“When you give a non-profit the right entrepreneurial tools and growth strategies, that non-profit can become incredibly powerful”
We are excited to share this feature of Donald Summers, Founder and Managing Director of Altruist Partners in Seattle, Washington. Altruist Partners recently became a Frontier Market Scouts partner organization and fellows from future cohorts will have the opportunity to help support their work with clients around the world. Donald tells us about Altruist Partners and the new partnership with FMS:
Tell us about Altruist Partners
Altruist Partners was founded in 2006 to transform non-profits into powerful social enterprises. Generally speaking, non-profits aren’t aware of the management and financial tools and strategies that have long driven organizational performance and growth. Non-profit leaders are idealists and programmatic specialists, not business or management experts. So their organizations struggle with funding and performance. Consider that are over 2 million non-profits in the US alone. Most are tiny–$500K is the average annual budget—but the problems they are addressing are huge. Fewer than a handful have scaled past $50 million in the last 50 years. But 70,000 for-profits have. So we asked, what do the for profits know that the nonprofits don’t? What’s applicable, and what isn’t? And we set about to close that performance gap. Because if we can figure out a common platform to help nonprofits scale, to bring together the best tools from both sectors, there’s an incredible about of good that can be captured. So after a decade of work with over 100 nonprofits of every size and shape, and lots of mistakes, we’ve arrived at a system that’s delivering very encouraging and consistent results. Our nonprofit clients are growing 25% a year. Now we have the job to reach scale ourselves and serve the many thousands of good organizations that need this help.
How does the process work?
First of all, we aren’t consultants—we are business partners, and we join out clients as part-time executives. We are player-coaches, if you will. We start by measuring the client’s business performance with a very targeted assessment tool. And then, over the course of 6 to 12 months, we guide our clients through a step-by-step process that embeds three essential management features:
- The Business Plan: This is very different from the strategic plans that non-profits usually work with. A business plan is very short and specific. It details the problem being solved, the proof the organization can solve it, and a concrete, exciting vision of success. Then we detail strategy, metrics, milestones, staffing, and a complete financial projection, with a hard focus on revenue. It has to be good enough inspire confidence in a finicky and impatient investor.
- The Revenue Pipeline: We don’t do “fundraising,” “development” or even “advancement” or “capital campaigns.” Those concepts and practices are outdated and largely ineffective. Instead, we provide our clients a step-by-step process to building and staffing a revenue development engine, based on an approach we call “Investments and Partnerships.” From recruiting and hiring staff to detailing strategy to organizing the meetings, we set up an entire office to generate revenue from individuals, foundations, corporations, and government agencies. And we consider earned income as well, including things like intellectual property and fee-for-service. And we are excited to move aggressively into the impact capital markets. Most nonprofits suffer from a poverty mindset, but the truth is, if they have a valuable program, there are billions of dollars our there. We’re proving it.
- The Dashboard: After a client has a business plan and an Investment & Partnership pipeline, we bring it all together with an executive dashboard, a 1-page report that captures the organization’s key performance indicators. Every month, it gives the board and staff an exact picture of everything important. Knowing what to include and what not to include is critical. Too many nonprofits are drowning in data and they lack focus and discipline around the truly important stuff. We help fix that.
High-performing organizations use these elements, whether they are for-profit, non-profit, L3Cs, Social Purpose Corporation, Certified B-Corp, whatever. Your tax status is irrelevant. And importantly, it’s an interdependent system. The Plan fuels the Pipeline, and the Dashboard ensures everything is executed well. Leave one piece out, and the org remains stuck.
Can you tell us more about a specific organization that Altruist has helped?
Treehouse is our favorite example. They work here in Washington state to help foster children graduate from high school. In Washington, like other parts of the country, the foster youth high school graduation rate is only 40%. Compare that to 80% for kids in general and you start to see the problem. These high dropout rates lead to lives with very high rates of homelessness, incarceration, self harm, illness, and even suicide. Treehouse recognizes that the foster children aren’t at fault. It’s the system that doesn’t support them. So they hired us in 2012. They had 75 staff in 25 schools working with 200 foster students, but they couldn’t get that 40% graduation rate needle to move. And they wanted to help all 800 foster youth in middle and high kids in the entire city. So we went in and, 9 months later, we had a new business plan and program model, a new fundraising platform, and a 1-page dashboard. Their donors responded very well to the ambitious vision and the tight plan. In the first 6 months alone, they raised about $7 million, and 4 years later, Treehouse has 150 staff working in 125 schools and serving over 700 students. The long-term high school graduation rate is now at 78% and they are reaching every 6 through 12th grader in the metropolitan area. It’s the most successful educational support program for foster kids in the country, and we are now helping them expand state wide.
Today we are working around the world with a set of ambitious and high performing nonprofits, most of whom prefer to think of themselves as “social enterprises,” a much more powerful and accurate term. We’re proud to be working with them. It’s exciting to help drive the leading edge of the change the sector needs so badly.
Why did Altruist choose to partner with FMS?
I met one of your Frontier Market Scouts at the Skoll World Forum and was immediately impressed with her description of your work. I am a Middlebury grad and social entrepreneur, so there’s obvious fit. So I’m excited about the Center for Social Impact Learning and the Frontier Market Scouts which is helping to grow the sector by equipping passionate individuals with the necessary skills to make a significant impact. And we need the help—we are accelerating social enterprises around the world, and Frontier Market Scouts is a perfect place to find the talent our clients need. We are excited to onboard FMS fellows from future cohorts who can work with our global partners. These are brilliant people with enlightened values.
What is on the horizon for Altruist?
We are working hard to produce an online version of our process, one that we can deliver thousands of nonprofits simultaneously. We are in beta testing now, but if the online version delivers even a fraction of the benefits our process has delivered in person, we have exciting potential to transform the performance of the entire social sector. Our goal is to be the largest business partner for non-profits worldwide.
The Frontier Market Scouts (FMS) program seeks purpose-driven professionals to join its award-winning social enterprise management and impact investing certificate trainings in Monterey, California (June 6-17, 2016), and Washington, DC (Winter 2017). Founded in 2011, FMS has trained more than 300 professionals since its inception. FMS received a 2013 Cordes Innovation Award from AshokaU and has now become the flagship program of the newly launched Center for Social Impact Learning at the Middlebury Institute of International Studies at Monterey. If you are interested in becoming an FMS partner organization, contact fmspartners@miis.edu.