What SA’s non-profits can learn from tech start-ups

6 Jun, 2017

The continuum between non-profit and for-profit has always fascinated me.

Non-profits. These organisations are almost singlehandedly responsible for closing the gap on social service delivery where government can’t. Without their symptomatic relief, we wouldn’t be where we are as a country. And yet, these saviour organisations are often highly inefficient and generally unsustainable, always at the mercy of an increasingly fatigued donor market.

For-profits. A beautiful, free market quest for shareholder returns. Yet capitalism is responsible for many of the problems our poor non-profit sector is trying to solve. The wealth gap. Globalisation. Lower demand for unskilled labour (a crucial gap-filler in developing economies). No one can shoulder all the blame, but many of these problems are getting bigger simply because capitalism is so dominant.

Where does the answer lie? Perhaps somewhere in the middle.

Our non-profit sector has a lot they can learn from capitalism – and it may have to learn these lessons quickly to survive.  An area in which I’ve been privileged to have some experience is tech start-ups. Some would say that tech start-up culture is at the heart of capitalism – optimise every person, product and process for profit.

Here are 4 short lessons the South African non-profit sector can learn from capitalistic tech start-ups.

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#1 Clean companies get investment
Angel investors and venture capitalists won’t throw money at a startup without a considered, clean company structure and good governance in place. Easy money is a myth. The ticket to the ballpark is to have legal, compliance, tax and governance ducks in a row.

This means if you don’t understand any of the following, you’re unlikely to attract the funds you need to execute: mission, vision, CIPC registration, MOI, business plan, cash flow, management accounts, debtors, creditors, VAT, PAYE, BBBEE, board, monitoring and evaluation, measurement (and more).

Google is your friend. Accountants are too.

#2 Be fast. Then be faster
Speed is everything in tech. From the speed of building your minimum viable product (initial offering to test your concept) to the speed of responding to and receiving feedback from customers/users. The world got fast and startups learnt to adapt.

The same can’t always be said for the non-profit industry. While there are plenty of valid reasons for the struggle (capacity, funding and staff churn of overworked and underpaid individuals are primary ones) – there’s a definite perception that non-profits just aren’t quick enough to compete in the modern landscape.

If you’re still only checking emails on a Friday. If you aren’t available through multiple channels including social media. If you can’t run your life on your phone. If you’re taking longer to do your reporting than you are your project, you may be in need of some start-up style optimisation.

Tim Ferriss is your friend. So is his podcast.

#3 Get to revenue as quickly as possible
Revenue is the ultimate measure in the start-up equation. It’s such a pure and beautiful measure because it means a market is willing to pay for a product or service you provide.

As non-profits begin to morph into social enterprises (the definition is a whole other blog, but you can generally interpret this as a normal business that has a socially conscious mission) – there’s no reason this measure shouldn’t apply to them.

Business is built around a customer paying for a service. Non-profits just need to think differently about who the actual customer is. Government, corporate sustainability projects and an increasing selection of global philanthropy organisations – they all need services. Some of these services would best be provided by the very market in which they operate: the non-profit sector.

Sustainability needs to be as important as impact. Or the impact isn’t sustainable.

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Eric Ries is your friend. So is his book, The Lean Startup.

#4 Paying is sometimes better
“I wrote you a long letter, because I didn’t have time to write a short one.” As this famous quote suggests, when you’re out saving the world, you’ll often take the tried-and-tested approach, instead of the fast, scary, new one. You’ll often do something manually to save money, instead of spending a few bucks to get it done for you.

This slightly mixed metaphor could apply to many elements of a non-profit, but the easiest example I see is the speed at which a tech startup can get to operational efficiency.

Take something as simple as Google Apps for Business. This is woefully under-utilised in the non-profit sector. For around $5 per user per month, you get email (on your own domain, which is professional and another ticket to the ballpark), calendar, documents, spreadsheets, presentations, 1TB of cloud storage, real-time collaboration tools and more. A ChromeBook costs half the price of a laptop. Microsoft Exchange who?

Product Hunt is your friend (there’s a free or cheap product for absolutely everything these days). So are the suite of Google Apps for Business Services.

Why tech and non-profits are destined to be together
I run a for-profit tech start-up in the non-profit space. It’s an odd hybrid company which gives me insight into the potential of this odd hybrid world. On www.forgood.co.za there are plenty non-profits changing the way they network, leverage technology, approach funding and promote themselves.

12 months ago, non-profits were using Facebook if they had the time. Now they’re using forgood to recruit 100 millennial social media amplifiers at a time – to not only assist with running their platforms, but also to tell their story. Technology is how those two audiences found each other – and technology is how they’re redefining and scaling their impact.

The Nashua Children’s Charity Foundation (NCCF), a well-established non-profit and primary social impact arm of Nashua, is one of the most active non-profits on forgood. Click through to their profile on forgood and see how you can help.

Go forth and behave like a start-up, whatever business you’re in.