The Beginning And The End

 In Business, Entrepreneurship, Fred's Blog, Fred's Blog, Leadership, People, Relationships, Social Entrepreneurs, Transitions, Vocation
Listen to “The Beginning And The End” By Fred Smith

 

I have worked with a number of entrepreneurs over the years and there are a few common themes and characteristics in their lives. One of them is an extreme focus and a personal identification with projects. They start things, grow them, and then look for exit strategies. In fact, the exit strategy is built into the plan from the beginning. In non-profit work, there are very few exit strategies – especially for founders.

A familiar and common characteristic of entrepreneurs founding ministries is, for a variety of reasons, they sooner or later start looking for other partners. Sometimes they lose their original enthusiasm for it but want to see it go on. They want to find a successor. The Swedish sociologist Max Weber wrote about “the routinization of charisma.” Many entrepreneurial ventures cannot survive the loss of the founder. “If the social organization is to survive, some form of routinization must take place; an orderly determination of who legitimately wields power.” More often, they wake up and see the project is almost completely dependent on them financially and that makes them uncomfortable. They don’t like to think about their capital being committed for an undefined future. As well, either the project becomes far more expensive than they thought it would be or they take a financial hit and are no longer able to support it by themselves. In each case, they discover the value (often for the first time) of partnerships. Entrepreneurs by nature do not typically partner well and often only as a last resort. They are comfortable with outside investors and donors but not with genuine partners diluting their control.

In time, they find the project is so completely identified with them and their funding that others see it as privately owned property. Of course, this is probably how the founder sees it as well. It has the founder’s face all over it and is so thoroughly merged with that person that others cannot see themselves as a part of it. They cannot imagine it being anything but a private venture looking for “other people’s money.” It looks like someone having a child, raising them for ten years and then looking for someone else to take over or help with the continuing expense. In many cases, they want help with the “child” but don’t expect to make concessions in the vision or operation. They think others should be interested in this project that has been so important to them and it is just a matter of finding the donors and convincing them.

For others, they have waited too long and created an organization so dependent on their funding that the time required to gradually find more interested funders makes a transition to partners difficult. They have been focused so intently on shaping and crafting it that they gave no thought (or very little) to a time when there would be a need for others to come alongside. They never designed it to have other investors/funders.

Then there are those who run out of money to support it and find themselves in a crisis. It could be from a financial downturn or it could be they had the resources to fund the start-up and growth but not an ongoing operation. Typically, they start looking for traditional donors thinking they can now present themselves as another grant opportunity for them. That’s when they discover how out of the ordinary they are in the minds of most traditional donors.

So what might entrepreneurs starting ministries do from the outset?

1. Consider how much it takes to make a ten-year commitment and put the money aside if you want to have total control. It will always be at least twice as much as you think.

2. From the beginning start designing the organization to have room for other funders. This means having a functioning board and not simply yourself and two family members to meet the minimum requirement. It means building relationships and offering ways for people to get engaged and not wait until you are in a corner.

3. Recognize that typically after about four years the ministry will be seen as your pet project and it will be very difficult to find others unless you do the hard work of redesigning it to attract others. As well, I have worked with founders who want to replicate a successful program only to discover the success is due to a unique individual or set of circumstances. Replication planning does not come after an initial success. It needs to be part of the original design.

4. Finally, don’t discount the option of ending it well instead of finding partners. Some things rightfully have a life for several years and their purpose is fulfilled.

There has never been a better time to start and grow a ministry. There has never been a moment with more opportunities, resources or imagination. Think it through and then do it right.

 

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 co-founding Leadership Network with Bob Buford and serving 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 8 comments
  • John Thomas
    Reply

    Great blog Fred. As the founder of a Non-profit (Living Hope), we have a very strong board but succession planning is difficult. About one-third of our funding comes from relationships I have developed. Finding the right fit for an Executive Director in South Africa is difficult. We are larger than many Non-profits – about 250 staff and finding a good leader with experience and a call is a problem!! We are constantly nurturing people who then get headhunted by business offering twice what we can pay. Thanks again for your insight and understanding.

    • Fred Smith
      Fred Smith
      Reply

      John, the Board of The Gathering is in a search for the new President now. I cannot imagine what it would be to oversee 250 staff! Fortunately, the new President will only have two full-time staff to manage.

  • Phil Burks
    Reply

    FULLY ARGEE! On all points.

    As an entrepreneur, I failed at early partnerships. Just recently, I’ve started a new venture and have an investor. A quiet investor. IT works.

    I had the dubious privilege of coming on to a board of a non-profit that was one generation away from its founder. As the founder’s passion, AND money was further from the center of the ministry, the worse things became. As I entered, they were gasping for air. The founder did not have a succession plan and it ultimately took down his 40 years of work.

    • Fred Smith
      Fred Smith
      Reply

      I think I remember your being in the muddle of that “dubious privilege”!

  • Gail McGlothin
    Reply

    This should be the first page of the Federal IRS 501(c)3 application.

    • Fred Smith
      Fred Smith
      Reply

      That’s funny, Gail. I’m not sure they would pay attention to it!

  • Lisa Wen
    Reply

    So grateful for your hard earned insights and wisdom, Fred. Oh how I hope and pray that new ministry founders and CEO’s would take in your advice and seek the Lord on following this wisdom for the sake of bearing lasting and greater fruit for His Kingdom !!

    Lisa

    • Fred Smith
      Fred Smith
      Reply

      Thank you, Lisa! It’s difficult to let go if you don’t know what is next or your identity is so wrapped up in being the founder.

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