How startups & non-profits can collaborate to accelerate growth
Non-profit organizations and startup companies have more in common than most would think. From constant fundraising to the never-ending quest for traction, non-profits and startups face similar obstacles on their journey to solve problems that are large enough to matter. Learn how collaborating to eliminate shared obstacles can benefit your non-profit organisation, startup company, and ultimately, the world.
Our guest, Chris Foltz, is a renowned startup advisor, social impact strategist, and a global Entrepreneur-in-Residence at Founder Institute. Foltz was named to the Institute for Real Growth’s prestigious ‘IRG100’, a cohort of the top 100 CMOs, change agents, and growth leaders in the world. You can find out more about Chris’ work by visiting: https://responsible.com
Resources and links
Hello everyone, and welcome to this Charity Professional Development Webcast; an opportunity for you to learn, develop, and contribute more to your cause.
Today, I’m delighted to say that we are joined by Chris Foltz, who will be talking to us about collaborations between startups and charities. Chris is a renowned startup advisor, social impact strategist, and Global Entrepreneur-in-Residence at the Founder Institute. Chris was named to the Institute for Real Growth’s prestigious IRG100, a cohort of the top 100 CMOs (Chief Marketing Officers) change agents, and growth leaders in the world. So, very excited to hear what Chris has to say. And I will hand over to Chris.
You know, I gotta tell you, Zac, I’m so honoured to be here. But just with your accent, and just how eloquently you make everything sound, I think I need to bring you around with me everywhere I go, so. But I really appreciate what you’re doing here.
And one of the challenges is, nonprofits and startups have played such an impact in my life. And they face so many similar obstacles and I want to talk about a few of these today. Because you know, what a lot of people don’t realise, we often talk about the failure rate for startups, it’s pretty prolific; more than 90% of startups fail in the first three years. And I was reading some statistics recently about how up to 50% of nonprofits fail in the first year. And the irony of this all is there’s a lot of shared obstacles, and I’m here to talk to you today about them and why this matters so much to me as, in my life, nonprofits have played a huge role.
You see, I’ve had that not the traditional upbringing that most people would have. My parents both were in law enforcement. And, of course, that means I decided I wanted to be president of the United States. And although that’s not necessarily the environment that yields that results, I made a valiant effort towards getting there. I spent most of my young years working in politics, in political campaigns or nonprofit organisations, and a lot of people don’t think of them that way. They think of them as this is kind of like grimy thing. But the interesting thing is that politics and government really do shape the way that society is done. Most nonprofits receive some sort of funding from governments, and governments set the rules, and governments often create some of the problems that nonprofit missions solve.
And politics really did become my thing. I was good at it at a young age. But you see, when you get into politics at a young age, you also get this jaded perception of reality. And I worked in Republican Party politics in America. And, you know, although I learned so much about life in the process, Republicans have a specific set of missions and values different than the Democrats, and although I wasn’t this person that that raised the party flag, I ended up in party leadership, and I was more or less a fixer. And in politics, I would relate to people, I would learn how to sell human beings, much like startups sell customers and, ultimately, nonprofits raise donors. But then, ultimately, in my life, this fixing career at a young age, there was something I couldn’t solve. And it was my first understanding of nonprofits from the other side of the equation.
You see, I grew up in a Sicilian family, I went to space camp when I was a kid, it was paid for by the local Italian American society, a nonprofit. My mom and my grandmother were involved with nonprofits. They had me volunteering at a hyper young age. And, my mother, unfortunately, you see, she got sick with cancer. And when you’re a Sicilian, you’ve got the kind of Italian family thing going on… it doesn’t matter if you’re out there working for the President of the United States or anything, right? You got to come home and help the family.
But you see, unfortunately, that political career that I had, and this lack of purpose in my own self-mission, where I didn’t align with what I was doing, no matter how successful I was, invited me to go down a path that I would consider to be less travelled, or at least I don’t recommend it. See, I had some dental work done, and I had leftover Vicodin. And I decided that I was going to wallow in my own self-pity, you know, we couldn’t necessarily pay the bills all the time, my mother was sick, we weren’t volunteering at things, I wasn’t involved with politics, a whole series of excuses. But ultimately, that led to, as opposed to at my mom’s retirement sitting here celebrating with tonnes of law enforcement – 35 years of law enforcement in the room – although you can’t tell by looking at that photo, I was a full-blown opiate addict at this time.
You see, what I did is, I wallowed in my own self-pity to the point that when my mother died, this beautiful article came out about her being a pioneer in law enforcement. She truly was. She changed the way people looked at it. All of her work in charity, all of her work and giving back changed the dynamic but also she was one of the first females that was a detective. First female law enforcement, helped change the way that we thought about it. As opposed to ‘policeman’ and ‘policewoman’, it’s now ‘police officer’ because of people like my mom. But, you see, inside this article – to my demise – I was arrested for ridiculous things, drug addiction related, and now I’m a felon. And, ultimately, I had nothing going on that was positive in my life. Now I’m moving into jail for lack of a better term.
And when I say that, it was like, you know, here I spent all this time, it didn’t matter if I knew presidents, didn’t matter what my mom did, didn’t matter how much volunteer work, how much charity, didn’t matter if I donate it to anybody at this point, I now live in basically, well, I mean, here. And the problem with this, is most of the people in this jail cell were arrested by my parents.
And my parents were entirely different in how they approached things. My mom is a very charitable person, my dad was more of a business person. So I grew up in this environment, this interesting dynamic of looking at things from two perspectives. And you can tell by working … ha, working … integrating and interacting with some of the inmates the differences between two approaches to the same problem.
So, ultimately, when I got out of jail – since I could no longer be in Republican Party politics – I decided to get involved in Democrat Party politics. And this is where I really understood how much nonprofit organisations play a role in everyday society, from social services, all the way to unions and trade organisations and the different dynamics of how they played a role in changing outcomes.
If you want to learn more about my exciting journey and failure, and how I started my business, there’s even a BBC Special about this particular thing. It’s always great when they say how painkillers lead to prison. But in there, I discuss how I created my first firm.
Because you see, what I realised through all of this is, I was spending all of my life focused on celebrating victories, just like nonprofits, we all want to spend our time celebrating our victories, we’ve raised more money this year than we’ve ever done, we have more donors, we have more mission, our annual report wins awards, all this kind of stuff. But, you see, the greatest nonprofits, and greatest startups, and people that make the most impact, spend a lot of their time focusing on reacting to failures, because that’s where all of the success lives.
Now, the tragedy of this, many charities helped me get on my feet, and helped me start over and one that was super prolific in my life, ended up closing their doors because they didn’t have a sustainable donation model. They didn’t have qualified revenue streams, they did some of the greatest work, but it was mainly the executive board, and board members, and their close friends that were donating just enough each year to get things done. And when they closed their doors, my heart was broken. And you know, here I spent all my time getting people elected to office, literally selling people to society, and I needed to figure out what I was going to do to help organisations like that.
Because, right away, what a lot of people do not realise, even though it’s so obvious, is that nonprofits are businesses, right? Literally, in America, when you get a tax-deductible organisation, you still have to form a state-level business. It’s a nonprofit business, but it’s still a business nonetheless. So, that means, in order to be successful, for any business, you need to have a sustainable business model.
Now, when you’re talking about the difference between a startup or a business, that’s for-profit and nonprofit, is that at the end of the day, you don’t have to return a profit to shareholders, you’re supposed to put your money into programmes and things that actually solve for your mission. But that’s not as easy said as done. A lot of nonprofits’ doors are closed because they can’t pay for operations. Nonprofit money is not meant for just operations; it’s meant for programmes. You need to raise money and support the operation structure, otherwise, you’re never going to get the grants again.
But I realised that in the quest to serve the mission, they faced considerable challenges. You know, you need all the basic things: business plan, vision, leadership – you can read it all here – a board, supporters… it’s relentless. But then I thought, who has sustainable business models, or are at least on the quest to that? Who has similar needs and similar obstacles?
Well, then when you look at startups, a startup does not matter unless it solves a problem. And you know, if it doesn’t solve a problem, it’s not going to matter. And the reason why is it’s not going to get enough attention, it’s not going to get market share, it’s not going to get investors. But the main differences in what the needs are is simply a few words, in my opinion, supporters, well, that’s your customers; products, well, that’s the solution that you have that’s driving your mission.
So here we have these two things that are completely divergent when you’re looking at them on paper. But when you look at them at the soul, at the need level, if you’re looking at them at the mission, great startups and great nonprofits solve problems, and they have a mission that’s validated to get there. So, you see, when a nonprofit solves a problem, just like a startup solves a problem, most of them need to have a problem that’s large enough to matter. And when I say that, you’re not going to get awareness, you’re not going to able to spend enough money, nor you’re going to get donors and funders, if you say that you’re going to do this grandiose marketing campaign – and that’s what’s going to need to draw attention to you – but you have no finances to get there.
Nonprofit donors don’t mind donating, investors don’t mind investing. That’s what they do.
What they do want to know is how you’re going to get that next set of money. Right? How are you going to have to avoid coming back to them each quarter to keep your business model flowing?
So, I’m going to talk to you about two things quickly today, because I know we only have so much amount of time. But I spent enough time working with some great nonprofits and businesses to really know what stands out. And you know, the greatest nonprofit leaders are always innovating concepts, they build sustainable models, and they change the dynamic of how much money is dependent upon individual donors.
One of the smartest nonprofit leaders I’ve ever met in my life is this person: Neli Vazquez Rowland. You see, she came to me one day, they just got doing a wonderful rebrand for their organisation in Chicago. And she’s like, you know, Chris, at A Safe Haven Foundation, we do a lot of things that really help people that were like you, that had to start over. And I’m like, “this is amazing, you know, it all sounds good”. But you see, that’s also what the organisation that closed their doors did for me back in the day, and it didn’t matter. So, I’m like, I’m gonna look into this. They wanted me to do – I think – a three-month marketing and public relations campaign for them. So she’s like, “why don’t you come over and take a look at what we got going on?”. And I’m like, “all right”.
And the address was in a sketchy neighbourhood, I would say, in Chicago at the time. But then I get there, and I see this. I’m like, “what is going on here?”. This was like the metropolis and everybody inside was so pleasant, but all of them were homeless. And they’re living in this amazing place. And they all have jobs, and they have all these amazing skills.
And, and she’s like, “Chris, you know when you go downtown, and you see all those tulips downtown in the city of Chicago and all over the city of Chicago? Do you know that is A Safe Haven’s landscaping business?”. I’m like, “what do you mean their landscaping business?”. “You see, we made this model where if we take these people that were homeless people that were like you, and we find what they’re passionate about, whether it’s landscaping, or perhaps the culinary arts, and learning how to cook, and we actually train them, teach them how to do it, there’s government dollars service contracts for us to teach these amazing people, the skill sets necessary start their lives over. But then on top of it, we can go back to places now and create a company that maybe all formerly homeless people, perhaps former felons, that are running landscaping teams that are planting flowers and having the contracts from the city of Chicago, some of the biggest businesses in Chicago, because those entities care about putting mission first”.
So she created this continuum that mattered, that made such a dramatic impact that this organisation is around a $20 million a year nonprofit, and the vast majority of their money comes from the service contracts they get from actually creating startup businesses, and sustainable business models as a nonprofit.
For those of you that don’t know, nonprofits can start businesses too. Nonprofits can even make profit, you just get taxed on profit. That’s the difference. People get stuck into words, nonprofits can even invest in companies. Now, A Safe Haven was so smart, they did the normal things, they had the Run to End Homelessness; they even got me and my team out there, I don’t run! Right?! But then I’m noticing that she had these presenting sponsors; and it wasn’t like other things.
One of my jobs was to help get sponsors. In the traditional things, let’s create banners, let’s put logos all over it, but not Neli Vazquez Rowland, she wanted to solve a problem. She knew that for people that were starting their lives over, they had banking problems, they were underbanked, underserved, everything was going wrong for them. So, in order to be the premier sponsor for this, you needed to create a model that helped people get into banking, that’s how they were going to use the money.
We did that.
We worked with this startup at the time that was one of the leaders in under banking, and as opposed to their cheque going to buy a bunch of fluff marketing material, it went to set up a programme to get people their first bank accounts, to get people their first IDs. We had some of the leaders of the state of Illinois here because we took the dollars and did something innovative.
But right away, I knew that this nonprofit leader knew about innovation, and I was waiting for the time to get them involved with something that was going to matter in my network a little bit more now.
So here’s the case of a startup that solved the problem, like a nonprofit. And when I say that, a lot of people have organisations that do good things, they write cheques to charity, they do all these prolific marketing campaigns, but what’s really behind it? How does your business model actually solve some problems that nonprofits have? How do you collaborate together to solve a shared mission? Right? It’s totally possible.
Monika Wiela, one of the most innovative startup founders, she came to me one day, she said, “Chris, I got this startup, Style Up Girl, we’re selling these shoes online”. And I’m like, “alright, cool. I’ll check it out”. I went there. And these were the type of shoes, they kind of scared me a bit, right? But she had such an interesting audience. And she had a huge heart.
And she said, “One day, Chris, I’m walking in Chicago, and I see a homeless person and the sign was asking for money” and all this, but she noticed he had no shoes. And every day, he’s complimenting her for her cool shoes, he had no shoes. She said, “I want to create a concept called Happybox. And with Happybox, what we’re going to do is, we’re going to ask the people that buy our shoes to mail their old shoes back to us”. Now, I didn’t think about “do the people that own shoes like this have the kind of shoes that’s going to help the homeless person on the street?”. But I was before that, the branding person, I mean, I’m like, “Happybox is great… But it doesn’t speak enough volume to it, what you’re doing is, you’re giving back … through a box!”. So, we came up with this concept called Give Back Box.
And, you know, this was early in 2012, when the concept actually became formalised, and she said, “Chris, this is what we’re gonna do, we’re going to come up with some marketing material” – we put up our first Facebook graphic – “and for the Style Up Girl’s – or the business’ – go to market, we’re going to market the fact that we’re going to have all the people that buy our shoes get a discount, the next time they buy shoes with us if they mail back some old shoes”.
So, that seemed simple enough, we did some photo shoots, we created our first thing that went in all of the Style Up Girl boxes, and that gave all the instructions. But that innovative nonprofit I talked about, since they did all this stuff to actually directly impact homeless, we were gonna basically take all of our boxes, and integrate into the Safe Haven continuum, and have them get them into the hands of the people that need these shoes the most.
So, our first boxes came in, we were so excited – this is one of my offices in Chicago – this pilot actually yielded some results! But then we opened the boxes, and I was excited – I was worried about the type of shoes – but we realised that, although there were some shoes in here, there were other things in there, too! You see, it was clothing, it was school supplies, it was things that went well beyond the original intention. It was amazing. And we’re like, “Wow, what are we going to do with this?”. A Safe Haven … I mean, there was even a thing in the news at the time about how much impact things like this matter. And we made the people that bought shoes feel great, we solved the problem for Safe Haven, but we knew there was something more to this. And we knew that some people were getting more excited about this concept than they were about just the online shoe store that she had. So, we were going to expand our pilot and do something larger.
This awesome website, Karmaloop, which was kind of like a fashion-forward website, they came to us and said, “Hey, listen, we got some bad customer problems with the amount of cardboard we use to mail our cool products, so we want to get involved with this; we’re going to do a pilot”. And they had a really awesome audience.
But then this company Newegg, that did computers, they said, “We love what you’re doing too, but we have much larger boxes. And we have a lot of customers as well, so I’m not sure A Safe Haven is going to be able to handle everything”. So, we had to go out there and find a nonprofit that had a model to distribute clothing, distribute all of this, but also that was sustainable, but that was gonna be large enough for us to grow.
So, Goodwill says, “Listen, we love this”. Goodwill is one of the largest nonprofits in America, focused on helping people build sustainable lives after they start their lives over. (A couple more slides here; I know we’re running short on time). But the interesting thing about this, is now we had our pilot, we had the first people to allow us to build some growth. And we had a large enough nonprofit to receive all of it.
We set up our first campaign. And it was pretty much breathtaking because once we had success with these, a company that we wanted to originally sell shoes on their platform came to us and said, “Hey, listen, we want to do this for our holiday season this year”. And this was a few years back that we did all of this, just in 2021.
I was reading about the impacts numerically. You see, a lot of people don’t realise that this is what this company became; Give Back Box became Monika’s business.
You know, it actually served a purpose so large in 2019, Lego did a Replay Campaign. Monika and Give Back Box are responsible for 50,000 pounds of Legos. That’s literally like 20 million Lego bricks being put through the system to date.
They’ve had over 1 million giveback boxes shipped. They’re responsible for over 19 million pieces of clothing. More than 700 tonnes of stuff that would have ended up in landfills, have now been distributed into the charity world, and to people that needed it the most because that nonprofit mindset of solving a problem became her sustainable startup business model to this day.
Authenticity is what we’re looking for in society. It’s the new disruptive.
Authentic business models, authentic mission, authentic collaborations. Where it’s not just writing cheques, because that’s the easy thing to do, it’s about eliminating problems through collaboration. It’s about realising that the greatest startups and the greatest nonprofits, solve problems that are large enough to matter, but small enough to actually solve.
You see, because in the end, when you’re a nonprofit leader, when you’re a startup leader, when you have mission, when you have purpose, and you do things for the right reasons, your nonprofit won’t shut its doors, your startup won’t fail, you’ll get on the radar of investors, everything will happen, because it won’t end for the wrong reasons.
And thank you so much, Zac, I know we only have a short amount of time today. But I would definitely encourage all of you to reach out to me at www.responsible.com, fill out the form on our website, email@example.com, I would love to help build collaborations for you. This is what I love to do. It is my purpose. And that’s why I’m good at it. Just like why all of you are great at your startup and nonprofit, make sure you have that product market fit with yourself. Thanks, Zac.
Thank you so much, Chris.
I mean, first of all, your story is incredible. And I’m touched that you would share it with us in so much detail. And, I am so happy that you’re with us now and helping us … today helping the nonprofit sector but just generally making the world a better place. I know that your work that you do is incredible. So, thank you.
I’m pleased that you reminded us all that nonprofits are businesses; we have to operate like businesses. Even though we do amazing work, all of the background has to be taken care of; we have to have sustainable business models. Those case studies, A Safe Haven in particular, it’s very easy, I think, for organisations to say “Okay, so we have this problem. The problem is homelessness. People care about homelessness. Let’s fundraise and fundraise and fundraise”. But taking that different approach of thinking, “Well, actually, we’ve got we’ve got a labour force here, a potential labour force here, why don’t we take that labour force and start a company and give them training and generate funds for ourselves and employability skills for the people who we serve?” It’s perfect. It’s a win win win.
These are world-class businesses, Zac. They’re award-winning, world-class companies.
And this is why I’m so glad that you’ve come to speak to us because you bring us the best.
And the same with Give Back Box. The thing that I like about Give Back Box – the case study, which you presented – is that it starts small. It learns. It iterates. Figures out, okay… the bit, which I really like, was when they put it out, and then realised what the customers were giving to them, or what the people were giving to them, it was more than just shoes. And rather than saying, “Oh, but we only want shoes”, they said, “Right, this is going to be bigger than we thought” and pivoted and have done something far more than what they initially envisioned. And I think it speaks to, test small, but have that vision to go bigger if you want to. So incredible.
I mean, thank you so much for your time, Chris. Is there anything you want to leave us before we close out?
You know, I normally don’t have that slide in there that has that BBC article, which is great because I know your audience will actually be like, “Yes, that’s something”.
But you know, to be honest, I really like to make sure that people do reach out. If you’re facing a challenge. Realise that, even cold emails to the people that actually care, they will reach back, right? I am an outcome. I’m the product of somebody that reached out to people like Neli, that got in the room with people like Monika, right? I was also that drug addict felon. I’m also on the stage here with you, Zac.
So you know, having the right purpose in mission, but going after it. That’s the difference between ideas and vision. That’s the difference between outcomes and just sitting there, right? So please reach out, Zac, I’m always here for you and your audience. I love what you’re doing at the Charity Professional Development Network. I mean, it’s just world-class. So I look forward to helping anytime I can.
Thank you so much, Chris. And we’ll see everyone else next time. Cheers.