The trouble with non-profits

That's true in theory but not in practice because most funders don't care, which is a point I describe further in the posts linked to above.

There are many reasons to do things other than money, but when you are dealing with people that you don't personally or directly know the fact that they are willing to pay for your services is basically the only real signal you have as to whether you are benefiting them. And if you are not making more doing this (for a combination of monetary and non-monetary benefits) than you could something else, then you need to switch to a better use of your time.

Of course, the contributors benefit from donating money, etc by signalling effects and warm fuzzies, but that doesn't mean the recipients are benefiting nearly as much as the contributors are spending.

I've worked at two social ventures that had non-profits as clients (Web Networks, and most recently Urbantastic.com).

There emphatically is something wrong with non-profits. Just because there are some excellent ones (Sturgeon's law applies) doesn't mean that the field at large isn't ill.

An anecdote: we had a meeting with a guy who worked at a large company with a philanthropic streak. They provided, free of charge, a "dashboard" for planning, along with free training and tech support to any non-profit that wanted it (it cost considerable money otherwise). It was simple but very powerful, allowing you to do sensitivity analyses on projections to determine which courses of action would result in the best returns - both monetary and any other metric you wanted to put in (i.e. the social goals of the project).

It was like he was selling popsicles at an ice rink.

We ran into a very similar issue with Urbantastic. We had a web service that was very effective at getting small things done for non-profits: it's called micro-volunteering. There's no supervision required, you just write down what you want and someone always did it.

When we founded Urbantastic we thought the challenge was going to be in getting skilled people to help out for free. That was not a problem. The problem was that we'd go up to non-profits and say: here's a machine where all you have to do is post your todo list, and people will cross off items for you. For free. And we never got uptake.

People lined out the door offering to help, and almost no one took them up on it. Despite our offers to walk non-profits through it, and despite the recent funding cuts which meant that they needed all the help they could get.

I'm not saying that Urbantastic is perfect, but in our pilot cities this was overwhelmingly the result, and I still can't think of any incremental change that we could have done to get the non-profits engaged. A big part of it was that most of them were still uncertain about the whole email thing. It's not an exaggeration to say that some of them didn't know how to use a spreadsheet.

With our fancy web 2.0 ajaxy website, we felt like we were giving out iTunes gift cards to the lost tribes of Papua New Guinea. They didn't value it because they weren't even close to being at the point where they could use it.

I care about social good - I wouldn't have founded a social venture if not. And twice now I've been floored by the state of the non-profit world. Again, 10% of them are brilliant, but the other 90%... It's a big problem, and it's not going to get better by pretending that it's not there. That world is amazingly backwards. And it's saddening to see such important mandates being handled by such ineffective organizations.

My advice to anyone here planning on doing a social venture: drop backwards compatibility with the non-profit world. (one giant caveat: working exclusively with one or two of the few clued-in orgs might work).

What does this even mean? Right now nonprofits do things in exchange for money from wealthy people. How would "running them like a business" be any different?

A lot of what you are saying here resonates with me. I work part-time for a local charity in my town and have been involved in various others at times. There are a number of problems charities normally face which may explain your findings to some extent, including:

- well meaning but incompetent staff. People don't seem to understand that wanting to do good doesn't naturally translate into the ability to do it.

- no real management. I suppose this may be local phenomenon, but where I am (UK), there seems to be a tendency for small charities to be managed by wealthy housewives as a kind of hobby job. There is very definitely a social network of them that dominate the charities in my town. Often this means the management will be consistently absent from the organization. You can also see my previous point.

- no real check on the management. Charity trustees are often people who just want their name to be associated with a charitable organization. I can think of several trustees of the charity I work for who probably have only a vague idea of what we actually do.

- funding constraints. Charities in the UK who receive funding from government departments are usually monitored in terms of the volume of work they do rather than the outcomes they produce (which are much harder to quantify). Thus the incentive is often to not try to improve efficiency as reducing the work load may negatively impact funding.

Obviously my examples are to some extent just personal experiences that may not be universal. However I would guess that most non-profits face similar problems and that these problems may help explain why you got such a negative reception with your projects.

With regards to volunteers though, what did you to do assess their competency to perform the tasks they were willing to help out with? I ask because part of my job is to manage my organization's volunteers (which mostly come to us on work experience placements from the job centre). They frequently start working for us claiming to have various skills and then we discover that they often don't. For this reason I am usually quite unhappy about accepting new volunteers - when I have to get rid of them is is much harder (emotionally, for me) than sacking an incompetent employee. This might also help explain some of the resistance you encountered to what you were doing.