THE BLOG

Small, Young, Cash Strapped and Lean? Good.

06/01/2015 04:22 pm ET | Updated Jun 01, 2016

In the first year of my first job out of grad school at Spark Ventures, my CEO and board decided to do a big, experiential event where we would re-create a Zambian scene (where we were doing development work) with a gravesite and schoolhouse (among other things). We were able to underwrite the event thankfully, so as not to worry as much about the direct ROI, but in the end barely broke even (and that did not even include our labour and any in-kind donations). Yet in looking back, it was the single most important thing we did as the lifetime value from those who gave was tremendous and the experience we were able to provide to those who attended let everyone know what type of organization we were and wanted to become. High resource. Low (immediate) return. Big risk. A huge win in the long run.

That's the type of decision that smaller, leaner organizations not only need to make, but they are also better suited to make. We didn't get bogged down in board debates, sidetracked by all the other things we could be doing or tried to be too many things to too many people. We were able to go from idea to execution pretty quickly and pretty thoroughly largely because of our small, tightly knit team.

Now being a small cash-strapped nonprofit is not easy and there are many, many, many challenges. But have you thought about the advantages? Or the opportunities?

In "Leslie's Law: When Small Meets Large, Small (Almost) Always Wins", the author talks about the advantages companies like Salesforce.com, DropBox and ZenPayroll have over traditional, bigger incumbents like IBM, Siebel and Intuit. In the charity world, we've seen the quick rise of organizations like Kiva, charity: water and Free The Children that have been able to hone in on very focused and unique segments and strategies to not just be 'cool' but wildly (and quickly) profitable.

Here are some of the advantages of being the young, small, scrappy and lean charity:

You don't have as much baggage.

Inertia -- the tendency to do nothing or to remain unchanged.

Older, larger organizations often suffer from inertia. They do things because, well, that's the way they've always been done and it seems like too much work to change. Strategies, people and processes become familiar making it harder to tweak, abandon and improve them. Historical decisions, good and bad, cloud the decision-making process for new ones. Poor tools, old technologies and sunk costs abound.

But the lean charity doesn't have to deal with as much if any of that. They can start fresh and even learn from other, bigger and older organizations' mistakes. Build a recurring giving program from the start -- you bet. Choose a good, cost effective website and fundraising solution that is mobile first and friendly -- done. Have a board that is only concerned about the future because that's all there is to worry about. The lean charity and move more freely and unencumbered allowing it to make quicker, better decisions.

You can treat more donors like the heroes they are.

No one sets out to treat donors poorly. Or have a bad online giving experience. More often than not, these things happen when organizations begin to scale. How do they keep that personal touch (phone calls, knowing names, handwritten notes, etc.) when they have 1,000 or 10,000 donors? When you don't have to worry about scaling your affection on donors, you can afford to treat them well. You can get to know them. Why they got involved, what makes them tick and what they like about your organization.

This also allows you to learn much more -- quickly and qualitatively. About what is resonating with donors, how they describe you and why they would (or would not) share your work with their friends. This is invaluable as the more you know about your donors when you start to grow and scale, your systems of care can, and should be, based on real world feedback and experiences. Not hypothetical guesses you have or 'off the cuff' suggestions from the person you are replacing in a bigger organization. Donor care is a key differentiator of modern nonprofits and the lean charity has a chance to embed and practice those values right now. Like today.

You can be unique.

If you can make quicker, better decisions based on experiences and feedback from real-world donors while giving supporters the care and attention they deserve then you are in a much better position to actually be unique. Unique in model or approach perhaps. But even more importantly, you can be unique to your customers (supporters) that helped shape and sustain you. World Vision already exists and does great work. Don't try to be Wold Vision or even the next World Vision. Try to be something we haven't really seen yet.

The actual work that charity: water, Kiva and Free the Children does internationally is not all that unique (in fact they really just partner with other organizations that were already doing the work). But what they were able to do as the young, lean charity was focus on finding the opportunities that exist in the charitable market (transparency, tangibility, "cool factor") and attack them with one group in mind (the hip, the smart and the young) to create strong brands and profitable organizations.

And so can you.

Because you have a choice. And because you are newer, smaller and less encumbered, you can use that power of choice better, quicker and more efficiently to be more unique, care more for your donors and do great things.

This was originally posted on re: charity and can be read in full here.