At Room to Read, our first major identity crisis came when we were eight years into our work. Over the years, we’d achieved rapid growth in revenue and staff. We’d also expanded the number of elementary schools with our literacy program and the scale of our girls’ education program every year. Yet we had serious concerns about the quality of our programs. Were we really improving children’s learning? Was our model sustainable? Were we doing our absolute best to ensure children had better educational outcomes—or were we just pursuing growth for growth’s sake?

While we were asking ourselves these questions, we were getting more requests to extend our services. Our country teams were asking us to help teachers do a better job of teaching children to read. However, this would have pushed us deeply into the unknown, way past our comfort zone. We would be striking at the heart of schools’ core responsibilities. Would schools even allow us to help? In our Girls’ Education Program, country teams wanted to hire more full-time staff. They suggested creating “social mobilizers” to help girls to develop more consistent life skills.

These were huge new opportunities. They were exciting to consider, but did we have the talent and money to pull it off?

Investors were beginning to ask more specific questions about our impact. What difference were we really making? Were children reading better? Were governments adopting our programs? How do we define success, and what is our end game?

We excelled at establishing well-functioning libraries at government primary schools in lower-income countries and filling them with exciting local language books. But we didn’t know whether these resulted in better reading skills for the children we were targeting. Was it time to be more ambitious?

Although some investors and board members cautioned against it, our senior management team argued persuasively that Room to Read needed to move fast to stay relevant. It was imperative that we deepen our impact. The benefits far outweighed the risks.

The result: We outlined an ambitious 2010–2014 global strategic plan that would transform our organization’s mission and operations. Our bet was to invest heavily in Room to Read’s operational support systems, thought leadership, and monitoring and evaluation processes. We would investigate our impact and adjust our programs accordingly. This approach would help us through our identity crisis—our “sophomore slump”—and position us for success in the next major phase of our development.

It was a bet that paid off.

The Rise (and Often Fall) of the Entrepreneurial Social Enterprise

The world faces no shortage of challenges. Climate change, infectious diseases, terrorist attacks, ethnic and gender discrimination, failing public healthcare and education systems, underemployed and alienated youth, food security, and water security—the list goes on. These large crises threaten the ability for all of us to enjoy peaceful, productive, and sustainable lives. The world requires daring, innovative solutions. And when we find those solutions, we need to scale them quickly and effectively to make a difference globally.

One way to do this is through entrepreneurial social enterprises (ESEs) such as Room to Read. ESEs take an entrepreneurial approach to addressing social issues. They combine for-profit and nonprofit business practices and approaches to find scalable, replicable, and sustainable solutions to social and environmental problems. Disruptive in solving problems, ESEs fall somewhere between traditional nonprofit and for-profit organizations in their management styles.

“ESE” is not a formal business term. There are no specific criteria, minimum financial thresholds, levels of proficiency, or annual ESE rankings in business magazines. The Bureau of Labor Statistics does not track the number of ESEs in the United States. The IRS does not grant special tax breaks. An ESE is more of a mindset, an approach to organizational leadership and development. Foundations such as Ashoka, Draper Richards Kaplan, and Skoll identify ESEs and build networks among social entrepreneurs. Business schools teach courses in social entrepreneurship and write case studies about ESEs. One can even earn a PhD in the subject. We think of ESEs as a smart way to structure socially oriented work for maximum impact.

We live in an inherently unfair and unjust world. If you have traveled widely like we have, you have experienced this yourselves. You have seen firsthand the difficult circumstances in which many people struggle to survive daily and how lucky you are in life that you do not live in that situation. That you have this book in your hands and can read it means that you are among an elite and privileged group. You are literate and can afford to buy a book, check out a book from the library, or have the means and skill to download it. Your life experience is far different from the people served by ESEs.

People approach this kind of inequity in one of two ways. Some people recognize that the world is unfair but shrug their shoulders. “What can I do about it?” they ask. They believe that their job is to look out for themselves and their families, make the best of their own situations, and work hard to end up on the better side of the household income statistics.

The other approach does not accept the status quo and is determined to change it. These people lie awake at night thinking of ways to create a better world—a more free, sustainable, and just world. They are passionate about their ideas for changing the system.

For those of you who fall into this second category, you may be a social entrepreneur—a person driven to establish an organization to solve big global problems or effect social change. Even if you don’t have the entrepreneurial bug to start an organization, you may be a social change champion who wants to support and rally around innovative, disruptive ideas and help turn them into reality. In either case, we firmly believe that “To whom much is given, much is expected.”

If we are to improve the circumstances of our planet, we must grow and harness the power of social enterprises. Like most business start-ups, nonprofits find it difficult to break through the initial rush of enthusiasm and early successes and develop a stable path toward longer-term growth, stability, and impact. The start-up years are invigorating, but building a strong organizational foundation to get to scale takes grit and perseverance.

Helping uncover why some entrepreneurial social enterprises make it—and how you can take steps to put your organization on the path to success—is the purpose of this book. This book is written by social entrepreneurs for current and aspiring social entrepreneurs and the social change champions who support them. We feel that you are our “tribe”—our peer group—and we hope our experiences can help you.

Who We Are

Room to Read is frequently cited as an early example of a successful social enterprise. It is among the organizations that received the first Fast Company/Monitor Social Capitalist Award for innovation and social impact. It was also among the early grantees of foundations investing in social entrepreneurs such as the Skoll and Draper Richards Kaplan Foundations.

Room to Read is an international nonprofit organization that helps improve educational opportunities for children in lower-income countries. Our goal is twofold: to develop reading skills and the lifelong habit of reading among younger children, and to help adolescent girls complete high school and make smooth transitions to the next phases of their lives. We won’t be going deeply into the details of our founding and early successes. These have been well documented in John Wood’s award-winning memoir, Leaving Microsoft to Change the World. But we will be discussing our challenges, experiences, and lessons learned later in the journey.

As is typical of many social enterprises, many of our first staff members had business backgrounds. We chose to leave successful careers to establish and grow Room to Read. We were committed to developing innovative solutions. We sought change at a global scale and persevered against the odds. We were risk-takers and passionate advocates for our cause. We were on fire to change the world for the better. So many challenges in the world are fueled by terror, fear, and hate. We sought to counter this by focusing on a solution filled with hope, courage, and optimism.

Let us briefly introduce ourselves.

Erin did not necessarily consider herself a social entrepreneur when she cofounded Room to Read. In fact, the term was not yet commonly used when Room to Read was founded in 2000! But as time evolved, she recognized her own determination to “be the change you want to see in the world,” as Mahatma Gandhi said so beautifully. She cashed in her business aspirations to become a social entrepreneur.

At Room to Read’s “10 millionth child” celebration in Cambodia in 2015, Erin gave a shout out to her two cofounders, Dinesh Shrestha and John Wood, in her speech, expressing her astonishment and gratitude that they were all still in the trenches together 15 years later: “Ten million children’s lives changed. Brighter futures for kids who deserve it. Happy, joyful readers exploring the world of books. Empowered girls knocking down doors and breaking through glass ceilings. We invested in the future, working hard towards our bold goal and got there five years faster than we planned. I am profoundly grateful that I partnered with you.”

Erin’s passion for Room to Read’s mission is still as great as when she started. She remembers sitting on a floor in a school in the Mekong Delta reading the first books Room to Read delivered in Vietnam to a group of eager kids. In the years since, some of her best work days have been in Room to Read partner schools across Asia and Africa, sharing her love of reading.

As one of the early adopters in the Room to Read movement, Cory has been deeply involved in its growth. In 2004, just a few years after Room to Read was founded, Erin was looking to build a more robust monitoring and evaluation system to chart the organization’s impact. She asked around for recommendations of experts in the field to consult. She contacted several people, but most didn’t return her calls. They probably felt Room to Read was too small to be worthy of their time. Cory, on the other hand, not only took Erin’s call, but willingly offered to get involved on a volunteer basis and offer guidance and advice. At the time, Cory was working at an education research and consulting organization in Washington, D.C. He was not put off by this disruptive, crazy start-up in San Francisco that audaciously sought to influence the international education sector. In fact, he embraced its boldness and new ways of working and actively collaborated for many years before Erin was finally able to convince Cory to make Room to Read his full-time focus in 2010.

Cory and Erin believe this book is for all those social entrepreneurs and champions who are dedicating their time, talent, and lives to helping create a better world. It is filled with the advice and tips that we wish someone had shared with us as we were growing Room to Read from start-up through scale-up.

At least once a month, Erin and Cory meet with would-be social entrepreneurs. These people, brimming with bold new ideas and big visions, seek advice on how to turn those ideas and visions into reality. Quite often these entrepreneurs are relatively early in their careers and have more ideas and passion than actual business experience. But their willingness to experiment and devote themselves to social justice as well as their unflappable belief that making a positive difference in the world is possible are things we admire tremendously. They are the future heroes of this planet.

However, we often struggle with what to say to these bright comrades in arms. How can we support and motivate them while simultaneously giving them a dose of reality about all the challenges they will inevitably face? There are the long hours, the doors closed, the many trips crisscrossing the globe on a limited budget, and the never-ending to-do list. And there isn’t a big paycheck or stock to cash in at the end of the road. There is only a sense of accomplishment that you have left the planet a better place than when you arrived.

In one such conversation, Erin found herself saying, “If I knew now how hard it would be to grow Room to Read, I am not sure I would do it again.” The crushed look on the young leaders’ faces made Erin realize how important it was to be constructive when encouraging the next generation of social entrepreneurs. And, happily, at the heart of the Room to Read story are many incredibly positive lessons to share.

But where do we start, and what is most relevant and transferable to others? Most of the entrepreneurs we help write e-mails thanking us for our time. The comments we really appreciate are the ones that tell us what was particularly useful in our conversation—the specific nuggets of information that resulted in “aha” moments for them. This book is our attempt to bring those nuggets together. It’s also an explanation of the blood, sweat, and tears, as well as tossing and turning in many sleepless nights wondering in the most desperate moments if the work it took to grow Room to Read was worth it. Spoiler alert: The answer is unquestionably yes.

We are sharing our story because we have faith that together we can create the world we all want to live in. Knowing that we are co-conspirators, doing the messy, hard work in support of each other, is inspiring to us. We strongly believe the world needs us to win—together—before it is too late. This is a playbook for winning as social entrepreneurs and champions.

Big Ambitions

Started as a small, country-specific charity called Books for Nepal, Room to Read is now one of a handful of international education nonprofits launched in this millennium that has broken the US$50 million annual operating budget barrier. Today we have programs in 14 countries, impacting the lives of more than 15 million children and their families. During our early days when Dinesh, Erin, and John were working hard to establish the organization, it was unclear whether Room to Read would be viable. We would tell each other, “Go big or go home,” meaning we would shoot for the moon when trying to build a dynamic, high-growth organization. If we failed in our dreams of scale, we would go back to our day jobs. But as ultracompetitive business types, we had high expectations and a deep commitment to success.

The big need we were attempting to address was the fact that there are more than 750 million illiterate people on earth. Approximately two-thirds of them are women and girls. Yet we envisioned a world in which all children could pursue a quality education in their local communities that would enable them to reach their full potential and contribute to their local communities and countries. Our early plan, which continues to this day, was to work with families, schools, local communities, partner organizations, and governments to make this possible.

In our Girls’ Education Program, we work with cohorts of middle and high school girls in their schools, providing life-skills education, mentoring, targeted money for fees and tuition, and activities to increase community support for girls to complete high school. In our Literacy Program, we help establish elementary school libraries, fill the shelves of those libraries with fun storybooks, train school staff to integrate library activities into the school day, and help first- and second-grade teachers learn to teach their students to read and write. What is most innovative about Room to Read is our ability to identify, package, and scale effective practices. We are good at choosing effective strategies from the range of options based on our knowledge of what works on the ground. Our programming is deeply rooted in scientifically validated practices that we test, refine, and retest with our community partners to deliver the highest-quality, replicable activities in these two crucial areas of education—literacy and girls’ education. We go deep in the development of high-quality teachers’ guides, student workbooks, storybooks, and coaching for teachers and librarians, but always with an eye to figuring out how to go broad and make these activities possible for the larger school systems to take on as part of their core work. We are what one educational official in northern Sri Lanka called, “the quiet organization that does not say much but gets things done.”

For us, what is truly game-changing about our programs is the transformative impact we witness in children’s lives. An example is a young girl in Sri Lanka named Ara, whose day-to-day life came with its own unique challenges. Like thousands of other Muslim Sri Lankans from the Mannar district, Ara’s family moved to the small village of Puttalam after being evicted during the country’s 30-year civil war. The eldest of five children, Ara and her family became internally displaced people forced to move empty-handed to a district where girls’ education is a low priority. Then, in 2007, Room to Read’s Girls’ Education Program arrived at Ara’s school.

Through the help of the local Room to Read social mobilizer, Fazeena, Ara and her parents became excited about Ara’s education. “Room to Read stepped into my life, and everything changed. Fazeena encouraged me to attend school every day, and by doing so, I gained so much knowledge that made me realize that I could do more if I learned more,” says Ara.

Ara had busy days. She would wake up at 4:00 a.m. to study, and some days after school there would be Room to Read life-skills sessions. Then, she’d come home and fly through chores like cooking and caring for her sisters before going to bed. Her persistence paid off. Ara was not only the first female in her family to complete high school, but she also earned straight A’s in every subject on her Advanced Level exam. She was accepted to the University of Colombo, a prestigious and competitive university in Sri Lanka—a feat even advantaged girls from the capital city rarely achieve. “Education benefits more than just the person being educated. Knowledge is a wealth that increases when you share it. I’m excited for my future and for the future of those I will cross paths with,” says Ara.

Room to Read’s approach focuses on deep, systemic transformation within government schools in lower-income countries during two time periods that are critical in a child’s schooling: early elementary school for literacy acquisition and middle and high school for girls’ education. With a focus on the quality of education services that governments are supposed to provide for their children, Room to Read has created reading and girls’ education programs that governments and other organizations can localize, operate on their own, and sustain over time. Room to Read is helping to transform educational experiences and impacting future generations with a belief in our motto “World Change Starts with Educated Children®.” We set measurable goals, collect and analyze data, and incorporate feedback into programming to ensure our work has impact while making the best use of every dollar.

Because we track metrics rigorously, we can tell you how many libraries we’ve established, books we’ve published, teachers we’ve trained, and girls we’ve served. We can also tell you how individual girls are progressing in school, how many books children are checking out of libraries, and how much children are improving in their reading over time. Similarly, we can tell you how children whose teachers participate in our programs are faring compared to their peers whose teachers do not. We can introduce you to families who made the difficult decision to send their daughters to school instead of keeping them home to work and the long-term economic payoff they get from taking that kind of risk. We can also tell you about thousands of struggling readers who, in just a few months, are reading well enough—finally—to understand the words they are seeing on the page.

Part of Room to Read’s growing reputation is based on the scale of our activities. We’ve worked in more than 20,000 government schools. We’ve distributed more than 18 million books, produced nearly 1,400 storybook titles in more than 20 languages, and are helping more than 50,000 girls finish high school (often referred to as secondary school in our partner countries) in our Girls’ Education Program. We have more than 1,500 full-time employees and a vibrant volunteer chapter network engaging over 16,000 volunteers who help raise funds in 16 countries. Everything we do, whether program development, operations, or fundraising, we do at scale. “Go big or go home” is still our ethos. We are known for our strong planning processes, for our careful tracking of expenditures and outcomes, for reporting our results openly, and for using information obsessively to improve our work.

Only now, after more than 18 years of hard work, would we begin to consider Room to Read a relatively “mature” social organization. This categorization helps us reflect on our stage of organizational development. In some ways, we feel we are in an evolutionary sweet spot. We are beyond the struggle of the early years but not yet of the size and scope to wrestle with bureaucratic sluggishness. Within a tumultuous nonprofit sector, our organization is relatively sustainable year after year, and we continue to grow. We remain small enough to be nimble, and continue to learn, evolve, and innovate. If this were Goldilocks and the Three Bears, Room to Read would not be too small nor too big, but just right for our current stage of growth.

One of our founders, John Wood, shared some of the Room to Read story in his two bestselling books, Leaving Microsoft to Change the World and Creating Room to Read, about his personal journey, the motivation to establish Room to Read, and the grueling yet exciting early years of our work. These books brilliantly answer the “what” and “why” questions about the genesis of our work. It is the excitement of these stories that has led people to ask the next question: “How did Room to Read do it?”

We are not claiming that Room to Read’s experience is a perfect model for others. It just so happens that our one case study extends over many years and includes many instances of trial and error. In the same way that Gandhi viewed his life as “experiments with truth,” Room to Read has worked through scores of organizational decisions and has tried to draw lessons from each experience to inform the next decision. Our process is to collect data and perspectives, debate, decide, execute, reflect, and modify as necessary. So, while we can’t assert that any single decision is directly applicable to other organizations, our process has helped to build a strong organizational foundation and deliver substantial impact that we hope is transferable to similar situations.

Smashing the Sophomore Slump

One underlying theme of this book is that it takes an organization to achieve social solutions at scale. This can’t be done by individuals acting on their own. It therefore follows that entrepreneurial leaders must first focus on helping their organizations thrive to achieve their social goals. This is important at all stages of development. At some point, though, the question changes from one about surviving to being able to scale sufficiently to have a system-level impact.

Unfortunately, we often see social enterprises suffer from sophomore slumps such as the one that we faced at Room to Read and described at the beginning of this chapter. This term typically refers to the challenging second year of high school or college, when the initial enthusiasm of a new school wears off and a student realizes that there is a still a lot of work to be done to earn a degree. It is like what breakthrough musical artists often face in cutting their second albums, or new writers when publishing their second books—often accompanied by disappointment after a tremendously successful debut. In these cases, it takes tremendous work to persevere and make it successfully to the other side. In the world of entrepreneurial social enterprises, we’ve witnessed this pattern many times.

Room to Read has been fortunate to have smashed through at least some of the barriers that have plagued some organizations trapped in the sophomore slump. Take the challenge we outlined at the beginning of the chapter. We worked our way through that stagnation and risk to effectiveness by being honest about our vulnerabilities, attacking them directly in our next five-year plan, and working diligently and patiently to help Room to Read usher in its next phase of development. We are excited to share some of these stories. The lessons reinforce the truism that the journey is just as important as the destination.

One misunderstanding about nonprofits is that they are somehow vastly different from organizations in the public and private spheres. In fact, the daily routines and decisions about organizational growth and development can be quite similar. Both sets of organizations have staffing structures with supervisors and direct reports. They have policies and procedures, invoices and investments, finances, and fundraising. Like private businesses, nonprofits are accountable for their products and services. They are accountable to investors, overseen by boards of directors, and have public reporting requirements.

Many people have unrealistic expectations about starting or working for a nonprofit. They may believe you don’t have to work as hard since there is no bottom-line requirement of profitability. Or they believe that nonprofit workers are on the front lines battling evil and protecting the disenfranchised. Some of that is true. Those of us in the nonprofit space do spend all our time working toward our organizational missions. However, much of that means doing the same kind of office work and organizational development as would be the case anywhere else.

This realization can be frustrating, perhaps especially so for some people who choose to start their organizations to achieve an important social goal. They are driven by their hearts and often have little time or patience for details. Unfortunately, passion and drive can only go so far. It is therefore essential that nonprofit organizations be as strong and robust as any other organization to achieve their missions. The excitement and enthusiasm for a start-up—even in the nonprofit sector—can only go so far. It is just as important to grow a strong organization as it is to advocate for a worthwhile cause.

In the book Beyond the Idea,¹ Dartmouth business professors Govindarajan and Trimble contend that successful innovation is 5% idea and 95% execution. This rule of thumb is equally as important for the nonprofit sector as it is for profit-seeking businesses. As the nonprofit sector has grown, competition for charitable donations has become fierce. Investors have many choices. Although many people fund nonprofits that pull at their heartstrings, many others want proof that organizations are strong structurally and able to accomplish what they promise. Goodwill for new ideas and new leaders can go far, but it does not last forever. When we meet with a potential investor, we always bring a variety of background documents, from country and program overviews to success story summaries, to engaging photos of children and teachers hard at work, to our latest annual report and statistic summaries that show changes in key Room to Read indicators over time. When we can, we like to illustrate the stark comparisons between schools where Room to Read is involved versus those where we are not.

We find a huge chasm between nonprofits in start-up mode and those that are more mature. Like new organizations in any sector, many new nonprofits can enjoy an extended honeymoon period. They can identify a new social need or highlight a social cause that has not yet been met. They can have charismatic leaders or receive substantial publicity for a time-sensitive issue and build momentum and recognition for good deeds or other successes. Working in such an organization can be an intense and exhilarating ride. It can throw staff and volunteers into the spotlight or into new places with new resources—the exciting, new start-up with the breakthrough innovation that will change the world.

But maintaining momentum requires substantial effort, often on a shoestring budget. An organizational structure must constantly evolve to respond to the latest needs. It can be exhausting. Public interest can wane. The organizational mission can be achieved, or, more likely, some other cause can take its place in the spotlight. The founding team can burn out, or worse, attempt to run the organization by themselves longer than is productive, without bringing on the new skill sets and experience they may need to continue to grow and evolve.

So how can you transition from a start-up to a more mature organization? What does it take to break through the awkward teenage years of growth and development, when the excitement begins to dissipate but systems are still being developed, programming is still being refined, and staff are working hard to build evidence of the success of your approach?

These questions haunt any ambitious organization but may be particularly difficult for nonprofits. This is because the charitable sector is inherently more unstable than the for-profit or government sectors. After all, nonprofits exist because they focus on issues that do not have a private sector or profit motive and have not been identified as enough of a public challenge to receive government funding (or perhaps the government-funded approach is not sufficient to deliver quality results). As a result, nonprofits hold an unenviable ground between for-profits and government organizations.

We believe that the Third Sector, another name for the nonprofit, nongovernmental sector, has a critical role to play in society—much like a third leg of a stool alongside the public and private sectors that keeps us balanced. Nonprofits often offer new ways of thinking; create innovative business models; take catalytic, disruptive approaches; and drive accountability. These approaches can challenge the public and private sectors in a constructive way, forcing them to consider their impact on the people and resources on our planet and strive for greater efficiency and effectiveness when delivering their services. We need a thriving civil society with vibrant nonprofit organizations and social enterprises providing solutions to society’s critical problems that would otherwise fall through the cracks.

We Do It Because We Love It!

Since you’re reading this book, you probably agree that cultivating healthy, vibrant entrepreneurial social enterprises is important. You might have a cause you are passionate about. This work gives our lives meaning, and we love it. Passion to achieve some greater social goal must be the starting point and the fuel that brings joy to our work and helps us persevere during the tough times.

Inevitably, driving large-scale social impact makes all of us feel as though we are leaving the world in better shape. We choose to work for a nonprofit organization because it is one of the most effective ways to make a difference in this world.

Nothing fills us with greater hope than meeting the children who are benefiting from Room to Read’s programs—like “Mr. Poet,” as he is called by his friends and teachers, who studied at an elementary school in South Africa that Erin was fortunate to visit. Room to Read had supported Mr. Poet’s school to establish a library, and he quickly became one of its most avid patrons. A well-stocked and well-run library was an exciting change to his school’s environment, and it quickly became an oasis from the challenges in the students’ lives. Mr. Poet, the title given to him by the other students and emblazoned proudly on this school uniform sweater, was so inspired by all the books he read that he started to write his own poems. He wrote one for Room to Read:

In the following chapters, we have tried to capture some of the most inspirational and difficult lessons from our Room to Read journey that has impacted the education of millions of children such as Mr. Poet.