Charities Are Getting Down to Business

Nonprofits are struggling. That's why more charitable leaders are taking a page from their for-profit peers-and learning how to make money.

- LIZ BRODY

Six years ago, Michelle Brown (pictured above) met with a major funder of her literacy nonprofit. She'd been counting on them to renew their grant, and there was no reason they shouldn't. But as the meeting began, she had that sickening, slow-motion realization that everything was about to change. In her mind's eye, she saw millions of dollars fluttering away like a flock of geese, on to warmer waters.

She thought of William, a seventh-grader in a small, struggling Mississippi town, who was so behind in reading-the one who inspired Brown to start her nonprofit, called CommonLit. Her memories flashed through the years of winning grants and charming donors. The tens of thousands of teachers using the program for free. The measurable improvements in children. But now, her major funder was dropping off, because-as far as she could tell philanthropists were moving on to some shinier, trendier cause. Brown walked out of that meeting knowing her budget would soon evaporate, wondering how she would support a staff of some 20 people and keep her students reading. "I never thought when I started a public charity, especially for something so basic as literacy," she says, "that philanthropy wouldn't come through."

So Brown did something that had long been frowned on in the world of charities: She started thinking like a business.