As we continue on with our theme of the year, Discover Your Purpose, I wanted to be on purpose and give another perspective. Doing this work doesn’t include working in a silo. Therefore, I wanted to share Ms. Erin McClarty voice.
For those that don’t know her, she’s a prior guest and a friend of the show. Erin is a well-respected peer of the social good industry and is doing the good hard work in a different part of the country. Her contribution to those working in and with nonprofits is different mine, but very needed and essential to the work being done.
Without further ado, let’s get into about Erin’s episode!
Many episodes ago, I did speak on Find Your Social Entrepreneur. But this is different. We’re going “in the weeds” of what social entrepreneurship is. In discussing how to Discover Your Social Entrepreneur, Erin broke it down into four main sections.
Play the Devil’s Advocate for Yourself
I don’t subscribe to the belief that there are too many nonprofits. I subscribe to the belief that there are too many nonprofits that aren’t impactful. The problem is, you don’t have the same market drivers as you do with a for-profit. So you have nonprofits drag on for years inefficiently and anemically.
People must always question themselves, their motives, and the way they’re going about doing things. It’s important to ask “can I or should I be doing this differently?”
For example, If you’re struggling to see how the organization will sustain itself, then this may not be a full-time venture. It may be a project, that you can have fiscally sponsored by another organization or a program another organization houses. Or a consulting gig for you in partnership with another organization. It may be a more traditional for-profit business or a hybrid too.
Get Clear on Your Purpose
Do yourself a favor and do the 5 Why’s when you think about the why of your venture. Often, after we’ve distilled down a few times it can become clear to founders that their mission is not so much about the community, but the adulation they’ll get doing what they’re doing for the community. Or it makes assumptions about the community and its needs that aren’t tested. In either way, you can’t honestly say you’re doing what you’re doing to help if you’re not being intentional on how you do it.
Not only do you need to be really clear on the mission. You need to be really clear on the impact. “improving the neighborhood” isn’t enough. Improve in what ways specifically? What’s wrong with it now? What are the root causes for it (usually not what you assume just looking at the surface). How will you measure where the neighborhood is at now, and how will you measure where it lands after you start your work?
How will you make money?
I mean this with much love and light, but if you tell people you’re not doing what you do for the money you’ve got it all wrong. More money means more impact. What you aren’t doing is harming the community at the expense of making money, that’s different. But working out of scarcity doesn’t make you a martyr, it makes you negligent. Everyone should work toward maximizing the models to bring in as much as they can responsibly, and with their impact priorities at the forefront.
I say that to say, don’t make a move until you understand how you’ll make money. Few, if any of the organizations I work with have taken the time to develop business models when they open the door. And shocker, when they open the doors they can’t do anything because they don’t have any money. Your pockets won’t necessarily be fat when opening, I get that. But there should be a nice diversity of fundraising (bootstrapping, service revenue, grant-funding, etc.) and a clear plan in place for getting each.
And for those of you focused on grants, more and more foundations are giving out PRI’s and MRI’s to where it may not be worth going for the 501(c)(3) if it won’t be your bread and butter.
How and What to Form
Often clients come to me and they don’t say “I want to find a way to eradicate truancy in my neighborhood”. Instead, they say they “I want to start a nonprofit.” But how do you know this should be a nonprofit? If you do the digging (fundraising, ownership concerns, responsibility, what the community needs, etc.) this data may point in a completely different direction? In which case, would you really be helping or hindering if you pushed forward with the nonprofit?
You can organize almost anything anyway. So it’s much harder to go in and try to impose a legal entity or a structure on a specific idea, than it is to flip that, get a clear idea of what you want to do first and find a legal entity or entities that can accomplish that.
I won’t get too much into the specifics, but the options available are many. There’s the nonprofit corporation. Some states allow for a nonprofit LLC or an unincorporated nonprofit association. There’s are networks, collaborative’s, cooperative and public-private partnerships. On the for-profit side, there’s the benefit corp. (not to be confused with the b-corp. certification) and of course, all the business entities that existed before like the LLC or Corporation and Partnerships.
In some states (cough texas), the laws haven’t necessarily caught up with this hybridization and melding that you’re seeing with business and social impact. In those instances, it’s even MORE important that you don’t allow yourself to be diligent about not limiting yourself to structures and ways of being that aren’t authentic to you or the community you’re working with. But to get creative and kinda play Mrs. Potato with it. Changing this out or replacing this with that. All the while, keeping your vision and impact focus in clear view.
Being a social entrepreneur, and dealing with real people and real-world problems requires a tremendous amount of fluidity, flexibility, and listening. So if anyone takes anything away from this, if you want to start on an idea for doing good in the world, it’s okay if you don’t walk into an idea immediately with a full out business plan and Prezi deck. When you start on a social venture, remain open and really get a sense of who your are, what you’re trying to do and if it truly supports the community you’re going in.
By, Erin McClarty
Erin McClarty PLLC