Let’s stop stereotyping — nonprofits deserve more than being labeled “profitless”

About 6 months ago, I jumped off a cliff and began trying to build together a plane on my way down (well, figuratively — and the plane has some work let me tell you that). Building Wethos, the first freelance site that supplies paid cause focused work, has been anything but ordinary. But don’t get me wrong, I’ve experienced plenty of doubt. Ah yes, doubt, the one thing people cover up with “well either way, you’ll get some unique experience!”. Listen up my doubtful friend, family and whoever else has ever said that — you’re wrong, because this is going to work, and thrive while we’re at it.

So while I took up an offer from our CEO to quit my fairly comfortable advertising job to join a startup, I started to get the question — “why nonprofits? why not let all companies post and you’ll make more money?”.

This is supposed to be a “smh” gif but close enough

I guess my answer to that is — you know nothing about freelancers then (go ahead and insert “Jon Snow” joke here if you want). As someone who’s personally tried to use Upwork, that sh*t is chaos. Try getting price gauged by someone in a foreign country while competing against 5,000 applicants using a website that freezes regularly and you’re applying to a soulless company that packages soda cans for a large entity. No thanks. I’ll stick to my comfortable advertising job.

BUT when you throw in possible work for the causes you care about, whether they projects support women’s rights, animal care, or the refugee crisis — and you get PAID — now that changes things.

But I keep hearing the same things from everyone around me, that my “nonprofit friendly business model” is going to leave me in the dark when the dreams of big startup dollars are involved. This has come from my dad, my sisters, my roommates, my boyfriend, random people I used to go to school with, friends of friends I meet out, but most importantly — investors. So I’d like to take the rest of this post to shut down the theory that having nonprofits as your addressable market means you won’t have a possibility at a large financial return, because… you’re wrong. You can. And you should make it happen, because this is an untapped market folks, and it’s thriving.

Now onto the educational facts: there are around 1.5M nonprofits alone in the US. Yes, ONLY in the US, we’re not even talking about the world yet. And of those nonprofits, 53% of them are raking in $1M-$10M every year. Mind blown yet? Just wait, because it gets better. Luckily for us, financial statements for every nonprofit are online, so we can see what they’re actually spending on outsourcing their resources. When my team and I found these statements, it was like Christmas morning, because 10% of their overall budget goes to outsourcing resources. That doesn’t include their staff, their spend on their cause, their rent or taxes — JUST outsourcing to freelancers whether they’re creative, legal or financial.

So of the average $5M nonprofits in our addressable market, that’s $500,000 to spend. If we could tap just 10% of that average spend, that leads us to a potential of $39B in spending on freelance projects on our site (for those of you that don’t believe it, here’s the math: 780,000 nfps *($500,000 outsourcing budget*.1 our tapped market)).

Now, I’m not saying nonprofits themselves are thriving anywhere close to for-profit businesses (and I’ve dealt with plenty of their creative budgets, they blow nonprofits out of the water). But for-profit businesses have enough money to waste 400% extra on agencies so they don’t have to deal with contractors, which is why advertising is still thriving. Nonprofits are bootstrapped, which makes them smarter and more agile. They use every dollar in a useful and efficient way, which is why we believe freelancers are such an amazing resourcing model for them. They aren’t losing sunk costs on paying a freelancer a full-time salary without any work to do, and they only need to get project costs approved instead of yearly fees (which we know can be a pain for nonprofits).

So my question is, how has no one figured this business model out yet? With over 300 freelancers on our site ready to complete work, all nonprofits/cause agencies/cause focused for-profit companies should sign-up and get started at www.wethos.co