The Nonprofit Hero Factory: Episode 17

How a Nonprofit Increases Impact Through Innovation with Sarah Lee

In this Episode:

What role should innovation play in fulfilling your nonprofit’s mission? How do you justify allocating precious resources to technology and moonshots versus on-the-ground work?

Sarah Lee, COO of New Story, joins Boris to talk about how nonprofits can leverage technology and innovation to create a great impact on the world.

Whether you’re a small community-based organization or a Silicon-Valley-based Y-Combinator graduate like New Story, this episode is guaranteed to inspire some conversations at your organization.

Listen to this Episode

[00:00:18.580] – Intro Video
Welcome to the Nonprofit Hero Factory, a weekly live video broadcast, and podcast. Where we’ll be helping nonprofit leaders and innovators create more heroes for their cause and a better word for all of us. Da-Ding!

[00:00:20.450] – Boris
Hi, everybody, welcome back to the Nonprofit Hero Factory. We’ve got a fascinating guest today who is part of an amazing nonprofit that I only recently discovered and came across. But I love what they’re doing and I love how they’re doing it. Her name is Sarah Lee. She is the New Story COO and Sarah’s bio is kind of impressive. She is the Chief Operating Officer at New Story, the organization pioneer solutions to end global homelessness. Since joining the team five years ago, New Story has built more than 2500 homes, raised more than 50 million dollars, 3D printed a community for families in Mexico and has been recognized by Fast Company as a “Most Innovative Company” in the nonprofit space three years in a row.

[00:01:06.080] – Boris
Sarah is a curious, creative who finds joy in improving, building and shaping ideas. She strives to find the unlikely solution, celebrates unique concepts and brings diverse ideas to a number of brands. Sarah describes her superpower as connecting dots through the organizations— I’m sorry, connecting dots through the organization and our networks for maximum impact.

[00:01:27.830] – Boris
So let me bring Sarah onto the show to tell us a little bit more about her and her story.

[00:01:32.750] – Boris
Sarah, Hi.

[00:01:35.420] – Sarah Lee
Hi Boris, excited to be here.

[00:01:35.420] – Boris
Welcome to the show.

[00:01:36.410] – Boris
Thank you. Thank you so much for joining us today. As we were talking earlier, I told you, I’m a huge fan of what you guys have been doing and how you’re doing it. I’m excited to break it down and get as much for our audience that they can incorporate into their own work as possible. But before we even do that, tell me a little bit about you. What’s your story besides what I read in your bio?

[00:01:58.400] – Sarah Lee
Yeah, absolutely. So I’ve been on the New Story team for almost five years now. And prior to joining New Story, I worked in digital marketing. So I had been in digital marketing for about seven years and was a partner at a digital marketing agency here in Atlanta, where I am based. And really got to the point in my career where I was looking for what was the next challenge. Right? I spent seven years really trying to understand how to influence different brands through branding and digital marketing practices, and wanted to devote more time to one singular brand instead of touching so many.

[00:02:34.670] – Sarah Lee
But I didn’t necessarily think I want to go to nonprofit space. Right? I did know that I was working a lot of hours and really burnt out. And I knew that ultimately I didn’t care if the shipping logistics company that I was doing digital marketing for succeeded or not. I wanted something that I felt more connected to and felt like I really would care if it existed or didn’t exist. And I had followed along New Story since the beginning. I had known one of our co-founders and our CEO, Brett.

[00:03:09.440] – Sarah Lee
We had gotten to work together just a little bit while I was at that digital marketing agency and really respected his leadership and his thought process and so, I had seen New Story when it was just an idea. I saw New Story when they were accepted into Y Combinator. And so at about a year and a half, two years into the organization, I was at that same point in my career where I was looking for what was next. And I reached out to Brett, the CEO and said, “Hey, would you ever hire someone in Atlanta?” They were based in San Francisco at the time and we started the conversations. And so, I joined to really kind of oversee and rethink the donor experience.

[00:03:44.840] – Sarah Lee
Until that point, there were only five people on the team and they were all thinking more about our on-the-ground work or how we were using technology. And so I came in and was really able to think about how are our donors experiencing what we were doing and the impact that we were able to have by them partnering with us? And since then, I have bounced around to quite a few different roles from donor experience, then I started overseeing the brand as a whole.

[00:04:12.920] – Sarah Lee
So think events, press, marketing, design, video, growing our team and our brand team, which has been a really important part of our growth and really our ethos as an organization. And then I stepped into overseeing what we call growth as a whole. Right? Which is everything I just talked about, as well as our fundraising. And then just in January, like you mentioned, I stepped into the COO role. So really, as the organization has grown, I have been super fortunate in being able to help grow the team, grow our systems and processes and programs.

[00:04:48.230] – Sarah Lee
And I focus really mostly on kind of everything stateside. Right? So all of the kind of fundraising and programmatic and how we’re building our brand and how people engage with us has really been my sweet spot and is what I know and love.

[00:05:04.460] – Boris
And that’s all of the things that we love to talk about on this show.

[00:05:08.840] – Sarah Lee
Great!

[00:05:08.840] – Boris
I love that you have a marketing background, but you were looking for something that had some deeper meaning, some deeper fulfillment, rather than just going to any company. Recently, I had Matthew Quint, who is the director of the center, the Center for Global Brand Strategy at Columbia University, and one of the things that we talked about was, nonprofits kind of have this advantage where they’re able to recruit talent based on the fact that there is an affinity for the work. There’s a feeling that I’m doing something more than just getting a paycheck.

[00:05:44.640] – Boris
These days, though, a lot of companies are aligning themselves more and more with social causes in one way or another. And that competition is kind of increasing. What I love, one of the things that I love about New Story, is that it seems like you guys are not just competing with nonprofits. You’re out there actively competing with any other type of company to do great work, to get donations, to make an impact.

[00:06:09.420] – Boris
Is that part of your vision of how nonprofits should work, that you should be competing for talent, for money, for everything else with for profit corporations as well?

[00:06:21.120] – Sarah Lee
It really is. And a lot of it comes down to frustrations that I think all of us have experienced with the nonprofit space. Right? And I think that a lot of those frustrations boil down to the fact that often nonprofits are held to totally different standards. Right? It’s “The oh, well, I didn’t get what I expected or the website looks terrible or, or…” Right? There’s all of these different things and we think, “Oh, well, it’s OK because they’re nonprofit.”

[00:06:48.390] – Sarah Lee
And so from day one and it’s true still today, New Story really does try to think, “what would anyone expect from an excellent brand and how can we do that same thing even though we’re a nonprofit?” Right? And so you’re absolutely right.

[00:07:08.970] – Sarah Lee
We try to compete with startups for the team and the people on our team. We try to compete with events that our donors would go to, whether they are nonprofit events or not, and really having that lens of excellence through everything we do. And then, of course, pairing that with the impact that we have is the ultimate combination and is what gets people really excited and keeps them around for a long time.

[00:07:30.050] – Boris
That’s so awesome. So you guys started out—I watched the video on your website and it’s a great story, by the way, your origin story, as we call it. And in there, it talks about how the founders got accepted into Y Combinator, which is very unusual for a nonprofit. First of all, very few nonprofits have ever even attempted to enter Y Combinator, or much less be accepted. But very few nonprofits would even think, “oh, you know what, let’s go to a tech startup accelerator.”

[00:08:01.520] – Boris
What’s behind that? And how has that been baked into your DNA?

[00:08:08.240] – Sarah Lee
Yeah, you’re absolutely right, there are not a lot of nonprofits that are thinking that way, and a lot of it does come down to the kind of standards or how you’re thinking about the types of people that your organization is attracting, whether those types are donors, the people that you’re serving, team, any of the above. And so, New Story from day one very much was how are we setting ourselves apart? And so as the co-founders got accepted into Y Combinator, I think one of the things that really cemented our ethos as an organization that has benefited us greatly even to today, is this idea of the same or higher standards.

[00:08:46.940] – Sarah Lee
And so at Y Combinator, for example, you have insane goals that you have to hit during this really short period of time. Right? And so the goals that Airbnb had during their cohort of Y Combinator, it was the same thought process for the goals that our team had. It wasn’t, “Oh, they’re a nonprofit, so they can have half the goals. They don’t have to think about these things.” It was the exact same standards that the team had to rise to and figure out how to make it work.

[00:09:14.720] – Sarah Lee
And so you’re absolutely right. I think a lot of how our team thinks about the problems we’re solving thinks about how we’re growing the organization is from this lens of just like anybody else, just like any other company. It just so happens that our profit, revenue, whatever you want to call it, is our impact that we’re able to have around the globe.

[00:09:35.210] – Sarah Lee
And we think that ultimately we’re able to have more of an impact by having this ethos to the organization and having this value for how we think about our brand and our impact and how our solving problems and making sure that that is aligned with best-in-class business principles and practices, not just best in class, nonprofit principles and practices.

[00:09:58.190] – Boris
And just be totally clear, you guys are not, like, a software company. You’re not, because I’m sure there are nonprofit organizations that are not just tech-enabled or tech-empowered, but they they’re focused on building software or providing online services. That’s not you guys. You guys do actual physical, you know, dirty, hands dirty on the ground, work, building homes. And yet you are starting with or a lot of times focused on the technology that’s going to help you get there. Is that right?

[00:10:32.000] – Sarah Lee
I will say that is true, but it is actually both. So we do have a software team that is building software, right? They are building software for our impact on the ground. Right? So let me let me give you an example. So in the homes that we built—we build—early on, we realized, “How are we measuring this impact more than just a number of homes built on a wall?” Right? We really wanted to understand what was the impact of a home.

[00:10:59.810] – Sarah Lee
But the communities and locations where we work are very remote, right? There’s rarely cell service, definitely not Wi-Fi on our phones that we can easily collect that information. And so our local partners, were taking a stack of paper. They were walking home to home, collecting all the information, and then they were getting back to the office. Hopefully it didn’t rain or a big gust of wind come in between because if, so those papers were done for. Getting back to their office, taking that information, converting it to be digital. But all of the information is in a different language, which then is being translated into English, and then we’re getting it to be able to analyze it.

[00:11:39.500] – Sarah Lee
And so our team saw, there’s a huge problem. It’s taking a ton of time, but it’s super important that we understand what is the impact, good or bad, so we can improve. And so our tech team was able to build a data collection tool that worked online and offline, and it was reducing the time it took to collect that information and get it into the correct hands by like, a hundred plus percent.

[00:12:03.740] – Sarah Lee
Right? Like, it was just cutting everything into fractions of time. And so we look at that go, “OK, great.” What can what can our on the ground teams, what can our teams be doing when they’re not having to spend time on that? So you’re correct. There is the like very manual taking a cinder block, moving it, paying the people on the ground, everything that happens with actually constructing homes. And we’re consistently looking at that process going how can we improve this process with technology, hardware, software, processes for how it’s being done?

[00:12:39.950] – Sarah Lee
And that is really what gets our team excited, is how are we figuring out a wide variety of tools that we can put against this problem that we’re solving to try to improve it at every step?

[00:12:52.250] – Boris
That’s amazing that you guys think of it that way and look at the ROI on investing into technology to help you do even more of the actual on the ground kind of work. When you create these kinds of tools, is it, do you consider it your secret sauce or is it something that you try to disseminate out to as many other organizations or government agencies or whatever it might be.

[00:13:14.980] – Sarah Lee
It’s a really great question. So for the first four years of New Story—let me actually say something before that…

[00:13:25.030] – Sarah Lee
It is never a “keep it for ourselves.” Like we very much believe that nonprofits should not have intellectual property. If you have intellectual property as a nonprofit, you actually don’t care about the problem as much as you say you do because you should be trying to help anyone you can who’s also working on this problem. I say that because that really is our lens that we’re looking at this issue that we’re working to solve homelessness. Right? And we believe anyone who’s working towards that… we’re all going to have to come together and share every best practice and every secret sauce we have, because otherwise we’re never going to come close to impacting this one point six billion people.

[00:14:05.710]
So with that lens, our first four years, we thought that was going to be the answer. We thought the answer was going to be, “we’ll figure it out by being practitioners, by building these communities. We’ll see what the biggest problems are, we’ll create solutions for them, and then we’ll share them with every nonprofit, every government, anyone who wants to use it so that their work can be improved as well.”

[00:14:28.900] – Sarah Lee
What we found was that the adoption just wasn’t as simple as that. Right? Everyone has their own things they’re already using processes for. And so for for somebody to come from the outside and say, “hey, use this. Here’s why!” It’s pushing a boulder up a hill. Right? It’s really, really hard to engage in that way, especially when it’s like “We’re another nonprofit and we do this.” So that does add credibility, but it can also be really challenging.

[00:14:53.590] – Sarah Lee
And so it’s still very much something that we believe in and something that we’re consistently looking for.… What solutions are we using that others can use and utilize with as little friction as possible? But it’s not the number one goal like it, transparently has been previously with the organization. So I would say it’s like it’s a mindset, but it’s not the driving force and the leading force for us. Does that make sense?

[00:15:22.330] – Boris
Yeah, no, it absolutely makes sense. And I think that’s a great way of looking at it. To be totally honest. I think that sometimes nonprofits can use IP, for example, if that becomes a great way for them to not have to constantly be soliciting donations. If they put up an online course, for example, I think it’s OK to charge for that if they have certain tools that they develop that can actually save another organization a lot of cost and time to develop, and they do have some sort of licensing agreement so that they could keep innovating and keep iterating on those tools. Personally, I think that’s OK, but I see your perspective as well.

[00:16:02.230] – Sarah Lee
I’m actually totally with you. I don’t have an issue with them charging for it. I have an issue with them closing the doors to it. Right? So I’m totally with you. If they have figured that out, definitely charge other people for it. Right? If it’s still impacting the problem. The concern is when people start saying, “Oh, gosh, we figured out this tool allows us to build way more homes faster, allows us to do this thing with our donors that is just so amazing.” And then they’re saying, like, “I have to hide this from everybody else, because if they find out, they’ll be able to do more than us or steal our donors or whatever that looks like.” So that’s a great clarification, because you’re absolutely right.

[00:16:38.860] – Sarah Lee
People can and should be able to charge for it and get the revenue right and really grow the organization in that way, because that can be more sustainable for them as an organization to have that earned revenue component.

[00:16:50.890] – Boris
Absolutely. And I’m glad we could still be friends now. So, as I mentioned in your bio, you guys have been on Fast Company’s 10 Most Innovative Nonprofit Organizations. Actually, I guess one time even before you, because four out of the six years that you guys have been around, including 2021. And I’m wondering how much is innovation a necessity? How much is it a tool for you guys? How do you approach innovation and how do you constantly keep innovating as an organization?

[00:17:23.980] – Sarah Lee
Yeah, it’s a good question and it’s a challenging one right now because I think that everyone loves the word innovation. Right? Everyone from the most boring company you can think about to the sexiest one alive. They’re all wanting to take the word innovation, stamp it on their website and say, “We’re doing this.” And we’ve had to ask ourselves questions around, like, why does it matter? Right? And how does it fit within our organization? And what we consistently come back to is, for people trying to solve the world’s biggest problems, you have to consistently be thinking about it in different ways. Right?

[00:17:58.840] – Sarah Lee
And that’s ultimately what innovation is. Sometimes it’s really, really sexy. You said at the beginning, 3D printing homes, that’s really sexy and sure, everyone can look at it and say “Yeah, innovation.” And sometimes it’s small changes to processes or programs or systems that do not nearly have the same sex appeal, but they actually maybe have more impact in how those innovations are used. And so it is definitely an ethos of the organization and something that we are continually looking at.

[00:18:30.230] – Sarah Lee
Where can we inject more innovation and what does that actually look like? But the reason for that is because we know ultimately it’s going to drive more impact. It’s going to allow us to impact more families because the problem is so complex and it’s so, so hard. Right? And so it kind of goes back to that quote that I’m sure you heard around. What is it? “Doing the same thing and expecting different results is the definition of insanity or stupid?”

[00:18:58.900] – Boris
Yeah, it’s often attributed to Einstein.

[00:19:01.100] – Sarah Lee
Yes. And so it’s how are we continually looking at what we’re doing and thinking, how can this get better and how can we ensure that there’s nothing sacred? Right? I’m sure you know, many nonprofits and businesses as a whole where there are things that are sacred, “We’ll change everything, but we won’t change this.” And we’ve really said, outside of our mission and what we’re trying to do, nothing else is sacred and we’re willing to reinvent and rethink about anything else that’s getting us closer to that mission.

[00:19:31.040] – Boris
I’m so glad you said that outside of your mission. Right? There’s this core. There’s this is, at the heart of your mission is your heart, essentially, and that doesn’t waver. But the way that it gets expressed, the way that it develops and is affecting the world can change from year to year. For example, this last year, you guys who have been innovating ways to build homes better, cheaper, faster, suddenly got recognized for doing something completely different, which was figuring out what was it, collecting data on rent?

[00:20:06.740] – Sarah Lee
Yeah.

[00:20:07.610] – Boris
What was that pivoted up and how did that come out?

[00:20:10.370] – Sarah Lee
I know you’re looking at it going, Sarah, explain this to me because you just said mission, but where does it fit in and how? So, you know, March of 2020. We, like everyone else in the world, were looking around going, “suddenly, everything is different.” Right? All of our on the ground construction and community builds were completely paused, couldn’t be constructing in any of the countries where we were working. We were pausing, soliciting our donors during this time that was very volatile for everyone.

[00:20:40.280] – Sarah Lee
And so pretty much our whole organization had about a week and a half, two weeks where we’re all looking at each other going like, where do we point this? Right? What are we doing during the season? And we asked ourselves the question. Whenever we get out of this season, whether the season is three weeks, like we all thought it would be in the beginning or three months or three years, what are we going to look back on and be really proud that we use this time for something that was meaningful and went within our mission and our team skill set?

[00:21:14.180] – Sarah Lee
Right? And so really quickly, we started seeing and hearing reports of and making sense that we were going to be having a major issue in the States of people falling into homelessness. Right? People were losing their income. Families who were already very vulnerable, now were in a whole different category. And so we said, what if we collectively could shift our focus and we can’t focus internationally right now and keep families in their homes? Right?

[00:21:44.850] – Sarah Lee
Pioneering solutions to end global homelessness, part of ending global homelessness is making sure that number does not grow.

[00:21:51.360] – Sarah Lee
And so we really quickly focused on a rent relief program. We spun it up and about 10 days from the initial concept to it being public. And we were able to fund rent for, gosh, it’s been a long time since I have thought about this, number. I think about two hundred and thirty families. We covered the rent for them for three months, which really was that tension point of losing their income and being able to figure out how they were going to take care of their family from there.

[00:22:19.800] – Sarah Lee
And so during that, to qualify those families, we used our impact data tool that we were already using internationally to measure impact. And it allowed—that’s part of why we’re able to spin this up and deploy it so quickly is because we really quickly could validate families. We could validate their income pre-covid. We could validate that they had lost that income. We could validate the size of their family and some of these other criteria that we had for the support that we were providing.

[00:22:47.880] – Sarah Lee
And I don’t know how the last year has been for you, but I think it’s been challenging for a lot of people. And it really gave our team an opportunity to rally around something that was really beautiful and really, really did impact so many families during one of the hardest seasons of many of their lives.

[00:23:08.670] – Boris
I think that’s incredible that you guys were able to do that. It’s what in nonprofits and not in nonprofits and startups is often called a pivot, right. Where you can’t keep going the direction that you’re going for one reason or another. Hopefully, you guys are going to be pivoting back as we hope covid dies down around the world. And so one of the technologies that you are famous for is 3D printing. Now, my nephew has a 3D printer and he’s great with it. He’s amazing with CAD and everything else technological. But what made you guys think you could 3D print an entire house?

[00:23:46.010] – Sarah Lee
Right? How does anyone think such a thing? So we try to get our whole team together at least once or twice a year for an all-team-summit. We have offices in Atlanta, San Francisco and Mexico City. And so it’s really important that we’re together once a year to really be able to collaborate and grow together. I promise that’s relevant for the question that I’m answering here. And so at those, often we do moonshot sessions. That, essentially, we think about what are our greatest obstacles in the problem that we’re trying to solve and what are just the most outlandish ideas for solving those?

[00:24:20.860] – Sarah Lee
Right? And one of the biggest issues we face is, cost and the speed of building at home. Homes are really, really expensive intervention. Right? I’m often very jealous of water and food and these things that they’re ongoing, but they are much cheaper cost for intervention. Right? And so as we were looking at that challenge, one of the ideas that somebody threw out was what if we could 3D print homes, right?

[00:24:47.120] – Sarah Lee
We would cut down on waste. We would cut down on the amount of labor that’s taken for the homes, would cut down on all of these different things. And it should be a whole lot faster. Right? Because you don’t have the same issues. You don’t have the same complexities. And so we really liked that idea and we were all really drawn to it. And so we’re like, let’s just explore what it could possibly look like.

[00:25:08.990] – Sarah Lee
And about that time, our CEO got connected with a company out of Austin, Texas, who was just an idea at that point. But they really had reason to believe that they could pull off 3D printing homes. Right? The technology behind it. And so we met with them and said, what would it look like to try to do this together? Right? To try to take this technology, this innovation, that could shape the world and every socioeconomic status and type of person—like homes impact everyone. And what if we could take that technology instead of it benefiting the lower socioeconomic last, we were impacting them first. Right?

[00:25:51.650] – Sarah Lee
And so we partnered with ICON out of Austin and we did the first home in Austin, Texas, to prove it was possible. And that was the first permitted 3D printed home in the world. And then we took the machine and the teams down to Tabasco, Mexico, where we completed a community. And it is… It’s really, really something that I think both the teams are so proud of because it was so hard, because it is so outlandish to think that that could actually become a reality.

[00:26:25.590] – Sarah Lee
Right? And it’s something that so often we get at New Story. People are like, oh, yeah, you’re the 3D printing company. And it’s hard to not fall into that because it is a fraction of what we do. Right? It’s a it’s a piece of the puzzle, but it’s definitely not the whole thing. But ultimately, this technology now has greatly impacted families’ lives and in a way that it never would have otherwise. The last thing I’ll say there, Boris, have you actually, I don’t think I sent you a link for it. Have you haven’t seen the Apple TV docu series on it yet, right?

[00:26:57.720] – Boris
No.

[00:26:58.590] – Sarah Lee
So Apple TV actually has a series called “Home” and each episode they follow an interesting home. Right? So it is the most beautiful, lavish homes you could ever imagine. And they also followed the journey in this 3D printed community. And so they followed it for about two years through many obstacles and many learnings. And they followed some of the families who are actually going to be moving into those homes.

[00:27:26.370] – Sarah Lee
And so if anyone is interested, if they’re having a hard time wrapping their head around, what the heck is 3-D printing a home even look like? How does that happen? The series is called “Home” and it’s the season finale of that series is New Story and ICON in this 3D printing community.

[00:27:42.330] – Boris
So that actually dovetails perfectly into what I wanted to ask you about next, which is it almost feels like this, or does it feel like this innovation strategy is actually leading to press coverage? It’s certainly getting your attention in plenty of online publications. I didn’t realize that you were also featured in that series, the docu series. Is that part of your strategy? Is that something that you guys rely on and shoot for?

[00:28:12.390] – Sarah Lee
Boris, I wish I had a better answer for you that was like, yeah, when we started we were like, “Oh, and imagine the exposure we could get and we’re going to get all these donors and all of these things.” That was, I think, something we knew people would care about, but we definitely did not expect, just how much people would care about it and how much attention it would garner for us. Right? And it is something that has been massive for our organization.

[00:28:38.100] – Sarah Lee
We often say now if we were to look back and say it was a complete failure. Right? And “We could never do it again, it wasn’t going to work,” like anything. That’s not the case but even if that was true, it still would have been worth it because of the connections we were able to make from it, from just the inbound amazing new donors who are partnering with us in this journey. And so it absolutely has been an incredible benefit and is how so many people—I’m consistently surprised on people like, “Oh, yeah, I’ve heard of you.” “Really?” They’re like, “Yeah, the 3D printing.” I’m like, “Oh yes.”

[00:29:12.930] – Sarah Lee
And so, yeah, it’s been hugely, hugely beneficial, but was not the ultimate driver. But I will say now we have seen how much people care about nonprofits thinking about issues differently, and it has really proven how hungry the world is for impact and innovation really coming together. Right? And so I think that’s a great encouragement for anyone who’s watching or listening to know that it’s often easy to think like, will anybody care and will it be worth it?

[00:29:47.640] – Sarah Lee
And so, you know, I’m sure you have experiences in different organizations that you work with. That, yeah, people are hungry, hungry for how to utilize innovation to drive a greater impact. And ultimately, that’s what they care about and that’s what they want to get behind.

[00:30:04.230] – Boris
So, yeah, absolutely. There’s a constant struggle with nonprofits who are, look, I don’t think it’s a secret that most people consider nonprofits behind on technology, not leading the way in technology, not leading the way of innovation. And there’s also this concern about, you know, if we’re spending money on that, then we’re not spending money effectively on our programs right now, today. And there’s you know, there’s a scarcity mentality which is largely historically justified.

[00:30:36.180] – Boris
If a nonprofit doesn’t get all the donations that it needs, then it can’t do the work on the ground. And if it doesn’t allocate enough of its resources, then it looks bad on them. And so they get fewer donations and it’s this scary potential cycle that they are worried about falling into.

[00:30:52.170] – Sarah Lee
Boris, I want to say I think you’re absolutely spot on. It’s like such a fear as an organization. And I want to share two things that have been really helpful for New Story as we have wrestled with those same questions. Right? The first one is as we were vetting this 3D printing project. Right? And we were looking at a scope of work and what it was going to take to do this. And we’re going, “Can we spend this money on this?” Right?

[00:31:16.930]
And ultimately the question or philosophy that we used in making that decision is that it felt irresponsible not to try. And that sometimes these big risks that nonprofits are faced with, there is definitely risk. But if it works. You have a responsibility to try it, right? And of course, there’s balancing how risky it is and all of that kind of stuff, but ultimately that that philosophy of it feeling irresponsible not to try is what helped get us over the hump to, like, we have to try this now.

[00:31:54.230] – Sarah Lee
And part of the reason we were able to do that is how our organization is set up. And it is a benefit that we’ve had thus far in being able to invest in or in innovation that not all organizations have, and that is that we have a hundred percent promise. Which means when anyone donates with New Story, a hundred percent of that either goes to homes or to our overhead and operational expenses, which includes our innovation. And a lot of people ask me about that hundred percent model. Right?

[00:32:25.790] – Sarah Lee
And is it harder to fundraise? Is it easier to fundraise? How in the world do you get people to care about covering the cost of your operations? Is that a question you get often?

[00:32:34.820] – Boris
All the time. All the time.

[00:32:36.560] – Sarah Lee
Exactly. So and one of the ways we’ve been able to make it sexy and get people excited about covering the operations is that “That’s where the innovation lives.” Right? We can’t have our donors who, hundred percent of their donation is going to build a home, pay for the R&D on a 3D printer.

[00:32:57.290] – Sarah Lee
Right? And so it has allowed us to attract a type of donor who is excited about those risks. And they understand that they’re not all going to work. But if you invest in the correct ones, you are going to find ones that do have an outsized impact. And that’s been really important because it allows us to attract a type of donor that is excited about that and not a type of donor that’s going to say, no, you can’t spend that money on that.

[00:33:23.990] – Sarah Lee
It has to, you know… Ninety eight cents have to go to the home. And it is just a different thought process. Right? I think I’m curious where you land on it, because I think a lot of people are kind of like one path or the other. Right? Hundred percent model. Or you should keep it all together. And donors should just start to expect that nonprofits need to invest more in marketing and all of these other things. But it has been hugely beneficial for us.

[00:33:49.700] – Sarah Lee
Where do you stand on it?

[00:33:51.260] – Boris
I don’t know that there’s one right way or the other. I know that personally. I don’t think nonprofits should be embarrassed by their overhead or apologetic about it, as long as enough of the funds do go towards actual services. So if you’re spending a lot of money on talent and marketing to get the best folks in, but that is producing a certain return that you wouldn’t get otherwise, I think it’s totally justified and fantastic. On the other hand, what you’re talking about is a slightly different model that I also love, which is, you’ve got different donor avatars.

[00:34:26.150] – Boris
There are different people who will support you for different things, and both in your case, especially both are true to the mission. So if you can sell them on—and it doesn’t need to be salesy, of course, but if you could give them a vision of—a better future by investing in your team and your development of technology, I think that’s fantastic. And there are a lot of people who are excited by that about really not just helping one person, which is, we know, super effective when it comes to marketing and driving donations, putting a face, but actually creating something that’s going to outlast generations, perhaps because it’s an investment in technology or a vision.

[00:35:09.920] – Boris
It’s similar to a capital campaign that a lot of organizations will run to get a new space. Right? You sell people on the vision of what that’s going to look like. And that is often separate. So I think an innovation campaign and an innovation fund within an organization—and maybe that starts with your board, maybe there’s one or two people on your board who are specifically innovation oriented that can bring others in as well. I think that’s super powerful and a great recipe for success.

[00:35:37.640] – Sarah Lee
I’m with you and I think you’re spot on in that there is no right or wrong. Right? It’s what works best for your organization and how can you take that path and really utilize it for your mission the best.

[00:35:50.360] – Boris
So I wonder, I have so many things that I want to ask you about Sarah, but you mentioned these moonshots, which I love Peter Diamandis’ book “Bold”, which talks a lot about moonshots and X Prizes and all those kinds of things. A lot of times moonshots, well, they missed the moon. And unlike that expression, what is it? “If you aim for the moon and you still wind up among the stars,” no, you actually wind up drifting endlessly in space and die.”

[00:36:18.500] – Boris
So how do you guys handle that? Have you had projects that failed? Do you have an MVP process that you take them through? What’s your thinking behind that?

[00:36:29.150] – Sarah Lee
Yeah, for sure. I would say the biggest driver for thinking behind that is we know. Everything is not going to work, so nobody coming into it has the expectation that everything is going to work. Now, that said, we really try to drive our team in the thought process of act as if this has to work right. I do think it’s easy for people to hear not everything is going to work, which then makes them think it’s OK if it doesn’t work. Right?

[00:37:00.820] – Sarah Lee
And so it is an interesting balance between knowing that not all of the experiments you try are going to work and making sure you are doing everything possible as if it had to work. So that is somewhat of the lens for how we think about that, how we invest in different things, how we try to set our team up for some of those things. And we definitely have had things not work. Right? So one great example is a little bit of what we started out in the conversation, this idea that we were going to be able to take our software and tools and get adoption from governments and other non-profits.

[00:37:36.130] – Sarah Lee
And we were like, of course, this is going to work. Right? And so we had a team. You could think of them as a sales team. Right? Who was just focused on adoption, government, nonprofits and where all these people were. And ultimately, it didn’t work. Right? And we had to look at it and say this is no longer worth the organizational effort that it’s taking. It is not in alignment with the results that we’re getting.

[00:38:00.270] – Sarah Lee
Right? And so maybe two principles or philosophies that have been helpful for us in making some of those decisions is, number one, have in mind, “What are you trying to get out of this idea?” Right? You have an experiment that you’re running. What is the goal, of course, to help everyone starting with a goal, with any experiment. But step one, make sure you have the goal and step two, have a lot of clarity around when you will stop working on it.

[00:38:29.920] – Sarah Lee
When I think about some of the mistakes New Story has made, I think a lot of them have been centered around trying to force things for too long, when if we have had more clarity in the beginning—when will we stop? Right? Or if we can’t reach this by this time, we’re going to know that it’s not worth it or that we shouldn’t keep investing time, money, energy into it—has been something that we have learned the hard way in spending too much time, energy on things, and I think is something we’ve gotten a lot better at now as we think about what does experimentation look like as we move forward.

[00:39:08.830] – Boris
So essentially you’re setting expectations and you’re setting milestones perhaps with clear targets of you’d like to reach this by this time. And then if you’re not reaching them, then you have a basically an easy out rather than. Oh, well, maybe if you just try a little further, a little harder and getting into the whole sunk cost fallacy where it’s essentially good bandwidth after bad or good, good resource after bad.

[00:39:33.070] – Sarah Lee
And it’s so hard to know. Right? We often talk about, everyone says “You’re just right on the brink of having a breakthrough and you just got to keep going no matter what.” And so especially as a nonprofit, when you taking longer to decide about something is directly impacting the families that you work with, right, or whatever your intervention is. So for us, those decisions are really hard, right? Are we right on the brink of something? And we just need to have more patience and keep pushing? Or do we need to totally stop it? And what is at risk or what is the opportunity with that decision? It can be really hard, right.

[00:40:10.370] – Sarah Lee
And so I think that knowing that it’s really hard and being comfortable and OK with knowing there is no perfect answer can be really free for people, because I think a lot of times we look at it and think there is a perfect answer. I just have to find it when a lot of times there’s not. You just have to make a decision

[00:40:29.050] – Boris
Right on. So speaking of bandwidth and resources, not a lot of nonprofits are in your fortunate position to in this case, of course, be centered in Silicon Valley and to have the tech and the resources around you to incorporate into your everyday lives as an organization. For those nonprofits that don’t have that at their core or from their founding moments. What? Would you advise if you were to tomorrow go to another organization, that is doing amazing work and very important that you would still feel equally fulfilled by but doesn’t have that technology background?

[00:41:15.120] – Boris
How would you start? You’re a COO… How would you start them on the path towards innovation? What could they be thinking about and looking at today in terms of that and adopting new technology?

[00:41:26.910] – Sarah Lee
So there’s two things I think I would primarily advise people to think about or really use for how they are getting themselves on that path to utilizing more technology, innovation, whatever you want to call it. The first one is that you don’t have to overcomplicate it. I think a lot of times as a nonprofit, it’s hard to think about technology, new innovation, any of those things, because it feels like a total uphill battle. It feels like we’re going to have to stop everything we’re currently doing and do things that are totally new and different.

[00:42:01.470] – Sarah Lee
Let me give you an example of that to make it really practical. So Bitcoin and cryptocurrency is obviously something that tech space in the world as a whole is very interested in and talking more and more about increasingly over the years. And so in the beginning, what it looked like as a nonprofit to think about cryptocurrency was like accepting it as a donation. And that was like, all right, we’re having innovation because we’re accepting cryptocurrency donations. Right? OK, that’s something that is relatively simple to set up. Doesn’t require anything crazy.

[00:42:33.390] – Sarah Lee
But taking that to the next level, Charity Water does a great job of this. In the last week, they unveiled this what are they calling it, like a Bitcoin trust where they thought about how can we really adopt Bitcoin in drawing a new audiences in our work and think about this in a really innovative way. And so I think most of our brains, my brain goes to, OK, innovation, bitcoin, cryptocurrency, you’re going to accept the donations and then you’re going to pay your vendors and then you’re going to track via the block chain every single step of building, whatever it is you’re building.

[00:43:06.750] – Sarah Lee
And of course, anyone is paralyzed by that because it feels like a ton of work. And so what Charity Water did is they said, “OK, how we’re going to be innovative with cryptocurrency is that we are going to take and ask for / solicit Bitcoin donations and we’re going to hold them for five years.” Because what is the cryptocurrency community care about? They care about that currency staying in the market. Right? And so just immediately selling it is not interesting to them.

[00:43:33.120] – Sarah Lee
And so to me, that’s a great example of that. Didn’t require a whole new team or 10 months of vetting it on the ground. They were able to quickly adopt an innovative solution for how to use cryptocurrency in their organization in a way that was simple but very unique in the market.

[00:43:56.280] – Sarah Lee
And so one thing I would encourage people that—the too long didn’t listen summary, there—would be to think about things simply. Don’t overcomplicate it and feel like you have to take it to the furthest element from step one.

[00:44:09.840] – Sarah Lee
The second thing I would really encourage people to do, and I think is something that has been one of, if not the greatest asset New Story had and that is asking other people for help. We are the very first people to cold email somebody who should never be talking to us and saying, “Hey, we’re a nonprofit, we’re trying to do X, Y and Z. Will you give us advice?” Right? And that has opened the doors to some of the top CEOs, venture capitalists, private equity people that we never would have had access to otherwise and wouldn’t have been on our team.

[00:44:47.070] – Sarah Lee
Right? And so utilizing other people’s knowledge, I think also it both de-risks that and it takes some of the pressure off your team having to be the ones to do everything and figure everything out. I’m sure you can think of times in your career that other people’s advice has actually been what’s really turned a corner for you and changed things.

[00:45:08.050] – Boris
Oh, absolutely. And also asking someone for their advice, which I think you may have even talked about earlier in this very conversation, actually makes them feel like they’re involved, makes them feel invested in it, in whatever it is that you’re doing. Hopefully they already have an affinity for your mission. And may result in a whole lot more than just advice. It may result in investment, of course, connections and everything else. So I think that’s a great strategy.

[00:45:34.020] – Sarah Lee
Boris, I want to add something there. You’re spot on. And what we often say is people love what they helped create. So if I can cold email somebody and get them to give me advice and then I can follow up a month later and say, hey, look, we did what you said, they are much more likely to be lifelong fans and want to continue to help you.

[00:45:52.690] – Boris
Absolutely. So I want to be respectful of time and this is—every single second of this episode has been so helpful and so amazing, I think we could do another five. And maybe we can have you back on, that would be great. But for today, are there any tools or resources? And we’ll share all these in the show notes that you would recommend organizations check out to get started on their own journeys.

[00:46:17.960] – Sarah Lee
Gosh, I’m sure there are, I will say, a plug for something we did that I think will also help other people as we created a podcast last year called Founder’s Lab. And it really goes through the ins and outs of a lot of our founding journey in our first five years. And I point out that not because New Story is the exemplar that everybody should be looking at and doing exactly what we do. We made plenty of mistakes, but in that we talk about a lot of kind of the specific resources and really practical things that have been helpful for us.

[00:46:49.030] – Sarah Lee
So that’s probably the best one-stop-shop for people to get some of that advice and learnings and roadblocks and obstacles we’ve had along our journey.

[00:46:57.550] – Boris
You also mentioned a few books that I personally love, actually all of them. So I want to be sure that they get plugged as well and we will have them again in the show notes. “The One Thing”…

[00:47:07.090] – Sarah Lee
Yes.

[00:47:08.170] – Boris
“Atomic Habits” and those two are not that common in the nonprofit space that I think it’ll be great for people to open up and look what those are about. But one that is popular and deserves to be even more popular is “Start with Why”, Simon Sinek’s “Start with Why”.

[00:47:24.578] – Sarah Lee
Yes

[00:47:25.100] – Boris
So I want to I want to give clear plugs for those. So I always like to wrap up with as every story should every chapter break anyway, have a call to action. What call to action do you have for folks that may be watching or listening to this episode? What should they do besides go listen to your podcast and check out New Story? How can they connect with you? What next steps should they take?

[00:47:51.880] – Sarah Lee
I’m going to answer that in two ways. The first next step I think people should take is really personal, and that is really challenging themselves for what is the bold idea that they need to push forward with their organization. Right? Bold ideas attract bold people, and I think we need more bold nonprofits trying to solve these really hard problems. So that’s more of the billboard I would put out there for everybody watching or listening. And then if anyone is interested in connecting newstorycharity.org is our website at @NewStoryCharity on all social handles.

[00:48:24.210] – Sarah Lee
And I love to chat with people. So if there’s any places that somebody listening feels like they want to hear a little bit more or chat a little bit more about, I would love for people to reach out as well.

[00:48:34.560] – Boris
That’s awesome. And we’ll have some of your contact info and definitely your website on our show notes page. Sarah, thank you so much for all your time today. I’m so glad we could do this. And I love the work that you’re doing and the way that you’re approaching it. So thank you for making the world a better place for all of us.

[00:48:50.790] – Sarah Lee
Listen, thank you for letting me join. Hopefully people got some valuable information here and yeah, keep up the good work.

[00:48:56.820] – Boris
Thank you. Thank you, everybody, for joining us today. We’ll see you again really soon. So please subscribe so you get notified when there is a new episode out. And if you love this kind of content from amazing people like Sarah, please do give us a rating, give us a review, because that will help more people discover us online. Have a great day.

[00:49:17.550] – Sarah Lee
Thanks.

[00:49:38.010] – Outro Video
Thank you all for watching and listening to the Nonprofit Hero Factory, we hope this episode has given you some ideas and strategies for creating more heroes for your cause and a better world for all of us. Please be sure to subscribe to this show on YouTube, Facebook, iTunes, Spotify, or your favorite podcast platform and let us know what you think, by leaving a review.

Concepts and Takeaways:

  • 7:08 — Nonprofits should have higher standards, not lower. Having a lens of excellence in everything you do and pairing it with impact helps nonprofits compete and have an advantage when it comes to recruiting.
  • 11:39 — Necessity is often the mother of invention. Investing in a technological solution can have great effects on your ability to deliver services more efficiently, saving resources.
  • 13:25 — What is your responsibility when it comes to your intellectual property versus your mission? Should you keep it as your unfair advantage or share it with others?
  • 17:30 — Innovation doesn’t have to be as sexy as 3D printing homes. It’s all about what will drive greater impact.
  • 19:31 — Sometimes nonprofits face unforeseen circumstances that prevent them from continuing with business as usual. These “pivot” points are opportunities to reevaluate your mission in the lens of the current situation and come up with new initiatives.
  • 27:42 — Innovation can fuel publicity, which can fuel donations. Although exposure is not the ultimate driver, it is highly beneficial.
  • 33:51 — Nonprofits should not be embarrassed by their overhead or be apologetic about it as long as enough of the funds do go towards actual services.
  • 36:29 — Everything is not going to work, so nobody coming into it has the expectation that everything is going to work. But when starting a project, the New Story team acts as if this has to work.
  • 37:59 — Two principles for helping decide which ideas to pursue and when to abandon them: First, think of what are you trying to get out of this idea? Make sure that you have a goal. Second, have a lot of clarity about when you will stop working on that idea, such as a performance target or milestone that needs to be hit by a specific date.
  • 43:56 — Don’t overcomplicate things and feel like you have to take it to the furthest element from step one. Start small and test.
  • 44:46  — People love what they help create. Utilizing other people’s knowledge can de-risk your processes or ideas and take some pressure off your team having to be the ones to figure everything out. It can also create long-term advisors and supporters.

Action Steps: What Now?

  • Start implementing!

    Challenge Yourself

    We need more bold nonprofits trying to solve all sizes of problems in the world today. Challenge yourself and your organization to consider which bold idea(s) you need to push forward within your organization. Bold ideas attract bold people.

    Connect with New Story

    To connect with New Story and chat with them, you can visit New Story’s Website or connect with them on their Social Media Channels, @NewStoryCharity.

About this week’s guest

Sarah Lee

Sarah Lee

COO of New Story

Sarah is the Chief Operating Officer at New Story. The organization pioneers solutions to end global homelessness. Since joining the team five years ago, New Story has built more than 2500 homes, raised more than $50M, 3D printed a community for families in Mexico, and has been recognized by Fast Company as a Most Innovative Company (nonprofit) three years in a row.

Sarah is a curious creative who finds joy in improving, building, and shaping ideas. She strives to find the unlikely solution, celebrates unique concepts, and brings diverse ideas to a number of brands.

Connect with Sarah Lee