By Mo Fong
Guest contributor Mo-Yun Lei Fong is Sr. Director, Google Technical Solutions, Assistant and Search; she was previously Google’s Director, Computer Science Education, Catalyst for Equity in Education, and Chief Compliance Officer for Google Payments. She began her career as a school teacher and then was promoted to assistant principal at Monta Vista High School. She then went on to Harvard Business School and became the founding executive director of the Stanford Educational Leadership Institute, prior to joining Google.
“Alone we can do so little; together we can do so much”
Helen Keller
As the pandemic continues to drag on, it is clear that government services and businesses alone can not provide all the products and services that are needed to maintain daily living especially for our most vulnerable populations. Nonprofit organizations (NPOs) that fill those gaps and provide vital services have also taken a hit. During the pandemic, we’ve seen volunteerism drop by two-thirds according to a recent Fidelity Charitable report. To sustain their organizations, many have to change their business and operating models out of necessity and many are updating their processes and systems. Having worked on a few HBS Community Partner projects, I’ve seen cases where nonprofits are now able to serve people outside of their local communities for the first time while others are moving from a centralized model to an autonomous regional model. Emerging nonprofit organizations have entered the fray with a fresh sense of urgency to stem the crisis to mixed results.
If you are thinking about starting a new nonprofit organization, now is the best time to consider your “why”, how and what before diving in.
Five Things to Consider BEFORE Starting your NPO.
Why do you want to start your nonprofit organization, why you and why now?
Passion is not enough, so be sure you know your “why.” Starting any organization is extremely hard work and can be a humbling experience. Perhaps your “why” is because you possess a certain skill set that others lack. For example, Develop for Good was started by Mary Zhu and Amay Aggrawal during the pandemic because they saw university computer science students have the technical capabilities to help nonprofits with web apps and design challenges. Perhaps you have the time right now to devote to the care and feeding of your nonprofit and you have personally encountered a need in a community that has been left unfulfilled. Perhaps you are in the later stages of your career and you want to give back by setting up a charitable fund. However, keep in mind that this is not just about throwing money at the problem, but also building the infrastructure from operations to accounting, nurturing the relationships of the people you want to help, and soliciting any volunteers and partners for the long term viability of the organization. If you don’t have a compelling “why,”, please pause now as you may inadvertently be giving false hope to those who may be depending on you for longer term support.
How does starting your nonprofit align with your personal goals and how will you sustain your commitment for the long term?
We know you have the interests of others at heart, but to maintain the organization, it will require stamina and commitment. For college students who are starting nonprofits based on passion, resourcefulness and sheer will, the positive impacts may peak at the onset, but once the administrative overhead and logistics become more complex with scale, will the founders and volunteers have the resilience to continue and secure the support they need? As visionary leaders, those who start organizations may suffer from founders’ dilemma which include giving up some control for the long term viability of the organization. With a dynamic environment due to economic turbulence and fast changing social ecosystem, founders should anticipate challenges. Bringing others alongside that can provide emotional support as well as the diversity of skill sets needed to make pivots will be necessary and it will be important to start developing those networks early. You may need to consider establishing a more formal advisory board or board or directors, outsourcing logistics to third parties (e.g. accounting), and building a reliable team of volunteers or paid employees to share the load.
How will you establish your organization’s infrastructure and what will the operating model look like? How can you leverage existing nonprofits for shared services?
More than 1.5 million nonprofit organizations are registered in the U.S., according to the National Center for Charitable Statistics. Rather than starting from scratch, some of these organizations can provide a benchmark for how to set up your operating model. Conduct simple online landscape research to see what nonprofits already exist in your space, to ensure you’re not duplicating efforts. Consider whether there exists a nonprofit organization that has a similar mission as yours and whom you could partner with and gain economies of scale by utilizing existing infrastructure. For example, instead of going through the hassle of registering your nonprofit with the IRS, consider first having an existing nonprofit act as your fiscal sponsor. More here on the pros and cons of fiscal sponsorship. There also may be existing playbooks on fundraising, board governance, co-marketing opportunities, and advisory networks to help you scale.
How will you mitigate the risks of your business/operating model including financial, operating, and brand/reputational risks?
If you are dependent on volunteers as your operating model, there are no guarantees that they will stay with you especially when times get tough as we’ve seen during the pandemic. You may need to provide safeguards including knowing what you can downsize in products and services immediately, ways to call on your volunteer alumni reserves, and potentially even some funds set aside to pay for interim support. There are also brand and reputational risks for the organization as well as yourself if you make promises that you can’t deliver.
- Is it dependent on volunteers?
- What would happen if your funding runs dry?
- What is the succession plan?
- What does your exit strategy look like?
Lastly (or firstly), how will you know if your organization has been successful?
Evaluating the success of your nonprofit is not only a prerequisite now for funding applications, but it is an important step to understanding what is working and what is not. Your key performance indicators (KPIs) can include absolute numbers of users reached, volunteer membership, devices/products disseminated. As a starting point, the Urban Institute and The Center for What Works have compiled common outcome and performance indicators used by nonprofits for 14 program areas, such as transitional housing, youth mentoring, and advocacy. Specific organizational examples include Mothers Against Drunk Driving, which has an aspirational goal of “Zero deaths. Zero injuries. Zero families impacted by impaired driving.” Another example is the Spark Program, which has behavioral outcome-oriented KPIs, such as the measures the percentage of students who grew in social emotional skills and “improved in critical competencies for successful classroom engagement.” Lastly, KPIs can also measure the effectiveness of your organization from fundraising efficiencies, donor attrition, to social return on investment. Setting milestones and clear objectives and key results for your organization will help you stay focused and guide you when making difficult decisions about where to spend your resources. As you map out your KPIs, also consider how you will collect, store, manage, and analyze this information on a regular basis.
If you’re still convinced you should start your nonprofit, it’s time to bring others along to help guide, encourage, and support you on your journey. Test out your ideas with a few trusted friends and family and as your positive impact grows, there will be a multiplier effect as more people seek out your services. Through it all, you will not only help change other people’s lives for the better but also your own.
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