College Summit was stuck. After two decades of preparing low-income high-school students to enroll at universities, the nonprofit wanted to expand to help more young people. But schools found its program too expensive, especially compared with proliferating free resources aimed at getting kids to college. And the nonprofit wasn’t bringing in enough to cover its current costs, let alone future expenses.
The impulse at most charities would have been to raise more money. But leaders at College Summit took a different approach. They decided to whittle the program down to its essential elements to cut costs, charge less, and ultimately grow.
“Mission creep is the leading virus of the nonprofit sector,” said Bill Meehan, a nonprofit strategy expert and the Lafayette Partners Lecturer at the Stanford University Graduate School of Business. “The notion of doing the opposite — refocusing on core mission — presumably on things they can measure and have some support that work, and cutting out non-mission-critical activities? I love it.”
As for the approach of nonprofits cutting costs to expand, he added, “I think it’s terrific, and rare, and ought to happen more.”
Market Research
College Summit works in 130 schools and says it has served 250,000 students. In fiscal year 2015, the nonprofit raised about $14 million in contributions and grants — a 24.6-percent increase over the previous year. But the revenue its programs brought, $3.5 million, showed a 21-percent decrease from results in fiscal 2014.
The decision to pursue cost-cutting rather than focusing on fundraising came from a clear-eyed understanding that “there are limited dollars out there in terms of philanthropy dedicated to college access,” said Michelle Tafel, College Summit’s chief innovation officer.
That analysis was seconded by the consultants the nonprofit enlisted to help it plot a new course.
“It was important to detach the rate of growth of impact from the rate of growth of philanthropy,” said Leslie MacKrell, manager at Bridgespan, a consulting group that worked with College Summit.
The consultants did market research to determine how much the nonprofit needed to cut its program fees. Previously, it charged schools per student, and the average cost to a school was about $27,000. The research found that schools could afford to pay between $10,000 and $15,000.
Additionally, Bridgespan surveyed College Summit’s current and potential clients to learn what parts of its programs schools valued the most. The response: the leadership training for selected students who encourage their classmates to apply to college. So, during the 2014-15 school year, College Summit tested a pilot program that focused on student peer leaders in several schools.
The survey also revealed how the nonprofit should market itself. Although there are many college-readiness programs available, “there isn’t one that’s laser-focused on leveraging the power of students themselves,” said Keith Frome, chief executive of College Summit. “That’s a unique value proposition.”
Armed with that new information, the nonprofit and its consultants set about redesigning the group’s program.
Trims to Programs and Staff
Focusing on low-cost student-leadership training meant cutting College Summit’s other offerings, including a program that trained teachers to deliver a custom curriculum. The nonprofit closed its small publishing division, which printed and shipped curriculum materials.
“The presses have stopped,” Mr. Frome said. “We’re going to get an all-digital format.”
Employees at some of its regional hubs will no longer work out of a centralized office; instead, they will work in school buildings, shared spaces, or out of their homes.
“Our mobile, nimble structure will allow us to provide support to the schools without offices,” Mr. Frome said.
College Summit also reduced its staff size by a third. After announcing the nonprofit’s new direction in September, leaders met with each employee one-on-one to explain what it meant for their careers.
While some of those conversations were difficult, “I think the fact we invested in our people and spent the time talking through made a difference,” Ms. Tafel said.
It also helped that a group of staff members who themselves were served by College Summit told her they thought “this is the right way to head,” she said. “To hear that from alumni on staff was really moving for me.”
Expansion Plans
With all of these changes, the new cost of the slimmed-down program will be $13,500 per school. The nonprofit’s goal is to expand the new, trimmer program to 500 high schools in five years.
So far, the feedback has been encouraging, College Summit leaders say.
“We’ve been rolling this out to our stakeholders, school partners, philanthropists — the response has been unbelievably positive,” Mr. Frome said. “They get the power of students, and they love the price.”