[RISING STARS IN PHILANTHROPY] Learnings from the Lilypad – A Tech Marketplace For Good.

Have you ever been on a sales or demo call for a tech platform and felt a strange disconnect with its narrative, stats, lingo, and insights? Like it doesn’t understand your services or impact and feels it necessary to “techsplain” all of your digital deficiencies? Well, you’re not alone. 

According to NetChange’s survey of technology use by nonprofits, only 11 percent of organizations feel their digital strategies are highly effective,  which goes to highlight the current digital divide between the adoption and use of tech solutions for both the for-profit and not-for-profit sectors. 

Those in the private sector will have you believe that the question  is actually whether nonprofits take their systems and services seriously when it comes to digital adoption.  The real question, however, should be whether the products being offered are in fact real solutions to the needs of nonprofits based on cost, capacity, and support.

“Tech for good” in this instance is a misnomer when the product is built by a for-profit entity, with solutions needing to be specifically built with an understanding of—not an assumption or interpretation of—the structure and needs of nonprofit clients front and center. An alarming number of tech companies have strong solutions for business but believe that, with just a couple of tweaks, the addition of a nonprofit sales department and promise of a silver bullet can solve numerous issues for your organization.

Nonprofits need to be stop being seen as an additional vertical through this lens for a number of reasons:

• Scaling operations are polar opposites in the business and nonprofit worlds. If you sell more product, you can drive lower margins and increase revenues. If you are successful in the nonprofit world, you drive up demand for your services, resulting in an increase in your operational costs and then needing to find more revenue streams (namely grants and donations) to meet this new budget reality. 

• Nonprofit donors are not the same as venture capitalists (VCs).

• Donors are not the nonprofit’s customers.

• Applying a nonprofit discount to an enterprise pricing model is not being charitable. It is still just a tool to drive sales. 

• The for-profit sales model is arguably a predatory approach when applied to organizations with revenues of less than $500,000 (which is approximately 88 percent of the 1.5 million nonprofits nationwide, according to the National Council of Nonprofits). These  organizations are understaffed and vulnerable to professional pitches  centered on a mission and impact ROI and are probably unaware of when they have entered into sophisticated sales funnels when downloading “freemium” content.

Much of my work revolves around demystifying tech in the nonprofit sector. That can ultimately be achieved if the sector chooses to help build a more sustainable tech ecosystem that will ensure progressive social change organizations are equipped with the best digital tools to build power and drive tangible outcomes on behalf of their clients regardless of their own capacity constraints.

This tech for good utopian practice however is easy to ideate but not as easy to curate, especially as we will need to support both the supply and demand sides of the house. Then we have the aforementioned misalignment around inputs and outputs, expectations and support. 

I have always seen the potential answer to these problems coming through an online marketplace that curates campaign tech packages for the benefit of grassroots organizations while delivering them at largely discounted prices. Aggregating existing platforms that solve the need and gaps in our digital toolboxes and cultivating larger adoption of those products.

While there are nonprofit tech companies building innovative solutions to help organizations tackle today’s most critical issues – organizations such as Fast Forward, Code for America, NTEN (the Nonprofit Technology Network), and TechSoup – the are predominantly cultivating talent, creating real solutions that help some of our most underserved communities, and acting as a bridge for the digital divide.  

However, we should advocate for something much more intentional. Something big and bold. Something that has the potential to help build the capacity of our nonprofit sector in a sustainable way. That marketplace option.

Then last year I stumbled across Pond. Pond is a small tech startup focused on alleviating two of the biggest stressors for nonprofit leaders: how to find the right tools and how to pay for them. Pond turns the traditional seller-focused marketplace upside down by centering nonprofit needs, taking work off their plate and then (this is the best part) paying nonprofit leaders for their time ($100 for each new connection with a provider). 

I met recently with Pond’s CEO Mitch Stein, who is definitely one of those leaders in our space that is going to reshape its impact and effectiveness. A self-diagnosed fanatic about impact with a strong belief in the scalable value of social entrepreneurship, he is on a similar mission to those that are excited about the future of our field, wanting to empower every nonprofit leader and organization by “harnessing the economic engine of the sector with shared digital infrastructure.”

My conversations with Mitch had me feeling hopeful for the future of philanthropy. He was acutely aware of the issues at hand and deftly articulated the moment our field finds itself. “I feel a real reckoning and transition from philanthropy and charity from one that is done to make one feel good, to focusing on the impact and outcomes. That requires looking more deeply at systems and root causes instead of just addressing the surface level problem that has a more immediate feel good effect.

“I view one of those root causes as a system that supports and perpetuates the status quo in the nonprofit sector. Our work with Pond is taking an economic model (not a philanthropic one) to centralize the tremendous economic power of the sector into a marketplace, so that the entire sector can harness it and benefit. Pond’s model creates a pathway for vendors of products or services that nonprofits consume to put the dollars they’d spend on marketing directly into those potential customers’ pockets. By valuing every nonprofit leader’s time equally in this system, we are creating tremendous equity for nonprofits of all sizes to have streamlined access to better tools and services, but also a more universal way to afford them – without philanthropy.”

Without philanthropy. That’s not as strange as it sounds. You see, 501 c 3 is just a tax designation, not a business model and Mitch’s thinking and approach is not exactly born out of the sector. However, contrary to many folks that have brought forward solutions into our orbit, Mitch gets it, because at the end of the day he is not selling, he is providing – tools, partnerships, solutions.

Mitch spent 7 years as an investment banker at Goldman Sachs, but over a year into his start up journey, he began to appreciate that the business world has way more to learn from nonprofit work than the other way around. “There is so much finger wagging at the sector about how to behave more like businesses or decrying all the things nonprofits are doing wrong. The innovation in Pond was all about looking inward at the sector and the value it brings and then charging people for access to it! It was not about applying outside business theory, it was about rethinking traditional business theory through the nonprofit lens. I would love to see more of that.”

When you talk to Mitch you don’t get the impression that he was a ‘Wall Street guy’, far from it. In fact, he is refreshingly open and honest about who he is, sharing regularly about his experience as an impact tech startup founder on LinkedIn and through his weekly email updates. 

“The most important thing I try to hold onto is to value the moments I am a beginner and a learner while appreciating the knowledge or experience I bring to the situation from prior experiences. I think so often we rely on an industry veteran or expert to come up with solutions to that industry’s problems, but actually an informed “outsider” will likely be able to think far enough outside of the box that the industry has put itself in.”

It’s an extremely delicate balance to have confidence in your prior experience, but not arrogance that causes you to miss the nuances of the new situation you’re in. Mitch candidly shared that he has struggled mightily with that in the past year and a half – listening more deeply to people is definitely how his vision has evolved into what Pond is today, a far more innovative and effective solution to the original iteration, a simple, traditional marketplace. 

“I think bringing a markets / economics perspective to introduce a platform that harnesses the marketplace of nonprofit spending is a fantastic example of my experiences. The technology of Pond is really not our innovation. It’s the economic model and the convening of such disparate and fragmented demand & supply. I brought an understanding of market making plus an appreciation of the power of ubiquitous consumer-oriented marketplaces plus a pretty insane appetite for risk that is very uncommon in the sector because everyone has convinced themselves (investors and philanthropists included) that the nonprofit sector is a bad market and it requires philanthropy to solve all of its problems. I’d argue philanthropy more often perpetuates those problems, but finding market solutions accelerates solutions.”

“Philanthropy’s role in our community is to fix the last mile problems and issues that our prevailing economic or government models and systems leave behind. I would like to see philanthropy reframe that role to be more situated on systems change to solve those last mile problems instead of surface level. A big part of that is investing in innovation – I hate the tendency of the nonprofit sector being the last recipient of new tech – they get the hand me downs, discounts, giveaways. The best tech isn’t built for them, but falls down to them over time. 

“I believe philanthropy has the power to drive innovation in nonprofits FIRST, that could even benefit other sectors after the fact instead of the reverse. It will take a letting go of control – particularly of narrative – which is incredibly challenging for philanthropists who so often need to center themselves in the story. Systems change and developing new infrastructure is rarely as sexy as your name emblazoned on a new building.”

This is where our conversation became a bit more philosophical. We talked about what philanthropy could be, what it should be and why so. What systems were holding back meaningful change and how might philanthropy help accelerate possible solutions. Importantly, we discussed racial justice at the core of all these problems.

“It intersects every element of our society in ways I’m still grappling to better understand on a daily basis. I think the funding of status quo in the nonprofit sector perpetuates a lack of progress on the racial justice front – I hear from so many nonprofits that waste countless hours trying to secure grant funding, or not qualifying for grant funding because they are too young or the worst – not having robust data systems in place.

“By keeping the process to secure funding complex, we are limiting the number of BIPOC folks leading organizations solving these issues on a grassroots level – where they must be solved. By keeping the time horizon on grant funding short, we are limiting innovation and equity because there’s no room for risk!”

Mitch discusses risk openly. And to be honest, it’s something that should be more widely discussed in our field, as ultimately it’s a trait of the bold and courageous leadership we so desperately need in our society right now.

“I think we should be pouring philanthropic dollars into new organizations and leaders of color at the grassroots level – wealth hoarding is a primary symptom of white dominant culture and I think we should raise the minimum annual distribution from tax protected foundations – Could it go up to 10%? 20%? Philanthropy should exist to courageously solve today’s problems, not hoard wealth into perpetuity.”

Philanthropy means different things to different people, to Mitch Stein it is pretty clear cut. “If you have money today, you benefited from a system that left others behind. Philanthropy is taking what one has gained from that broken system to both help those negatively affected and address root causes of that inequity.”

“While there are so many ways that the ultra wealthy could practice better philanthropy, I think a much bigger portion of the population could also be participating in charitable giving. Simple things like recurring giving, round up apps, all kinds of passive forms of giving that imbed it into our daily lives are the most exciting to me to activate a larger segment of the population to be engaged with impact.”

Fundamentally Pond is challenging the economic efficacy of advertising (what if you could spend your ad dollars talking to the customer who says directly they have the problem your product solves and the majority of the money goes into their pocket, increasing their ability to pay?), but I think they are contributing to something much larger.

Civic engagement, civil discourse, trust in government and voter participation are at historic lows and our communities suffer as a result. With the increased levels of societal isolation (exacerbated by COVID) and constantly growing inequities – in what is the most technologically connected age in our history – it’s no wonder people feel the system is rigged and are calling for circuit breakers rather than fighting for systemic change. We must embolden and equip our progressive organizations and their staff with the tools to support campaigns, self-organize.

I believe technology will be able to bridge these gaps and that organizations such as Pond can play a generational role in building a reinvigorated civil society by helping them be more effective and where people through the collective strength of nonprofits, clubs and membership associations can build both power and influence the majority for better, more inclusive outcomes on behalf of our communities.

I am definitely a big fan of Pond, as it’s creating a more human-centered non-profit sales environment. I’m also a fan of Mitch and his team. You see, a better philanthropy, heck, a better society is an all hands on deck approach and one where we will need to bring together key players and assets and unify these where possible.

Connect with Mitch Stein today:

LinkedIn – https://www.linkedin.com/in/mitchsteinpond/

Pond – joinpond.com

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If you know of anyone doing great work or believe someone espouses the values of future focused leadership and deserves to be highlighted in this way then please nominate them. If you believe this ultimately speaks to you, please, please nominate yourself.

To nominate an individual to be featured, please fill in the quick contact form here. Individuals don’t need to be specifically in organized philanthropy either – we hope to cover all facets of the ecosystem from planned giving to programming, from fundraising to IT, from nonprofits to activism or those that simply have a passion for giving back and are standing up to showcase their values through our field.

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