How to tell if your nonprofit is 'early stage'

One of the highlights of Fast Forward thus far has been Anne Marie Burgoyne’s stellar brain dump on the differences between nonprofit boards and funding at earlier and later stages.

One particularly helpful point for me was breaking down the difference between “earlier” and “later” in this context. For this purpose, Anne Marie explained the split between “early” and “late” as occurring around the third cycle of demonstrating your model, or around a couple million in annual funding. So, you could think of it as launch vs growth stage, or angel/seed vs Series A/B stage to use the for-profit venture world’s terminology.

If your nonprofit gets to the later stage, it’s probably because you’ve gotten rather good at what you do—good at executing on at least one aspect of your model, and good at bringing in at least one kind of funding.

During this transition time, Anne Marie suggested that your nonprofit will probably be well served by changing a few things:

  • target the majority of your fundraising on whichever strategies have been working best so far (theoretically strategies plural, but more likely strategy singular)
  • hire a full-time development director who’s excellent at that type of funding, and pay them what they’re worth
  • modify your board composition to include people whose personal resources (passion, time, knowledge, connections, and/or cash) actively support your later-stage model by adding some members and retiring others

The flip side of this advice is that, while you’re in the earlier stage, it’s less likely to be productive to take the transitional steps. As founders, we get so much advice that it becomes hard to process and actualize it if it doesn’t come with a timebox: “this is something you should work on now” vs “this is something you’ll probably want to think about later, but not act on just yet.” Anne Marie’s empathy around this fact was a delight.

In this framework, you could say that WattTime is in mid-to-late early-stage. (At a dynamic startup, that passes for clarity!) For instance, one way to express our first three cycles of model development is the following:

  1. Researching and launching the first way to know the carbon footprint of electricity in real time.
  2. Proving the 1st cycle is useful by launching the first “WattTime-enabled” product, and using it to begin to create environmental impact and enter the public conversation in a targeted sector.
  3. Proving the 2nd cycle is replicable by launching the next wave of “WattTime-enabled” products, and using them to create dramatic environmental impact and significantly move the public conversation in broad sectors.

In that framing, we recently wrapped up cycle 2, and are making fast inroads on cycle 3. So we should be keeping Anne Marie’s advice not entirely on the back burner, but not entirely on the front burner either, and preparing for a big transition soon!