How to Build a Nonprofit Like a High-Growth Startup with Jeff Nelson, One Goal

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At some point, every founder starts thinking about giving back.

For most of us, that means writing checks. Maybe joining a board. But most founders avoid building a nonprofit themselves, because we assume the nonprofit world runs on different rules and rewards a different skill set.

It does not. Nineteen years ago I co-founded OneGoal, and what surprised me most is how little I had to unlearn. We built OneGoal the way we would build a startup: scrappy, focused, and obsessed with the end user.

I did not run OneGoal day-to-day. I was one of four co-founders, I spent 18 months finding the person who could run it, and I promised to cover payroll out of my own pocket if we ever came up short.

Jeff Nelson is the one who took it from an after-school program in one Chicago high school to a national organization serving tens of thousands of students. He now sits on the board, with me, and teaches social innovation at Harvard.

I recently caught up with Jeff to reverse-engineer what we actually did. Here is the blueprint.

Anywhere you see the 💬 means I’m quoting Jeff directly.

If your goal is impact, should you start a nonprofit, or a for-profit B Corp?

The structure is a strategic choice, not a moral one. We considered whether OneGoal should convert to a for-profit or a B Corp, and Jeff is clear-eyed about the tradeoff we made.

💬 "The target population and the target schools we serve is not the place I would have started if we were a for-profit company, even if we had a social mission."

For-profit Education or EdTech companies almost always started with high-performing charter schools that were values-aligned, willing to take a risk on a young vendor, and quick to buy. We went after chronically failing public schools instead, because that is where the most in-need students were and the largest impact we could make.

The founding team never wavered from the mission. As Jeff put it, there was never a board meeting where someone said impact was not the most important thing.

The Rule: Choose a nonprofit when your target population doesn’t have the means for market-rate solutions. Go for-profit Benefit Corporation (B Corp) if they do. But don’t sacrifice impact to chase a more valuable market.

Most early-stage nonprofits plan one year out. We planned five and ten years out.

From the beginning Jeff was balancing four questions at once:

If you have ever designed a seed-stage product around what a Series B business would need to look like, you know what it’s like to plan this far ahead.

Many founders who start impact organizations do not go full-time on them. That is normal, but the organization still needs an all-in founding team to succeed, just like any startup or business.

💬 "We didn't want to run a program in a school. We wanted to actually build a business, if it works."

I spent close to 18 months interviewing people to lead OneGoal, looking for exactly what I look for in tech founders: grit, domain knowledge/expert, mission obsession, and ability to adapt quickly. When I met Jeff, the question flipped from whether he was the right person to how I could possibly convince him. I wrote the offer on a napkin.

Maybe you are that person. Maybe your job is to find and back that person. Either way, somebody has to be all the way in, or you have a committee with a mission statement.

Every nonprofit can tell you its annual expense budget.

Very few can tell you its KPIs, unit economics, and burn rate.

Those numbers were OneGoal’s obsession especially cost per student.   What does it cost to get a student into and through college, and how much of that result is incremental to what their peers were already doing anyway?

💬 "We were differentially obsessive about the cost per outcome."

The context made it stark. Chicago Public Schools was spending tens of thousands of dollars per student per year, across 12 years of schooling, and a single-digit percentage were receiving bachelor's degrees. Money was not the constraint. Cost per outcome was.

But a metric only matters if you let it change what you do. We used to run significant student conferences every few months. The fellows loved them. There was even good quantitative data on them. But they did not contribute enough to the cost per outcome, so we cut them.

Jeff was not cutting costs for the sake of it. He and his team were looking for the most efficient way to deliver the results they were promising. Anything beyond that is waste.

The Rule: Pick the one KPI, key performance indicator, that would kill you if you ignored it, then let it make your most unpopular decisions. In the for-profit world, the market eventually forces this on you. In the nonprofit world nothing does, so you have to force it on yourself.

Early-stage software companies are not profitable. Neither are early-stage nonprofits. Both have real costs, whether that is engineers or program staff, and both start out funded entirely by people betting on a future that does not exist yet. Angels and VCs on one side, donors and philanthropists on the other.

Similar to a tech startup (that shouldn’t rely on VC for too many rounds),  a nonprofit should not rely on donors forever. They need to find an operating model that pays for itself.

We pivoted from an after-school program to an in-school, credit-bearing course. This completely changed the operating model and finally made the programs sustainable. Schools started absorbing real cost through teacher time, class time and credit hours, and we began charging for portions of the model outright. Today entire states, Kentucky and Illinois among them, transact directly.

In the early days, we contracted high-performing teachers over their summer break to help build the curriculum. Independent reviewers later rated it among the strongest in the country.

We essentially paid high performing teachers, our customer, to build the product, because they knew better than anyone what it needed to do.

The Rule: Nonprofits need to generate revenue. Look for a business model that companies, schools, government programs, and even end users would be willing to pay for. Revenue is not the enemy… waste is.

Everybody knows the CEO sets strategy and vision.

But his/her real job can be summed up to two key things: talent and resources.

Talent is especially hard in the nonprofit world because they typically pay below market rate and have no equity to offer. You need a mission-driven CEO like Jeff to attract like-minded people to the cause.

Then there is managing the talent. One might think that the nonprofit world is easier because everyone is working toward the same mission. It’s not.

💬 "If you were to ask my dad about the five times when I called him in the hardest moments at OneGoal, probably all five were talent related."

Then there are the resources. Great talent with nothing to work with is dead. In a nonprofit, resources means capital you raise over and over from people who get nothing back for it, which is why Jeff spent 30 to 50% of his time fundraising. That never stops being part of the job.

Whether you’re the CEO of a nonprofit or a for-profit org, it all comes down to your people.

I asked Jeff what matters most right now for actually moving outcomes. His answer was not strategy or product.

💬 "If you were to ask the core people in education what matters most right now for outcomes, it's rigorous implementation. The few places that have gotten that right are wildly outperforming everyone."

That is true in the startup world too. Execution is the moat, and it is the part that never shows up in a pitch.

Entrepreneurial philanthropy does not have to be a second career you postpone until an exit.

I never ran OneGoal. I took a board seat, introduced my network at every level (board, co-founders, executives, staff, and volunteers), volunteered for 12 months then spent 18 months finding the person who could lead it day to day, and promised to cover payroll if we ever came up short. That was one uncomfortable financial guarantee but it gave me financial motivation to help raise capital.. Because I was a co-founder, there were sleepless nights in the early days when there were challenging moments.

Nineteen years later, OneGoal is a national organization.

The nonprofit world is not short on money. It is short on operators who know how to build. You already know how, and I encourage you to use those skills to make the world a better place.

Jeff Nelson is the co-founder and former CEO of OneGoal, where he now serves on the board. He teaches social innovation at Harvard.

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