#NonprofitBookClub: Social Startup Success

By Caylin Haldeman

2019 is off to the races, everyone. How are you doing on your resolutions?

Me? Work in progress. I made the resolution to read more books on things I feel passionate about. I even created a reading list of books that will help me get smarter on topics like affordable housing, notions of “community” and “belonging” and (shocking) nonprofits.

But man, it can be hard to find the time! Josh and I talk all the time about how to stay on top of all of the great thinking coming out of the nonprofit sector – both locally and in other communities. We listen to podcasts (On Life and Meaning, BrandBuilders and the Charlotte Podcast have all featured great local nonprofits lately) and read online publications like SSIR, yet I have been watching as my “to read” stack of nonprofit literature grows taller and taller on my bookshelf.

In late January, hundreds of nonprofits gathered together at Project 658 for SHARE Charlotte’s 2019 Nonprofit Summit. It was a packed day, with two panels featuring local nonprofit, philanthropic and corporate leaders and a keynote address by Kathleen Kelly Janus, social entrepreneur and author of Social Startup Success: How the Best Nonprofits Launch, Scale Up and Make A Difference. Which just so happens to be one of those books in my stack…

I took that as a sign from the universe – “Get to reading, Caylin.”

So, I did. Here’s what I learned, organized by four ideas Kathleen presented during her keynote:

Nonprofits Must Invest in Themselves – This, I would argue, is the crux of the book – and just so happens to be one of Next Stage’s organizing philosophies, too. Too often, organizations are subject to the nonprofit starvation cycle, in which nonprofits underspend and underreport on overhead expenses due to unrealistic funder expectations.

In her book, Kathleen presents five core strategies for nonprofit success: testing ideas, measuring impact, funding experimentation, leading collaboratively and telling compelling stories. Each of these strategies requires deep investment – of time, resources and brand.

Nonprofits Must Harness the Passion of the Next Generation – According to Kathleen’s research, 55% of millennials say that they choose companies to work for because of their commitment to social good. Other research shows that 75% of millennials would even take a pay cut to work for a more socially responsible company. As Next Stage’s resident millennial, I feel like I can vouch for this: the next generation really cares about engaging in social good.

But we are also discerning in how we engage with nonprofits, in a way that diverges from the generations that have preceded us. While donors have zeroed in on evidence and efficiency in recent decades, the next generation has demonstrated an appetite for risk-taking, ambitious vision and bold story-telling. Nonprofits have to shift data collection and analysis, fundraising and communication strategies to meet these changing priorities, testing new strategies to harness the support of next-gen volunteers and donors.

Nonprofits Must Cultivate More Diversity, Equity and Inclusion – This is an unfortunate truth in the nonprofit sector: philanthropy often presents an inherent bias toward a nonprofit’s pedigree of leadership over an authentic representation of the community it serves. And due to the unique nature of the nonprofit structure, the sector tends to organically organize itself around philanthropic demand.

This means that the most successful nonprofits are typically the ones most aligned with this bias – organizations headed by well-connected, well-resourced and credentialed leaders. But in recent years, there has been increasing emphasis on the importance of cultivating diversity, equity and inclusion in the nonprofit sector both from nonprofits themselves and from funders. While this topic was a huge theme of Kathleen’s keynote address, I was disappointed to see that it does not play a central role in her recommendations related to cultivating collective leadership in Social Startup Success.

Donors Must Invest in Nonprofits – Nonprofit leaders have long championed efforts to reframe the way donors understand “overhead” and instead highlight capacity building – not program funding – as the key to unlocking more sustainable nonprofit business models. Frequently, donors will pair an investment with specific, restrictive expectations about its usage and impact. Kathleen calls this “donor entitlement,” and if you’ve spent any time working for a nonprofit, I bet you’ve run into it.

While the tides of donor attitude toward capacity building are slowly changing, many nonprofits develop alternative fundraising strategies to cover operating costs. As Josh explored in a recent article for his Breaking Good column in the Biscuit, Forget “Charity.” Think Like a Business, earned income is an underutilized method of revenue generation for many nonprofits. Kathleen leans into this notion, dedicating two chapters within the theme of funding experimentation to an exploration of how to build successful earned income strategies.

In sum, Social Startup Success was full of well-researched strategies for organizational strengthening, and was a great kick-off for my new monthly series on the Next Stage blog: #NonprofitBookClub. What should I read next?

P.S. I have to give a shout out to our friends at SHARE Charlotte for all that they do to champion local nonprofits – their leadership has done so much to strengthen our community’s supportive infrastructure through the encouragement of philanthropic giving, volunteer engagement and other forms of charitable involvement. Facilitating conversations about topics like the ones presented in Social Startup Success will make all of our work more effective. If your nonprofit has not yet joined their online platform, I encourage you to check it out.

Our Firm’s Next Stage

by Josh Jacobson

We are proud to announce that our firm is rebranding… err, sort of…

Going forward, we will be known simply as Next Stage, dropping the word Consulting. Our new(ish) logo is above.

In truth, I never thought I would become a consultant. When I moved to Charlotte from New York City a decade ago, I wasn’t sure what I wanted to do when I grew up. I felt I had climbed the mountain of fundraising for the performing arts and was prepared to run an organization. And I was pretty sure it wouldn’t be a cultural nonprofit. I had (and have) so many passions.

In 2008, Charlotte was a very different place than it is now. This was Charlotte just before the onset of the Great Recession and being a new guy from out of town rendered me persona non grata. “But who do you know locally?” I knew very few people. What I did know was process and strategy – I had learned best practices from some of the strongest nonprofit executives I will ever meet. But without a local network, I was going to have a tough road ahead. Indeed, people who turned me down for positions then are now friends and colleagues.

I share this because working as a consultant was not in my mind when I arrived in Charlotte. Without other options, and honestly without a clear direction of what I wanted to be in the nonprofit sector anyway, I reluctantly took up the title. And during my 10,000 hours learning the profession, a seed was planted that germinated as Next Stage.

It took a while – in fact, it took years – but nonprofits in Charlotte finally did wake up to the need for stronger leadership and resource development regardless of local footprint. Now, a talented professional from out of town is a coveted executive in our nonprofit sector. I was asked recently to assist with a nonprofit search where the preference was for someone not from Charlotte. Let that sink in for a minute.

My firm started in January 2014 with the charge to change what consulting could be. We sought to partner deeply with the nonprofits we serve, doing the homework needed to earn the right to offer assistance. We recalibrated the high cost of local consulting purposefully, to make strategy help affordable for many more types of organizations. And we sought out innovators and big thinkers – people who would be willing to invest in the partnership as deeply as we do.

The result? Another 10,000 hours and more than 100 nonprofit engagements later, Next Stage is reborn. While we have always seen ourselves as a social entrepreneurship company serving as a tool of community leaders on both sides of the philanthropic divide, we now understand the true nature of work. We see real gaps in our community – gaps that we feel called to help fill. Following last year’s addition of Caylin Haldeman as Next Stage’s Project Development Manager, we are expanding our model to serve Charlotte’s nonprofit and philanthropic communities by building out capacities that allow us to explore local challenges to our sector.

We feel we have already redefined what consulting can be, but it is a word that will always conjure different things for different people. We remain deeply committed to consulting with nonprofits – what we now call client partnerships – but we see a new horizon for our work.

Going forward, we are committing to three distinct lines of business:

  • Client Partnerships – We are extraordinarily proud of our 100+ engagements with nonprofits across the Carolinas, with a concentration in our hometown of Charlotte, NC. We believe that area nonprofits benefit from our efforts to dive deeply into organizational strengthening and resource development. As we look to the future, our goal is to serve as Charlotte’s go-to firm for vision-centric planning and implementation, and we welcome your help connecting with organizations seeking stellar counsel.
  • CULTIVATE – Our incubator for emerging nonprofits launched as a pilot in 2018 with participants including Charlotte is Creative, Promising Pages and Learning Help Centers of Charlotte. Early returns have been extremely positive, with each of these organizations taking substantial steps toward deepening impact and increasing sustainability. Next Stage is planning to expand the program in 2019. The application will be available beginning in early September 2018, so please help us source amazing founder-led organizations.
  • Thought Leadership – In early 2019, Next Stage will be publishing a research-informed report examining the challenges and opportunities of talent recruitment and retention in Charlotte’s nonprofit sector. Helping improve the ability of local nonprofits to source and keep talent is emerging as a leading issue facing our community, and Next Stage sees a need for leadership on this topic. This research begins in summer 2018, and we hope you will help us by responding to our requests for survey participation and interviews.

It’s a new day at Next Stage. We look forward to serving you – all of you.