Alex Yastrebenetsky is an Entrepreneurs' Organization (EO) member in Cincinnati and founder of InfoTrust, an award-winning digital analytics consulting and technology company helping marketers use data to make smarter decisions. The InfoTrust Foundation undertakes charitable events quarterly, including its annual Basket Brigade, which is providing nearly 2,000 Thanksgiving baskets in 2018. We asked Alex how to start a charitable foundation. Here's what he said.
"The most important lesson of entrepreneurship is to commit to something significant beyond yourself because you can fail if you are doing it for yourself, but you cannot fail when you've committed to giving to others."
Evans Nwankwo embodies those inspiring words. A native of Nigeria, Evans shines as a perfect example of the American Dream. He came to Cincinnati at age 19 and started Megen Construction 25 years ago. In 2005, he launched Nuway Foundation, which is dedicated to providing HOPE to Nigerians:
- Health: Building hospitals in Nigeria, paying for doctors, nurses and medical equipment including incubators that save premature babies.
- Opportunity: Microlending programs that provide zero-interest loans help entrepreneurs. Repaid loans go back into a fund that supports additional entrepreneurs.
- Pure water: In the US, we may not appreciate the luxury of drinkable water at the turn of a tap. Nuway installs water pumps, so people no longer need to walk miles for a few gallons.
- Education: Renovating schools and paying teachers' salaries provides access to education, the key to improving lives. Evans' dream is for graduates, especially STEM students, to return and teach the next generation.
In its thirteen years, Nuway Foundation has become one of the most successful private foundations in Cincinnati.
We sat down with Evans to brainstorm the steps for launching a private foundation. Here are seven tips to start you on the path to giving back in a big way:
1. Everything begins with "Why"
Launching a foundation can be challenging--especially if you're also actively running your main business. You'll wake up some mornings thinking, "What did I get myself into?" That's why you have to find your passion--your Why--and understand why it drives you. It comes down to pull vs. push motivation. Tony Robbins says push wears you out, but being pulled toward your vision will carry you through even the most difficult times.
2. Get your team in place.
Legally speaking, you'll need a board of directors, but it's even more critical to surround yourself with people who share your passion and are willing to invest time and energy into moving it forward. Here's what to look for in a foundation board:
- Strong connections with both the local community and the community you'll serve.
- Highly resourceful people: Even if you seed the foundation with enough capital that you don't need to worry about operating budget, you still want to maximize impact.
- Access to donors
- Doers: People who get things done are, by definition, all very busy, so recruit doers who can also carve out enough time to contribute.
3. Create your Vivid Vision
Executive coach Cameron Herold describes Vivid Vision as visualizing your success, getting it on paper and making sure that stakeholders see what you see. It's one thing to want to help people in Nigeria, as Evans does. What drives his success is that he can even define what it looks like three years from now--how many villages they will help and how many hospitals they'll build. Once you can visualize success, your mind will find a way to achieve it. Use your Vivid Vision to find people who share your vision, especially board members.
4. Attaining 501(c)(3) status is difficult
You'll need knowledgeable professionals to gain 501(c)(3) status (or the appropriate designation in your country) and allow tax-deductible donations, but it's a critical hurdle you must overcome. You can save the foundation significant operating expenses if these professionals volunteer their services or are on your board. However, in many cases, it's worth paying professionals who will make all the difference in the areas of:
- Public relations and media connections
5. Create early wins
Because the 501(c)(3) process is time-consuming, consider moving forward before you're fully approved. Focus on early wins to see how much you can accomplish with your own resources. Raising money is important, but your goal is not to raise money, your goal is to change lives, so focus early successes in the most impactful way--they'll often help you attract future donors.
6. Understand the opportunity cost of your time
When both actively running a company and a foundation that conducts fundraising and other projects, you must understand the opportunity cost of your time. Too many entrepreneurs who delegate tasks in their businesses try to do everything themselves in their foundation. Outsourcing and delegation are key. Especially if you're the largest donor, focus on earning a business profit. How much more can you earn and donate to your foundation if you offload all of the operating and even some fundraising aspects of your foundation to a part-time professional?
7. Determine your strategy
Once you're up and running, decide what is most important for you:
- Long-term legacy and sustainability, or
- Maximizing short-term impact and using the results to attract more capital to support longer-term growth.
Either way, congratulations are in order: This is a good problem to have. You are well on your way to running a successful foundation!