Join us in Chicago to meet two very different women taking on two very different social missions — both with inventive, entrepreneurial nonprofits. Stacy Ratner, a serial tech entrepreneur, aims for a 100%-literate Chicago with “social venture” Open Books. Former Justice Department lawyer and stay-at-home mom Donna Peel is easing the legal aid crisis with Pro Bono Network and gig-economy ideas.
See related video and article for Stacy Ratner.
See related video and article for Donna Peel.
STACY: That was the first moment to say, “This is what I have really had in my heart my whole life and now I think I would like to do it.”
COLLEEN: (as music plays lightly in background) Welcome to The Story Exchange, featuring the stories and strategies of entrepreneurial women around the world. I’m Colleen DeBaise.
SUE: And I’m Sue Williams.
COLLEEN: We’ve noticed over the years that women tend to start businesses because they’re on a mission.
SUE: They put purpose over profits.
COLLEEN: Today, we’re talking to two Chicago entrepreneurs who want to solve huge social problems.
SUE: But they’re coming at it from two completely different angles.
STACY: We collect used books. We sell those in our two bookstores and online. We use that money to fund literacy programs, reading and writing.
DONNA: Well, Pro Bono Network brings more attorneys to people who really need legal aid. There’s a real legal aid crisis right now.
COLLEEN: Two very different missions.
SUE: And two very different women.
COLLEEN: Stacy Ratner of Open Books is a serial tech entrepreneur.
SUE: Donna Peel of Pro Bono Network is a former Justice Department lawyer turned stay-at-home mom.
COLLEEN: But there’s one thing they have in common...
STACY: We are a nonprofit organization, a 501c3.
DONNA: ...and all that comes with being a 501c3.
COLLEEN: The nonprofit business model is becoming so popular -- especially among millennials -- that we wanted to take a closer look at it.
SUE: And of course, we’re a nonprofit media organization ourselves -- so we can relate. We produced video profiles of both women that you can watch on our site, TheStoryExchange.org.
COLLEEN: We headed to the Windy City to talk to Stacy and Donna about the challenges and rewards of running a nonprofit. Today we’re sharing snippets of those conversations.
SUE: This is the perfect podcast to listen to if you’re a bold risk-taker who wants to change the world.
STACY: I had no nonprofit training. I’d never written a grant. I’d never asked for a gift.
COLLEEN: That’s Stacy Ratner of Open Books. She’s the type who starts a business, runs it, starts another business, runs it...
STACY: It has been said, yes. I am a serial entrepreneur.
COLLEEN: Stacy’s partner in crime has been her brother.
STACY: The first company we ever started was computer consulting for small to medium-sized businesses. And we’ve now done five other startup companies together.
COLLEEN: Including the brilliantly named DriveItAway.com, where they sold used cars on the Internet.
STACY: We have raised and gone through millions in venture funding. We’ve launched things from idea to national. But, I certainly never thought that I was going to be a literacy nonprofit professional.
SOT: How was story time?
-It was good, a really big turn out.
COLLEEN: Around the time she turned 35, Stacy began thinking, in an existential way, “The startup scene is great, but what if I get hit by a bus?”
STACY: I really was thinking it was time to make the next big strategic change. So I made a list of all the nonprofit causes I thought were important, and it was a really, really long list because I think there are a lot of things in the world that could be better than they are.
COLLEEN: Now, Stacy -- aside from being a tech entrepreneur -- also has a law degree and even worked in catalog production. But her first love was reading.
STACY: I loved the Mrs. Piggle-Wiggle Series by Betty MacDonald: Happy Birthday Mrs. Piggle-Wiggle, Mrs. Piggle-Wiggle’s Farm, et cetera, et cetera, et cetera. I loved the Prydain series by Lloyd Alexander. I read Moby Dick. I read Dangerous Liaisons. What I mostly read is Agatha Christie...
COLLEEN: I think we’ve established that Stacy likes books -- and writing. In fact, she’s written a novel every year, for the past 13 or so years.
STACY: Yeah. So, I wanted to be a copy editor from the time I was about six.
COLLEEN: But when it came to career, “tech entrepreneur” always won out. So when she decided to do something more meaningful...
STACY: Literacy was on the list because literacy has been sort of a thread throughout everything in my life.
COLLEEN: But she thought, surely a major city like Chicago -- with its world-class museums and architecture -- wouldn’t need a literacy organization. She was wrong.
STACY: The current numbers that we have are that about 30% of the adult population in Chicago would benefit from basic literacy training. We are talking about beginning at the level of difficulty reading the label on a can of food, difficulty filling out a job application, difficulty deciphering a bus schedule. So once I got over being furious and shocked, I kind of ended up saying, “This is what I must do.”
COLLEEN: We’ve been sharing the story of Stacy Ratner, who runs the Open Books bookstore and literacy organization in Chicago.
SUE: There’s a detail we’ve left out.
SUE: She has green hair.
COLLEEN: Yes, bright green bangs.
SUE: It’s really striking when you meet her in person.
COLLEEN: Which is exactly her intent -- let’s listen.
STACY: I have a very mild case of a neurological disorder called face blindness, which means I can’t really process people’s faces or remember them. So, partly it’s empathy because I wish everybody had something like green hair that I could attach to.
SUE: To me, it represents how Stacy approaches everything a bit differently. So when she started her nonprofit, her first thought as a green-haired business woman was: What can we sell?
STACY: So, the Open Books concept from the beginning was: Let’s have a used book store because then we’ll have some financial independence.
SOT: … a lot of books missing back there, which is great. That’s what we like to see.
-Yeah, I know.
STACY: So, if my cost of picking up a bag of books is a couple of dollars, and I can sell each of those books for a couple of dollars, I have just made a profit on that particular bag of books and now I can make it work to scale.
COLLEEN: Like all good startup entrepreneurs, Stacy bootstrapped Open Books when she started in 2006.
STACY: The pure cash to run the business was friends and family at first. And then once we got our 501c3 certification we would start looking for grants.
COLLEEN: We’ll pause here for a sec to explain the 501c3, which is, of course, the federal tax-exempt status that basically makes a nonprofit a nonprofit. We’ve seen in recent years a lot of social enterprises -- B corporations like Warby Parker or Patagonia -- but they are all for-profits. If you are a nonprofit 501c3 -- that means you can access grants, and that donations to you are tax deductible. That was particularly important to Stacy as her products -- which are used books -- are by and large donated.
STACY: It is obviously helpful if you are looking to source a whole lot of used books to say there is a tax break if you donate them.
COLLEEN: In Stacy’s case, the goal was to sell enough used books to fund programs for school kids -- things like creative writing workshops.
STACY: I don’t have a background in adult literacy and I wouldn’t want to blunder into it and do the wrong thing. But, it is possible for almost anyone with the excitement to come in and really make a difference in the life of a child.
SOT: There’s about 25 of them, a really diverse group. They are reading a novel called Bronx Masquerade.
-Yeah! I think they really like Bronx Masquerade.
COLLEEN: The first big grant she received -- which was not quite $20,000 -- came from the Field Foundation, a Chicago institute that supports good causes. Stacy’s fundraising experience in the for-profit world came in handy...
STACY: Everything that I’ve ever done has been about asking somebody to support an idea that I have so that that idea can get bigger. If you are approaching an investor, clearly what they want to hear is they will get more money when you are all done. If you are talking to a foundation or a charitably minded individual, what they want to hear is they will have made the difference in more lives by the time that you’re finished.
COLLEEN: It took three years, but Stacy opened her first Open Books store in 2009.
STACY: It was so hard to find the right space because we had a very specific set of needs. We were looking for a retail facility which could also have offices and classrooms, which was near public transportation, that was in a part of the city that students could access, but was also retail attractive to shoppers, that had ideally some processing space and a loading dock because the books had to come in and out somewhere...
COLLEEN: So Sue, you shot our video in the space.
SUE: Yeah, it’s pretty amazing she found a space that fulfilled all these needs. And when you go there, it feels like a regular bookstore -- you don’t realize at first that they are selling second hand books. They’re all well-catalogued and under headings like a regular bookstore. It’s a pretty big space, and at the back, near the loading dock, there are a couple of rooms which look like the children’s area in a library with yellow walls and fun posters, a very friendly vibe. And that’s where they run the literacy and writing programs for the kids.
COLLEEN: Stacy told me that once she had the bookstore up and running, her ability to raise money changed significantly.
STACY: I had been explaining the earned income model, and how we would sell books in the store. For the first three or six months, people will take it on faith. After two years, after two-and-a-half, funders really start to doubt. Once it was open I had a few minutes to look around and say, "Phew.”
COLLEEN: She now has a second store, and an annual operating budget of $1.4 million dollars. 70% of that comes from book sales.
STACY: The remaining money we still do raise traditionally through grant applications, through annual appeals, through charitable individuals, through sort of regular philanthropy.
SOT: Is it a whole bunch of Portuguese stuff or just that one?
-Oh, just this one.
COLLEEN: She also gives away 100,000 books every year to students and teachers.
STACY: We now have 18 people on staff, 500 volunteers a year. Every single one of those people is here because they care deeply about the mission. And so my job as founder for the next three years is going to be, I think, to support all of that. We are all heading for the same ideal vision, which is 100% literacy in Chicago. We all want to be a part of that.
COLLEEN: Fast Company magazine recently wrote a piece about how today’s nonprofits are thinking a lot more like high-growth startups.
SUE: For instance, many are using tech to their advantage, whether that’s crowdsourcing, data analytics, social media...one high-profile example is DonorsChoose. Let’s listen to this clip, of founder Charles Best speaking at SXSW EDU.
CHARLES: So 14 years ago I started teaching history at Wayne’s Academy, a public high school in the Bronx. My colleagues and I would spend a lot of our own money on copy paper and pencils and we would see our students going without many of the materials and experiences that they needed for a great education. We’d talk in the teachers lunchroom about books that we wanted our students to read, and a field trip we wanted to take them on, and a pair of microscopes that we wanted for a science experiment. And it occurred to me that there must be people out there who would want to help teachers like us, if they could see exactly where their money was going. So using pencil and paper I drew out a website where public school teachers could create classroom projects requests and donors could choose a project that they wanted to support. Version one of our site was super rudimentary. Today, 63 percent of all the public schools in America have at least one teacher that has created at least one project on our site. So there are now 14 million students, most of them from low-income families, who have got books, art supplies, field trips, technology, resources that they need to learn.
SUE: What a really great organization!
COLLEEN: Yeah, it is.
SUE: DonorsChoose has raised more than $300 million dollars for schools -- not bad for a 501c3.
COLLEEN: Especially one that was really doing crowdfunding on the Internet before the term was even invented.
SUE: Yeah, it’s a wonderful example of how nonprofits are being super inventive and -- I almost dread saying it -- acting like Silicon Valley startups in their approach.
COLLEEN: I think there’s a lot less hoodies involved.
SUE: Yeah, a lot less entitlement and a lot less “brogrammers.”
COLLEEN: Well, what’s interesting is that there is actually a movement to ditch the word “nonprofit.”
SUE: Absolutely. A recent article in the Stanford Social Innovation Review suggested using the term “social impact sector” -- Stacy Ratner likes “social venture” -- because it reflects better the ambitions of these organizations.
COLLEEN: Right, plus the word “nonprofit” doesn’t really convey “innovation.”
SUE: Which brings us to Donna Peel, another social entrepreneur who we profiled in Chicago. You could say she runs the Uber of legal aid.
DONNA: I really love this work.
SOT: So can you tell me about why you’re here today?
-I’m trying to get a reduced fee on my license.
DONNA: To give people the dignity of knowing that they have a right to the judicial process and to have an attorney help them along the way, is extraordinarily powerful.
SUE: Donna runs a network of 200 volunteer lawyers, many of whom -- like herself -- are stay-at-home moms. They do pro bono work when it fits in their schedule -- kind of like being a part-time Uber driver.
DONNA: The real simple way to think of it is, we’ve basically created a law firm of people who are outside of the full-time practice of law, who want to volunteer.
SUE: These volunteer lawyers provide free, civil legal aid to low-income people.
SOT: Well, you ready? Okay, we have an office in the back.
DONNA: Civil legal aid often encompasses real simple human rights, like housing, being united with your children, being safe from an abuser.
SUE: Legal aid agencies are supposed to provide this help -- and they do -- but Chicago’s resources are tapped out and overwhelmed.
DONNA: In Cook County alone there are 700,000 people a year, it’s estimated, who live at 150 percent of the poverty guidelines. And unfortunately there are only 350 paid, full-time legal aid lawyers to handle that number.
SUE: So, clearly there’s a need for Pro Bono Network...but let’s back up for a second. Unlike Stacy who we were just talking about, Donna is an accidental entrepreneur.
DONNA: I graduated in 1992 from Washington University in St. Louis, and then moved to Washington, D.C., and started working at the Department of Justice in the antitrust division.
SUE: While “antitrust” might not tug on the average person’s heartstrings, Donna loved the fact she was protecting consumers.
DONNA: The issue with antitrust harm is that the consumer is harmed, but often not enough in their personal pocketbook to be suitably outraged over the enormous profit a corporation is able to make.
SUE: Much of this stems from her childhood in Detroit.
DONNA: I grew up in the town where the first Model T was built. I saw, with my own eyes, a town die. And the economic power that these corporations had, and that they didn’t have to take responsibility. It was the antitrust division and the Federal Trade Commissions that were the ones responsible to make sure that the corporations didn’t get too powerful. And that was very important to me.
COLLEEN: So Donna has always been drawn to fixing wrongs.
SUE: Exactly. Setting aside any political connotations, you might call her a “bleeding heart.” And she chose to make change as a successful, power-suit-wearing, burn-the-midnight-oil government lawyer.
DONNA: I never thought in a million years I would leave my career. It was very important to me. But when my first child was born, for the first time I felt that I was just being torn too many places and becoming undependable in one place or another.
SUE: So Donna -- like many women do -- stepped away.
DONNA: It was a pretty tough decision, but I made it.
SUE: She took care of Michael, and then David. But as they grew older, she missed her legal career, and thought pro bono work might be the answer.
DONNA: I volunteered downtown at a legal aid agency. And the training times all involved going after 3:00 PM. Which meant I had to get a babysitter, I had to pay not-early bird parking. It sounds silly, but it all added up to being over $200 just to get myself trained. It just seemed like this should be easier.
SUE: That’s when the light bulb went off.
DONNA: And I saw this wasted resource of lawyers -- a gold mine out in the streets -- that our community needs desperately.
SUE: What was missing was a network that could organize these volunteer lawyers -- and handle the administrative work of training and doling out cases based on who was available to help.
DONNA: So I put this idea out in this big email listserv in Oak Park called “Mom Mail.”
SUE: She immediately heard from 10 people.
DONNA: We started on February 1, 2011, around a kitchen table. And somebody jokingly made a joke about us being a nonprofit and opening a chapter in Dubai. We all laughed because there were just 10 of us. But we very quickly got bigger and bigger.
SUE: Fast forward five years. Pro Bono Network doesn’t have an office in Dubai -- not yet -- but it’s very active in Chicago.
SOT: Yes, I am a pro bono attorney with the Pro Bono Network...
-I’m calling regarding your eviction question...
SUE: It now provides about 40 volunteer lawyers a month to 10 legal aid agencies, helping seniors, the disabled, immigrants with visa problems, and incarcerated women.
DONNA: The highest need of legal aid is brief advice and short-term representation. So it turns out the type of work we do is the most needed.
DONNA: Today we saw somebody who had a lot of credit issues.
SOT: Have any of them, um, served you with any kind of lawsuit?
-They’ve been taking out $99 while I was in the hospital.
-Yeah, where is that? Is that on here?
-It’s on there.
DONNA: For her, now, this could be the difference between her paying her rent, paying her heating bill -- these are the choices she has to make. Which one am I going to pay? And having a lawyer help walk you through that and problem-solve it can make a very big difference to her.
SUE: With grants from the Illinois Bar Foundation and the Chicago Bar Foundation, Donna operates on a very lean budget of $120,000, which pays for a staff of three, plus an office.
COLLEEN: But what she really takes advantage of -- and again, this is similar to Uber -- is this idea of a “gig” economy.
SUE: Yeah. Her goal is to make volunteering “hyper-easy,” especially for stay-at-home moms, or anyone who wants to volunteer. It’s perfect for someone who needs flexibility, who can work remotely, who wants to keep their legal skills up-to-date...and that’s a lot of people.
DONNA: My husband calls us a force multiplier. He worked at the Pentagon and I think I know what this means, which is basically -- what you are doing is taking resources that already exist, and you are multiplying the impact of those resources. I love that term; I hope that’s what we are.
COLLEEN: Well, she’s a disrupter in legal aid.
SUE: And she’s currently fundraising. When we spoke to her last, she was hand-writing notes to about 400 individuals who have donated in the past, asking them for support again.
COLLEEN: We hope today’s podcast has provided inspiration...
SUE: And perhaps a little bit of guidance.
COLLEEN: We thank Stacy Ratner and Donna Peel for sharing their unique experiences of running nonprofits -- or should we say, social ventures.
SUE: And we thank you for listening. I’m Sue Williams.
COLLEEN: I’m Colleen DeBaise. Join us next time to hear more stories about innovative and inspirational women doing the things you’d never dream of. Or...maybe you would. This has been The Story Exchange. If you like what you’ve heard, visit our website at TheStoryExchange.org, where you’ll find news, videos and tips for women entrepreneurs. Sound editing provided by Nusha Balyan. Interview recorded by Sam Shinn. Executive producers are Sue Williams and Victoria Wang.
Additional sound by Charles Best on SXSWedu.