Be Ruthless

 In Business, Community, Fred's Blog, Giving, Leadership, Money, Philanthropy, Social Entrepreneurs, Vocation

Like many Gathering participants, I have an affinity for entrepreneurs. That is one of the reasons so many of us look forward to Praxis being with us at the annual conference. Entrepreneurs are often identified (mistakenly) as risk-takers who don’t calculate before acting. Nothing could be further from the truth. They work hard to eliminate as much risk as possible but having done that they are willing to make the move. This is why I love watching the process of true entrepreneurs eliminating risk to give themselves the best chance of succeeding. I like being a part of their identifying an opportunity brought on by a change.

I’ve been in conversations lately with two friends who have built a company and are turning their attention to a complex, important issue in our community: early childhood education. They want to do something substantial with their giving and are working hard to figure out what that really means.

I couldn’t help but think about all the start-ups I have been exposed to over the years, particularly one initiative to help minority students who would be the first in their family to attend college. After our first conversation, I emailed my friends some of my thoughts about that experience and thought it might be helpful to other donors wanting to take an opportunity and turn it into something truly meaningful.

Learn enough to get started. If you learn too much you will suffer “paralysis by analysis,” but if you learn too little you will pay a much higher “dumb tax” and in the end get few results. Everyone initially thinks they are the only or one of very few funders working in the field. With a little research, you will discover there are not only overlapping nonprofits but overlapping funders who are not aware of each other.

Once you think you know enough, go back and clarify what you want to do. The clearer you are, the more impact you will have. To put it another way, be ruthless. Mission drift begins before you take the first step if you are not absolutely clear about what you will not do.

There is a right time to pull the trigger. When you know what you want to do, then do it.

Only work with those who are receptive. Peter Drucker told me this once, and he was right. In my case, we originally thought guidance counselors and school administrators would be our allies and would want to help more “first in their family” students get into college. We were wrong. They were more interested in protecting the system than changing it. As well, they were already overwhelmed with other responsibilities, and we did not have the authority to change that. Upton Sinclair said, “It is difficult to get a man to understand something when his salary depends on his not understanding it.”

Don’t assume people working in your field of interest are interested in changing or challenging the system. Funders large and small – including Gates, Zuckerberg, and Annenberg – have all made expensive discoveries about how little effect they can have as outsiders.

Find monomaniacs and back them. Don’t try to add what you want to do to the mission of an existing organization unless they are as committed to it as you are – and likely they are not or they would already be doing it.

Make small bets at first. This is what we used to call “low-cost probes” or tuition for learning. See what works. Try a little more and see if it grows. It’s tempting to go “big” from the outset. Don’t do it. Making a splash is appealing to the ego but deadly to the project. Yes, crawling before you run takes longer and you may think you do not have the patience for it, but it will pay off.

Find other investors. Unless you want to own it and be the main supporter for it financially over the long term, you need to begin as soon as possible to bring on other investors. Otherwise, everyone will expect you to fully fund it forever. It’s a trade-off. You will have to give over some control, but the long-term health of the program will be better.

There is no one point of leverage. I would suggest you think in decades or in the same way you think about bond investments instead of certificates of deposit. You cannot “fix” the system, but you can make some changes that will have a ripple effect.

The temptation is to try and find the one point of leverage that will change the game. In a complex system, there is no one point of leverage. Often, what seems to be inconsequential turns out to be key. What appears to be salient is insignificant. Focus on a piece of the puzzle and be prepared for staying invested.

Measure carefully. Measure honestly. Find a few essential things to measure – not many. When we started our local Habitat for Humanity, we decided to measure four things: How many houses. How many volunteers. How many volunteer hours. How much money raised other than ours. This was enough to indicate how we were doing.

First ideas, then results. This phrase hangs on my wall. It’s the truth.

 

Fred Smith
Fred Smith is a graduate of Denver University and Harvard Divinity School. He spent several years as teacher and administrator at Charlotte Christian School and The Stony Brook School before joining Leadership Network, where he served as President for 12 years. Fred is the Founder and President of The Gathering, an international association of individuals, families and private foundations giving to Christian ministries. Fred will tell you his true vocation is that of a Sunday School teacher and it is this role for which he would most like to be remembered. Fred and his wife, Carol, have two grown daughters and a son-in-law. They also have three well-loved grandchildren.
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Showing 4 comments
  • John Carr
    Reply

    Hi Fred.
    I have been interested in changing the education expectations of minorities in Tyler by concentrating on 5k-3rd grade. I discovered the Promise Academy which is on the same track. My premise is that if a child can read excellently at age 9 (3rd grade) then their chance of success in the world is vastly improved. Do you know others who share the concept? There must be many.

    • Fred
      Fred
      Reply

      Thank you, John. I am a friend of Sarah and Alan and a donor to Promise Academy. In fact, I am meeting with Sarah next week.

  • Ron McSwain
    Reply

    Fred,

    The Gen-1 Program at University of Cincinnati has been successful in this area. While not faith based they offer a great opportunity to learn what goes into running a successful growing venture. Their web site provides contact information. It is essential that providing funds to under resourced individuals whether Gen-1 or foster youth must be accompanied with mentoring to be successful.

    • Fred
      Fred
      Reply

      Thank you, Ron. There are many, many programs and, as you know, the trick is finding those that have track records as so many of them come and go. You know the difference!

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