Five Lessons Learned by Our Charity Entrepreneurs

Updated: Dec 8, 2021



“How are they doing?”, is a question I get asked frequently these days. In 2019 Charity Entrepreneurship incubated six new charities. This built on our own experience founding Charity Science Health and providing support to Fortify Health – both of which received GiveWell incubation grants. Based on this shared experience, here are five lessons learned by our charity entrepreneurs.


LESS IS MORE


Our charities tackle evidence-based and high-impact interventions. While many charity entrepreneurs start out with one idea, they soon realize that there are other potentially interesting interventions in the same field. As an example, why not offer short-term contraceptives in addition to long-term contraceptives? And even if you stick to one idea, there are numerous ways of implementing it. Should you start testing a policy program in one or multiple countries at the same time? Wouldn’t it be nice to test different implementation strategies, say, not just lobbying but also a ballot initiative? In theory, all of this makes sense. In practice, less is often more. While we encourage testing, it should not become an excuse for a lack of focus. Why?

  • First, management capacity is usually limited at a charity start-up with two co-founders. It is hard enough to manage one pilot well and gradually build an org. Going for three or more tests at the same time often undermines planning and management.

  • Second, running multiple experiments costs more, and funding is often restricted at an early stage.

  • Third, evidence-based donors care about, unsurprisingly, evidence. Conducting multiple interventions will likely restrict the depth of monitoring and impact evaluation. Instead of one lightweight randomized controlled trial, the founders might opt for three observational studies. That would be counterproductive.


JOIN FORCES


Entrepreneurship promotes the image of the solitary genius who succeeds in a context where no other organization even remotely works on the same issue. In reality, even for neglected causes there are a few other charities tackling similar issues. In general, we are not big fans of partnerships as other NGOs are often not value-aligned. They might work on programs irrespective of the evidence, or operate with bloated cost structures. Yet there are cases when a partnership or merger is better than going solo. One example is the recent merger of 2019 incubatee Suvita with Charity Science Health. Both are evidence-based organizations that work on increasing demand for vaccinations in India. The merger has allowed them to build on existing government partnerships and an SMS reminder infrastructure. At the same time, they have introduced a promising new modality: increasing demand for vaccinations through village gossip.


RECRUIT DILIGENTLY


An organization is nothing else than its people. That’s why we spend considerable time on co-founder pairing in our incubation programs. That’s also why diligent recruitment is key for new charities. In practice, this means that charity founders should not recruit at all initially. As they pilot their program, things are moving quickly. Best not to hire a team lead in India and figure out a week later that Vietnam would have been the better country focus. Once an org is ready to recruit, it should still take it slowly. Don’t rush into marriage on your first date. Instead, implement a comprehensive recruitment process that builds on tests and work samples rather than shiny CVs. In the best-case scenario, you test a future staff member as a contractor on a specific project first. This allows both parties to see whether there is a fit. And it avoids the scenario of having to fire someone after two months because the position was not defined well enough or the person did not match.


DOCUMENT PROCESSES


Moving fast is key for every start-up. Yet this is no excuse for chaotic and undocumented processes. McDonald’s is not an organization we aspire to be in this community. At the same time, they are an example for standardizing and documenting all of their processes – down to the number of pickles on each (hopefully vegan) burger. Why bother with processes?

  • First, if you don’t document, you can’t improve. If every employee uses a different script to talk to a beneficiary, how will you know what worked and what didn’t?

  • Second, if you don’t document, you can’t scale. Imagine onboarding dozens of new staff members when most of your organization’s processes are only available in the founders’ memory. The founders will be busy responding to urgent questions from staff all day long instead of planning the big picture.

The good news is: documentation does not have to be complicated. Yes, there are specific apps for it (e.g. task management tools such as Asana or workflow apps such as Process.st). But in most cases, a simple Google Doc with a clear folder structure does the trick.


ANTICIPATE FUNDING GAPS


Fundraising is hard. And some cause areas have less EA funding available for evidence-based charity start-ups than others. Global health charities, for instance, have a harder time raising funds than animal welfare orgs. A few strategies work well to address potential funding gaps:

  • If fundraising lags, lower your budget. The amount of funding needed by a charity is not set in stone. A more economical charity will have to fundraise less.

  • Get into sales mode. Fundraising is, to a certain degree, a numbers game, and you will need to establish many relationships in order for some of them to result in major contributions. If you have spoken to two foundations in your cause area, why not twenty? If you have applied to three social entrepreneurship competitions, why not triple that?

  • Finally, setting up an advisory board with experts in their field has also helped our incubated charities – not just for fundraising, but also for reflecting on overall strategy.

Even considering these lessons learned, fundraising remains a challenge. That’s why we have recently set up the Charity Entrepreneurship Fund to increase the early grants available to start-up charities.


SUMMARY


So what lessons did our charity entrepreneurs learn so far?

  1. Less is more: focus on implementing a narrow program.

  2. Join forces: collaborate with value-aligned orgs if you can.

  3. Recruit diligently: postpone recruitment initially and select candidates based on their outputs as contractors.

  4. Document processes: you cannot improve the quality and scale of your org without step-by-step instructions.

  5. Anticipate funding gaps: operate a lean org and understand that fundraising is a numbers game.