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How to Grow Your Non-Profit: A Quick Case Study

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A few weeks ago I wrote about All for Good, a web site that aggregates volunteer opportunities. All for Good has been around since 2009, when founder Jonathan Greenblatt recruited volunteers from Google, YouTube, UCLA and elsewhere— a mix of software engineers, marketing managers, product developers and designers—to help build the site. Target, P&G and other organizations contributed funding, and several Google engineers worked on All for Good as a 20-percent project—a company perk that allows engineers to spend a day a week on projects that interest them.

Since my post, Greenblatt announced that Points of Light Institute, a national community service organization, plans to acquire All for Good. Unlike for-profit startups, All For Good doesn’t have equity shares. Greenblatt won’t disclose the terms of the deal, but he says that he’ll pump whatever cash is exchanged back into operational expenses. He’ll be navigating familiar territory with Points of Light, whose chief executive— Michelle Nunn­— is on All for Good’s board.

All for Good’s deal made me think about exit strategies for non-profits. There are more than 1.4 million registered non-profits in the U.S., many with overlapping missions. Why don’t more consolidate? Here's what Greenblatt thinks:

  1. The board doesn’t want to. “A lot just fizzle out because they don’t have a board that’s deeply engaged,” says Greenblatt. “Maybe the board doesn’t feel the pressure. Also, the non-profit space hasn’t been forced to make these decisions. The cold logic isn’t always there.”
  2. People want to control their own ideas, even if other people are thinking the same thing. In his blog post announcing the deal, Greenblatt also blames a strong “NIH” factor—short for “Not Invented Here,” or a bias against an idea or product that originated elsewhere.
  3. Letting go requires humility. Like any executives at any startup executive, leaders at non-profits have to be willing to recognize when they can grow faster, or have more impact, by partnering with someone else. “For the entrepreneur to be willing to consider an exit, he has to have humility,” says Greenblatt. “You have to find a partner who shares your values, which isn’t always so easy.”

What else? Please email me with your thoughts. Or, better yet, leave a comment below. Thanks.