Podcast: How You and Your Company Can Lend Expertise to a Nonprofit in Need
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Social Impact May 8, 2018

Pod­cast: How You and Your Com­pa­ny Can Lend Exper­tise to a Non­prof­it in Need

Plus: Four ques­tions to con­sid­er before becom­ing a social-impact entrepreneur.

An entrepreneur faces many routes for startup success.

Yevgenia Nayberg

Based on insights from

Megan Kashner

Kara Palamountain

Listening: How You and Your Company Can Lend Expertise to a Nonprofit in Need

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While most of us are inter­est­ed in con­tribut­ing to the greater good, it can be daunt­ing to fig­ure out just where to start, and how to make the most impact. 

In this pod­cast, we talk with Megan Kash­n­er, a clin­i­cal assis­tant pro­fes­sor and direc­tor of social impact at Kel­logg, about how com­pa­nies and their employ­ees can offer their exper­tise to non­prof­it orga­ni­za­tions. Then we dis­cuss with Kara Palam­oun­tain, a research asso­ciate pro­fes­sor at Kel­logg, how social-impact entre­pre­neurs have some tough deci­sions to make when they are decid­ing whether to go the non­prof­it or for-prof­it route. 

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Pod­cast Transcript 

[Music intro­duc­tion]

Jes­si­ca LOVE: Many of us, when it comes down to it, want to make a dif­fer­ence. Whether it’s by donat­ing time or mon­ey, there are a lot of ways for indi­vid­u­als to con­tribute to the greater good. 

And from an employer’s stand­point, encour­ag­ing employ­ees and teams to get involved can make a lot of sense. Here’s Kellogg’s Megan Kashner. 

Megan KASH­N­ER: Over­all, most peo­ple give a hoot, right? Most peo­ple are excit­ed by things that help. You’re doing a project for a children’s orga­ni­za­tion, for a children’s hos­pi­tal, for an adult lit­er­a­cy pro­gram. You kind of would have to be Scrooge to be unin­spired, or unin­ter­est­ed, in your employ­ee get­ting involved in some­thing like this. 

LOVE: But sim­ply want­i­ng to do good isn’t always enough. Indi­vid­u­als — and com­pa­nies — need to think strate­gi­cal­ly in order to turn good inten­tions into real social impact. 

Wel­come to the Kel­logg Insight pod­cast. I’m your host, Jes­si­ca Love. Today, we’re going to hear about two very dif­fer­ent ways com­pa­nies and indi­vid­u­als can make a dif­fer­ence. First, pro­duc­er Fred Schmalz talks to Megan Kash­n­er about a grow­ing trend where entire com­pa­nies decide to adopt” social-impact organizations. 

Then, we hear from Kellogg’s Kara Palam­oun­tain about one of the most dif­fi­cult deci­sions social-impact entre­pre­neurs have to make. 

Stay with us. 

[Music inter­lude]

Fred SCHMALZ: Some of us who want to make an impact donate to char­i­ta­ble orga­ni­za­tions. Oth­ers vol­un­teer time. 

If we’re a lit­tle bit finan­cial­ly savvy, we can even take up impact invest­ing. That’s where we put our mon­ey in com­pa­nies or funds with the expec­ta­tion that they won’t just give finan­cial returns — they’ll also make a pos­i­tive impact on society. 

For a lot of pro­fes­sion­als, there’s a spe­cif­ic way we can get involved that too few of us con­sid­er even when we’re aching to make a difference. 

To explain, here’s Megan Kash­n­er, a clin­i­cal assis­tant pro­fes­sor and direc­tor of social impact at Kellogg. 

KASH­N­ER: When I think about a pro­fes­sion­al — Jan in account­ing or Chris in mar­ket­ing — and I think about that per­son won­der­ing, What can I do?” The very first thing I think is, Well, you’re an accoun­tant. You’re a mar­keter.” The non­prof­it sec­tor and start­up social entre­pre­neurs are hun­gry for help, for pro-bono sup­port, for project work, for skills-based vol­un­teer­ing from peo­ple who have hard skills that they’re will­ing to bring over and help a non­prof­it by using. 

SCHMALZ: Kash­n­er points to the Tap­root Foun­da­tion. It’s an orga­ni­za­tion that con­nects skilled vol­un­teers to a vari­ety of non­prof­it orga­ni­za­tions that are look­ing for help with their fundrais­ing, HR, or strategy. 

And real­ly ambi­tious pro­fes­sion­als can do more than offer up their own skills. They can try to get their entire com­pa­ny on board. If your boss is game, why not adopt” a nonprofit? 

KASH­N­ER: What does your com­pa­ny do, what does your com­pa­ny pro­duce, what is their ser­vice, and who out there could ben­e­fit from hav­ing access to that ser­vice to improve their impact on the world? 

So, if the team is an account­ing team, that team could choose to adopt a non­prof­it. Which sounds bor­ing, but I’ve got to tell you: if I threw out a social media post and said, Hey, I’ve got a group of account­ing folks who are eager to help a non­prof­it refor­mu­late their chart of accounts,” I promise you I would get over a dozen respons­es. Right? It doesn’t sound sexy, but if it’s what you’re good at, and it’s what your team is good at, there’s no rea­son not to come togeth­er and use that as a ral­ly­ing point. 

Not all pro bono is the pro bono you need. Just because someone’s offer­ing it, you don’t have to say yes.“

— Megan Kashner

SCHMALZ: Kash­n­er can attest first hand to just how use­ful this kind of pro-bono assis­tance can be for its ben­e­fi­cia­ry. She found­ed and directs the non­prof­it orga­ni­za­tion Benev­o­lent, which crowd­sources small dona­tions to indi­vid­u­als who need help raise mon­ey for a spe­cif­ic pur­pose, such as a car repair or a lap­top for school. 

KASH­N­ER: We need­ed to do a great deal of social-media out­reach. We were approached by a dig­i­tal com­mu­ni­ca­tions firm who were look­ing for a pro-bono oppor­tu­ni­ty, and they adopt­ed us. They remade our Face­book, and LinkedIn and Twit­ter pro­files. They built us back-end data-analy­sis dash­boards, so that we could under­stand how our posts were per­form­ing. They brought this high­er lev­el engage­ment, because that’s what they did for a liv­ing. And it cost them almost noth­ing, because it was what they did all the time. 

SCHMALZ: This all sounds great. 

But for com­pa­nies and orga­ni­za­tions on both sides of this arrange­ment, mak­ing sure every­one involved under­stands expec­ta­tions is crit­i­cal to the partnership’s success. 

For non­prof­its espe­cial­ly, offers of pro-bono assis­tance pro­vide an oppor­tu­ni­ty, but they also require a bit of foresight. 

KASH­N­ER: Not all pro bono is the pro bono you need. Just because someone’s offer­ing it, you don’t have to say yes. 

The first ques­tion real­ly is get­ting the scop­ing and under­stand­ing right up front. 

What’s in this project; what’s not in this project? What is the time table for this project? What are the key deliv­er­ables? How often will we communicate? 

Once you’ve got that fig­ured out, you still have to make sure that the pro-bono engage­ment is not, what we used to call, the gift that keeps on tak­ing.” There have been instances of pro-bono teams break­ing a nonprofit’s web­site instead of fix­ing it, of them com­plete­ly screw­ing up the mar­ket­ing and mes­sages for an event in a way that felt com­plete­ly off brand, if not off-putting. 

SCHMALZ: The key to mak­ing sure this arrange­ment works is to make sure the non­prof­it or social enter­prise stays in con­trol through­out — after all, it’s their orga­ni­za­tion that is shoul­der­ing the risk. That means rec­og­niz­ing that the non­prof­it can at any time inter­vene with the work that is being done on its behalf. It may even mean being com­fort­able call­ing the rela­tion­ship off. 

KASH­N­ER: These are out­side con­sul­tants; they’re not team mem­bers. So, they should not have the pow­er to break your stuff, or to deploy tech­nol­o­gy changes, pro­gram changes, mar­ket­ing mes­sag­ing, with­out you. At any point. 

Any non­prof­it social entre­pre­neur, their num­ber one inter­est is their orga­ni­za­tion. And so, wor­ry­ing about hurt feel­ings has to come second. 

SCHMALZ: It’s easy to see how such an arrange­ment can help a scrap­py non­prof­it or social entre­pre­neur when done right. But there are also long-last­ing advan­tages for the pro­fes­sion­als who are offer­ing these ser­vices and for their companies. 

Com­pa­nies often want to high­light and cel­e­brate what their employ­ees are pas­sion­ate about. 

KASH­N­ER: Many com­pa­nies today are actu­al­ly encour­ag­ing employ­ee engage­ment in non­prof­its, in the com­mu­ni­ty, in out­side endeav­ors, for exact­ly those rea­sons. Right? It increas­es employ­ee engage­ment, and employ­ee reten­tion, and lead­er­ship devel­op­ment and pro­duc­tiv­i­ty, all of these dif­fer­ent things. 

SCHMALZ: The great thing is that often com­pa­nies pro­vide employ­ees with time to par­tic­i­pate in these kinds of projects. And if a group of col­leagues is work­ing on the same project, the expe­ri­ence can be a good team-build­ing exer­cise as well. 

KASH­N­ER: So, any man­ag­er, whether that man­ag­er is the top dog or not the top dog, any man­ag­er has the oppor­tu­ni­ty to use a sense of pur­pose and impact to help gel their team. 

[music inter­lude]

LOVE: But some pro­fes­sion­als aren’t inter­est­ed in just vol­un­teer­ing some of their time to a cause. They want to immerse them­selves in it. Per­haps even start their own orga­ni­za­tions as social-impact entrepreneurs. 

Like Kara Palam­oun­tain. Here’s Schmalz again with her story. 

SCHMALZ: Kara Palamountain’s sis­ter worked as a pedi­a­tri­cian in Sub-Saha­ran Africa. After hear­ing about the chal­lenges her sis­ter faced prac­tic­ing med­i­cine in the region, Kara decid­ed to devote her career to health­care. At first she want­ed to become a doc­tor. But her sis­ter told her that she could make a greater impact if she went to busi­ness school and devel­oped prod­ucts that could func­tion in the chal­leng­ing envi­ron­men­tal con­di­tions of rur­al med­ical clinics. 

She decid­ed to make it her mis­sion to devel­op prod­ucts that could low­er infant mortality. 

Over the course of a career spent tack­ling this issue, Palam­oun­tain has faced a dilem­ma com­mon to social entre­pre­neurs — would start­ing a for-prof­it com­pa­ny or a non­prof­it orga­ni­za­tion bet­ter serve her mission? 

Palam­oun­tain, now a research asso­ciate pro­fes­sor at Kel­logg, has cho­sen both paths at dif­fer­ent points. She says it is impor­tant to under­stand how they differ. 

Kara PALAM­OUN­TAIN: I think there are four key things that make them dif­fer­ent, at least from my expe­ri­ence. The first is mis­sion, the sec­ond is rev­enue, the third is an exit strat­e­gy, and the fourth is scal­ing and growth. 

SCHMALZ: In Kara’s mind, the first of these — mis­sion — offers one of the biggest ben­e­fits of form­ing a non­prof­it orga­ni­za­tion. Specif­i­cal­ly, for non­prof­its, this mis­sion is explicit. 

PALAM­OUN­TAIN: It’s under­stood that the mis­sion is your top pri­or­i­ty and that’s why the IRS gave you per­mis­sion to be a not-for-prof­it. With a for-prof­it, mis­sion can still be a top pri­or­i­ty, but it’s not auto­mat­i­cal­ly assumed to be so by every­one else. 

SCHMALZ: Rev­enue source offers anoth­er impor­tant dis­tinc­tion. Non­prof­its can earn some rev­enues — think muse­um admis­sion or copays at a non­prof­it hos­pi­tal. But they often rely on dona­tions for much of their income. And while work­ing with donors can be great, being at their mer­cy is complicated. 

Donors can have very pre­cise ideas about how their mon­ey should be spent. Strict spend­ing restric­tions can make it hard for a non­prof­it to act nim­bly in response to an unfore­seen challenge. 

Take, for exam­ple, the chal­lenge Palam­oun­tain faced when her for-prof­it need­ed to rein­vent itself. It would have been impos­si­ble to accom­plish this piv­ot as a nonprofit. 

PALAM­OUN­TAIN: So we had been work­ing to make diag­nos­tics for the low-income and mid­dle-income mar­kets for a cou­ple of decades. Like, one prod­uct at a time, if you will, and real­ly focus­ing on those mar­kets first. And I think what we found is that that’s real­ly hard to do one prod­uct at a time. So the oth­er approach now we’re tak­ing is let’s do some­thing for high-income mar­kets and see if we can use the prof­its to make prod­ucts for low-income markets. 

SCHMALZ: Because it isn’t behold­en to donors, the com­pa­ny could shift its entire rev­enue mod­el in a way it believes will ulti­mate­ly help it ful­fill its mission. 

For-prof­its can also avail them­selves of the grow­ing pool of impact investors who want to make sure their mon­ey is put to good use. 

Impact investors can offer equi­ty invest­ment, debt, and oth­er cre­ative cap­i­tal inflows. And in the process of woo­ing them, a for-prof­it is like­ly to dot all of its i’s and cross its t’s, result­ing in (one would hope) a pret­ty sound strat­e­gy for achiev­ing the mission. 

PALAM­OUN­TAIN: I think what impact investors are bring­ing to the way that mis­sion is expressed is in spe­cif­ic met­rics. So, prove to me that you’re not only mis­sion dri­ven in how you give mon­ey away, but also show me the impact that that mon­ey has on the pop­u­la­tion that you intend to serve. It’s cost per life saved or num­ber of babies that receive X treat­ment in XYZ coun­tries. Real­ly bring­ing more rig­or to the way that you express how you accom­plish your mission. 

SCHMALZ: Which brings us to a third dif­fer­ence raised by Palam­oun­tain: scal­ing. For for-prof­it com­pa­nies, tak­ing on impact investors can be an effec­tive way of scal­ing your efforts to achieve your mis­sion. But non-prof­its don’t have any equi­ty to give away. 

PALAM­OUN­TAIN: In a not-for-prof­it, you can use prof­its to grow your busi­ness, you can use debt to grow your busi­ness, but you can’t sell off equity. 

SCHMALZ: That inabil­i­ty to sell equi­ty can act as an inhibitor to growth. But then again, it also pro­tects your non­prof­it. Because giv­ing up equi­ty can also put your mis­sion at risk. 

PALAM­OUN­TAIN: I think the dilem­ma you run into as an entre­pre­neur is, Well, what hap­pens if I give up my mis­sion at some point when I’m try­ing to raise the next round,” or I give up equi­ty and I get this part of what I care about shut down?” So, you know, I think that’s what you should con­sid­er when you’re seek­ing investment. 

SCHMALZ: If you’re think­ing about start­ing an orga­ni­za­tion, Palam­oun­tain says you should def­i­nite­ly ask your­self ques­tions about the long term — both the organization’s future and your own. 

Which brings us to that final big dif­fer­ence: your exit strat­e­gy. Because maybe, as much as you care about your mis­sion, you don’t want to devote your life to it forever. 

PALAM­OUN­TAIN: So, if you are a for-prof­it founder, and it’s been about five or six years and you’re to the point where you want to move on to your next ven­ture, or you think that the busi­ness is grown and had a lot of suc­cess, but some oth­er enti­ty would add more val­ue to it. Let’s say you want­ed a big med device com­pa­ny to buy your small social-entre­pre­neur start­up. With a for-prof­it, you can have your com­pa­ny bought or acquired and you would, as a founder, like­ly ben­e­fit from that sale per­son­al­ly, and your mis­sion can also be expand­ed because you’re sell­ing it to a com­pa­ny that can scale your idea. 

As a non­prof­it founder, five years goes down the road and you’ve reached some mile­stones and the orga­ni­za­tion still has a lot of assets in the bank or on the bal­ance sheet. You can’t sell your­self to a large med-device com­pa­ny. Rather, if you want to shut down your not-for-prof­it, you would have to take the remain­ing assets and find anoth­er non­prof­it that would take on those assets and nur­ture those assets in the way that donors for those assets intended. 

SCHMALZ: With so many pros and cons to both for-prof­it and not-for-prof­it orga­ni­za­tions, which does Palam­oun­tain ulti­mate­ly rec­om­mend? Unfor­tu­nate­ly, there’s no one-size-fits-all solution. 

But there may be some cre­ative ways to get the best of both worlds. Such as by form­ing for-prof­it sub­sidiaries with­in a larg­er non­prof­it organization. 

PALAM­OUN­TAIN: There’s a non­prof­it in Kenya, the Kenyan equiv­a­lent of a non­prof­it called the Cen­ter for Pub­lic Health and Devel­op­ment, CPHD​.org, and CPHD​.org has two sub­sidiary com­pa­nies, one is a for-prof­it dis­trib­u­tor called Med­E­QUIP and they basi­cal­ly pro­vide a vari­ety of med­ical-equip­ment solu­tions in Kenya. The sec­ond for-prof­it com­pa­ny that CPHD has as a sub­sidiary is called Hewa­tele, and they are set up as an oxy­gen man­u­fac­tur­er and dis­trib­u­tor in Kenya. So these two enti­ties are under­neath the non­prof­it umbrel­la. The struc­ture is bril­liant, but it does require some leg work to set some­thing like that up. 

[Music inter­lude]

LOVE: This pro­gram was pro­duced by Jes­si­ca Love, Fred Schmalz, Emi­ly Stone, and Michael Spikes. 

Spe­cial thanks to our guests, Megan Kash­n­er and Kara Palamountain. 

You can stream or down­load our month­ly pod­cast from iTunes, Google Play, or our web­site, where you can read more about social impact. Vis­it us at insight​.kel​logg​.north​west​ern​.edu. We’ll be back next month with anoth­er episode of the Kel­logg Insight podcast. 

Featured Faculty

Megan Kashner

Clinical Assistant Professor of Public-Private Interface, Director of Social Impact

Kara Palamountain

Research Assistant Professor of Innovation and Entrepreneurship

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