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Five Challenges a Charity Entrepreneur Faces -- and How to Manage Them



“Why take this risk?” Mentioning at a family gathering that you would like to become a charity entrepreneur might trigger looks of concern and opposition. What about the high failure rate of startups, the low entry salaries, and the need to work around the clock? There are potential personal challenges related to charity entrepreneurship. Neglecting them would be dishonest. Yet often these challenges are either exaggerated or can be dealt with successfully. Let’s go through them one by one:

  1. Uncertainty and a high risk of failure

  2. Financial limitations

  3. Separation from friends and family

  4. Work-life balance

  5. Unglamorous work


1. UNCERTAINTY AND A HIGH RISK OF FAILURE

The cliche is correct: a high percentage of startups fails. In the case of charity startups, an impact evaluation might show negative results, your funders might move on to other cause areas, or your team might no longer be sufficiently motivated by the organization’s mission. Even successful startups involve a lot of uncertainty. It is often hard to predict how the organization will look like just 6-12 months in the future. The risk of failure and the general sense of uncertainty have an effect on both a psychological and financial level. While financial concerns often come up first, the underlying challenge about uncertainty is likely psychological. As human beings -- even more adventurous ones -- we strive for a certain degree of stability in our relationships and tasks. A startup provides anything but. Yet the concerns are manageable with a few simple strategies. For instance, acknowledge the worst-case scenario of failure in a visualization exercise inspired by stoicism. Even in this scenario, your efforts will not be in vain on a personal or societal level. The lessons learned will contribute to shared knowledge, while you will have personally benefited from the journey, since you worked on a meaningful project and gained valuable career capital. The pressure generated by your venture will also trigger personal growth that you might not have achieved otherwise (see Four Reasons Why You Should Consider Charity Entrepreneurship Besides Impact). Other simple techniques, such as sports and meditation, can help you take a step back when you feel overwhelmed by the uncertain outlook of your charity.


2. FINANCIAL LIMITATIONS

Financial challenges related to a charity startup are twofold. First, you might worry about what happens financially in the case of failure. Second, you might be anxious about lower salaries in the non-profit space and limited financial freedom. In dealing with the financial risk of failure, it might help to perceive charity entrepreneurship an investment similar to university education. You will benefit in the long term -- and, as a charity entrepreneur, you get paid a salary instead of being confronted with school fees. Further ways to alleviate your financial concerns include building a 6- to 12-month financial buffer before starting, and checking out the social security benefits of your country of origin (as a last resort). And don’t forget that as a charity entrepreneur you are likely highly skilled, so it is realistic that you could find another well-paid job in the worst case scenario. In terms of financial freedom, starting your charity will restrict you more than working for an established company. Maybe you will have to reduce your budget for vacations, the latest gadgets, or eating out. However, becoming a charity entrepreneur does not equate to joining a monastery. Your donors understand that you can only be productive if your living costs are covered. So you will not have to switch from smart to feature phone, stop going out with friends, or spend holidays on your balcony. Finally, as an entrepreneur running an early-stage organization, you are likely already cost-conscious, so cutting back a bit will feel natural to you.


3. SEPARATION FROM FRIENDS AND FAMILY

Your happiness depends to a large degree on your social network. Being away from friends and family can be challenging even for social individuals. Charity entrepreneurship will mean time away from your loved ones. You might have to set up a program in a rural Indian state or attend multiple donor conferences in a faraway global capital. However, job mobility is not unique to charity entrepreneurship. It has become a common feature of modern working life. The autonomy you enjoy as an entrepreneur can even help you stay close to your social circles. Many tasks can be accomplished remotely. For deep concentration, a quiet remote setting is even better than a hectic field setting. Moreover, if you have a co-founder, you can split up the time spent in far-away locations among multiple people.


4. WORK-LIFE BALANCE


The first years as a charity entrepreneur might not be the best to start time-consuming new hobbies or plan extended holidays. Your work-life balance is likely to suffer as you start your venture from scratch, test it in the field, and recruit the first employees. 40 hours per week will likely not be sufficient. At the same time, the workload should also be put into perspective. For many charity entrepreneurs, the counterfactual would be climbing the career ladder in a highly demanding job such as management consulting. The work-life balance there is arguably worse. As an entrepreneur, the distinction between work and life will become less clear. After all, you have started something you truly believe in, that you pursue with a high degree of autonomy. This is a different path to working for a conglomerate in an anonymous office building. As your organization grows, delegation processes will also become more established, and you will not have to constantly extinguish fires on top of your leadership duties. Staff will take care of operations, and you will be able to focus on strategic questions. All of this reduces your workload and stress levels. Finally, while working more than 40 hours per week is clearly beneficial in the beginning, the science of productivity [1] shows that more is not always better. As a smart leader, you can resist the urge to work constantly, and consciously set windows for uninterrupted rest and recuperation.


5. UNGLAMOROUS WORK


The movie version of your life as a charity entrepreneur might involve speaking at a prestigious conference and drafting research reports in a shiny coworking space in a global capital. The reality is often less glamorous. You might be sweating in a tiny hotel room in a foreign country as you try to fix your internet connection to update your organization’s website. Initially, your organization only has you and your co-founder(s) as employees. By definition, you will have to carry out all or most of the tasks. Moreover, the large majority of duties at an NGO is operational: revising budgets, talking to lawyers, drafting work contracts, and so on. This is particularly important to consider if you come from a research background and expect charity entrepreneurship to be an applied research fellowship, which it is not in most cases. The upside of this breadth of tasks is broad skill-building and career capital. You also get to understand every process from scratch, a good remedy against the detached decision-making that hampers many larger organizations. Of course, you will be able to hire staff eventually so you can focus your time on more strategic responsibilities. In the meantime, you could outsource repetitive tasks or IT-related tasks to freelancers available through platforms such as Upwork. In sum, charity entrepreneurship brings challenges, there is no question about that. Yet there are many strategies to manage and alleviate them.


SUMMARY: FIVE CHALLENGES A CHARITY ENTREPRENEUR FACES -- AND HOW TO MANAGE THEM


  1. Uncertainty and a high risk of failure are intertwined with an entrepreneurial journey. It helps to visualize the fact that, even the worst-case scenario of a shutdown, charity entrepreneurship is beneficial for the broader community (through lessons learned) and for yourself in terms of career capital and personal growth.

  2. You will be more financially restricted than your colleagues working in the corporate world. However, you don’t need to become a monk and give up your social life. Planning for a financial buffer and reminding yourself that you can always get a well-paid job are two additional ways to reduce anxiety about finances.

  3. Being separated from family and friends is often unavoidable in a modern work setting. Yet as a charity entrepreneur, you can split field time with a co-founder, and get to work remotely.

  4. Work-life balance as a charity entrepreneur might initially not be ideal, but is potentially better than in careers such as consulting. The additional work hours will be compensated with meaning and autonomy. You can also keep your workload in check by delegating and setting up standard processes.

  5. Charity entrepreneurship involves a lot of unglamorous work. On the plus side, this allows you to understand your organization from scratch and build broad career capital. You also have the option to hand over tasks to freelancers initially, and staff members eventually.


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