Episode 245: Scaling Nonprofits with Kathleen Janus

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Yeah.

Who?

Kathleen Kelly. Janet.

That's right. You nailed it. You're about to hear that and so much more on today's episode of Entrepreneurship Elevated. I love this song.

Listen to that.

Oh, dang it, Mike. Dang it. I hit the button. I'm so into it.

Dang it, Mike. Dang it.

Dang you, Mike. I'm Mike Michalowicz. I am the author of Profit first and Clockwork and Surge and Others and Pumpkin Win and listen. I am on a mission. I am jacked. You should have seen how jacked us to today's presentation.

Ooh.

I was just getting so fired up. One person was rolling their eyes. I'll tell you who wasn't in. But I'm on a mission. Eradicate entrepreneurial poverty. There is this misperception. Jbone, you started that business The. The meat rubs and stuff. Right. The dry rubs. I bet you friends of you're like, oh, my God, you own a business now. You're a millionaire.

Yeah. There was one of my friends who's a teacher, was telling his students about it, like. Like, I was, like, making millions of dollars. Yeah, but I. I was not making millions.

No, but the. The perception is entrepreneurs make millions. The day you start your business, the reality is struggle. It is freaking hard. That's what we fix on this show. No more entrepreneurial poverty. We're getting rid of that. And I'm joined in the studio by Kelsey Ayres, which we discovered is. I'm sorry, 800s's at the end of your name.

Yes.

But you and your family decided to abbreviate that for American ears and just put one S. Yeah. Interesting. Very interesting fact. Tell us about yourself. Yeah, I mean, like, tell us about this.

Well, you can find us on itunes. Stitcher, Tunein Radio, Spotify, iheartradio or Entrepreneurship Elevated Podcast dot com.

Yeah, the worst. Longest domain we could find.

Literally the longest.

Surprisingly, it wasn't taken.

No, I know.

And we're doing a bribe. Here's the bribe. If you will do a review of our podcast on any of these podcasters, wherever you listen to Tune in radio, be great. Itunes would be fantastic. Take a screenshot of it. Email to Kelsey. It's k e l s e ykemicalitz.com. send us the screenshot and also include the mailing address for you. You gotta be in the US and we will mail you a copy of the book of your choosing. So you gotta pick. Do you want Profit first or Pumpkin Plan or. Or Clockwork? Yeah. So we were talking off air about this issue with asphalt, so, I mean, really playing into it a little bit too much. It's getting a little bit beaten down. But Jeremy said there's a solution.

That's like your forte.

That's your forte. Mike is assholes. He goes, there is a solution, and we need a superhero that comes in, swoops in, and fix businesses. Because we had a cartoonist on last week, and we're like, oh, maybe we can have a cartoon superhero. So I'm thinking Profit man or, you know, Money man or something. And Jeremy's like, yeah, he's gotta have wads of cash on him. And my suggestion is he.

Or if. I mean, if his specialty is as well as. He could be, like, the prophetologist.

No, no. Aswals is the enemy.

Aswalt is the enemy.

But, I mean, that's his specialty is to avoid it. Right, so he's defeats.

He doesn't avoid it. Can you imagine Superman flying in. Oh, my God. Lex Luthor. Avoid him.

Vocabulary is very important.

Let's run away. Everyone run away. No, he confronts it. So Prophet man confronts the ass.

I invite you to write a different kind of narrative for your comic hero.

Well, it's a horrible one. He's like, I'm here to save, uh. Oh, no one. I'm out of here. Let's avoid this. I'm avoidance man. Horrible. So we're. We're developing this superhero. What have you been up to? Kels.

Segways?

Yeah, not much. We got our first snow a couple weeks ago.

Yeah.

And I met my neighbor for the first time.

Oh, man or woman?

Man.

And give me his details. Is he safe?

So he is safe. And he was super nice because I was like, out shoveling and. You've been to my house. It's kind of like a long driveway.

Yeah, long, but it's long and it goes downhill and it keeps coming down.

And it's gravel, so it's like hard.

You hand shoveled that?

I started to. And then this wonderful fella who lives two doors down came by with his four wheeler and plow.

No.

Yeah. And he was like, hey, you want me to do that for you? I was like, that would be amazing.

He'll what? Kind of four wheeler? Like an ATV type? Yeah, See, I know. I knew you can plow it with an atv.

Yeah, of course.

So that's something I'm hoping to achieve one day. I've been say, I've literally been saving for a. What's called a utv, which is the two seats are next to each other because our house is surrounded by 1500 square acres, which I know when you hear New Jersey, you're like, are you sure? Yeah. New Jersey actually has woods and forests. It's actually shocking.

Yeah.

Well, I want to go back there with the ATV because there's trails and all this different stuff. And I was like, oh, I wonder if I can use the plow. My driveway. You've been in my driveway. It's a long one too. And someone's like, no, they won't push enough snow. But he clearly did.

Oh, yeah. Yeah. It was awesome.

What have you been up to, Jay Boner?

I got a new motorcycle.

Really?

Oh, is it electric?

It is, yeah. They were too expensive, so instead I went for something half the price. But it's.

Have you seen this thing Is probably badass, right?

No, it's not. It's. It's the 650, but it's just.

It's fast.

It's pretty fast.

So, you know, he does. He puts on his helmet, he puts on his chaps, grabs the revsy engine, and he puts on his favorite song, Nasty Boys by Janet Jackson, and just goes racing around. You see him hauling down the highway 90 miles an hour like that guy. He is badass. What's he listening to?

Well, and nasty boys, the chaps, they protect against asphalt.

Oh, totally.

On long rides. Yeah.

You know, I've worn chaps talking about nasty ways. You're gonna shave that mustache.

Oh, yeah. So I've been growing this mustache. Can you see it? What are you saying? So I've been growing this mustache because it's Movember, but the thing was, I started. You can't see it get closer.

No, I can't see.

Yeah, well, if you guys want to see, you should check it out on YouTube.

I don't know.

Oh, yeah, I see a little bit there.

Got too close. So it's Movember. So I'm like, I'm gonna find. I'm start growing facial hair now. I started this last Movember. Just so you know. It's been a year, and it's right there a little bit. That one hair. That's the mustache. You can't really see it. Yeah, it's horrible.

I can't see it.

It's cause I'm blonde and I can't grow good facial hair.

This is horrible. Look at this.

Is this because you're blonde?

Yeah, because you can't see blonde hair.

I beg to differ.

What do you mean? What are you talking about?

The top of your head is not blonde.

Well, not there it's not. But the bald spots. No, it's not blonde. I think I have black. Is my hair black? Is it black?

No, it's not black. It's brown.

Ye. My facial hair is blonde.

There is one PR picture that you have where it's like silver.

Yeah, yeah, yeah. There's a lot of gray coming in. There's a lot of gray coming in.

There's not a lot.

There's some. It's on the sides.

Yeah.

There's a distinct.

It's very dignified.

Do I feel it? Yeah.

Yes.

Yeah. Until you hear me talk and you're like, this guy's an idiot.

Yes.

What listener mail we have do we have?

So this comes from Sra Leaf, another iTunes review they write. While I only recently found this podcast from a suggestion from another podcast host. While there seem to be a lot of podcasts covering similar content. This one sounds really crisp, and the banter gives me the feeling of a morning radio show, which I love. Makes me keep coming back for more when a new episode pops up on my feed. Keep up the good work.

Thank you, srab.

Yeah, thank you.

Straw leaf. Or maybe it's how it's spelled here. It looks like senior A. Senior A. Yeah, Senior a leaf.

Senior A.

Maybe that. What's your name?

You're a leaf.

You're like, oh, thanks for playing on my driveway. He's like, no problem here. What's your name? He's like, it's Senior A Leaf.

Well, I love him even more.

Okay, so let's get to the business at hand here, Kels. We have corporate partners that make the show a reality. It's Nextiva and Receipt Bank. We will share more details on them in a little bit. They are phenomenal corporations. We actually use both, both their businesses, and we like to make a little bit of fun of them, but that's because we love them. And if you have a business that you want sponsored, we've never actually sought it out before, and we realized, oh, we should actually invite people. So if we want. If you want us promoting your business, send Kelsey an email and maybe we can work something out for a few episodes or any episodes. We like to see the impact it has. Anything else I need to do before we roll? Okay. Her name is Kathleen Kelly Janis, and she is a social entrepreneur, author, and lecturer at Stanford University on the west coast there. I went to Stanford, get affected by the fires. I know Pepperdine. Pepperdine closed down.

Oh, really?

Yeah, yeah, yeah.

So sad.

It was. Don't even let me go.

No. Now they're having mudslides.

Yeah, it was so funny. So my wife's from California, and then these fires go tearing through and she has still his family out there. And then there was news that the rains were coming, and someone here said, oh, my gosh, it's so glad it's raining. And Chris is like, that's the worst thing you can have because we have this ignorance on the east coast, like, oh, rain puts out fires. It also causes mudslides when you have no vegetation left, and that causes more devastation. So it's really horrific what they're experiencing out there on that high note. Kathleen is an expert in philanthropy, millennial engagement, and scaling early stage organizations. She's a co founder of Spark. You know Spark, right? The largest network of millennial donors in the world, based in the heart of the Silicon Valley, that's San Jose, right? Silicon Valley, is that right? Am I right? Yeah, it is. Her forthcoming book, Social Startup Success features best practices for early stage nonprofit organizations based on a five year research project interviewing hundreds of top performing social entrepreneurs. Kathleen, welcome to our show.

Welcome Kathleen.

Thank you so much for having me.

So Silicon Valley is San Jose, is that right? Is that the heart of it?

It's part of it.

It's part of it. Okay, so that put aside, why are nonprofits struggling? So I know so many people, even my mother in law, decades ago try to start a nonprofit because she wanted to do good and the business was a financial disaster. Why do so many nonprofits struggle?

You are absolutely right that nonprofits are struggling. I think that as a society we have developed this mentality around nonprofit starvation that nonprofits have to solve some of the hardest challenges that we are facing in today's world, whether it's climate change or increasing inequality on a shoestring budget. And you know, I really believe that we need to shift this mental and to invest in nonprofits to solve these issues that we all care about so much so they don't have to suffer so much.

But why does the nonprofit have to solve the world's challenges? Can't for profits do it too?

Well, I think it's got to be both. But the reality is that there are problems that the market has created market inefficiencies, that if it were profitable to solve these problems, companies would have have done that a long time ago. If it were profitable to bring clean water to the millions of people in this world who needed it, Coca Cola would have done that a long time ago. And so what nonprofits do and the role of philanthropy is to fill that gap to support social problems that aren't necessarily profitable, but that we all care about. Whether it's human rights, democracy, justice. And it's a very important role that they play.

Yeah, it's a critical role. Now I see that clearly. Thanks for the explanation. But they need money to do that work. Bringing purified water, you know, climate change is, is a really massive problem that I don't see a profit opportunity there. But we all need it or our survival is done. So how, how do we get them the money? Is it just people that are do gooders or is there a more sustainable way than that?

Yes, this is something that I have been really passionate about over the past five years. I engaged in this massive research project to try and understand how is it that the best nonprofits succeed, what are they doing differently than other nonprofits because it turns out that two thirds of nonprofits are struggling. They're $500,000 and below in revenue and on this treadmill to raise money every month for payroll when they should be focusing on the impact of their work. And so I went out and I surveyed hundreds of organizations and I interviewed 100 top performing nonprofit leaders from water to teach for America, many organizations that you'd know. And one of the keys that I found to sustainability is the idea that the best nonprofits don't just draw their income from philanthropic dollars, that they also, when possible, bring in sources of earned Inc. Come in order to sustain their efforts.

So I got to learn how to do that. I remember I was traveling through. Was I in Guatemala? Guatemala City. Does that sound right, Kelsey? I was. Okay, so I was in Guatemala and I met a company. Was it envirotech?

Yeah.

How do you remember this stuff?

It might not have been Envirotech, but it was something like that.

Yeah. So there's a company, it's called Envirotech. And to your point, Kathleen, they first went out to do good. It was actually the purification of water. But the owner of this not for profit realized that's not sustainable. They couldn't raise enough funds to have the impact they wanted. They then turned it to a for profit model. And what they did is they developed these clay pots where you can pour, let's say, dirty water, because I don't have a better term for it, but dirty water in it, out comes purified water. And what he realized is these poor communities that needed it the most can't afford it. But he said he still had to charge them something and found that right now, how they were trying to purify water was by buying a cord of wood or whatever, a bundle of wood, and then boiling. So he figured out what a bundle of wood cost and says that has to be the price. And he figured out how to make these clay pots for the price of wood. And that was the turning point that people started buying it. Secondly, he then found that there was another opportunity. And I wonder if this is where you're kind of leaning toward that. Wealthier communities wanted to also buy this. They want purified water too, but they had a greater means. So what he did was he had local artists start painting the clay pots from the outside to have this beautiful presentation. He was able to mark up the price 10 or 15 times more to wealthy communities and use that money to help fund his other work. Long story, but that opened my eyes to a Way to for he's not for profits to sustain.

I love that story because it's also about this testing process. You know, it's not like every single organization has to come up with their own revenue model. There's no one size fits all funding model for nonprofit organizations or for for profit businesses, for that matter. And one of the things that I saw again and again is it's this testing process, just trying out different forms of revenue that helps you get to sustainability. An organization that I feature is Hot Bread Kitchen, a job training organization in Harlem, New York, which brings low income women into the food. And Jessamyn Rodriguez, the founder, said, I'm going to make this business 100% sustainable on bread. Which she realized later was a terrible idea because bread has razor thin margins. You can't just make a bunch of bread and sell it over the course of the year. You got to sell it in three days because it's perishable. But she was able to make a business out of selling the bread that the women made in the training program. She sold it to Whole Foods and JetBlue. She had a cafe where she sells it in Harlem, developed an incubator program where she was able to charge fees to small business owners and allow them to use this space to generate income. So she had all these really creative ways of earning money, but she found that actually she was selling the program short by not accepting philanthropic dollars. So this gets back to your question of why is philanthropy necessary? Philanthropy was necessary to make the program better when it might not be the profitable thing to do, but it was the right thing to do for the women. So, for example, giving them childcare during the program so that they could actually participate and not worry about where their kids were going to be making them stay in the program longer, even though it might not be the profitable thing to do, but was ultimately the right thing to do for them in the long run. So this is the challenge that every entrepreneur has to deal with. And I think that too often nonprofits in particular get stuck in one way of fundraising, and the best organizations really begin to think outside the box. And that's what I'd love to see more nonprofits doing.

You know, to wrap up that envirotech story, one thing I heard back from this guy, after I built a relationship with him, we emailed back and forth and he had this fabulous finding. And there is some organization, another, not for profit, who measures the pollutants coming out of different areas, industry and so forth, and they use satellite technology to do this. They was monitoring this area where they're installing these pots. The pollutants have dropped tremendously because now people aren't burning wood every day. So they said, we actually want to acknowledge the impact you're having in reducing pollution. And he had no idea. It goes to your point, Kathleen, of the importance of measurements. Why is measuring so important? And then how do we go about it for our businesses?

Yeah, this is really a big finding from my research that the best organizations, organizations from my survey, said that they began measuring their impact from day one. And so they said that this was important not just to prove that what they were doing was working, but to improve their work as they grew their organization. And so you see this when I went out and talked with these entrepreneurs, it's like, embedded within the DNA of their organization. They want to know that what they're doing is actually working. I remember Tess Reynolds from an organization in San Francisco called New Door Ventures, which employment organization for youth. She said, it's really hard to raise a million dollars. I need to know that that money is actually being used as effectively as possible. So this is the rigor that people bring. And I think the biggest challenge that organizations face is that people get into nonprofit work because they care about the causes. They're not data scientists. And so what you see is that while 75% of nonprofits say that they collect data, only 6% of, like, they're making good use of their data.

Wow.

So nonprofits are really struggling in this area. And it's something where I think that nonprofits could do a lot better.

You know, another challenge I heard not profits have is sometimes people will give money to the organization, but they'll have a specific required use of those funds. And now you have this tracking responsibility. Right? Like, you can only, you know, you have to allocate this money only to this one purpose. And so you could be sitting on cash for a purpose, but the organization can't even sustain. Right.

100%. I think this is the biggest challenge that the nonprofit industry faces. Going back to this issue, we were talking about the nonprofit starvation cycle. 80% of philanthropic giving in the United States is restricted. So what does that mean? That's like going into a restaurant and saying, I'll pay for the food, but I'm not going to pay for the time of the chef to prepare it or the server time to bring it to me or the lights that are on while I'm eating it. We would never do that. And yet somehow we feel entitled in the nonprofit sector to pick and choose what we pay for. And we say we'll pay for the program that teaches the kid how to read, but we're not going to pay for the teacher's time in the classroom or whether to figure out whether that lesson was successful, which is exactly what nonprofits need to be doing in order to be successful. So I think as donors, we need to begin to invest not just in the causes that we care about, but in the incredible leaders who run these organizations, because we have to take into account the entire cost of doing business. I mean, imagine on the business side if you said that you would pay for, you know, as an investor, I'll pay for the product, but I'm not going to pay for the CEO's salary.

Right, right. Or any of the line workers. Sorry, yeah, it sounds absurd, but also, do the nonprofits have responsibility here to educate the donors?

Yes, absolutely. It's gotta be both. I mean, nonprofits have to educate donors. But somehow this myth has become, this overhead myth of this idea that nonprofits should have as low overhead costs as possible has become super pervasive. And it's really hard for nonprofits to educate donors. So I think we all have to do our best in evangelizing this message.

Well, the shame is, I think, when the news breaks about a corrupt nonprofit, which is an absolute rarity, but it happens. It's, oh, 99% of funding was going toward this administrative work and the CEO. And so then we presume, wrongly from the outside that, oh, that's how nonprofits operate. So I have to take the other extreme and say, this money can only go. And shame on me, because I've done that. Like, I've been a benefactor of. Of a thing that I now donate to regularly. But I restrict the funds to only give to what I benefited from because I know that drives a true benefit. But I never thought about the impact I'm having on the organization by not including that. Well, were you gonna say something?

No, no, go ahead.

I want to know about stories, because, you know, this, the communications critical, and you were arguing off air that you have a great story for all elements of your nonprofit to be successful.

Absolutely. Storytelling is so critical to any entrepreneur. You cannot sell a mission, a vision without a great story. And I think that oftentimes people underestimate this. They hear a great TED Talk or we hear a great political speech, and we think, wow, that person's just a natural. But that's not how it works at all. When I went out and talked with these social entrepreneurs, they were making storytelling A priority. I talked to one social entrepreneur, Nadine Burke Harris from the center for Youth Wellness, who talked about storytelling as her Olympic sport. She knew when she had to go out and make this TED talk on adverse childhood experiences and how they result in toxic stress outcomes for children, that. But this was her opportunity to build a movement in the United States around toxic stress and to try and get pediatricians all over the country to be screening children for toxic stress. And so she literally practiced that TED Talk for six months and said by the end of it, her husband could have given the TED Talk for her. She had practiced it so many times. So that's the level of commitment to storytelling that we're talking about. And if anyone wants to be successful in pitching, pitching donors, in pitching media and getting people's attention for partnerships or for other advocacy opportunities, they've got to be able to master that story. And it's not just the person at the top. It's got to be at every level of the organization. Because the best organizations realize that anyone in their organization can be a brand ambassador for their cause.

But say we're the brand new startup. I bet you someone listening right now has always had a vision for a nonprofit. I want to do this. How do you even get started? How do you get that first donor in the door?

You know, you gotta play to your strengths, and for everyone, that's gonna be different. And this is, this is a question that comes up a lot. One of the questions I get most frequently is, should I be a nonprofit or should I be a for profit? And so often it depends on where are your connections? Where are you gonna be able to get the best forms of capital? Is it gonna be from individual donors and foundations, or is it gonna be from investors? So starting with your own. And maybe you don't have context to donors or investors, but that's where you can get your circle of champions around you, get your individual board of directors, and get those people to help make connections for you. Because you can't get funded without tapping into your network.

And do donors mean wealthy people alone or not at all?

It can be, but actually, the most significant funding comes from smaller donors. The average household in the United States gives somewhere around $2,000 in donations a year. And so. And actually, proportionately, people who earn less give a bigger percentage of their money than wealthy people.

That's actually interesting.

And this is something that we learned at spark. I mean, one of the reasons why I co founded Spark, this organization of millennial donors, is because when I was starting my Job and my career in my early 20s, you know, I would pull together $250, which fel like a ton of money to me at the time, and I would feel like I would donate it. And it was just a drop in the bucket for these bigger organizations like the Red Cross or you know, even the Boys and Girls Club or something. And so we started SPARK to bring donations together and show young people that, yeah, maybe $250 is a drop in the bucket, but if we all put in $250, we can actually raise thousands of dollars and that is meaningful to organizations. And this is what Obama did during the 2008 campaign. I mean, he was able to show that you can raise millions of dollars off of $5 donations. And actually that's going to be a much more effective way to generate excitement about your cause because then all of those $5 donations then feel donors feel invested in the cause. So this gets back to the testing process for fundraising and figuring out what's going to be the best form of revenue for your organization. And if you're tapped into lot of people who can give a little, well then maybe that's going to be your best way to raise money.

You know, Wikipedia is a non profit. Did you know that?

No.

Yeah, so they, on their website it says once a year they do this, they do their annual raise. They say, many people don't know this. We're not a for profit organization. We're asking for three dollar donations. And if every person reading this gives three dollars, we can sustain for yet another year. And I, I actively give it to weekend Wikipedia because I use it so frequently and the ask is so small. Like if they say, could you please donate $2,000? I'm like, oh my gosh. But three bucks. And then so what I do, I gave, you know, 25 bucks or 50 bucks.

I was wondering what that charge was. Thank you.

Oh, seriously? That was a donation to Wikipedia. How much was it? Was it 25 or 50?

Yeah, I think it was 25.

25, yeah.

And NPR does this so effectively and so many nonprofit organizations. So starting small can be a great way to raise money.

Yeah, and they're great names. Like Wikipedia has a big impact on people. NPR is an amazing, amazing outlet to learn from and to be entertained with.

Absolutely.

So, okay, what about if things aren't working for a nonprofit? They've been trying for the longest time to get this thing off the ground. Is this failing? Is there a way that some common steps to turn this around, get it back in order or Is there a certain point where, like, you know what, it's time to call it quits?

Well, this is where measuring impact is so important because you have to know whether you're having an impact. And if you're not, you need to either course correct or close your doors. And I think that that is a problem in the nonprofit sector. There's 1.5 million nonprofits in the United States. Many of them should probably close their doors. There's no. Unlike businesses where there's a clear market incentive, either you have customers and you stay open, or you don't and you close. In the nonprofit sector, there's this weird kind of dynamic where you can have donors funding programs who they're not actually the beneficiaries of those programs, so they don't have the direct connection to know whether those programs are actually impactful. So the onus is on the nonprofit to see whether their programs are having an impact and if not, to change them or to close their doors. And the only way that you know that is by collecting data.

So I got a big question, and maybe I don't know how to answer this myself from any perspective. I don't know if you'll be able to. But impact that you use that word, impact. How do I, if I want to start a nonprofit or any kind of business, how do I know the impact that I want to have that, you know, almost called to do a purpose? How do you find that? Do you know?

Well, you have to be clear about your vision. And I think the challenge that most nonprofits face is they're really good about talking about their programs. They know what they're doing. They're really good about talking about their vision. On the other end of the spectrum, what the world that they want to see, not so good about connecting the dots between the two to try and see, well, what are the outcomes that we need to see from our programs in order to determine whether we are on track to achieving our vision. And I'll give you an example. There's organization in San Francisco called One Degree is a Yelp like platform for social services. It's helping connect poor people online with social services. And so when they first started, they put their technology up, they created their website, and they were super excited. Within the first year, they had 40,000 visitors. And they realized very quickly that these were vanity metrics, that that was telling them nothing about whether those people coming to their website were actually getting social services as a result of coming to the website. Those social services were actually having an impact on their lives and helping their long term life outcomes. And so they had to start getting more rigorous about their tracking to not just look at the outputs or the number of people who were coming to their website, but the ultimate outcomes. What were those programs actually doing for their lives? And this is something that I think most nonprofits don't do well and can do a lot better.

With all that research you did with nonprofits, what do you feel the future is? I don't know, the next 10 years from now, where are nonprofits heading as an industry?

I believe that we are living in a golden age of philanthropy. There are more ways to give back than ever before. We see this with the next generation. I get so inspired by my students at Stanford. They no longer see lines between for profit and nonprofit. They believe that all business should be in pursuit of the greater good. 55% of millennials are saying that they choose their job based on a company's commitment to a social cause. So if companies want to be competitive in hiring and retention, they've got to get involved in social cause work in order to make that happen. So this presents a real opportunity for the nonprofit sector, get more people involved, but they have to be prepared to harness that energy and that excitement and that enthusiasm to turn it into impact as opposed to, you know, letting it just die on the vine.

You heard it first. We're entering the golden age. Her name is Kathleen Kelly Janis, and her book is Social Startup how the Best Nonprofits Launch, Scale up and Make a Difference. Kathleen, before we let you go, where can people get your book and learn more about you?

You can find my book, Social Startup Success at any of your favorite booksellers. And my website, Kathleen Janis.com has a ton of extra resources and information.

Awesome.

Encourage you to visit.

Awesome. Thank you for joining us.

Thank you.

Thanks for having me.

So, Kelsey, my favorite bookseller is my mom. So I don't know if the book's character buried there at my mom's house, because my mom, she promotes all my books. Like, my mom, literally when I launched my first book, put signs in her car like, you. You thought the car was for sale? So people like, walk up to the car because it said for sale. Like, oh, my God, it's only 20 this car. And it said my son's book, literally. It was the most embarrassing. It was sweet, but it was embarrassing. And she actually sold two books that way because we were trying to buy the car.

Yeah.

They came up like, oh, I like, what's this car for? She's like, no, it's my son's book here. And she forced it upon them. Two books sold. Thanks, Mom.

That's a sweet mom.

All right, cows, before we discuss what we learned, before we go into our listener mail, before anything, we're gonna talk about corporate partners. Oh, nice. Nice. You almost threw your neck out that way. Oh, I found a new pillow and I don't like it.

Oh.

Yeah. So I'm not gonna say the brand called my pillow. So I found my. You ever hear my pillow?

He says, yeah, I just heard an had. They're having a big sale.

So I. I'm returning mine. Listen, I'm not saying it's a bad pillow. It's bad for me. Yeah, first night pillows are hard, not bad. My neck, it's not working for me. So I found. I went on Consumer Reports, and you can search out for best pillows and, like, listen. This is what Consumer Reports said. Listen, Mike, everyone has a different pillow that they like. Like, some people will love the MyPillow System. System. It's a pillow. Like, you don't have to throw the word system in there, but the. They do. Some other people like the gel pillows. I've had a gel pillow. I've had memory foam. They say some people like. And this is what I'm trying now. A combo. Gel in the center, memory foam on the outside.

I got. I got your pillow. What is it, Casper?

I'm writing this down right now.

I. I've had it for, like, six months. It is the best pillow I've ever used.

I need these.

It's a pillow in a pillow.

Ah. It's.

It's like. It's like a double pillow.

See, that's like putting ice cream in ice cream. Like, that's genius.

Yeah, you can get it at Target.

Really?

Yeah. It's expensive, but it's. They offer like 190.

Well, dude, with the money you're making here, you're like, oh, Casper, please, please. I'll take two. But, sir, it's only for you. No, I'll take two. Kelp, tell us about our corporate partners. Besides our pillow sponsor today was my pillow. That was they, by the way, they're a sponsor, so if you decide to come and sponsor, we'll slam you. They're not sponsored, Casper is. We just toy set up for Casper. What. What we got for.

Well, first we have nextiva.

Oh, my gosh. Have you. Do we have a nextiva at your house yet?

Yes.

Oh, we do. Seriously?

Yes.

Oh, you called me on literally every time.

It's Called fading Surprise. Do you understand anything about the performing arts, Kelsey?

Yeah, but it's like hears it every time.

I am an artist. I'm a thespian and sing. I'm gonna call you.

You're really great at it.

I'm call you at least once a week on that phone. Just so you remember.

So every other time. Forget details like that. You're just acting, right?

It's all acting. Every time. I mess up a word. Every time. Gosh, you guys don't know anything. I'm an actor. I went to school for this Boon high school. I took an acting class. How do you like your phone? Do you ever do you much? You don't have to use it that often, do you?

How do you like that? True voice system?

Yeah, the true voice system. It's. Yes, they call it a system.

Do you hear that? Their new function, it's called multi. Do you hear about this?

No. Please tell us.

Tell us.

Nextiva innovated true voice. It makes your voice sound like your natural real voice. They are also the innovator of multi ring, meaning you can set different types of ringtones. You can get a. Or a. Either setting is available. They have two options. Or.

Tell us more about this technology.

Yeah, it's called multi ring.

They also have this super innovative technology where you can make it louder or quieter.

No. Yeah, they're the innovators of that. Yes, I heard about that. I thought that was amazing.

Amazing.

Supposedly you're adding buttons to their phones too.

I thought they innovated. When you pick up the phone, it answers to the other person. I thought that was their like main content.

I think that was them. Yeah.

I used to do a prank when I was a. A kid. Like, you know, you. You do the dial and you call. Used to prank people on the phone. I. The prank I did was I call someone and I pick up the phone and they say hello. I say hello. And like hello? I'm like, hello. Like, is it. Who's this? I'm like, what do you mean? Mean, who's this? Like, what are you saying? I'm like, you called me like, no, you rang me. I'm like, no, my phone just rang. And you're like, what?

Remember that time I was trying to find a dog poop picker upper?

Yeah, yeah. And I just a backstory. My sister in law got in an accident. They have many dogs at their house and there was no one to clean it up. So we offered to clean it up. And when I say offered, I called Kelsey and said, hey, can you find something to clean this up? So what happened?

So they live in an area where there's not a lot of services offer. So I finally found, like, a yellow pages listing, Right. And so the first person I called, I left a voicemail, and they didn't call me back. And then so I found the second person, and shoot. Now I forget what the name of their business was, but it was, like, something like.

But goofy, right?

Yeah. Yeah. And so I don't give me nothing. And the guy was just like, hello? I was like, hi, is this. Are you the. The. The dog poo picker upper? And he's like, I'm sorry. And I'm like, is this, like, shits to go? Or, like, whatever the name was? And he was like, no. And I was like, I swear. Not pranking you.

Oh, that's so you. You tried to unprank him. This is not a prank.

Even as I was saying, I was like. I was like, this is awful. It really sounds like I'm pranking him.

You got pranked? I bet you the person that put that listing in.

Yeah, exactly. It's like that dude's friend, like, made a listing.

My best friend is Chris. We should do that to him. We should give his cell number in an ad, like, poops to go. Yeah, that's awesome. All right, so that's our corporate partners, nextiva. And then we also have receipt. Bank Receipt. Bank is a. It's a scanner for receipts.

Yeah.

And it scans in. Ties into QuickBooks and all these different things. They have innovative functions, too. We don't have the time to go into it. Maybe we'll do that next week. I want to know what you learned today, Kelsey, And I want to know.

So what'd you learn today?

I want to know what your favorite takeaways were.

I feel like there's so many little nuggets. I don't really know what to focus on. But one thing that I really love was that storytelling is critical to any entrepreneur, but I think it's particularly critical to nonprofits because they need to be able to sell their mission. And I think the most effective way is to do that through storytelling. And I also love her example of the woman who said that it was her Olympic sport and that she's practiced for six months. Yeah, like, to me, that's just such a great indication of how passionate that she is for her mission. I just love that. I also thought it was super interesting. What was my point? Oh, I like that. She said nonprofits, they start because they want to obviously solve a problem, but they're not necessarily data scientists. So they might collect the data, but they have no idea what to do with it. And so I think that there's a need to fill or an opportunity to make sure that that service is something that they can utilize more effectively. Right.

I like that. I think Kathleen's book will help answer it too, if you pick it up.

Yeah.

I think the one thing that was shocking, 2/3 of not for profits are struggle not. They're just trying to cover payroll. Right. So these not for profits exist to have an impact, but they can't even exist, and therefore they're having no impact. Two thirds.

Yeah.

Like, here's the thing. When we say 83% of small businesses are surviving, check by check, they're still delivering their services. Right.

Right.

So they're still providing what they promised, but they're struggling just to stay afloat. These not for profits can't even deliver what they're promising.

Yeah. And I feel like it speaks to the business model of nonprofits. Right. Because there's not necessarily a product that they're selling. They're selling a mission. And so there's not this clean money cash flow. And then you do have this restricted funding coming in. That's really hard. A. It's like super time consuming to apply for or set up the vessel to acquire them. Right. So it's like all of this work that you're putting in without a guaranteed return on investment.

Yeah.

How do you cover that in an effective way? You know, it's like, I just feel like there has to be a better way, a better model.

Yeah. But also, here's the other flip side. The positive side is like, we're in the golden age. And she really has me enthusiastic about this. That the millennial generation is demanding it in in their own employment. Like, I'm gonna work for you unless you're having impact. So I think that's cool. And what I really liked was this rise of the small donor. The three or five dollars donor.

Yeah.

And with the takeaway for me was because when people donate, Even if it's $5, they feel invested in the outcome. And that's what you want.

Yeah.

You want people who invested in it, promote it to others. They become your marketing engine, and they may come back and up level to 25 bucks.

Right.

Or whatever it is. Those were big takeaways that there's an opportunity in seeking the small donor. It doesn't have to be home run hits with rich gal, rich guy type thing.

Yeah.

We want to know what you learned also, my friends, and how you can post it. It's just in our reviews. Go in our reviews and say, this one episode blew my mind. Yeah, I mean, I learned so much about not for Profits. I learned also that nextiva has this wonderful multi ring function of two different ringtones. We want to know that. And we'll even take a step further. We'll brighten you if you go to a podcatcher, post your review and then email it to Kelseykemicalitz.com screenshots. Gotta be a screenshot of what you did. Completed. We will send you a book and you gotta give us the mailing address and we'll mail you a book. Okay. Is there.

Oh, we have listener mail.

Oh, listener mail. You've got mail, baldness. I'm sorry. I don't know why I had to do the double bra.

So this one comes from Lori Hall. She. I'm starting a new business with two business partners. How does profit first work when other people will be contributing to the business? I haven't shared this book with them yet, but I will. I'm not sure if it'll be easy or hard to convince them. What's your suggestion?

Run away. Lori. No partners. No. You have to get them to buy into it. So if you have like two or three partners in the same business, one person wants to profit first and the others don't. Sorry. You're going to struggle. So first, have them read the book. Yes. Get them in into it. The technical execution is the owner's compensation count gets distributed based upon what you see as your salary. So say the three of us, jbone, Sparkle and I. That's your nickname. A lot of people don't know that. Sparkle. Sparkle. J Boner and me, we go into business together and what.

Both of our super names?

Dude, I don't make this stuff up. It's just your name. I'm sure. Sorry. Talk to your parents. So, and say we go in like, J. Boner owns 40%, you own 30% and I own it. Yeah, you got. Yeah, exactly. And I own 20. I own 30%. So it's 40. That's right. Adds up.

Yeah.

So J Boner owns the majority of the company when it comes to profit distribution, say $1,000 coming out. J. Boner get 400, you get 300. Sorry, I get 300. But we may argue salaries. You may be running the company. Sparkle, California. Kelsey. That means we may say Kelsey is the one who's driving the hardest. She gets a $50,000 a year salary. Jay Boner. We're getting 25,000. And, Mike, you're never there. You're getting zero. So the owner's comp account is to support your compensation for the work you contribute. And that's negotiated so you can get the most money, Kels, because you're doing the most work. And if we all agree to it, and that's the setting for salaries, the. The profit is a profit distribution based upon the equity. 40, 30. 30. So that's how you do it. That's how you do an execution. But you have to get everyone to buy into the system.

Didn't you talk about a. A vesting schedule before, too? Or was that.

Oh, wow, dude, you. You go back old school. So nice work, Jay Bone. So if it's Boner, I'm sorry. I apologize. Mess up your name, that's like saying Jeremiah. It's Jeremy, Jay Boner. So one thing that we could do is say you and I start a business together, we can agree that instead of going 50, 50, which most business partners say, oh, let's go 50, 50, or both in this. And then like, three years later, it's like, I hate you. You don't do anything for the business. I do everything. Which inevitably happens. Instead, go into a partnership saying, we're gonna start off with 10%. 10%. So we both own 10% of the company. 80% saves the business based upon performance metrics. How? The number of hours we work, the sales we bring in, the happiness of customers. We pick the parameters. We will then vest in that remaining 80%. So J. Boner brings the A game, and he's cranking away and works ridiculous hours, has pushed the business forward. He may own 60% more from the 80%. Now he has 70, and I may only get 20%. So I get 30. And that's a way to much more equitably share in the equity of a business.

Interesting.

Pretty fantastic. Okay, did we answer all the questions? We do everything.

Yeah.

All right, let's get out of here. I don't have the new music to get out of here, so we're going to.

But if you have any questions, just email Ask Mike Michalowicz. Com.

Thank you for letting it. That's right. We want your questions, so ask Mike Michalowicz.com and we may even get you on a video. We started doing a coaching series via video, too.

Yeah.

And we give you exposure, and I help coach you personally. It's totally free, you know.

Yeah.

But if you send gifts, I have some great Gifts. I got Virginia Tech. Someone sent me a Virginia Tech pen.

Yeah.

And chocolates and what? Was there a gift we got?

I think I saw a pillow out there.

Was there my pillow?

Like, someone sent me a pillow? That was funny. I actually fell for it. I thought we got something else recently. I can't remember. Did I tell you John Rulin of Giftology sent me? Yeah.

That was nice.

Yeah. So everyone listening to the show. John Rulin, the author of Giftology lives the lives what he preaches. His book is phenomenal. And I say I said that before I even knew he was. Or he sent me this gift, but he writes this book about gifting.

Yeah.

And the method of how to do it. And then he heard about me and said, hey, Mike, I heard you talking about the book. I want to send you a gift. Send me Cutco knives. Unbelievable. Unbelievable. Cutcos, dude. You know how good those are?

Yeah, they're really sharp.

Yeah.

Yeah.

Exactly.

Yeah. Oh, and if you want to see Mike's mustache, just go to YouTube.com and subscribe to our channel.

Oh, yeah, look at this. You can see right now. I'm pointing it. You got, like, a little cut closer. Yeah, there it is right there. It's crazy. Yeah. You want to see what I look like? All right, we're good, Kels.

We're good.

Okay, guys, we appreciate you. Thanks for listening to Entrepreneurship Elevated, and we'll see you next week.

Thanks, everybody.

In the meantime, bring your aame. Nice little laughter there.