507 Sarah Olivieri:
Many women are drawn into business because they have a heart-centered mission to change lives and improve the world. The focus on mission compels many to create non-profits
I’m Melinda Wittstock and today on Wings of Inspired Business we meet an entrepreneur who focuses on helping nonprofit founders make a bigger impact without burning out.
Sarah Olivieri is the founder and CEO of The PivotGround helping nonprofits simplify operations, build aligned teams, and get diversified funding and revenue sources.
Today we talk about the upsides and downsides of organizing as a non-profit … because social mission is not incompatible with a fast-growing profitable company.
Sarah Olivieri is a nonprofit business strategist and a former nonprofit Executive Director. She was the co-founder of the Open Center for Autism, the Executive Director of the Helping of War Foundation, and the co-author of Lesson Plan a la Carte: Integrated Planning for Students with Special Needs.
Sarah saw firsthand how many nonprofit executive directors and teams struggle with low pay and inadequate resources and set out to change all that with her Impact Method – a framework that helps nonprofits simplify their operations, build aligned teams, and make a bigger impact without getting overwhelmed or burning out.
Today we’re going to talk about why women sometimes mistakenly gravitate to nonprofits because of limiting beliefs about money and a feeling that its somehow wrong or inconsistent with mission to build wealth. We talk about what business should and should not be a nonprofit, and if you do have a nonprofit how best to run it.
Sarah Olivieri began her business career in the nonprofit world, learning first-hand as an executive director, all the pitfalls and challenges … that come with running a nonprofit. And then started a for-profit … to help nonprofits.
We’re going to talk about … money mindset, and how we value ourselves, hiring and how to build and align a team, and much more.
Let’s put on our wings with the inspiring Sarah Olivieri.
Melinda Wittstock: Sarah, welcome to Wings.
Sarah Olivieri: Melinda. It’s really a pleasure to be here.
Melinda Wittstock: Yeah. It’s great to talk to you too. I know your business is a for profit and you advise a lot of people in the nonprofit world. What made you decide to focus on that particular market?
Sarah Olivieri: Sure. Well, I came from a nonprofit background, kind of originally air quotes. I had been a program director, executive director, and I shifted to owning for profit businesses, I started a media company which turned into a digital marketing agency, kind of simultaneously. I helped my husband at the time start a retail store and cafe. And as I did those things in the marketing agency, I started to really hone in on nonprofits because I had this experience and understood them in a way that a lot of other marketers didn’t. And at the same time, I was learning so much about being an entrepreneur, kind of coming into my own as an entrepreneur. And I learned all of these great frameworks that the for profit industry had developed and the nonprofit industry just didn’t have anything like that. And so I really wanted to bring the kind of thinking around efficiency and effectiveness that the for profit space has been working on and bring that into the nonprofit space, but in a way that really connected with nonprofits.
Melinda Wittstock: I find that a lot of women launching businesses, because we tend to be so mission-driven, often gravitate towards nonprofits, but we don’t necessarily have to do that to have a social mission impact. What’s your experience working with both women and men and why is it that the nonprofit world sometimes attracts more women?
Sarah Olivieri: I think partly it is, that heart driven aspect. Unfortunately, I think too, it’s a self-fulfilling prophecy that many women are used to sacrificing personal wealth and income, and they do that in the nonprofit space and it’s very easy for them to fall into that temptation in the nonprofit space. So I think that’s one thing. But you’re absolutely right. Being a nonprofit is really a tax status that comes with a few legal requirements for your organizational structure, but I’ve certainly had many people come to me, not many, but a number of people who come to me saying, can you help me with my nonprofit? And my advice to them is you’d actually be better as a for profit model.
Sarah Olivieri: So if the work you’re doing really has minimal opportunity to have its own revenue generating activities, then you probably need to be a nonprofit so you can get those grants and have a revenue stream that comes from donations. But if you don’t, there’s no reason why you shouldn’t go out and make a huge impact on the world having a for-profits tax status, which is actually a much easier business model than being a nonprofit.
Melinda Wittstock: Don’t I know it. One of my earliest businesses, it was a news agency and we started out with most of our clients being in public radio. So it seemed to make sense, “Oh, it’s public radio, so we should be a nonprofit.” However, we got a lot of capital influx in the beginning, but then it became a nightmare because we couldn’t pivot. The grant system wouldn’t let us to pivot, to capture market. We were so constrained, and I really regretted that decision at the time and especially as we moved to serving commercial properties and that kind of thing as well. What are some of the things you’ve got to think about when you’re at that stage deciding are we a for profit or are we a nonprofit?
Sarah Olivieri: Yeah. So really think about where is your revenue going to come from? Where can it come from? And if you can sustain yourself without donations and without grants, now, grants, we can go on a little tangent if you want, grants are often not a true source of revenue because they often cost more than you get.
Melinda Wittstock: I joke that they’re money you can’t afford to have.
Sarah Olivieri: Right. Right. So I often tell nonprofits, don’t go after grants unless they have a good setup or ready to do it. It’s a pretty advanced thing to be doing grants well.
Sarah Olivieri: But really think about where is your revenue coming from and think about the pros and cons. So, the big con with nonprofits is if I told you to start a for profit, but you had to have a minimum of three business partners and you had to start selling two different services that were very different at the same time from day one, you’d be like, get out of here. That is a recipe for disaster. And yet that is what you have to have to be a nonprofit. You legally required usually to have at least three board members. They are the kind of the ultimate decision makers, legally, they hold the liability and you have to build both a fund raising business, as well as the business of delivering your mission. And that is a big undertaking. So don’t do that unless you really need those donations to be a primary source of revenue.
Melinda Wittstock: That’s really good advice. It was interesting in the public radio space because it was a bit of a hybrid. I think the way the corporation for public broadcasting, for instance, at the time, was being, I don’t know, steered into putting grant requirements on various people in that space and in that nonprofit space to be scalable, to have revenue, to be independent of ultimately their support. And yet at the same time, the grant terms were so onerous that there was no way that you could kind of escape. It was kind of the worst of both worlds.
Sarah Olivieri: In some ways the foundation industry is changing the way they give money. So it’s not as bad as it used to be, but it still can be pretty bad, especially for small grants. I know a number of fundraising professionals who say don’t apply for any grant under 5,000, just as a blanket rule and be so careful about if you’re applying for grants. I once was the director of a foundation and I kind of had the dark side realization that foundations are nonprofits who have their own mission and they pay other nonprofits to fulfill their mission for them. So if you and the foundation don’t really have the exact same mission, then it’s going to cause mission creep for you because they’re basically paying you to go in a different direction than you’re trying to go. That doesn’t work very well.
Melinda Wittstock: I know that so well too. That started to happen with us as well, where you would go to get grants because you needed money, but they didn’t really give you operational support. So each grant that you got, you were doing something new and meantime, it was hard to fund the underlying activity of the business.
Sarah Olivieri: Right. Right.
Melinda Wittstock: Is that better now? Are nonprofits getting more sort of operational support?
Sarah Olivieri: They are beginning to. Some foundations have really shifted their models drastically. Others are kind of on their way. Places like GuideStar, which is now called Candid, have put out a lot of articles saying, “Hey, saying that overhead is bad and we shouldn’t spend money on it is crippling the nonprofit industry.” So that kind of word has been out there for a while and the foundations are catching up with that.
Melinda Wittstock: That’s wonderful to hear. So tell me a little bit about the impact method and your framework that really does help the nonprofits figure out how to align their operations and figure out all these different things without that overwhelm or burnout. Because gosh, I know so many people in the nonprofit world who are constantly in a burnout state.
Sarah Olivieri: So the impact method really works on my general feeling about nonprofits, which is that nonprofits have to be great at innovating. So you have to combine strategies that make an organization very agile and great at innovating with things that you might find in larger corporations about really keeping a lot of people aligned because from day one, nonprofits have more people. So everything in the impact method works really well for for-profits, but they’re not as desperate for it as nonprofits.
Sarah Olivieri: So, everything I’ll tell you about the impact method, if you’re a for-profit business, you can totally apply to this. And I run my own business on the impact method. So there’s three pieces that you have to have working together. And these three pieces create a synergy that kind of does a lot without you having to do a lot. It has a big, big result for a relatively small effort that you put in.
Sarah Olivieri: And the three things are, you have to have a process for improvement. You have to have an ongoing change mechanism where you’re constantly leveling up the work you’re doing, reviewing what worked and what didn’t work. And then also in the impact method, I’m a huge advocate of you need a certain amount of respite. I say respite is part of the work. Like you have to take time for your brain to relax so that you can have great new ideas. So that’s the first thing, the first major concept in the impact method.
Sarah Olivieri: The second is you have to have an actionable strategy. You have to have both big goals and the specifics about how you’re going to take action to actually achieve those goals. A lot of nonprofits have like a bunch of tactics all over the place and they’re not necessarily connected to their big goals, and I see for-profits doing this as well, they haven’t connected their big goals or gotten really clear on their big goals and connected that to what am I doing today?
Sarah Olivieri: And the third thing you need is I call it your modus operandum, because it’s a combination of really having a clear self identity as an organization that is your brand. I call it the heart of the brand in the impact method. It’s not branding, it’s not your logo. It’s like who you are in your core. And that pairs with how you organize your people, how you get all your people aligned and working together and what is your kind of basic organizational structure. And when you do all of those three things together and you really focus on how do we optimize in each of those three areas, and the impact method is a set of tools and processes that are optimized ways of doing each of those three things, you get just an exponential return on your effort.
Melinda Wittstock: Yeah, absolutely. I recall going to work with Sara Blakely from Spanx, who is a big champion of female entrepreneurs and a bunch of us serial entrepreneurs we’re called on to go and mentor all these women and her foundation pick the 10 best, the most promising. They were all nonprofits, every single one of them could have been a for-profit business and underlying all of that because I mean, all of us were sort of quizzing them. Like, why don’t you want equity in your business? Why don’t you want this to be an asset that you can actually increase your wealth? To a person, nobody had really thought it through, but there was this underlying mindset issue I found. That it was something about not deserving or not feeling like they were allowed to make money. It was somehow unseemly or something like that. What’s at the root of that, particularly for women?
Sarah Olivieri: Yeah. I think there is. I reached this point in my own life when I started the current version of my business, Pivot Ground, where I said, I need to choose a business that’s not so hard. I don’t have to choose the hard path. I can choose the easier moneymaking path. And that’s how I started evolving my own business, but I didn’t even realize that, somehow I felt like if it wasn’t hard or that I had to share the wealth or share the decisions and that was somehow the right thing to do. And I really had to get conscious and intentional about letting those things go to really come into my own. And so I think that’s what goes on for women. And it’s like double that in women in nonprofits, because it’s so easy for people to say to themselves, because it’s a cultural thing.
Sarah Olivieri: Oh, people who run nonprofits shouldn’t also make money. But in the end though, of course that creates a conflict of interest because if you’re not getting paid well for your job, you’re not going to be able to do it as well as you might, if you were getting paid a reasonable amount.
Melinda Wittstock: Yeah, so true.
Sarah Olivieri: The nonprofit industry has that same kind of cultural sacrifice, martyrdom thing going on that women have going on and you put the two together and it really, I’ve seen so many women executive directors just not paying themselves at all. And it’s very sad.
Melinda Wittstock: Yeah. You see that even in for-profits as well. I know as a tech entrepreneur, there’s a tremendous pressure to like reduce your burn in the early years especially if you need capital in the early stages, say it’s a scalable tech business and you do need investment often before you’re making any money or certainly before you’re profitable. And in that case, it’s usually the woman who falls on her sword and pays herself less or not at all. And then when the business is really profitable or humming, it’s just much harder to reset that. I always advise women, you’re the first person that needs to be paid and paid well, because the thing wouldn’t exist, but for you.
Sarah Olivieri: Yeah. Yeah. So true. So true. I think another thing that goes on for some women, I certainly experienced this in my business. I did make a very conscious choice to pay myself less in the beginning so that I could hire more contractors and people to help me out because I was in the middle of getting divorced and I had a three year old and I inherited $18,000 of debt from a business my husband had run into the ground. So, we started 18 grand in the hole, in the middle of getting divorced and with a three year old. And on the one hand, there just wasn’t enough money. I could have paid myself more, but I would have had to do all the work. And I chose that this was a very special time for my son and that I was going to work less.
Sarah Olivieri: So while I was starting a business and paying myself less, I didn’t work that much starting my business. I really delegated the work on to other people. So I think there are certainly mothers who are balancing that kind of equation. Although I would hope that, like I did in my case, I was very conscious about it and I didn’t do the work and not pay myself. That would have been really bad. So, I worked maybe three, four hours a day, four days a week.
Melinda Wittstock: Yeah. I mean, excuse me, excuse me.
Melinda Wittstock: Finding that balance is really important because a lot of women make the mistake of hiring too late as well and trying to do it all themselves. So the worst of those worlds is like underpaying yourself and trying to do it all, not hiring fast enough. I’m at the early stage of my fifth business right now. And like, thank God for Upwork. I just say, thank God for Upwork. Because we can do amazing things if you have really good operational systems and you put those SOPs in place and you get all that humming and you just get people working, you get this team. I built so many businesses before where, on freelancers, on part timers on interns and then training them up, a lot of them become like your team and perhaps some of them don’t because they’re just needed for a very short term. So you’re really making an investment in that. I know that businesses that hire within the first six months tend to succeed, whereas those that don’t and put it off, tend not to.
Sarah Olivieri: I think that has to do with something, speed. And it’s something I talk about in the nonprofit world because we say, time is money. People don’t say that in the nonprofit world, but it’s just as true. Slowness will kill you. You have to move quickly and it’s so expensive to be slow. And one of the best ways to go fast is to hire people. And I know I take like a two prong approach. I hire experts who are going to figure out what works really fast for me and then I’m going to offload the experts and replace them with automation or lower pay contract workers who are now just going to churn the strategy that was figured out by the expert. Or I hire lower level people and bring them along and they fill bigger positions.
Melinda Wittstock: Yeah. Well that was the pain point for me with grants because you would apply for a grant and then it would take a really long time to get the grant, and then by the time you got the grant, you were locked into certain spending patterns and you had to stick to what you said you were going to do, which is just not how business works. And I remember actually losing part of a grant because I got a better deal on insurance. So like I reduced my insurance costs. And so then they just took away grant money because, wait a minute, shouldn’t that be a good thing?
Sarah Olivieri: They were punishing your savvy business moves.
Melinda Wittstock: Yeah, it was bizarre. But also I would get locked into a certain salary. So this person is going to have this salary and then just even negotiating a salary or say, for instance, if you found a contractor to do the same thing for much than also they’d take away the grant money. So it incentivized you to spend more often than you needed to spend, even though it was really hard to get grants and you didn’t have operational money and all that kind of stuff. So you can tell I’m a little bit jaundiced about nonprofits.
Sarah Olivieri: Well, I can tell you the benefit of that for people who serve nonprofits is I once had a client call me up and say they were and existing client. They’re like, we need to spend, it was like $32,800.53. We don’t know what we’re going to do with it yet, but we have to spend it by the end of the week. Can you invoice us? And we’ll figure out what we’re going to do later. I’m like, sure. Yeah. Because a lot of grants, if you don’t spend them, you lose them. So, I’m sure that’s not what was the intent of the grantor in that grant. But it meant that the nonprofit was like, we’re not losing this money, we’re just going to spend it anywhere that qualifies. My edge was I did digital invoicing and I was able to invoice them for something that fit their needs within moments. And they were able to cut their check in time.
Melinda Wittstock: So with Coronavirus and the economic meltdown, usually what happens with foundations and the folks that are writing grant checks and whatnot, that hits them a little bit later because their endowments are smaller or all of that kind of stuff, depending on what’s going on in the financial markets and all those knock on effects. So how is this impacting the nonprofit world?
Sarah Olivieri: In a number of ways, many nonprofits who are actively fundraising are doing really well right now, because the general charitable nature of people is up. Now, they’re needing to expand their donor bases because some of their donors have less money to give. Others have more money to give. So I’ve advised a lot of nonprofits to increase their total pool of donors. In some ways it’s been very good for nonprofits seeking grants because a number of foundations lifted a number of their reporting requirements to make it easier and made funding more unrestricted, meaning they didn’t have to spend it in a specific area. They could spend it however they needed. I’m sure that there’ll be a dip in fundraising. Right now, foundations have the money that they already had to give. But in the future, many foundations may have invested and it’s possible their investments will be down and they’ll have less money to give.
Melinda Wittstock: So, I wanted to ask you too about what’s the best portion of funding you should be getting as a nonprofit? It is so much effort to go and find those major donors and those individuals, there are also things like small individual donors and there are grants and all these different funding sources. What do you recommend is the first thing someone should do if they’re at the early stages of having a nonprofit and on the major donor side, how does one do that? Especially if they don’t move in those worlds and don’t have those contacts where they can just call up their friend from the golf club or whatever.
Sarah Olivieri: Well, I think the first thing when you’re starting out, if you don’t want to make the mistakes that so many other nonprofits have made is you need to learn a little about the different types of fundraising revenue. So there’s major gifts, that’s bigger checks coming from individuals, typically. There’s your regular individual donations. That’s your people giving you 25, 50, those kinds of donations, the first time and then you want to keep them as a customer, retain them. So they keep donating regularly. There are grants. We’ve talked about grants and there’s planned giving that’s where you make arrangements with a donor who’s going to give you probably a large sum, or it might come in the form of assets, not just cash upon their passing away.
Sarah Olivieri: And so you need to learn about these different types of fundraising activities and just prioritize them based on return on investment, just like you would in a for-profit. So you want to start with the most efficient, the most return on your dollar fundraising activities first. Once you master a high efficiency fundraising activity, and I didn’t even say events because events are the least efficient fundraising activity.
Melinda Wittstock: Well, so there we go. And, so there’s no point doing those and we can’t even do them really right now, anyway, at least not for a while.
Sarah Olivieri: So, if you max out a high efficiency fundraising activity, by all means go to the next level to a less efficient, but still profitable, fundraising activity. So typically major gifts are the highest return activity and they are a great place for people to start. And I think when you’re first starting out, you can’t really start two businesses at the same time. You really want to start one and then the other. And so a nonprofit needs to start very much like a startup for-profit. You’re going to make your initial plan, put your ideas on paper and then do not start delivering your programs yet. You’re going to stop that activity and you’re going to move over to your first round of funding and you’re going to go after those major donors, and you’re going to get them to fund the first round of your plan, the first milestone or the first phase of your plan.
Sarah Olivieri: And then you’re going to do that first phase. Ideally, your first phase should be about testing to see if your idea works. You’re piloting your programs. You’re not just going in. So you’re going to run your pilot. You’re going to get some results. And then you’re going to go look for your second round of fundraising. Usually by the third, once you go into your second phase of actually doing, then it might be your second, it might be your third phase, but at some point you’re going to start to be able to run your program and fundraise at the same time. Once you kind of have a proven model, then you’re ready to be fundraising at the same time as you’re doing your programs. So that’s how you want to start out. And once you have a few major donors, you can definitely get some smaller donors in, but really I would focus on larger donors, think of them as investors.
Sarah Olivieri: And if you’re not tapped into a wealthy community, there’s always somebody generous who, I think everybody has access to, someone who’s willing to invest. So just start with one, you really only need to start with one and then have that person help you find your second person and just work your network out. In the beginning, it’s really phone calls, one on one meetings and just slowly building that support. Not slowly, but building that support, it feels slow because it’s one at a time, but you want to really push on that.
Melinda Wittstock: Absolutely. Really good advice. And so what made you make this switch? Tell me a little bit about your entrepreneurial career before you started doing what you’re doing right now.
Sarah Olivieri: Sure. Well, I fell into the nonprofit space originally, I was asked to manage a conference and was quickly then asked to manage the programs for that whole nonprofit and that kind of kicked off my nonprofit career.
Sarah Olivieri: Like anybody in nonprofits, I learned many different skills, picking up things that weren’t being done. And one of which was marketing and it started by building websites, back when it was HTML and DreamWeaver, which led me into other marketing pieces, to market the conference that I was doing, market programs. Another skill I learned along the way was bookkeeping, which was really important, I think, for my own entrepreneurial career, being able to really understand and manage my own money I think was a huge thing. I often hear people say, “Oh, first thing you should delegate off is your bookkeeping.” And I just don’t like that advice. I think you really need to have a good grip on your money. So don’t delegate it because you don’t understand it, make a point of understanding how your money works. That’s my little money rant.
Sarah Olivieri: As you get bigger, you can absolutely delegate your bookkeeping, but you need to understand your reports still at that point, and stay close to the money. But so I learned marketing and when the economy crashed, I had just published my first book. I’d just graduated from graduate school and I lost my nonprofit job because they didn’t have as much money. And so they had to downsize. And at that time I turned to building websites. People still needed websites, businesses needed websites trying to survive the economic downturn, but kind of a typical story of a woman, I still didn’t think of myself as an entrepreneur, even though I had already started my own nonprofit and I had now started another company for my husband, which was a video production company.
Sarah Olivieri: So I learned a lot about video production and that really helped me pick up more marketing media capabilities. And at one point I reached that point where I said, I really need to turn this into a business that’s going to be profitable and that I’m going to love doing. I was preparing to be a mother. And so I kind of did that, start thinking about that. And that pushed me into an agency model.
Sarah Olivieri: At the same time, my husband at the time wanted to start an art supply store, which was really an education in understanding retail, not a business that I really ever want to be in again, but I definitely learned a lot. And then it was through the process of getting divorced that I got really serious about making a business that was profitable, that was streamlined, and being super intentional about everything I was doing because I had no capital to work with. I was in debt and I had very little time. And so I didn’t have, don’t call it a privilege, I couldn’t have that issue that many entrepreneurs have where they say I’ll just work harder because I couldn’t work harder because I was committed. I had to be there for my son and I was committed to that. So I really had to be intentional about what kind of business I was building.
Melinda Wittstock: Absolutely. Yeah. So tell me a little bit about where, sorry, I’m just going to pivot here because we’ve got to wrap up.
Melinda Wittstock: So, Sarah, what’s the big vision for where you’re going now? Where do you see yourself in a few years’ time?
Sarah Olivieri: My big goal, my BHAG, if you’re a fan of BHAG big, hairy, audacious goal, is to really change the status quo for the nonprofit industry. So that we’re not just always, that thing we talked about with women, we’re not just bleeding for our nonprofits because it’s not only not good for us, it’s not good for the missions that we’re trying to achieve. We’re actually less effective when we sacrifice in that way. So it’s like double badness. So with that, I’m hoping to really teach as many nonprofits as I can the impact method so that they can really achieve better results. I think of it really as a different approach, it’s a way of running your organization without taking all the baggage from the nonprofit industry with you. And to do that, of course, working with nonprofits one-on-one is not going to cut it.
Sarah Olivieri: So my big vision is to start training other nonprofit consultants in the impact method so that nonprofits can get support from a trained consultant. But the impact method itself is not difficult to implement. It’s not expensive to learn it, to go through one of my programs, to learn the impact method. And it’s not hard to do. It’s really convincing nonprofits to be brave enough to try something new. That’s my message to nonprofits. It’s also my message to women. I think whatever you’re doing, it’s really about be brave enough to speak out and when you see something that doesn’t make sense, to highlight that. You don’t have to have the answers to succeed in this world, you just have to be great at calling out the problems.
Melinda Wittstock: So, for anybody out there that is thinking of launching a nonprofit or has a nonprofit arm of their business and can use your expertise, how can they find you and work with you?
Sarah Olivieri: Yeah, the best way is to go to pivotground.com. That’s the name of my company, Pivot Ground. And you can read about the impact method and the work we do there, but there’s also a button to apply for a free consultation call with me. And I’m always so happy to talk to nonprofit folks. Or even if you’re wondering should I be a nonprofit or not, by all means schedule one of those calls and I can usually give you some advice on that right on the free consultation.
Melinda Wittstock: Fantastic. Well, Sarah, thank you so much for putting on your wings and flying with us.
Sarah Olivieri: My pleasure. Thank you.