Given the excitement and importance of new projects getting started, there have been a huge number of people interested in helping in the founding and funding of new projects. However, there are a lot of simple mistakes made that decrease the number of good projects starting in an area. One of the most common of these is a fairly fundamental misunderstanding about what motivates entrepreneurs.
‘Looking for an entrepreneur who will do whatever I say’
We get a lot of job ads and projects sent to us that implicitly have this built-in. Entrepreneurs have a very different priority set when it comes to jobs, and autonomy is huge. There is often an imbalance between the help offered and the control asked for. If Charity Entrepreneurship (CE) mandated that CE staff had to be on the board of every project going through our program, our attendance would drop. If CE set the names and logos of every recommended idea instead of just the broad strokes of the intervention, people would be far less interested. Ownership over the project is one of the few huge advantages of entrepreneurial career paths, and a job or project that is effectively “I made all the big choices but I want to hire you to do all the work” is just not that appealing- even if the salary is triple what someone could get otherwise. It is worth noting this also applies when the decisions are not made in advance but are made “collaboratively” between the entrepreneur and the person supporting the project. If a funder or project incubator is making calls the entrepreneur would make differently, or vetoing calls, most entrepreneurs will leave.
Value alignment and charity entrepreneurship
This challenge of control becomes even more pressing in areas where values can determine a lot of choices. It is one thing for a disagreement between a board and a CEO to happen if they both have the same broad goals of making profits. It can be considerably more challenging to navigate disagreements that boil down to differences in values. Typically a charity entrepreneur has chosen this path due to the impact. If they feel they are handcuffed or slowed down and that impairs their endline work, they will quickly get jaded. Differences between project runners and project supporters are basically guaranteed to happen, as even those with identical values will be looking at different scopes. For example, CE might feel more comfortable with one of our 18 projects taking a large risk of failure for a higher net impact, but the CEO of the project will likely feel differently on the topic.
Help vs control
When a new founder is considering a partner or supporter for a project, they should consider where that person falls on the chart below. The yellow relationships are pretty typical and are true of most workplace relationships. The green part of the chart is very exciting (and part of why CE gets so many applications). The red quadrant is just a bad deal and will result in a lot of conflicts.
High help - High control
Typical of a good employment relationship; the employee gets a lot of support but also a much more limited scope of control over their work.
High help - low control
This is the sort of help that excites entrepreneurs by both offering a lot of help, (e.g. funding, advice, etc) but fundamentally leaving the key decisions to them.
Low help - High control
This is the area where funders and incubators can sometimes end up; offering a lot of strings or challenges but relatively little of the key support the entrepreneur desires.
Low help - Low control
Typical of a good mentorship relationship; the mentor gives some limited support, but equally has relatively little say over the project.
In practice, the CE program starts in the top left corner for the two months of the training program. After incubatees graduate from the program, CE switches to the top right; for the first couple of years we provide a large amount of support with only mentorship levels of control. After the first few years of a project, our support lowers too, falling into a more typical mentorship relationship as depicted in the bottom right corner of the table. Notice there is no point when we end up in the red zone, and the most value we provide for entrepreneurs is in the green zone.
What counts as help?
Help can be defined in three different ways. Two of these are useful, but let’s first talk about the least useful way.
Help defined as what the helper thinks is helpful
This is the most common form of help that many consider, but it's also the least…helpful. If I am offering help, it doesn’t matter if my help is required or requested, I will tend to think it's valuable. Many more people like giving advice than people like listening to it. For example; when Charity Science first did charity consulting, we wanted to consult on the topics we thought were most useful. However, this had relatively little overlap with the topics charities most wanted to learn about. This meant the advice and work we did was rarely heeded and ended up not being a good use of time for either us (the helper) or the beneficiary. Interestingly, even in this clear example, we got relatively little negative feedback. Particularly if you are a grantmaker, your “help” will often be thanked and appreciated even if it was net negative. People anticipate that it might make you more likely to give real help e.g. funding, later on. In summary, what the helper defines as helpful is of so little use it is almost irrelevant to our above chart. Let's move on to some more useful ways to define help.
Help defined as what the entrepreneur thinks is helpful
This definition is the second most common, and is far more useful than the first definition. What is helpful in this category is that information can be relatively easily gathered simply by asking the entrepreneur. An example of this is how CE’s mentoring works over the first year. We have a booked session, but the topics are selected by the entrepreneurs; there is a lot of flexibility set by the entrepreneurs over how often to meet, and when to start meeting less frequently. This sometimes means we do not talk about the topics that CE sees as most important, but it does mean that the advice is appreciated and applied by the projects to a much greater extent than if CE set the topics. This sort of help is genuinely appreciated and much more likely to be useful. However it does leave space for gaps, e.g. things that a young project founder might not think to ask about or will later learn they should have cared more about at an early stage. This takes us to our third definition of help.
Help defined as what an informed and value aligned external actor thinks is helpful
This is the hardest information to get and thus is often the most neglected. An example of this applied in the CE context would be asking founders in their third year of their charity what they wished they thought about more, talked about more and got more help on in the early stage. This can be surprisingly different from what a new entrepreneur might be drawn to, but is an invaluable source of data. Asking others who have successfully run a project (or failed trying) what would have aided them can give you an even deeper sense of what might constitute real help, particularly if these outsiders have similar values to the entrepreneur you are aiming to help.
When thinking about how much help or support you are offering, these two definitions will give a much more descriptive sense of what counts as help.
What counts as control?
The concept of control can be broken down further, although it might include more things than a typical funder would assume. So let's break control down into ‘simple control’ and ‘complex control’.
Simple control can be easily identified as control from any informed external actor. This could include things like mandating a board seat, or firing a founder. It could also be smaller but still obvious things; it all boils down to how much say different sides get if there is a disagreement. Say a highly involved board does not like the CEO’s idea for a new direction and vetoes it, keeping the organization on its old path; that is the board exerting its control. The simplest example of this is granting with strings or without strings attached. Strings mean less control and are a less appealing option for an entrepreneur. Unsurprisingly, entrepreneurs prefer to have control over their organization. Simple control is usually relatively well understood.
Complex control on the other hand is much more subtle. This might be a funder who does not express a preference and yet enforces it through their policies and processes, while giving the entrepreneur the illusion that the ultimate call still rests with them. This sort of control can be much harder to not accidentally do, and funders in particular have to be quite careful not to implicitly set up these sorts of structures. An example of this could be a funder that aims to remove a financial barrier but only accepts closed applications. The only way to meet them in person is during an event in the funder's city. The funder may feel like all they have done is remove barriers but they are now only accessible to a small number of organizations that happen to be in the right city. This can create pressure for a founder to move to a given city and thus create some accidental control of the project.