Purpose and Profit
Let’s move the conversation beyond compromise
In early 2014, my last company, greeNEWit, was in crisis.
We had just lost our most lucrative contract implementing one of Baltimore Gas and Electric’s largest energy efficiency programs. It was worth over $1 Million.
Layoffs were inevitable. We had to part with nearly half of our staff to survive.
Nobody felt less secure than Josh Massey and Gabe Bustos, Co-Directors of greeNEWit’s OUR Schools Program. OUR Schools was a social program that supported greeNEWit’s mission by teaching Maryland elementary students the importance of sustainability and the environment in an exciting assembly style presentation.
Because OUR Schools didn’t bring revenue to the business, Josh knew that there wasn’t room for both he and Gabe if OUR Schools was to survive the cuts. As he walked into the conference room on a Friday afternoon in April, he knew what was about to happen.
“I believe in the mission of this company, and I’m going to continue to work for you to achieve it.” He told greeNEWit’s owners. “But you’re also going to lay me off, and I’m not taking no for an answer.”
Gabe Bustos (left) and Josh Massey (right) at greeNEWit in 2013
I can’t think of any other anecdote that so succinctly describes the character of Josh Massey. It also demonstrates the kind of culture that existed at greeNEWit driven by its purpose and people like Josh.
For his part, there was nobody at greeNEWit as resilient as Gabe. Not only did OUR Schools survive that crisis in 2014, but it actually outlasted the company entirely, now owned and operated by Gabe under a new business called Elemental Education.
So why am I bringing up this story of struggle and survival in a piece on the profitability of purpose?
A lot of people think about purpose in business similarly to the sacrifices that Josh, Gabe, and greeNEWit made in order to achieve it.
What do we have to give up in order to do good?
Encouragingly, I think the perspectives of many have shifted one step forward.
We shouldn’t have to compromise profitability to pursue a purpose.
But that mentality stops one step short. I believe that not only can purpose and profitability coexist, but they can actually lift each other up to levels not possible with one or the other alone.
Purpose lifts up profitability. Profitability lifts up purpose.
greeNEWit’s story is a bit misleading at first glance. We lost the BGE contract because the program’s administrators had grossly overspent their budget in prior years, and as the largest contractor in the program, there simply wasn’t enough room for greeNEWit. But we maintained our contract with the Potomac Electric Power Company (Pepco), and we won back the contract with BGE the very next year due in large part to the OUR Schools program, which the utility companies adored.
Switching from Environmental to Financial Education
It’s no small coincidence that today, Josh and Gabe have reunited at a startup called Ortus Academy. Ortus Academy provides experiential and game-based education to 5th-12th grade students that teaches them money management and “Financial Intelligence.” Josh is its Co-Founder and COO, and Gabe is the Director of Education. Aaron Velky is the other Co-Founder and CEO.
I reconnected with Gabe and Josh recently to learn about Ortus, and what struck me most about the company was the crucial role that purpose has played in its growth. At Ortus, there has never been a trade off between purpose and profit. In fact, their purpose has actually improved their profitability.
I want to share some specific examples of this that really surprised me. But first, I need to tell you a little bit about how cool Ortus’ product is.
The centerpoint of Ortus Academy is hands-on money game they’ve created called NumisMatters. During the game, which simulates 5 years of life and financial decision making, the kids are given play money and set loose in a school gym to put that money to use. As they move from station to station, they are put into scenarios where they have to handle everything from employment and bill paying, to managing important life and investment decisions, to even choosing whether to play the lottery.
Developing NumisMatters took a number of years, a lot of iterative development, and a few pivots along the way. It was all done bootstrapping with nothing more than sweat equity and the drive and determination of their mission. So when I asked Josh and Gabe what one of the most resourceful things they’ve done that’s had a significant impact on the business, I was surprised with their response.
“Our volunteer program has been incredibly successful,” Josh responded. “We get a tremendously positive response from the students that go through the program. But it’s the enthusiasm of our volunteers that’s had the biggest impact on our growth.”
To run NumisMatters, Ortus sources volunteers from the local community to run each station that the kids progress through during the game. The volunteers aren’t only donating their time. They’re offering their experience as well. Ortus sources people with a diverse set of financial experience, from business students at local universities to seasoned wealth managers.
“Our coaches love volunteering with us because they get to pass on their own set of life experiences to the students, and they can see the impact right in front of them with the smiles and enthusiasm in the kids,” Gabe shared.
“And that enthusiasm has paid off for us,” Josh added. “Not only has utilizing volunteers kept our operating expenses low, but they’ve turned into our biggest sales channel as well. We’ve spent less than $500 on marketing and advertising because so much of our business comes from word of mouth, most commonly from the educators and outside coaches that volunteer in the program.”
It took a moment for it to sink in for me just how awesome this model is. Ortus has developed a volunteer program that people want to participate in because it doesn’t ask for people’s money or personal time. It essentially asks for a couple of hours out of their work day to offer their professional experience.
The result: Lower operating costs and a sales channel with an extremely low acquisition cost. Both equate to higher profit margins.
Switching from Not-for-Profit to For-Purpose
The volunteer program isn’t the only benefit the purpose-driven business model has had on Ortus’ success. I was blown away when Josh told me that they had made the shift from a non-profit organization to a for-profit entity.
“We like to think of it as a shift from a ‘Not-for-profit’ to a ‘For-Purpose’ organization.” Josh stated.
It’s not that Ortus is motivated to make more money. It’s that benefit of the non-profit structure doesn’t justify the added regulatory hurdles and requirements any more.
When they first started and weren’t well-known, being a non-profit gave them access to sales opportunities that would have been difficult otherwise. But after a while, people stopped asking them if they were a non-profit.
“Once people started seeing what we were doing, the reputation of our program became more important than our corporate structure. So we decided to make the shift,” Josh explained.
Simply put, they walk the walk so the talk doesn’t matter.
Their decision hasn’t hampered them at all. Ortus was honored last October with the 2018 Spark Award by the Better Business Bureau of Greater Maryland for their dedication to building ethical practices at the center of their business.
Adding to the laundry list of how Ortus’ purpose has been an overwhelming asset to the company, Ortus has also just completed an accelerator program at Conscious Venture Lab in Baltimore. Conscious Venture Lab, which is only open to purpose-driven businesses, has provided them with seed capital, office space, and mentorship. They now have their eyes set on expanding their offering to new communities beyond their current local footprint.
There’s no doubt Ortus Academy’s purpose-driven approach has paid off thus far. They’ve been an absolute testament to how purpose and profitability can not only coexist, but can thrive together. I’m excited to see what comes next for Ortus, and I’ll be rooting for them every step of the way!