Profit, Purpose, and the Truth in Between

Start with value. You know, how are you creating value and for who? People immediately jump into, should we be for profit or nonprofit? How are you creating value? And it this is really important if you're in a a social enterprise, you know, setting because in many cases, the person or individual or population or environment for that matter that's primary beneficiary if you will from the work that you're doing is not the same person who's paying you.

At Flywheel Social Impact Enterprise Hub, our talented coaches work closely with founders of nonprofit organizations as well as founders of for profit companies. In any and every case, we focus on those enterprises with a double bottom line, a return on investment, and a positive social impact. My name is Joan Kaupp. I'm the host of On the Fly. And today, we are going to look at nonprofit organizations.

Flywheel is a nonprofit organization, a five zero one(three). Flywheel has a board of directors that govern and oversee our operations to ensure we practice high ethical and legal standards. Active board members help set the organization's mission, strategy, and goals. They hire and evaluate the executive director. Essentially, the board acts as a fiduciary responsible for the organization's assets and its long term success.

It is not a small thing to agree to serve as a director of a board. Today, the executive director of Flywheel, Donna Zerring, is talking with one of Flywheel's board members, Mark Davis. Mark is CEO of TableSense, a nonprofit organization that invests in the research, innovation, and advocacy in the child welfare space. Let's listen in to their conversation about social impact and nonprofit enterprises.

Hi, Mark. Thanks for being here today. Yep. So excited to have you, our board member on On the Fly, and we're so grateful for all you do for Flywheel. You described yourself as a bean counter turned social entrepreneur. What do you mean by that? Tell us what your journey from bean counter to social entrepreneur has been like.

Well, so it's funny. I probably flippantly threw that up on my LinkedIn profile ten years ago and I forgot about it. So every now and then people remind me that it's there. But no, I mean, it is real as tongue in cheek as it is in the sense that I began my career as a CPA. I majored in accounting at some point after changing about 18 times, deciding what I'd do with my life and settled on accounting and business because I knew I'd get a job and it was that reductive.

But no, I mean if you really go back my exposure and interest in social impact really goes back to even high school. At that time, I thought I wanted to be an engineer so I could help invent the first commercially viable hydrogen fuel cell car. So at that time that was like one of the more promising technologies. But the emphasis was the commercially viable part because even then I knew like it's got to be economical. But yeah, I've had a very traditional first turn of my career in accounting consulting.

Learned a lot, audit tax consulting, M and A work. And it was great. But yeah, I ended up where I am today after a couple of twists and turns. And it's been a pretty complete fulfilling journey. And I'm really happy to be able to employ a lot of what I learned in that first half of my career here because we need some new solutions.

Well, yeah, let's talk about the new solutions a little bit. Well, I I kept thinking about your journey. Sounds like flex capacitor to to bean counter to social entrepreneur. That's awesome. And and here you are now working day in and day out to put a new face on child welfare.

So, tell us a little bit more about what it is you're working on, what are you trying to accomplish, and how are you going about doing it?

Well, there's, a macro and there's the small wins conversation, but I'll start with the macro. We are really focusing on young people here at TableSense. So, you know, particularly teenagers and young adults. So you can't ignore, it's all a continuum, right? And variably you're working with adults when you're working with teenagers.

But a big difference, and I mentioned before and alluded to this, a little bit different approach is how do we change these conversations? Instead of making it more of a moral obligation, do it for the kids, it's the right thing to do. How dare you not to care about kids? It's more about do it for the kids, of course, but also here's why it's good for you. Here's why it's good for you as an employer from the taxpayer's perspective.

You know, there is a very real funding gap in some cases, very real over the short run. Over the long run, we have a lot of money and capital at our disposal, whether it's at the government level within the private sector. And we're usually all paying for this eventually. So it's more about how do we spend that money more wisely, maybe at the right time, the right way, the right place. So again, there's a lot of nuances to that conversation, but the most basic level, that's what we're all about.

Interesting. So table sense is investing in our future.

And helping others to do it.

Fantastic. So what are some of the ways that you all do that?

Yeah. I mean, partnerships are critical. These are what some would call wicked problems. Wicked problems have different definitions. But effectively, they are highly complex.

Envision playing whack a mole at an arcade, right? You solve one aspect of the problem and then another one arises and you didn't expect that to happen. So these are complex formal and informal systems at a societal level. And if the individual solutions, the quick wins, and again, we'll come back to that. The small wins are easy to aggregate all those into one kind of comprehensive set of solutioning, if that's a word, requires, you know, a lot of partners with different skill sets, networks, capital, all that.

So, a lot of my time has been, early on just focusing on establishing some of those networks partnerships and building on, that which I brought to the organization and, and, and the board and some of the other advisors we have. But, but ultimately again, I go back to whether it's grants, whether it's investment dollars, whether it's government funding, whether it's private sector spending, you know, there's a lot of money that's flowing through, our society that in and around, you know, these issues that affect, you know, young people. So how can we be more of the traffic cop, if you will, to help direct a more rational, straightforward, and effective way that we're doing that?

Interesting. And then the whole vision is to create a world in which each young person has a real shot at finding success. And so by tackling those issues, we're creating a society that's better off. That's fantastic. I'm curious. Where do the name Table Sense come from?

An amalgamation of different concepts. One thing that was very evident is that this is a crowded space in some ways in the sense that there's lots of people and organizations that are passionate about young people. And so it's crowd in the sense that there's a wide field of voices out there. But most of those are they'll have mission statements like, we're going to solve homelessness by 2030. You're not.

Sorry. Part of my DNA and part of, I think, inherently the idea of table sense too is the same is that we're very practical. And sometimes we're going to say things that maybe aren't popular, but they're true. And that the truth is really important. Probably now more than ever is the truth important.

So we want to bring a more kind of practical, realistic, pragmatic, approach and orientation to how we view these issues and frame them. So there's kind of a common sense, if you will. And the other parts of the common sense idea is that, you know, in a lot of times we don't need a two year million dollar study with focus groups to make decisions. Do we need stakeholder support? Yes.

But again, when we boil these things down to more tactical, smaller bites to these wicked problems, the solution is typically pretty obvious. And you think about back to in business environment, you're only going to spend as much time as you need to make a decision. Going back to say the field of finance and accounting, there's a concept of materiality, meaning and there's different definitions of it. But essentially, if it's not material enough, if the unknown, if you will, the risk of the unknown is not important enough to change your decision, then we don't care. So we don't have to be perfect.

We just have to be good enough, you know, rad enough, directionally correct. Probably the big thing would be the kitchen table idea. So, you know, there's a lot of money thrown around in healthcare. There's a lot of bureaucracy in a lot of these, you know, nongovernmental organizations with, within education. And, and you know, there's a lot of growth that happens when you have a you know, person, young person could be again, a young adult sitting around a table, kitchen table, sharing a meal with somebody.

I've had a lot of mentors in my career professionally and personally. You know, of course I was fortunate I had, you know, a very stable, you know, traditional family life. But you know, I can tell you that a lot of who I am was because of the other people that I shared a meal with. So, I owe that, you know, there's a lot of people that were involved, at the board level and some external advisors too. So again, not one particular idea.

It was just, again, this idea that we want to bring this human element to what we're doing but also be very somewhat terse. And I think that we're going to have to come in sometimes and poke people in the eye a little bit to get their attention, you know? And I mean, the last thing I'll say on this is, I was at a, event where, you know, dare I drift into politics for a second, there was a call out that essentially, you know, yeah, okay, you know, taking an approach of blowing everything up without anything to replace is probably not the best approach. But we also shouldn't keep defending things that are simply not working. So that's again, you know, I think if you look at some of our materials, you'll see that that we need to call out and be back to the truth.

We need to be honest that certain things are not working. They be better than doing nothing, but we have so much more room to grow and that we've got to focus on that part of the equation.

So, like, table stakes and common sense. Sure. Well, and that's why you're so so we just value your presence on the Flywheel board so much because that's what Flywheel is all about is finding novel solutions through entrepreneurship and innovation to some of these pervasive challenges, right, that we've been trying to tackle for so many years and making some progress, but certainly not not completely solving the issue. And and when you apply entrepreneurship and new ideas to some of these challenges, you can completely change the dynamic. Yep.

So tell me a little bit about before you joined TableSense as CEO, you were the chief strategy officer for NECO, also an organization dedicated to youth. Tell us a little bit about that experience and what you were doing at NECO.

Yeah. I mean, I wouldn't be here today if it weren't for my experience with NECO for a whole variety of reasons. You know, it was an interesting, you know, career path I've taken. If you line it up today, you could see, okay, where I am now versus where I started. And you could say, okay, that all tracks.

But it was it was a series of happy accidents, if you will. You know, Neko was a client of mine actually, while I was still doing public accounting. And, essentially they were like, Hey, we need a CFO. And I was like, I'm kind of done with the consulting rat race, so let's do this. And, so yeah, it, is somewhat serendipitous with the benefit of hindsight because NECO has definitely got a lot of the same attributes that you're probably hearing me speak about.

And then certainly I think aligned with Flywheel too. And that there are attributes of this for profit business orientation, but also still kind of the traditional nonprofit sector, if you will. And I think that one thing that that really reinforced for me is that this idea about nonprofit for profit, I mean that's just simply a tax status. I mean that's a creature largely of the tax code. You can choose to be a charitable or not.

That's a decision for the organization to make. And back to the idea of structure around businesses versus charities, one thing that I've been doing is I've been obviously networking and talking to a lot of other my peers that are running non nonprofits and they're all leaning into how do we basically create for profit subsidiaries essentially and recurring revenue streams. Because in today's environment, funding is very, very challenging and that's not new either. It's been, I think, a ten year roughly ramp to get here. It's just more poignant today than ever.

But, yeah, I mean, on the children's space, obviously I got to know a lot about, you know, and I'm a parent too, I'm also a coach. So, you know, it's not like I don't know something about children. But once you're in that space working with the foster care population, juvenile justice, school based mental health, and some of the things that we used to do, or NECO still does, that I was indirectly responsible for, You realize how irrational, a lot of the stuff is and how much room there is to grow. And part of that comes back to, you know, with table sense here elevating that conversation. A lot of times those are trapped with a very, very specific within an echo chamber almost, right?

It's the same people repeating the same problems to themselves. So how do we make these issues a lot more prominent for, again, not to sound overly bombastic, but for society as a whole? Yeah. Because if you look at the polling and the research, you know, young people, children, young adults, that's like one of the most bipartisan things you could ever find. Yeah.

So we're all aligned to it. We're just not having the right conversations at the right levels to drive change.

At TableSense, as a nonprofit, how are you gonna tackle some of these issues? What are some of your strategies?

Yeah. Sure. Well–

It's a tough question.

It is and it isn't. I mean, you know, again, execute. It's easy to say at the halo. So again, the halo is how do we align ourselves with other organizations, governmental, nonprofit, private sector that are all aligned to these issues. And if you look at, there's really a few, thematic, topics that just keep coming up over and over again where there's lots of interest and lots of synergy and most importantly the ability to actually do something.

Jobs. I mean, look, you can talk about, again, mental health will always be part of our strategy too when we talk about the investing policy. But we talk a lot about most things that we refer to, which I'll come back to affordable housing, childcare, education. The common denominator is a job. Interesting.

Education. It's good to be a lifelong learner. I am, I read all the time. But if you're going to pay that kind of money and invest that kind of time in full education, to what end? Hopefully to earn a living, right?

Affordable housing, okay. Affordable relative to what? Your income.

Childcare. It's both an impediment to work and then also justification. Right? So, and there's other aspects of reason why you would need childcare. Don't get me wrong. But ultimately again, so it's not all about jobs, but that is a key catalyst for a lot of these other areas.

So those are four areas that I just mentioned actually. Think jobs, education, housing, childcare are coming up over and over again.

There are a lot of regional and national groups that are very focused on this that are more specialist, if you will. You are seeing, for example, nonprofit organizations that have a very robust network and policy arm that are creating investment vehicles. So as an example, we are in diligence with several nonprofit sponsored venture capital and private equity funds that their whole thesis is we are going to find and create and invest in organizations that tackle these problems from a market based perspective but still generate that return to investors. So that's an area that I feel very, very strongly about, because, you know, and this is where the alignment flywheel is and always has been. I've been, you know, involved as you know for off and on for ten years.

You know, if you can create a structure in which you are creating a recurring, you know, profit profitable model, you know, and, you know, oh my gosh, clutch your pearls profit. Right? If you have a profitable business solution that drives some social benefit or social good, that investment, that one time investment is permanent social capital. So if you compare and contrast that with a million dollar, if you give a million dollars away for ten years, that's $10,000,000 of charity. That's great.

And there's definitely a need for that. Don't get me wrong. I would be happy to take that gift. But, that can't be the only solution. You know, if you can even just get your money back, even if you just get your money back as an investor, so a one x return if you will, you know, that is infinitely more social capital than a grant or donation that is spent expended and then is gone.

It's not that simple, of course, because those grants do fund ongoing operations and not every asset coming from, again, a former CPA shows up on the balance sheet. So there's a little bit of accounting, mysticism there. But but that trend I think is one that we need to lean into more. And I want to be very clear. Like there will always be things where, you know, we just have to choose to say, you know what?

We don't know if this is ever gonna be commercially viable, but it's the right thing to do. And we, whoever we is, we're going to fund that. But we got to do more of the other too. And that's a big part of it. But we also lean into the research world.

So this kind of lends back to some more traditional nonprofit work, if you will. A key difference for us though is that we believe back to common sense, make decisions that we don't always need to do a two year six person study here. There's a lot of work that's already been done. What isn't the case though often enough is that research and those findings haven't been translated to more actionable steps. Yeah.

And they haven't been written for a broader audience that actually will be interested and affect that change. So I think that's where we're going to really lean in and back to the idea of partnership. So there's a lot of redundancy in the social space, I think. We're all trying to solve homelessness independently. These are societal level issues.

How can we find the best of breed organizations out there that already have built out that infrastructure, that are already aligned to those issues? And how can we partner and help, share our expertise and resources network to guide that conversation? So last thing is government relations and advocacy. And that's what I got some exposure at the end there with Neko to that world is the importance of and it's an art. How do you work with those relationships at the policy level, the political level, to try to find a way?

Again, it's so important in today's world to make things as bipartisan as possible. Yeah. There's so much polarization right now. And look, there's reasons to be upset. You know?

Again, don't get me wrong. You know? Pick your issue. But we're not gonna get stuff done if we're always fighting with each other. We've got to find a way to find some common ground. So that's us.

You know, it reminds me of a book that I love called Switch by Chip and Dan Heath.

K.

And these I I love this book. I read it probably fifteen years ago. It just changed my perspective on so many things, but they talk about tackling some of these really complex issues in the world. And, one of their, core methods that they talk about in the book is finding the bright spots. So you talk a little bit about you don't have to do all this research all the time. There's things out there that are working somewhere.

Right.

And they talk a lot about if you can find those bright spots and try to replicate that in in different applications, you can actually create quite a bit of practical change.

Right. And then it feeds itself, right? Success begets success. So you can make that a very internal conversation of, Okay, you've demonstrated success. Again, if it's something that lends itself to more of a social enterprise business model, then you're generating cash flow and you can reinvest that.

But again, you think about, you know, if you think about, you know, I don't know, I'm trying to think of it. This is hitting I don't know why this is hitting me, cleaning your house. You could sit back and strategize about, okay, which room do I clean first? And I was like, just get to work. Fold the laundry. Start there. Sweep the floor. Just, you know, see where you get. You know?

I like to bring my kids in to hear that message. Well, that's great. Well, you know, we're we're so glad to have you here today to tell us about the work that you're doing. And, you know, we have a great network of coaches and volunteers at Flywheel that have been working with entrepreneurs trying to tackle these issues for years. Yep.

What advice from your experience would you give to those volunteer coaches and or founders of the organizations themselves?

Start with value. How are you creating value and for who? What I find over and over again is that people immediately jump into should we be for profit or nonprofit? Or we would need to raise money and what type of investment instrument, should it be a safe or convertible debt. Think about how are you creating value, how and this is really important if you're in a social enterprise setting because in many cases the person or individual or population or environment for that matter, non human, that's benefiting or primary beneficiary, if you will, from the work that you're doing is not the same person who's paying you.

So that's very different than a brewery. That's a very straightforward transaction. You're the bartender, I'm the consumer. I show up, I look at your beer list, here's my prices. And there's some immediate feedback versus in a lot of more social enterprise oriented structures.

Again, whether they're ultimately a for profit or nonprofit tax structure. You know, the beneficiaries over here, there's a payer over here, there might be a regulator over here. Oh, by the way, here's the rest of society. And you've got to really think all that through. I'll give a childcare example.

There are several businesses, startup organizations that are focused on, solving the childcare gap. And a lot of them have different ways that they're monetizing the value, meaning who are they charging if you will. Are they charging employers? Are they charging the government? You know, are they charging consumers?

Is this combination of the above? But in all cases, if you're not creating value and think about how do I create value for that primary beneficiary, the rest doesn't matter. So that's always my advice when I get into that. People come in with very specific sometimes like, hey, how should we value ourselves? Or we're thinking about setting up a for profits subsidiary, you know, whatever.

We want to raise $5,000,000 of philanthropic capital. It's like, okay, what value are creating? What is your deliverable, if you will, to your audience?

That's good advice.

Yep. Hope.

That's good advice. Yeah. I mean, I've worked in the branding and innovation and consulting world for twenty years, and that's always been true. Just get back to what's the value proposition. What is the what are you delivering, the end user?

So, Mark, if if someone would want to get involved with TableSense, what can they do?

Let's start with the how, and I'll get to the what. So the the how is, like like any anybody else, you know, LinkedIn, you know, follow our page. You know, we'll be putting out a newsletter, and, you know, there's contact information on the web page. You can reach out. And and if there's anybody that you recognize in particular, you've got an organic connection with, you know, we're building out our advisory board, continuing to add board seats, and on and on and on.

I mean, that's always helpful. But, you know, more of the the the what, you know, the the the what what are we trying to do, and where could we use help? Yeah. I mentioned before there were three tactics, if you will, that we're really employing here. One is investing, two is is the research, and three is the government, you know, advocacy and and education.

You know, those are three domains, in particular that, even if, you know, you don't have expertise in the children's space or the young adult space, that's okay. You know, that's where we we can live. And I think that's what's really emerged for us is that, we can be this this this kind of proverbial tip of the spear, if you will, to, you know, organize and lead those efforts. You know, we've we've got the experience, with with the children's space, you know, but if you're, you know, really, really, really sound on the research side, if if you've got, you know, you know, capital, whether that's philanthropic capital and you want to make a donation or whether you want to co invest alongside of us, or with others, you know, if you have, you know, some connections, and some insights on how can we do a better job educating policymakers. All that is very, very helpful.

I mentioned before a few themes around housing, education, jobs, and childcare, but but those are not exclusive. Those are just the four most prominent at the moment. So, you know, I I would say, like, look. We if you're interested and you got passion, you know, we'll we've got room for you. You know, we can find a way to to to get you engaged, but those three areas, again, research, investing, and then the education, educating policymakers, government policy, those are three things that we're hyper focused on and will always be hyper focused on.

And one can find you online at

tablesensekids.org, And you should be able to find us on LinkedIn as well.

Oh, fantastic.

Yep.

That's awesome. Well, thank you for all you do for young people and adolescents and teens and young adults in our region. And thanks for all you do for Flywheel. It's been it's been wonderful working with you, and I'm excited about all the things we're going to do together as a team at Flywheel. And we just wanna thank you for being here today to share your story.

Of course. Thanks for having me.

On the Fly! is produced by Joey Scarillo with music composed by Ben Hammer. Recorded at 1819 Innovation Hub in Cincinnati, Ohio, courtesy of the University of Cincinnati.