via a campaign for growth capital, can better the situation.

Nell: The for-profit sector currently enjoys a broader and deeper array of financial vehicles than does the nonprofit sector (seed funding, angel investors, growth capital, stacked deals, etc.) do you anticipate that the capital market for nonprofit organizations will become more robust and what will it take for that to happen?

Clara: I’ll push back a little and say that the vast majority of both nonprofits and for-profits (that are small, with less than $200K in revenue) have approximately the same level of access to similar financing vehicles: sweat equity, seed/angel funders/investors (friends and family, the first foundation grants, etc.), credit card debt, bank loans, retained earnings, etc.   Then there is “growth capital” or “capital grants,” which a very small proportion can access in either sector.  And while large for-profits are much, much larger than large nonprofits, large nonprofits have reliable access to some highly sophisticated funding and financing vehicles that for-profits don’t (and vice versa).  Some very large nonprofits have access to for-profit subsidiary ventures and investments—and some are highly sophisticated (universities investing in development of intellectual property and associated products, CDFIs with venture funds, public media with development and sales of program assets, and others).  And on the debt side, much of nonprofits’ “capital market” is for-profit-run (bank debt, investments, tax-exempt bonds, etc.)

The most important barrier to enterprise scale (for either sector) is not so much lack of access to capital as it is a scalable, focused business model with reliable net revenue.  Once you have those—or evidence that they are possible—capital will flow.

But that said, we’re talking about a couple of “market wide” dysfunctions.  The first is that despite highly resourceful managers, sophisticated board members and billions of dollars of revenue and capital funds, there is no tradition of “enterprise finance” in the sector.  “Pretty bad ‘best practices’” designed to make nonprofits more efficient and fiscally prudent cost the sector dearly.  Confusion about the direct funding of programs (it’s not possible, most of the time you need to fund an enterprise to deliver programs) means capital is mixed up with revenue, growth with regular operations, and “build” grants with “buy” grants (and a variety of hybrids!).  This wreaks financial havoc in growing organizations. Missions—along with the public—suffer.

The second problem is that there’s no really reliable signaling mechanism for organizations to fold their tents, pass their programs to another organization, and go out of business.  In the for-profit world, that would be financial failure; in our world, that’s not so straightforward: so we hang in there, meaning resources that might go to a stronger program remain tied up.  It also means that the biggest and richest players have (and, largely, keep) the vast lion’s share of resources (even more pronounced than in the for-profit world).

Finally, there is a problem with access to charitable revenue.  Promising, mid-sized organizations—especially those serving low-income people (and therefore lacking access to the traditional source of capital in the sector, individual donors) have a difficult time building the operation they need to grow.  Foundations are the logical path here, and having foundations embrace “enterprise friendly” practices—including growth capital and build-buy understanding—can go a long way toward changing that dynamic.  Establishing a field-wide understanding of basic enterprise finance principles will help insure that growth capital campaigns become true innovation with long-term staying power, rather than a short-term novelty.

Nell: Growth capital for nonprofits is mostly only available to larger nonprofits that have the capacity to prove the results of their model. Do you think growth capital will increasingly become available to the bottom 80% of nonprofits (those with a budget less than $1 million), and how and when do you see that happening?

Clara: Our goal is not that all organizations of every size and business model have access to growth capital and pursue aggressive growth goals ASAP.  That’s neither possible nor desirable in either the for-profit or the nonprofit worlds.   In both sectors, some business models may not be scalable, and that’s ok—in fact, it’s good.  Nobody wants their favorite neighborhood clam shack or Italian restaurant to go public or become a Pizza Hut.  Diversity is good; and most people like things about both large and small enterprises. This is true in any sector, where economies of scale and preservation of quality are frequently subject to the laws of diminishing returns.  Growth capital is not for everyone, and it is only one tool in the enterprise tool box.

The more important revolution is to make broadly accessible the tools and principles of enterprise finance—with a clear understanding of the realities of the commercial proposition of the sector (i.e., there’s a reason we have a nonprofit sector). There are well-managed and poorly managed (and capitalized) enterprises of all sizes and tax statuses, and there are scalable and non-scalable ones as well.  Most critical on the scaling front is that our sector embraces and deploys the broad set of principles that make enterprises of any size or shape effective in reliably achieving great results.  Trouble arises when a specific social benefit or innovation is so compelling that we all want the maximum number of people to benefit from it: Our failure to use the principles of growth capital and proper scaling techniques to assure results while growth proceeds is (and has been) tragic for the social sector, and a change in practice can help.

Nell: How do you think the Social Innovation Fund will change the capital landscape for nonprofits?

Clara: I think the SIF already has raised the profile of the ideas around growth capital and scaling discussed here.  And it certainly has the attention of a group of large foundations, a significant number of whom are applying as intermediaries.  I think it took courage for them to apply, and courage for the SIF to get developed. At the beginning there will be some fits and starts, and government procurement can be dicey (especially when it’s trying to be capital rather than revenue), and foundations are trying to make it work in this way for the first time.  That said, it’s very exciting for us to see “growth capital,” which is the core concept, being given a whirl by both the White House and the Foundation world.

Nell: Venture philanthropy funds (that provide growth capital to nonprofits) and social venture capital funds (that provide capital to double bottom-line businesses) currently don’t interact very much in the marketplace. Do you see an opportunity for greater integration of nonprofit and for profit social investing? And if so, what will it take to get there?

Clara: I think there is increasingly frequent interaction between for-profit and non-profit business models (and entrepreneurs) on the conceptual level, and that’s being translated into some compelling platform-agnostic enterprise structures to accomplish social ends in many sectors—health care, research, arts and culture, media, housing—are all examples.  And interactions may not be best between two enterprises that are both at the “venture” or “start up” stage.  A start-up nonprofit may want to partner with a fully-scaled for-profits (and this is common), while a fully-scaled nonprofit may want to create (or house) a venture for-profit to help reach certain social goals.

On the “deal” level, I think there’s a reason to maintain a bright line between the nonprofit and for-profit tax status.  I favor crisply defined hybrids (of which there are a variety) over mushiness (we’re a for-profit but we are good people doing socially beneficial work) because they are more likely to stand the test of time and skepticism, and since ownership and tax structures have bright-line legal and moral duties attached to them.

Tags: CDFIs, Clara Miller, equity capital for nonprofits, George Overholser, Good Capital, Grantmakers for Effective Organizations, growth capital, GuideStar, Kevin Jones, nonprofit capital campaign, Nonprofit Finance Fund, NonProfit Times, Social Capital Markets conference, Social Innovation Fund, White House

The Road to a Better World is Jammed with Red Bikes

This past Memorial Day weekend I headed to Denver to have fun and explore the city. The trip was made infinitely better because of 500 red bikes. Denver is the first city in the country to have a bike sharing program, called B-cycle, and it is phenomenal. It results in a cleaner city and healthier citizens. I wrote a post about the whole experience and what it’s doing for Denver, and could do, for the whole country, at the Change.org blog. Here’s an excerpt:

There is something pretty amazing going on in Denver, and it might just change the world. B-cycle, a nonprofit that provides rental bikes around the city, has found a cheap, fun way to make Denver a cleaner city and its inhabitants and visitors healthier. I spent last weekend playing tourist in Denver and the experience was made so much better, and cleaner, because of the rows of red B-cycle rental bikes around the city. Denver is demonstrating that change really is possible, especially when it’s easy and fun.

Denver is the first U.S. city to do what European, Canadian, Chinese and Mexican cities have already done–share bikes. Here’s how it works. You buy a short or long-term “membership” via credit card online starting at $5. Then grab one of the 500 bikes waiting for you at the 50 kiosks around the city (found through a pretty cool iPhone app) and ride. When you’re done, return it to any of the kiosks, and your card will be charged for the amount of time you rode. The first 30 minutes are free, and it goes up in increments of around $1-2 for each 30 minutes after that…

You can read the whole post here.

Tags: B-cycle, Denver

Fixing the World Requires Disruptive, not Incremental, Change

The nonprofit sector has always been, at its core, about social disruption–some sort of disequilibrium exists in the market (poverty, unequal access to healthcare, segregation, homelessness, hunger) and a nonprofit organization is born to correct it. But somewhere along the way the big changes nonprofits sought to make in social norms, inadequate institutions, and unfair systems shrunk to small, incremental changes. Visions of disruption gave way to plans for the incremental. But we need to find our way back to disruption.

Incremental change is when a small portion of a problem is addressed.  It’s the idea that 10% of hungry children are fed, or 15% of at-risk youth go to college. Incremental change is small, endless steps toward solving a huge problem. At an incremental rate you begin to wonder if the problem will actually ever go away.

Disruptive change, on the other hand, is about reaching a tipping point where the solution, rather than the problem, becomes the norm.  It’s the vision of giving every kid a bright future. Or the goal of ending hunger.  Disruptive change is not just about the idea of scale, a key component of the social entrepreneurship movement where solutions are expanded to other cities or other people who could benefit. Disruption is in essence about reaching a point at which there is no going back. The old way yields to a new one.

A great example of disruptive change is the charter school movement. The American public education system is quite broken. But charter schools like Aspire, Green Dot, and KIPP have disrupted that broken system and are creating a new model of getting kids, who would otherwise drop out of the system, to college. None of these three charter school will ever reach all kids who need them, but rather these schools are demonstrating how to educate poor, at-risk kids. And the idea is that their model will be adopted as the norm by the American public education system. And given the Obama administration’s interest in these models, that could actually become a reality.

Or take homelessness, another seemingly intractable problem. The goal of  Common Ground, a nonprofit in New York City focusing on homelessness, is to “change the social and economic forces that undermine stability and health, and produce homelessness.” They want to completely end homelessness by changing the underlying systems that cause it. And it looks like they are doing just that in New York City. They have already reduced homelessness in Times Square by 87% and throughout the city by 47%.  Eradicating homelessness in the largest city in the country, that’s pretty disruptive.

But charter schools and Common Ground are the exceptions, rather than the rule in the nonprofit sector. Nonprofits are encouraged to think and act incrementally because they don’t often know where funding will come from year to year. It is difficult to make huge goals or attack big problems if the resources for execution are uncertain.  An undercapitalized, highly competitive market like the one in which nonprofits operate does not incent disruptive change.

But disruption, by its very nature, is uncertain and risky. More than anything else it involves a change in mindset. A commitment to disruption is a determination not to let fear and resource constraints hold you back from the disruption the market requires. The nonprofit sector needs to get back to its roots. Incremental change just doesn’t cut it anymore. Let’s get back to the disruption that defines the sector.

Photo Credit: tcpix

Tags: Aspire, Common Ground, Green Dot Public Schools, KIPP, Obama, Social Entrepreneurship