Giving Compass' Take:
- Kathleen Kelly Janus details how her book, Social Startup Success, can act as a strategic guide for nonprofits to scale impact and find success.
- How can donors ensure that they are supporting nonprofit work in the most strategic ways? How can funders better communicate with organizations to ensure they are meeting nonprofit needs?
- Read why nonprofit success requires collaboration.
What is Giving Compass?
We connect donors to learning resources and ways to support community-led solutions. Learn more about us.
In these uncertain times, when so many social problems are not only persisting, but in many cases, worsening, we need every bit of creativity and determination to find better solutions. My hope is that this book and the tools it recommends will help you to make your own organization, or those you are supporting, thrive. We need to spend less energy keeping organizations alive, so that we can devote more energy to spreading positive impact. This book is a guide for how to do that.
Attracting funding is by far the biggest barrier to scale. In fact, 81 percent of the social entrepreneurs I surveyed identified access to capital as their most pressing problem. Nonprofits at all levels struggle to get noticed by new funders. What separates the best organizations is a culture of testing a variety of funding streams to figure out what works. By purposefully experimenting with revenue, they discover a funding model both authentic to their mission and effective at raising money.
Earned income such as selling products or services is fertile ground for experimentation. My survey revealed that successfully developing an earned-income strategy was one of the ways organizations broke through the $2 million annual revenue barrier. The responses showed that while organizations typically start out with mostly philanthropic support, with just 8 percent of their budget coming from earned income, as they grow past $2 million in revenue, they are more likely to report that a higher percentage of their budget is covered by earnings; on average about 30 percent. These findings indicate that testing earned-income strategies should be a key ingredient of efforts to scale. But my research into how nonprofits generated earned income also highlighted that the process is fraught with challenges, and is more viable in some subsectors, such as education and health care, than others.
Read the full article about social startup success by Kathleen Kelly Janus at Stanford Social Innovation Review.