Investors and their distaste of the nonprofit industry
Let’s start off with something we all know is true — investors like money. And what’s more important to them more than anything else is their return on investment when looking at startups to invest in. Yes, some will claim they’re in the “social impact space” or “looking to give back because they’re ethical people”, but we all know what they want — the next unicorn of the tech industry that will line their pockets to make them famous. They want the next Facebook that has so much data on users they could nearly replicate us. Or the next Salesforce that all companies buy as their go-to CRM software.
What’s so frustrating about this is how many AI marketing software systems made for businesses are out there. Or retail businesses that deliver wine to your door so you have your fix without even thinking about it each month. Or laundry services so you can pay a premium to not even leave your couch to get clean socks if you prefer.
Our CEO at Wethos wrote a blog post called “The Nonprofit Revolution”, and after reading that and seeing the amazing impact it had in the nonprofit space (finally someone is fucking saying what everyone has been compartmentalizing for years), it got me thinking.
Are investors are the reason the nonprofit sector is left behind in the age of technology?
I’m here to argue that may be the case. These investment specialists claim the nonprofit market can’t scale, or don’t have a need to improve their resourcing, or won’t post projects because they won’t spend money to improve their content in order to increase donations.
Well my response is — fuck that. These nonprofit unicorns are more resourceful with their current options than any of us could dream to be, but all we’re doing is disadvantaging them by using our will power to build the next in-house manicure service for companies instead of building a platform that can be used for GOOD. Something these organizations can utilize, that will directly improve their processes. They’re already doing an amazing job, so why not put more time back in their day to allow them to do their job well by making their lives a little easier with the use of tech and innovation?
So we built Wethos, a platform that makes resourcing easier for nonprofits. These organizations, who have been forced to waste money on high cost agencies with overhead fees, or will get a lower quality product by using friends of friends or Craigslist, would greatly benefit by having a well-thought out machine working for them to help resource easily and efficiently — automatically helping them with sourcing freelancers, providing advice and direction, completing paperwork and filing data needed for their lengthy tax filing. And what’s so great about all of this is we can make this all automatic through the site, keeping our overhead low and thus benefiting everything by making this an incredibly efficient business model that has a conservative path to being a $1B business, and we already have 80 organizations and 600 freelancers on-site exchanging work. But it’s amazing the feedback we’ve received from investors:
“We don’t think the market is big enough or proven”
“I typically stay away from the nonprofit or impact space, so it’s not a good fit”
(doesn’t even look at deck) “I have to pass”
It’s the cat and mouse game. How can we prove this if we don’t have the funds to build this product to be a well oiled machine? Or get the word out so they know something like this that solely benefits their processes exists?
We’ve met a few amazing investors on the way. One of them, who’s an avid feminist and female founder supporter, told us straight up during our second meeting what our big hurtles to overcome were — “first off, people are going to look at you, 3 female founders, and not take you seriously as sad at that is. And secondly, the minute you say the word ‘nonprofit’, that investor will stop listening and start counting the minutes until the meeting is over because they will think your business model means no money”.
Can’t we make money AND do good? Those things aren’t mutually exclusive anymore, so let’s open up our mind a little bit here.
Through this whole experience, we can truly empathize with our user base. We can feel the disrespect, belittlement, and true rejection they receive every day from foundations, donors or government agencies. We need to change the way we think about nonprofits if we’re ever going to revolutionize the space. Isn’t the whole small government mantra that private corporations are more efficient, thus a better use of money? Why not use our expertise, knowledge and time for good, and actually create something that can help these organizations become more efficient, become more profitable, become happier in their lives because they don’t individually have to be the marketing director, head of product, communications strategist, designer for their social content, official tweeter, person responding to every email, manager of cleaning anything thrown at the organization that day, and chief of figuring everything else the f&*$ out.
If they tech industry can find time out of their busy schedules to entertain Trump and his kids, then they should have time for the nonprofit sector. And the rising tech industry can’t thrive if angel investors and venture capital investors don’t take them seriously, and dismiss ideas out there to improve the space.
So I challenge all investors — what’s stopping you from investing in a business that’s targeting a market that contributes a trillion dollars to the GDP a year and rakes in an average of $5M a year per organization?
But good luck finding the next Salesforce! I’m sure the AI software for what emoji users will use next will be equally as fulfilling for you.
