This month we are celebrating Next Stage’s ninth anniversary. Nine years?! Are you serious? It astonishes me how much time has passed. And yet in the same breath, it feels like only yesterday I was sitting at my old kitchen table, trying to figure out what it meant to own a company.
I think I’m proudest of having lost the Next Stage pub-style trivia Haley designed for our team meeting this past week, with questions culled from the nine years of the company’s existence. That others on our team know more about Next Stage’s history than me? That’s pretty special.
Another anniversary? It was 20 years ago that Michael Lewis published Moneyball, a book that in some ways contributed to laying the core philosophies for what would become Next Stage. I was reminded of it multiple times this past week, and it serves as inspiration for this essay.
We Are Family
Moneyball is one of the first books post-college that I can distinctly remember not just reading, but obsessing over. Some of that relates to my lifelong love of baseball. Or rather, my lifelong passion for a specific baseball team – the Pittsburgh Pirates. I was born into a family with Pittsburgh connections and ever since I could hold a baseball, I have been a bit fixated on the Battlin’ Buccos.
And yet, the Pirates are a very bad baseball team. They have been most of my life. As a small market franchise with an owner unwilling to invest what it takes to compete, I am relegated to cheering for victories that are sort of random – where the team picks in the draft, the development of players in the minor leagues, and incremental improvement as demonstrated by statistics. Where others root for pennants, I tend to geek out on analytics.
That love of statistical analysis was forged with Moneyball, a book that followed the 2002 season of the Oakland A’s and highlighted the unique approach to winning led by the team’s general manager, Billy Beane. Rather than go after players who had classically strong performance attributes, the A’s sought those who were undervalued in the marketplace, and yet performed in ways that made for a successful team.
It is an asset-based approach, of finding the competitive advantage that is often hidden from view, that felt so fresh and inspiring. The applicability to social good is obvious – like the Oakland A’s, most nonprofits are cost constrained and have to find system hacks to make progress.
They would go on to make a movie from the book with Brad Pitt in the GM’s seat, but back when it was published, I pictured someone else. Someone… more like me.
The Art of Winning an Unfair Game
I realize now that my love of the hapless Pittsburgh Pirates has fully informed much of my life. I am forever a fan of the underdog. No matter the situation, whether in sports or life, I find myself almost always choosing the side with the least opportunity to succeed. My compass has been wired for social justice in this way, of believing that an unequal playing field is just wrong.
And while I am an advocate for system change – like a salary cap in baseball or a change to public policy to assist disinvested people – there is also something I love about the challenge of overcoming great odds. Like Billy Beane, I enjoy that outsider status, of finding ways to be competitive even against the backdrop of an unjust system.
It is certainly the mindset that caused Next Stage to launch Cultivate as an incubator for emerging nonprofit organizations in 2018. Pre-pandemic, it was incredibly difficult to get local leaders of social impact to make time for small nonprofits early in their founding. “Too small, too little experience, too inconsequential.” And yet, we knew the founders of these organizations as true disrupters, often with lived experience, who offered new ways of doing things that deserved to be recognized. They also had the trust of the people they sought to serve. They were so worthy, in our eyes, and the lack of an onramp to the systems that support nonprofits was, we felt, unjust.
So, we built a curriculum to help “the little guy” get a leg up, find the marketplace where they could be competitive despite their size, and grow a plan for increasing their impact. It was in keeping with the work Next Stage has done since its humble beginnings, of identifying strategies to help level the playing field by looking to grow impact, resources, capacity and trust in places where others don’t.
The Hidden Side of Everything
I was reminded of Moneyball while listening to one of my favorite podcasts, Freakonomics Radio, based on the musings of its host, Stephen Dubner. The original Freakonomics book was another seminal influence on the founding of Next Stage, published in 2009, soon after my arrival in North Carolina. In it, co-authors Steven Levitt and Dubner uncover “the hidden side of everything,” turning conventional wisdom on its head.
Rejecting conventional wisdom is right up my alley. It is certainly the energy fueling our Profit & Purpose series, examining the intersection of the private sector and nonprofits. We are publishing our next report at the end of this month – Profit & Purpose: The ESG Addendum – and pitching it to Freakonomics Radio is something I hadn’t even thought to do until writing this very sentence.
In a recent podcast, Dubner revisited Moneyball to explore its continuing impact even two decades later. While Lewis would go on to write many great books, including The Blind Side and The Big Short, one could argue none had the cultural or industry impact of Moneyball. The title itself has been often aligned to other domains (like the title of this essay), with the goal of getting a leg up on the competition. It also transformed Major League Baseball, where the principles outlined in the book have gone on to be considered best practice.
The concepts themselves may have been revolutionary to find in a book on the New York Times bestseller list, but it turns out, they were not exactly new. Israeli economists Danny Kahneman and Amos Tversky had previously pioneered research into the field of behavioral economics. As noted by Dubner:
“One big takeaway from their research was that we all use mental shortcuts to make decisions, even important decisions, and those shortcuts can create cognitive biases.”
Mental Shortcuts and Cognitive Biases
My journeys have shown me that most people are essentially good. As a humanist, I believe strongly in people and communities, and that what leads to injustice is most often a combination of factors – economic limitations, limited data, a lack of intellectual curiosity, and yes, cognitive bias.
It turns out, trusting your gut is a really bad way of making decisions. And yet, people do it all the time. When it comes to the world of social impact, there are a bunch of wrong directions and missed opportunities that come from mental shortcuts that do harm. Here are a few of our least favorite:
- “Low overhead for a nonprofit is good.” – Paging Dan Pallotta! Add his must-watch TED Talk to your list of to-dos if you are unfamiliar. Speaking of anniversaries, this year also marks a decade since Pallotta dropped a mic on “the overhead myth” that suggests a moral victory for organizations that talk about low overhead as a virtue, about driving your contribution primarily at their direct services. That is a great way to make sure your nonprofit never grows its impact! And yet we still find nonprofits every day bragging about their low overhead, feeding into a cognitive bias that does active harm to other nonprofits. What misguidedness!
- “The largest nonprofits are best equipped to create positive impact.” – Not so fast! While there is no question larger nonprofits have more resources to serve more people, the pandemic taught everyone that ‘might doesn’t make right’ when it comes to effectiveness. In fact, it is more often the smaller, community-based organizations that have trust built with the people in their communities. Many large “agency” organizations proved wholly ineffective at getting services to the people who needed them most throughout COVID-19. The time has come to recognize that a new supply chain of social impact is needed – one that recognizes the needs of both large and small nonprofits alike.
- “Need to raise money? Host an event!” – Uh, what? Even if the abundance of rubber chicken fundraising lunches in your city or town hasn’t reached a saturation point, certainly the pandemic laid bare the reality that event-centric fundraising is no longer sufficient. Organizations overly dependent on event revenue found themselves unable to host their galas, golf tournaments, 5Ks and breakfasts. Younger generations are far less inclined to participate in the events made so popular by their parents (and grandparents!).
- “There is little a nonprofit can teach my private sector company.” – Ugh! We still run into this mindset, of thinking of nonprofits as children, benefitting from the largess of the grown-up private sector companies that provide “corporate gifts.” In truth, companies are looking more and more like nonprofits these days, with purpose statements and employee engagement strategies designed to create an increased sense of belonging. Nonprofits have been winning in this space for years. In fact, we tend to think of it as a competitive advantage for nonprofits that succeed at creating true partnerships with companies.
Reframing My Point of View
Our ninth anniversary finds Next Stage at the precipice of some amazing opportunities. Our company has grown as a result of finding ways to work with bigger clients featuring more complex challenges than ever before. We now talk about “working at the intersection of social good,” where nonprofits, companies, government, philanthropy and residents come together to make a more lasting change.
Critical to this shift was a personal reckoning, of no longer seeing myself and the company our team has built from a purely outsider perspective. The strategies we have been pioneering for years are now ways of thinking that intrigue large institutions and systems as well. Everyone has been disrupted in some way over the last few years, and leaders at all levels are realizing that “getting back to normal” may not ever be possible.
Embracing new realities means also wrestling with the truth that what once worked is no longer a go-to. It is an environment in which Next Stage can thrive. It’s in our name, after all. Working towards the collective next stage for our communities has always been our raison d’être.
And that has meant starting a new chapter personally as well.
I’m ready. Because nine years in, Next Stage isn’t just me anymore. It’s a team. And our team is amazing.
Happy New Year.
An essay by Josh Jacobson