Hello there, this is Romy back for another episode on the Bonfires of Social Enterprise. We have author, Kathleen Kelly Janus, as our guest discussing her new book, Social Startup Success, How the Best Nonprofits Launch, Scale Up and Make a Difference. Kathleen is an award-winning social entrepreneur, lawyer, and lecturer at Stanford University, where she teaches social entrepreneurship. And, as usual, we have a great Detroit artist playing a full song at the end of the episode so stay tuned.

Before we get rolling down the lane with good advice from Kathleen, let’s see what Natalie has come up with for our Fun Fuel for this episode.

I’m Natalie Hazen and I am bringing you this episode’s Fun Fuel.

Since this episode talks about Non-profits not operating on survival mode, I started thinking about what survival mode really means and I my mind drifted to cool animal survival instincts.

Survival instincts are inherent to all creatures great and small. I often wonder how animals survive natural disasters such as wildfires and tornados. I think of the birds being whipped around by such high winds and wonder if they get swooped up in the turbulence or soar higher.

According to TuftsNow.com, birds can ride out intense storms by taking advantage of microhabitats. Gale force winds can knock even the sturdiest of tv weatherman off their gait, but birds can seek shelter on the lee side of trees or deep inside thick hedges. The decrease in wind speed in these microhabitats can be huge, and as long as they stay put, they are not actually buffeted much by the wind. Now they do need to find food to last out the storms. There are some reports of birds increasing foraging activity as a storm approaches, which indicate some birds can detect subtle changes in air pressure, which can indicate an approaching storm. When this happens, they immediately try to get as much food as possible. The more fat a bird has, the better chance it has of surviving and riding out a long-standing storm.

So let’s join up with Romy and today’s guest to learn more about nonprofits not operating on survival mode.

Love it, love it, love it. Thanks, Natalie!

Alrighty, I had the opportunity to talk with Kathleen while she was in San Francisco preparing for her book launch. I mentioned earlier that Kathleen is a lecturer at Stanford, but she is also a co-founder of Spark among other human rights organizations. She informally advises a variety of non-profits and social entrepreneurs in San Francisco and more globally. Let’s drop in on our conversation and learn more about Kathleen and her great new book.

Romy: What prompted you to start to write a book on how to scale?

Kathleen: Well, this is a really critical question, as you know, Romy, and I think that it can be a controversial word, like a four-letter word, in the nonprofit sector and the for-profit sector because I think a lot of people would say that scale isn't necessarily a good thing for a number of reasons. Maybe we don't want big organizations. Maybe we want a lot of organizations working together. Maybe we want more Mom and Pop organizations that communities know best how to solve the problems of individual communities and scaling aren't necessarily going to be effective. Something that works in San Francisco isn't necessarily going to work in the middle of Iowa.

All of that true, and, also, we do have so many organizations that have really, really great ideas to scale and to grow, to expand their impact, and so the problem is that of the 300,000 nonprofits in the United States, 2/3 of them are $500,000 and below in revenue, constantly struggling to make the next payroll, when what they really should be focused on is making impact.

I wrote this book because I was really curious, who are the organizations that are getting over this revenue hump? What are the ones that are getting to, say, around two million dollars, which I define in the book as getting to a level of sustainability, where you're not constantly teetering on the brinks of collapse as an organization? I got to interview over 100 of the top performing nonprofits in the United States in order to try and get to the bottom of that question. Those are the findings that I feature in my new book Social Startup Success.

Romy: Wow. Well, I'm glad you just hit that head on because I'm delighted with the idea of scale, just for all the reasons you said, and there's just efficiency as partnerships can happen in the ecosystem when you've got successful organizations instead of those that are, I think you said in your introduction, spending more energy trying to just stay alive than delivering their social mission. I think we bump into them here in the Midwest in the Detroit area left and right and the donor fatigue and the staff fatigue is so high, they are about to collapse. I was delighted when I saw the word scale because I don't know, I'm sort of a practical, in-the-weeds gal at the street level, and we see the reality of what's going on.

Kathleen: Absolutely. A scale doesn't have to mean that you're a 50-million-dollar organization in the nonprofit sector. It's interesting.

Kathleen: In fact, only 140 nonprofits that were started since 1970 have actually sailed past 50 million dollars, and those are the big organizations that we think of, like Teach for America, and those organizations are doing important work, but the reality is that the vast majority of organizations will never get to that level of scale, so when we talk about scale, I'm not talking about scaling past millions and millions of dollars of revenue. I'm really talking about how do we get organizations to a level of sustainability.

Romy: Keeping the doors open. The first rule of sustainability.

Kathleen: Exactly.

Romy: First rule.

Kathleen: That's basic.

Romy: Let's step back to our listeners and talk about your role right now with Stanford and your history with Spark. Many of our listeners may not be familiar with that. Would you mind taking us on a little tour of your work life and your history there?

Kathleen: Absolutely. Well, I think, like most people, I am an accidental social entrepreneur. I didn't intend to go out and start a nonprofit. I always felt passionate about giving back to causes that I cared about, so when I started working as a corporate lawyer in San Francisco, I wanted to get involved in nonprofits and didn't find one that was really engaging and harnessing the spirit of young people, and so we started Spark as a way to engage young professionals, millennials, in new forms of philanthropy to support gender equality issues, so at that point, I was spending my days billing corporate legal hours and spending my nights making name tags and guest lists and sending out grant reports and working on building this nonprofit, Spark.

That was really, for me, the first opportunity where I felt like I could be an activist and claim that and be a leader in the social justice movement even though I was a young professional in the corporate sector, too, and I think that's one of the things that's so exciting about being alive today is that our work, giving back, doesn't have to be relegated to after five when we leave the office, that there is so much more opportunity to be involved in social causes, whether you're working at Goldman Sachs or in a law firm or for a nonprofit or a social enterprise.

I started teaching at Stanford as a way to evangelize that message. I quit my job as a corporate lawyer and I started working in human rights work and social entrepreneurship. In my class, I often get students who ask me, "Should I go work for a nonprofit, or should I go make some money and then give back later?" It turns out that it doesn't have to be an either/or thing, that you can give back no matter whether you're 25 years old or you're a 65-year-old millionaire, that there are opportunities to give every space in between. That's one of the issues that I've become most passionate about is I've written Social Startup Success just thinking about how can we all have tools to be able to be more effective with the resources that we're s