Satisfying donors and potential donors is an age-old challenge that led Clevelander Adam Roth to turn his passion for working in nonprofits to creating Streamlink, a tech company aimed at creating software tools for nonprofits and the public sector to help manage operations and get grants. The two tools help nonprofit boards communicate with their organizations with more transparency and show funders and potential funders where the money is allocated. Watch video
CLEVELAND, Ohio -The average American believes charities should spend the vast bulk of funds on programs and services, not administrative costs. And good charities agree - working hard to manage operations on what's left over. But it's hardly that simple.
National surveys and focus groups prove that donors are often confused about how much of their money goes to causes they want to support. Meanwhile charities find themselves scrambling to compete for federal and foundation funding to subsidize small and often dwindling operating budgets.
Satisfying donors and potential donors is an age-old challenge that led Clevelander Adam Roth to turn his passion for working in nonprofits to creating StreamLink Software, a tech company aimed at creating software tools for nonprofits and the public sector to help manage operations and get grants. The two tools help nonprofit boards communicate with their organizations with more transparency and show funders and potential funders where the money is allocated.
By the time you pay for everything that goes into programs, services infrastructure and salaries, Roth says investing in technology tends to be at the bottom of the list for remaining funds - leading to negative public perceptions. Nonprofits can be seen as slow to evolve, when Roth says it couldn't be further from the truth.
"I think nonprofits kind of get a bad rap. They always have to be reinventing," said Roth, 44. "You have to be entrepreneurial because the people using your products and services don't pay for them, and funding sources like foundations always want you to have something new and different."
"In order to get funding, nonprofits have to move quickly. They have to adapt quickly and they have to find new ways to get money," he said.
StreamLink Software is expanding in downtown Cleveland Roth was clueless about developing technology when he decided there was an opportunity to help nonprofits bridge some gaps. He had a big vision and said he was humble enough to seek help and willing to take some chances, while learning from mistakes along the way.
He started Streamlink in downtown Cleveland during the recession at the end of 2009. Today, five years after hiring his first employee, Streamlink has 43 employees and two technology products: AmpliFund and BoardMax. Streamlnk has about 600 customers that includes governments, nonprofits, colleges and museums. Most sales come from inside sales - making calls and demonstrating products over the Internet.
"I had a vision and some good relationships to help get me started, but I didn't know what to do. I thought sales would be like raising money for a nonprofit. I knew the problem that I wanted to solve through technology and I knew it could be solved, and I went from there," Roth said.
Roth's desire to learn about technology stemmed from his passion of helping to make the business side of nonprofits more efficient. He was good at building teams and he counted on others to help him build a company.
"Early on, I didn't know how to build or define the requirements to get the value out of the product that I wanted. There were parts that I just didn't have a good grasp on," he said. "But I had a good grasp on relationships. I was willing to learn and I knew I was good at cultivating folks to support me. I had no issue in reaching out for help."
At 37, Roth had spent about a decade helping to run West Side Ecumenical Ministry, in management positions that included interim CEO. With a dual master's degree in nonprofits and social services, Roth enjoyed making a difference. His passion for nonprofits started at age16 while working at summer camps and continued throughout the years: working with a sex offenders program, working at the YMCA and at the Diversity Center.
Every year about $600 billion in federal funds goes to nonprofits, state and local governments, Roth said. It's a huge amount that generally represents about 25 percent of funding for states and counties, and a better option than trying to raise fees and taxes. But funding comes with responsibility of illustrating financial performance and reporting back to the government. One of Streamlink's products helps manage and track performance.
The other product helps boards to be more engaged with their organizations through technology. Roth said foundations are more likely to support organizations that have engaged boards. "A board is often an organization's biggest asset," he said. "Foundations have to trust the board."
The word "trust," is one that Roth has built his technology around.
"Nonprofits operate at the public's trust because it's the third largest subsidy in the country for taxes they don't pay, behind social security and Medicare," Roth said. "And nonprofits exist with the support of the community."
How do your previous experiences help with your new role?
My previous experience helped set the vision for the company and put a focus on culture. And I really think that's valuable in building a great company. Also, nonprofits force you to be willing to change quickly and be entrepreneurial in your thinking. You constantly have to reinvent programs and services per the request of funders. This same strength is very valuable in a startup.
What makes a leader?
A leader not only has vision, but has the ability to communicate vision. It is critical in this respect to understand the power of information. The power of information is not best gained by trying to restrict it to operate from a position of strength - by knowing more than others - but rather a position of leadership by sharing the information and helping others understand it.
Do you have a mentor or mentors?
Judy Peters my last boss atWest Side Ecumenical Ministry really helped to crystalize the importance of culture, and the kind of culture I wanted.
What are you most excited about right now with your company?
We have great and talented people at our company. No matter what plans you have, you have to have strong people because your plan won't happen exactly as you draw it up, and you need strong people to adjust. We have that. You also need a team of managers/directors willing to understand their group's weaknesses, and we have that as well. Finally our markets are maturing at the right time.
How do you unwind when you're not running your company?
I have four kids and they keep me really busy with all of their activities and events. I find that spending time with them is a great way for me to unwind. I also like to work out. Usually that's first thing in the morning, so unwind might not be the best way to describe it, but it helps keep me balanced.
Can you offer one piece of advice for someone looking to reinvent?
You have to be humble in your approach. You have to be willing to step out and take a leave in a new opportunity for yourself. But you have to understand that there are a lot of things that you did before that can apply, but there's also going to be a lot of things that won't apply. And you have to be willing to listen and learn and ask questions. If you're starting a new business, not only do you have to learn something new, you have to realize that things are not going to go as you planned. You have to be willing to constantly adjust. The only way you can do that is to be open.