#jason lorimer

There is a cottage industry of "capacity builders" that make up a growing portion of the nonprofit space. Almost all of these service providers are one-to-few person consulting shops offering a prepackaged service like grant writing or strategic plan facilitation to nonprofit organizations. Very few are capable of much customization for their clients. This is due to the unscalable nature of their own business model and the relatively nominal amount of available capital for these kind of services.

The nonprofits are in a tough position themselves. The grants made by foundations and governments are highly restricted to specific deliverables. Organizations who are growing to meet demand find themselves struggling to create efficiencies and activate underutilized assets. The time is simply not available with leaders having to both lead a team and manage fundraising relationships.

My team and I consistently find ourselves at a disadvantage in rooms with nonprofit leaders not familiar with our work. We need to always be doing a better job to educate our market around how we can do all the things we can do at the cost we do it. They are understandably cautious, suffering a fatigue that has come from years of unspectacular outcomes with the capacity building industry.

It’s easy to blame the small business consultant but the reality is that there is not enough income per client to invest too heavily. The money just isn’t there to support a robust team who can adapt to the unique needs of any organization. 

We are trying to crack this nut.

Dandelion is Impact Assembly. We don’t write reports. Nonprofits tell us what they need (diversify their income, execute a program, reinvent their brand, etc.) and we create a managed process to deliver that result at a flat rate that our clients can afford.

  More than 1.4 million nonprofits with thousands more coming online each year. The barrier to entry in developing a new nonprofit has reduced drastically in the last decade. This is true of many other industries over the same period.

Foundation and Government budgets are relatively finite. Tax rates are historically low while expenses inevitably increase and foundations need invest only 5% of their endowment each year to maintain their tax status.

Earned revenue is the only good way forward towards reinvention and growth. Diversify your funding streams. Every dollar you earn without grant applications and answering RFP’s is unrestricted. You can allocate the revenue into the departments that serve your long term goals.

At Dandelion, we are often asked to build out earned revenue models within nonprofit organizations. Over time we have developed a simple framework to evaluate an organization's ability to succeed with a new product or service. We call it the 4 W’s:

Who is your customer for this product or service you want to sell?

Why specifically should they buy it?

What are their alternatives? Your competition.

What is the profit margin per unit?

Well managed nonprofits around the world are working right now to respond to a request-for-proposal (RFP) from a funder. A government, a foundation, “the funder” is looking for a specific type of impact and so they are outlining exactly what they are looking for from applying organizations.

RFP’s work optimally in the private sector because profit-making organizations have the margins necessary to afford the operational capacity to infinitely scale up and meet demand. The nonprofit sector doesn’t work like that. Foundations and Governments fund programs all but exclusively and the capital is heavily restricted to program related activities. There are only nominal allocations for operational support and they are usually defined as contract staff or technical assistance. Nonprofits spending those dollars on consultants out in the capacity building market.

This misalignment reminds me of an inefficiency that Hollywood studios have found a way to correct. Studios will fund a project and for any number of reasons it will fall apart before it hits the big screen. Those funded initiatives have a rider in the agreement that allows the studio to pull the project into “turnaround.” They will push pause on the funds not yet distributed and take a closer look to see if the investment continues to be viable. Often times they bring in outside experts to get it back on track.

Everyday at Dandelion, we see nonprofits struggling to deploy funded initiatives effectively and often at all. It’s really not their fault -- restricted revenue and an insufficient marketplace of capacity builders, often peddling pre-packaged products and preconceived ideas, leave nonprofits in the unenviable spot of having to prioritize the needs of their beneficiaries over the outcomes that their funder had originally sought.

Finals are wrapping up in colleges and universities across the nation this week, and students are breathing a sigh of relief. But that smiling grad in your life has more to worry about now that school is over than what to wear with their cap and gown. Statistics show that seven out of ten graduates in 2013 left school with student loans averaging at around $30,000 each, and it’s only looking worse for the 2014 crowd.

With the weight of student loan debt and the discouraging career prospects offered in today’s troubled economy, many young people are putting off life events normally associated with being twentysomething: getting married, buying a first home, and starting a family. Debt is stilting the future for Millennials and creating changes in the way our society looks at transitioning from youth to adult.

While student debt was growing into one of this year’s hot-button topics, some people were coming up with creative ways to pay off their education. One such group is a small non-profit called SponsorChange.org, which is harnessing the power of volunteerism to help graduates pay their debts while giving back to their communities.

SponsorChange.org works by matching donation money to volunteers who offer their time to causes within their community that have enrolled in the program. Donors give money to SponsorChange with the knowledge that they will be helping both a cause and a graduate, and non-profits get free work from trained people looking for opportunities and experience. Volunteers get money paid toward their student loans based on donations and the amount of work they do.

Potential volunteers can sign up in cities where SponsorChange has offices. Normally, co-founder Raymar Hampshire says, “we match a graduate to an organization, and they actually live in that city." Currently, there are only a few cities where opportunities are available—Chicago, Pittsburg, and Washington, D.C.—but the program coordinators are working to expand into other cities and into something they call “virtual volunteerism.” “We're trying to figure out what type of projects can be done at a high-quality level” remotely, says Hampshire.

Volunteering virtually can be anything from designing a web page to grant writing. Volunteers can sign up to work remotely for causes that aren’t necessarily in the city where they live, broadening the options for volunteers and the pool of people to choose from for organizations. While the people at SponsorChange prefer to have volunteers investing in their local communities, they acknowledge that for some volunteers, it’s just not possible.

Drunk driving has been on America’s radar since the inception of MADD in 1980, but in spite the non-profit’s legislative inroads, such as raising the national drinking age and promoting heavier penalties for drivers, MADD has had little impact on providing transportation alternatives for social drinkers. That’s where crowdsourced car services like Uber, Lyft, and SideCar come in.

In case you haven’t heard of these companies, here’s the rundown: Anyone with access to the app can request a ride right from their phones and pay pre-set fees without ever having to exchange cash with a stranger. What makes these services different from taxis is their pool of drivers—regular people who have signed up for a sort of rideshare in exchange for a fee. Sounds good, right?

But it turns out that these companies aren’t for everyone. Cities like Seattle have cracked down on the number of drivers companies like Uber can have on the road at any given time, and Uber’s policy of raising prices by three or four times during high-demand time periods (think New Year’s Eve) has recently come under fire. Some have accused these rideshare services of pandering to the rich, leaving the less affluent to fend for themselves.

But the problem that the Uber model highlights isn’t as simple as an issue of the haves versus the have nots; it’s actually a lesson in supply and demand. That crackdown on Uber’s business that occurred in Seattle? It came only a few months before a county vote struck down funding that would keep a number of critical bus lines running. Come November, the greater Seattle area will be losing as many as forty routes. Where rideshare services might have once helped alleviate the upcoming strain on Seattle roads, commuters will likely turn to driving their own cars to work instead.

Transportation is important, and not just for tipsy college students. Reliable access to transportation is one of the basic necessities for our economy to function. The fact that Uber, Lyft, and SideCar exist means that there is a market for the service they offer. And the fact that they’re doing well enough to cut into the profits of traditional taxi companies (complaints from taxi companies was one of the main catalysts for the Seattle crackdown) means that there is a demand.

It’s true that MADD’s campaigning has done a lot for our society in the past thirty years. DUI-related deaths have dropped drastically since the 1980s, and much of that can be attributed to MADD’s efforts to educate young people on the dangers of driving under the influence. Unfortunately, there hasn’t been an emphasis on alternatives to drunk driving, and public transportation is growing at an abysmal rate.

Seattle’s situation is just an example of the complicated way that our nation views issues surrounding transportation. In Boston, the “T” only recently added late-night routes on the weekends, and Phoenix’s Valley Metro light rail, which connects downtown Phoenix with Arizona State University’s main campus has only been open since 2008. And that’s not even mentioning cities like Los Angeles where public transportation is so underdeveloped that it barely registers on the morning commute, let alone having an impact on late-night business.

When most people think of the Department of Health and Human Services, entrepreneurship probably isn’t the first thing that comes to mind. But along with helping the country stay healthy and enjoy a higher quality of life, HHS is also looking to get entrepreneurs the help they need in seeing their vision come to life.

High Risk, High Reward

That’s how the Department of Health and Human Services has described the types of projects they’re looking for from eligible entrepreneurs. Given the level of ambition most entrepreneurs have, this shouldn’t be a problem. However, it’s still interesting that HHS would put themselves on the line like this, all to help with projects that involve so much risk.

However, as the Chief Technology Officer for HHS, Bryan Sivak, made clear, the whole idea is that they’re looking to bring innovation to government operations—an area that can often fall stagnant or rely too much on what’s worked in the past. So HHS’ intended outcome will have as much to do with helping entrepreneurs as it will with getting this department the help they need too.

Ideal Candidates

To this end, the Department of Health and Human Services is looking for candidates who will embrace the challenge, but also who have a desire to help shape government in new and innovative ways. Obviously, they’ll need to be adept at problem solving and have their own toolbox of methods for approaching hurdles. Clearly, they can’t be intimidated by scope either, as the HHS employs over 75,000 people, has a number of departments within it and has some components and procedures in place that haven’t changed since 1979, when it first started.

Four Years Running

This isn’t the first time HHS has held such a program. Known as the HHS Innovation Fellows Program, it was started back in 2010. In 2012, they changed the name to HHS Entrepreneurs. Its stated purpose was to help the department locate members of the public who had a unique skill set, level of experience and dedication to solve some of the challenges that stand in the way of providing the public with proper care. In the past, HHS had trouble attracting these applications, but the offer of a yearlong fellowship, they have found, has been a viable solution.

For over 50 years, Misereor, a relief organization dedicated to ending suffering around the world, has found innovative ways to get the good word out about charitable contributions and bring in donations at the same time. Their most recent method may just be the best example yet and could actually change the way other philanthropies raise funds in the future.

A Simple Swipe

Most charitable organizations use some kind of poster or billboard campaign to get the word out about what they do. However, usually they have to stop short at actually getting donations. Instead, they’ll usually give a website or phone number people can call if they want to help.

Misereor got around this issue by making it possible for donors to actually swipe their credit card on the poster itself. Anyone who sees the sign can walk up to it, swipe their card and immediately put two Euros toward this important cause.

Innovative Marketing

Here’s where it gets really cool though. The poster is interactive and displays an animation triggered by the swipe of a credit card. To pull this off, Misereor teamed with a Hamburg-based ad agency called Kolle Rebbe that eventually put the interactive posters together.

As an example, you may see a poster that reads, “Feed Them.” Below the message is a loaf of bread that can have a piece “cut” from it when you run your credit card through it. Once you do, your two Euros are donated and you get to watch the piece get cut off. Other posters show children with their hands tied together. Swipe your card and they are released.

The real challenge behind the poster was synchronizing so many moving parts. Aside from the animation that needed to be triggered, the company also had to figure out a way to read, authenticate and then charge a credit card all within a moment or the interaction wouldn’t come off without a hitch.

Many startups and entrepreneurs face the exact same challenge at the beginning. It’s not that they don’t have the knowledge, the drive or even the right people to work with. Instead, they simply don’t have the resources. This isn’t exactly the best economy to raise money in either.

Enter the Knight Prototype Fund

For 17 groups, however, this hurdle has been overcome in a pretty amazing way. The Knight Prototype Fund was started to help people get the time, space and money they need to take their projects from conception to reality. For these lucky groups, they’ll receive $35,000 and six months of office space to get their vision off the ground.

Early Successes

While the idea itself is great, there are already many reasons to think it is going to be a successful one, as well. Two different groups from a recent class have already taken the next step out of the fund and secured funding from outside sources. With a new class now starting, that includes 17 different groups, it will be exciting to see how many can reach similar degrees of success.

A New Class

This most recent class includes the following projects:

Capitol Hound

GovLoop Academy

Expunge.io

LibraryBox

Minezy

Louder

MLRun

Open Data Philly

News on Demand

PressSecure

SmartResponse.org

Project Fission

Tabula

Uncovering Cost, Examining Impact

Tipsy

Whilecard

Wiredcraft

While all these groups function on interactive platforms, it’s still a very diverse collection of companies. Wiredcraft, for example, serves to help people edit and publish maps of their local areas. Tipsy’s goal is to help news sites fund themselves through microfunding by readers. Expunge.io’s project focuses on helping youth offenders make sense of an often confusing legal system so they can have a chance in the future.

Getting Started

Aside from the resources, the Knight Prototype Fund is also helping members get off the ground by providing them with the knowledge and experience they may not already have. The beginning of the experience starts with a two-day boot camp wherein members not only learned the tools of the trade, so to speak, but also network with one another and workshop their ideas.