A Modern Nonprofit Podcast: A Different Approach to Earned Income for Nonprofits

John Renouard is the founder and executive director of the nonprofit organization, WHOlives. Like many nonprofit entrepreneurs, John’s career path wasn’t centered around becoming a 501c(3) director. For him, the journey truly started after he became curious about his son’s humanitarian and missionary work in Africa. The curiosity drove him and his wife to travel extensively through Mexico, Central America, and South America before diving deeper into exploration with a  trip to Africa. 

Through their previous trips, John had witnessed impoverished communities, but nothing comparable to the realities of 4am wake up calls to walk 3-4 miles for, not clean, but dirty water. When he imagined his children experiencing this problem, this struck a chord and he wanted to do something about it. 

His thought was simple, if only they could problem solve and fix the water crisis, then they would ultimately eliminate existing healthcare problems because of the lack of water. Inturn, this would create more opportunities for the individuals in Africa to go to work, experience community engagement, and much much more. Can you imagine walking miles every morning, just to get water? 

John couldn’t either and so his nonprofit, WHOlives, was created. 

What & Why’s That Matter 

WHOlives’ operations model is a piece of their business that truly sets them apart. This really begins with John’s ‘why’. He didn’t want to only put a band-aid on the problems he witnessed, but he wanted to solve them. What began as serving and volunteering his time, changed to wanting to create a difference and sticking to it. 

We learn from John’s experience that volunteering time, receiving achievement accolades, and willing to do good in the world, sometimes are the only reasons they are done. This wasn’t what John wanted for the people who were suffering. The ability to take charge and innovate are sometimes lacking from the nonprofit world and it’s those like John who  strap up their boots and get to work that can really be the ones to make a difference. 

How & How Much 

As John continues, we learn that the pure action piece of his story started with a ‘how’ question. 

‘How can we get clean water into villages?’ 

‘How can we solve this problem?’

‘How can we do it?!’ 

Wholives is now in 42 countries around the world and gained some traction from a dream of John’s. Talk about divine intervention. John had dreamt of a human powered drill in the middle of the night. He woke up and started utilizing his finance degree for engineering products… All jokes aside, he wasn’t quite sure how to drill water to begin with, as most of us experience water straight from the tap and we never even consider those things. 

After 15-20 minutes of drawing, he decided he had enough and went back to bed. The divinity of the situation goes even further because the next day, John received a call from the engineering department at his alma mater. The university was returning a previous call John had inquired on. It was regarding capstone projects and out of 32 selected for that semester, John was one of them. 

As some time had passed and John spent more hours with the engineering student hoping to bring the project to life, the idea of a human powered drill was introduced. A traditional drill for clean water could cost anywhere from $20,000 to $40,000 and this would be difficult to provide over and over again, especially in developing countries. Alas, the human powered drill was a much more affordable option, ranging from $3,000-$4,000. 

John and his team decided that when you split this cost over time, depending on the amount of families, it can work its favor to ~$2.00/month which is affordable, even in developing countries. What makes the WHOlives model so great, is that they moved away from simply giving away this drill, to loaning it out and collecting the payment back over time. 

It works like this: 

With an average of 200 families per village. If each family paid $20, then the $4,000 price point is reached. Taking it a step further, by distributing the $20 over 10 months, a $2/month price point can be reached. Through all of this, they created a program that allows for the individuals to pay the $20 back over time, while also giving them ownership at the end of the term. Because they are responsible for the maintenance and upkeep of the drill, they take pride in the ownership of it. Outside the principle of a standard loan, the individuals are taught a valuable lesson that allows them to  become a part of the solution. 

Not only when it comes to clean water production, but John and his team help individuals implement economic principles in their everyday lives. 

This is done many different ways, all which are extremely innovative yet simple. For example, helping the individuals understand that a chicken may produce 2-3 eggs a week while drinking dirty water, but 6-7 eggs a week when drinking clean water. Likewise, helping pass on the understanding that clean water will increase crop yielding and overall farming productivity. 

John and his team do an excellent job of passing on ownership to those involved in the communities and giving them a sense of pride in their daily lives. 

Opportunities & Ownership

Think of WHOlives as an angel investor for these communities. Emphasis on angel, because they are more interested in the communities success than they are in furthering their brand name.  

Culturally, it may not be as effective to seek back the ‘micro-loans’ back directly from the villages, so John removed WHOlives from the equation. WHOlives may have financially supported and empowered the water drilling companies in these areas (who are the ones that ultimately pay back the loans), but to the villagers the economics are kept within their own cultural system. 

John gives us a comparison of two villages to help understand these cultural differences. When things are given to let’s say  Village A, they are appreciative of course, but then continue to ask for more things over and over. This could be attributed to them not being a part of the problem solving process. However, on the flip side with Village B, when John and his team loan out these projects for improvement an independent and ultimately interdependent mindsets are introduced. 

In essence, when something is handed to the first village they remain dependent on future solutions, but when a solution is supported and individuals are involved within Village B, independence is introduced which can later evolve into interdependent mindsets. 

Here John exposes the value of the difference between something that is owned vs. something this is given. 

One extremely powerful statistic from WHOlives’ mission is their ability to increase their impact while simultaneously decreasing their programmatic expenses. Saywhat? 

Less than 25% of the group’s income comes from the repayment of their ‘micro-loans’. The good news is that they started at 4% and have increased to nearly 22% and in business an increasing basis is usually a good sign. 

To make this clear once more, John and his team lend to the drilling groups in these areas that they have helped develop. So once again, the repayment goes from the villagers to the drilling groups and then the drilling groups back to WHOlives. 

Their payback rates have reached a powerful number where nearly half of their loans are reaching an 80% payback rate.  And once the village has made progress, they don’t necessarily always send the money back to WHOlives either. Instead they reinvest into new projects (wells) so WHOlives is only sending a portion back for the micro-loans.

For example, if a drill costs $4,000, but the village has collected $2,000 from other operating wells, then the nonprofit will only send the difference for a loan instead of the full amount. 

John and his team have developed one of the most unique formats of a nonprofit that exist today, yet their operations are extremely effective. Aside from their operational structure or the actual ‘how to’ of what they do, we can also learn from the strategies they have implemented. 

• Involving people in the problem-solving process gives them a sense of purpose, ownership and empowerment. 
• Giving away things can create dependency, while creating ownership opportunities invites independence and growth. 
• Economic empowerment and principles create future opportunities and equal opportunities 

To learn more about what John and his team achieve, visit their website WHOlives.org 

If you’re enjoying a Modern Nonprofit Podcast, please engage with us! Content is found through engagement and our podcast exists to create resources and share new and innovative, modern ways of running a nonprofit organization. Please share, like, and engage with our conversations. You can find Tosha and the Charity CFO team on Youtube or our website, thecharitycfo.com!

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