Nonprofits must innovate in order to survive, Ryan McCrary, founder of Great Outdoor Adventure Trips (GOAT), said at the Nonprofit Startup Talk Monday during Greenville Startup Week.
McCrary said most nonprofits see rapid growth right away but quickly stagnate. He said GOAT, a youth development organization for at-risk students, followed that format.
Nonprofits typically get funding from endowments or grants. But McCrary said getting an endowment is extremely difficult and grant writing is a time-consuming process with mixed results.
To continue growing, he said, nonprofits must innovate like any other company.
He said his nonprofit innovated by creating The Mountain Goat, a rock-climbing gym, as a side business where the profits would go to supporting GOAT.
The revenues from the gym help cover the overhead costs of running the nonprofit.
Finding funding can be harder for a nonprofit versus a traditional startup, McCrary said. “Banks will laugh at you if you ask for money as a nonprofit,” he said.
He said many people think that nonprofits can’t make a profit, but he said nonprofits can, and should, make a profit.
“The sooner you can make money from your nonprofit, the better,” McCrary said.
In contrast to a traditional startup, profits at a nonprofit are put back into the company’s mission rather than distributed.
Other than through the gym, GOAT gets most of is funding through a monthly donor group the organization created. The donor group grew 36 percent in six months, he said.
Because nonprofits don’t have stakeholders, the organizations can often have a lack of accountability, McCrary said.
People looking to start a nonprofit should also consider other options like joining a board of an existing nonprofit and helping it innovate or starting a for-profit business to do good.
“Social change stuff doesn’t have to be a nonprofit,” he said.
Events during Startup Week focused on the different aspects of starting a business and connecting entrepreneurs with resources.
David Rubin, a project manager at Johnson Space Center in Houston, said he is looking to move to Greenville and the week was a good way for him to see the startup culture in the area.
Ian Crook, who sits on the board of the Furman Youth Association, said the Nonprofit Startup Talk interested him because it looked at different funding perspectives.