Social Startup Success: How the Best Nonprofits Launch, Scale Up, and Make a Difference Hardcover – January 16, 2018

Our team just finished reading Social Startup Success, and I wanted to write to thank you for your hard work and contribution to the field.

We found the book to be substantive and on point. Indeed, it must have been difficult to boil down the research and organize it all into the right amount of depth – you did yeomen’s work there. We liked that there were a lot of organizations profiled – that makes it (rightly) seem like you’re not simply cherry-picking the 2-3 best organizations in the country. And because the steps they took were explained clearly and succinctly, we think a new ED would feel like successfully emulating those steps would be within her/his abilities. And therein lies the book’s potential.

And, thanks for the storytelling chapter. As social entrepreneurs, we hate putting ourselves in the story, but it’s a powerful device, and thankfully we have grantees to profile who can do that instead. On that note, I will remember the anecdote you shared about your father helping the local nonprofits. It’s easy to see where you get your talent and orientation. He and the rest of your family must be delighted by the impact you’re making through this book.

The title of the book is a bit misleading with the "startup success" stuff. The implication is that if you can apply the Silicon Valley spirit and hype, the attendant financial success inevitably follows. The Stanford affiliation of the author should have been a giveaway, but I took a chance nonetheless. All of the breathless 5-star reviews are perplexing to me. NFPs are not "businesses" in the capitalist sense; they have much different operating models.

If you're looking at this book as a possible resource for earned-revenue (product sales, fee-for-service, or contract revenue) for your not-for-profit (NFP), I recommend that you first read a Harvard Business Review article entitled, "Should Nonprofits Seek Profits?" It's available for free via the Web. Written by staff of The Bridgespan Group (bridgespan.org), an organization that provides management and consulting services to NFPs, the article disabuses rosy-eyed folks of the idea that NFPs can engage in profit-making ventures as a substantial source of revenue for their organizations.

I do recommend the book, and there's very good information in it. However, from the dust jacket, "...any modern nonprofit today needs to reach--and sustain--multimillion-dollar annual revenues." Her benchmark seems to be a magical $2-3 million budget, at which point you've got enough “scale” to really make a difference and grow even farther. With that as a given, so many of her exemplars are organizations that are involved in huge national or international works with multi-million-dollar budgets. Many organizations I've been associated with make do with far less and set their sights much closer to their own communities.

There are several problems I had with the book, all of which occurred to me before I bought the book, but I decided to take a chance anyway. I'm not sorry I bought the book; I'm just not much better off than I was before the purchase.

1. Janus says the following (page 93) as the first sentence in her setup section titled "Funding Experimentation": "Attracting funding is by far the biggest barrier to scale." Uh...really?

2. (Page 94) "If bringing clean water to the 800 million people who don't have access to it, or selling mosquito nets to the 200 million suffering annually from the scourge of malaria, were profitable ventures, private companies would be doing it. Expecting social entrepreneurs to figure out how to devise profit-making solutions to such problems, when even the behemoths of modern-day capitalism can't do so, is misguided wishful thinking." NFPs are not capitalist businesses and can't be. (Neither is government, and those who want it to operate like a business are disingenuous at best.)

And, here's the real kicker: "Although, on average, earned income accounts for 30 percent of the budgets of the larger organizations I surveyed, 78 percent of those organizations earned only 10 percent of their income."

And, my biggest issue, the one I anticipated before buying the book:

3. (Page 94) "...earned income typically works better in certain sectors, such as education where 48 percent of nonprofits have earned revenue that accounts for over 20 percent of their budget, followed by health (27%), global development (24%) and youth development (22%). On the flip side, in my experience human rights, criminal justice, and environmental organizations are particularly unlikely to find sources of earned income, whether because their clients cannot afford to pay fees or because making any sort of profit from the work is widely considered inappropriate.” The organization I volunteer with is involved in criminal justice and social justice, and the author’s contention is spot on regarding those service areas.

4. (Page 98): "Those launching an organization with a business venture as a core part of its model, or launching a service or product line for an existing organization, should plan on philanthropic funding covering a significant portion of operating expenses for at least a couple of years, if not more. And even once revenue is coming in and a venture is thriving, it is likely that earnings will not be sufficient to totally cover the organization's expenses..." Okay, so that should be no surprise to anyone.

5. (Page 99): "Foundations and donors, and organizational leaders themselves, must not put organizations under unrealistic pressure to fund more and more of their operations by selling products and services." Yes, well, good luck with that. The 2005 Bridgespan report referenced above talks about the increasing pressure from funders and well-meaning-but-misguided corporate types who want NFPs to operate like for-profit enterprises, and the pressure has only gotten greater in the intervening years. With right wingers, corporatists, and assorted libertarians who want to monetize and privatize everything and let the devil take the hindmost, there's increasing pressure for not-for-profits to just suck it up and make do. Having run my own business for 10 years and having spent 30+ years in the corporate world as a learning and development director and officer, I understand business and the profit motive, and fully support them. But, having worn both NFP and for-profit hats, I've found that those who've neither been on an NFP board nor worked in the NFP world are largely clueless about that side of life.

The author’s early chapters (The Discovery Phase; Engaging All Stakeholders; Reframing Failure as Learning; Crafting a Compelling Theory of Change; Maximizing Use of Data, and; Making Your Data Tell a Story) were worth the read. The remainder of the book fleshes out the biggest issues of leadership and telling compelling stories about your organization and what it's trying to remedy, with a heavy dose of getting a compelling story down pat. The storytelling is absolutely essential, and it’s the NFP version of for-profit marketing.

Again, this can be and is a great book for helping you think through the topics I addressed above. But, if you're a small organization and/or involved in the efforts that don't lend themselves to revenue from services or products, you might be somewhat disappointed if you're looking for earned-income ideas.

The last glaring omission of the book is that there are thousands of small NFPs that rely largely on volunteers rather than cash donations or sales revenues, and mine is one. Sure we'd like to have more cash, but the work we do, the one-on-one time we spend with incarcerated women and men, the camaraderie and sense of community that we establish with our other clients in our social justice work , and the long-term outcomes we effect all have a strong social benefit--even if it's just on a local level.

This book is a treasure-trove of information for any non-profit founder who is getting started and struggling to raise funding. The step-by-step approach to establishing and growing a non-profit led us to re-evaluate our engagement with stakeholders as well as try to define metrics that focus on "outcome vs. output" which has been a struggle in the space we are in. I appreciate the concrete examples that Kathleen gives, from the many non-profits she has interviewed, to corroborate her findings. While there may be other great books out there, this book is a very engaging read and I highly recommend it.

I have been a consultant for nearly 40 years and have read scores of books offering management advice, but I have found few that are more practical than Kathleen Janus' Social Startup Success. The cases are specific, naming names and offering numbers so critical if you are building your own social startup. This is a book very rooted in reality. It offers an important dose of reality and solid advice for those dreaming to make the world a better place. Social Startup Success assembles a very good starter kit for anyone launching or fine-tuning new social venture.

This book is full of well-researched and compelling examples of how and why social startups succeed. Importantly, it includes a critical analysis about access to funding networks and the equity issues involved. A recommended read for all in the social sector!

Really good ideas and information. I plan on buying a copy for my board members. Loads of practical advice on how to make a non-profit sustainable and successful.

Those who are called to make a difference in the world, to improve the human condition no matter how targeted the benefit, may not have the business, management or financial skills to create sustainable change and fund their mission in the long term. Some nascent organizations, formed from the political and social impetus of recent events, may be just now looking around figuring out how to manage for the long haul. This is a book for them. I wish the tools identified in this book had been known to many of us in the days just after January 20, 2017. Hoping this book can help us all be the change we wish to see.