Your charity startup just hit the ground running. You are passionate about your cause, you just gave a big talk at a conference, and you've set up a shiny website. All is looking great. Yet your organization might still fail: it might collapse or not have any impact. Here are six ways a charity startup might fail -- and how to prevent this scenario.
1. You picked an ineffective intervention
What can go wrong when you select an innovative idea and a cause area you feel strongly about? Potentially, a lot. Innovation and personal passion for your idea are weak indicators of your intervention’s suitability. First, your personal fondness for an idea might make you overlook its weaknesses. Second, innovative ideas are often overrated. There are dozens to hundreds of proven, evidence-based and cost-effective interventions that need to be scaled. And they are just waiting to be implemented, sitting idly in the databases of applied research organizations such as J-PAL, 3ie, GiveWell or Charity Entrepreneurship. Picking one of these sets you up on a path of impact.
Remember that the intervention, not your implementation skills, is the principal limiting factor of your organization. If you select a poorly-researched and expensive intervention, even having stellar implementation will not get you anywhere. Moreover, as a first-time founder, you can be fairly certain that your operational skills will not be outstanding, so a high-impact intervention area can compensate for that as well.
How can you avoid picking an ineffective intervention?
2. You chose the wrong co-founder or partners
The cliche is correct: you are as good as your team. Working with the right co-founder and partners is critical.
You are setting yourself up for failure if your whole organisation is not aligned on values such as beneficiary focus, lean operations, and an evidence-based approach. Diverging working styles and preferences can also have a detrimental effect. For example, if you like to plan thoroughly and your partners prefer implementing at the last minute, a good working relationship will become tricky.
When choosing a co-founder or partners, try to list factors for a successful relationship in a spreadsheet to give you some degree of objectiveness and comprehensiveness. However, given the importance of the human element here, also trust your gut as a suitable heuristic. A bad feeling about a relationship can be strong intuition not to proceed.
In terms of picking suitable co-founders and partners, look out for:
3. You don’t understand your beneficiaries
You know all about the effect sizes and p-values of the research papers in your field. And you have a sophisticated cost-effectiveness model ready to be applied. Yet you have barely spoken to the beneficiaries of your intervention. This is an issue, as even the intervention that appears most cost-effective on paper is not worth much if it is not successfully applied in the field.
“Understand your customer” is the mantra in the business startup world. It applies to the non-profit domain as well, even though the feedback loops are less straightforward: you get your funding from donors, while you serve your beneficiaries. Hence, your beneficiaries are your real customers. Do you really understand their problems and preferences?
The reality is usually more complicated than what one would assume sitting at a faraway desk. There is a myriad of reasons, for instance, for which mothers do not access free vaccinations to protect their children from deadly diseases. While research goes a long way, conversations and testing in the field can be extremely informative and provide answers specific to your context.
To understand your beneficiaries, you could:
4. You prioritize research instead of focused implementation
Weeks or months into your implementation, your focus remains research. “Let’s just look at the evidence for another 3-6 months.” This intuition might be correct in some cases. However, for the large majority of action-focused charities, at some point you have to arrive at conclusions from your research and start the actual implementation. There will never be an optimal moment for this; just look at the standard request for further research at the end of each academic paper… Yet, unless you are a charity whose core objective is research, you have to go beyond papers sooner rather than later, and start implementation.
Prioritizing implementation over research is not sufficient. You also need to move quickly to keep donors and staff -- and yourselves as founders -- fully engaged. It is difficult to maintain momentum if an organization has not made major progress over 6-12 months. The key here is a focused implementation that prioritizes the most important and urgent tasks.
The following can help you focus on implementation:
5. Your fundraising is not working
As a non-profit organization, you operate at a loss by default and therefore rely on constant fundraising. Established organizations might benefit from a one- to two-year runway, but, as a charity startup, you might only have funding for 3-6 months.
Fundraising is a time- and energy-consuming task for founders, yet there are a few recipes that can help.
6. You transition leadership too quickly
Your charity has successfully tested and scaled an intervention. Expert staff are in place and structures built. You and your co-founder consider leaving the organization to start something new from scratch. This is a high-stakes decision. It can go right if you have built solid systems to steer the organization and replaced yourself with staff who excel in their respective domains. It can also go terribly wrong if you have no high-performing and value-aligned senior staff in place to take over.
Here are a few things to consider:
The six ways your charity might fail are also six ways you can excel and stand out. Keep these points in mind as you tackle your specific challenges, and you will continue the journey toward evidence-based impact. And don’t forget to have fun in the process!