An Experimental Approach to Early-Stage Nonprofit Governance

University student volunteers celebrate the Commencement and Launching Ceremony of H-Jump School. (Photo courtesy of Jump)

Interest in early-stage nonprofits within Korea’s social impact ecosystem has increased in recent years, and more and more are garnering financial and organizational support. As one example, in early 2023, Brian Impact Foundation, which focuses on big-bet philanthropy, donated a total of 12.6 billion won (about $9.7 million) to 15 nonprofits through its Impact Ground Project. Among the grantees, early-stage nonprofits accounted for 66.7 percent. The foundation has also started a capacity-development program for nonprofits in collaboration with Root Impact, an intermediate support organization.

The ultimate success of these young nonprofits—their ability to fulfill their missions—will depend on many things, but good governance is among the most important. The global environmental, social, and governance (ESG) phenomenon sheds light on the long-overlooked matter of governance in the realm of corporate management in Korea, and we must examine nonprofits with the same lens. Establishing practices that hold founders, C-level leaders, and board members accountable and responsible can guard against decision-making based on personal preferences and help ensure that organizations’ social mission comes first. It follows that the more successful nonprofits are at achieving their missions, the more support they’ll receive, and the greater the impact they’ll have on both the social impact ecosystem and society.

That said, preventing irresponsible management and less-than-transparent operation—cited as a major problem of Korean nonprofits in the past—can be challenging, especially as organizations grow. In this regard, the education-focused nonprofit Jump Corporation offers a useful case study of how early-stage nonprofits can develop effective governance practices and evolve them over time. Since its founding in 2011, Jump has experimented with a variety of governance approaches and identified a range of insights that can help other new nonprofits ethically and effectively pursue their missions. This includes the value of experimentation.

An Experimental Approach

Jump’s mission is to create “a society in which anyone can benefit from learning opportunities,” with a focus on expanding educational opportunities for underprivileged teenagers throughout Korea. The organization uses a “triangular mentoring model” in which three different groups mutually benefit: University student volunteers assist teenagers with their schoolwork; professionals act as mentors and role models for the teenagers and provide career advice to the university students; and, as they make progress, the teenagers offer university students and professionals a rewarding experience. The program creates a system in which everyone benefits from learning and sharing—a model that was awarded 250 million won (about $200,000) through Google Korea’s Impact Challenge in 2016.

This model was the basis of several Jump programs, and in 2013, the organization used it to develop H-Jump School in partnership with Hyundai Motor Group. To date, 1,932 university student volunteers have taught 6,604 teenagers at 398 regional learning centers across the country, equivalent to 1,566,382 hours of cumulative learning time.

According to a 2019 survey of program participants, 66.7 percent of teenagers increased the number of hours they studied and 63.8 percent improved their grades. Moreover, 69.1 percent experienced greater self-esteem and 72.9 percent felt a greater sense of self-efficacy. University students and professionals meanwhile noted that the program helped them enhance their soft skills and better understand the viewpoints of various generations.

The Triangular Mentoring Model of Jump. (Image courtesy of Jump)

Successfully experimenting with and evolving its governance structure over the last decade has been central to Jump’s success. Adapting to organizational growth, embracing diverse perspectives, thoughtfully collaborating, championing leadership change, and committing to transparency have all moved the organization closer to achieving its mission. Here’s a closer look at each of these five lessons.

1. Adapt Governance Structures as the Organization Grows

Nonprofits need to adapt their governance structure to suit each stage of their development. A structure that works at an organization’s inception likely won’t work as it evolves. For one, it’s simply not realistic to expect one or two people to make informed decisions about every aspect of a nonprofit’s increasingly complex operations. Inviting more people to participate in decision-making over time, based on their expertise and proximity to the work, and refining communication processes can improve efficiency and foster growth.

In 2011, seven Korean Harvard University students established Jump with the common goal of expanding educational opportunities for underserved youth. Their focus was on problem-solving, and all of them eventually joined the board. In the beginning, the board emphasized practicality over formality; the directors communicated informally and on an ad-hoc basis, without any limitations on time or place. They were also deeply engaged in day-to-day matters.

The organization evolved and stabilized, and in 2013, the directors appointed a full-time chief operating officer to help manage Jump’s operations. However, this strategy was short-lived; the heavy demands of the job and uneasiness with working in a full-time capacity led the person in the role to leave in 2015.

The directors decided to try something new. Instead of overseeing both day-to-day operations and relevant business decisions themselves, they handed both tasks over to Jump employees in 2016 and began to engage only in major decisions and policy-making activities. After a gradual transfer of responsibility to employees, governance became more systematic and pragmatic, as exemplified by quarterly board meetings.

Jump's current COO, Chorong Eun, who joined Jump in 2014 as the H-Jump School manager and was promoted to an operating director in 2016, explains the process: "At Jump, we were able to witness the synergy between [the board of directors and employees. This] led to excellent decision-making and business execution, because [they] carried out their own roles clearly. For instance, employees now have the practical knowledge and abilities to plan … projects and prepare grant proposals without largely depending on the board of directors. The board of directors has more time to look into Jump's long-term plan.”

Eun attributes several successes to this shift, including winning two grants from the AVPN Digital Transformation Fund for 200 million won (roughly $154,000) and the Impact Ground Project for 1 billion won (about $770,000). In addition, Jump launched a new pilot project with the KOICA-NGO volunteer group Edu-Corps program in the Philippines, Cambodia, and East Timor, which sends out Korean volunteers to collaborate with young locals to tackle educational and social problems in the community. Eun says, “These … are the positive outcomes of a smooth shift [of responsibility] between the board of directors and employees.”

2. Foster a Diverse Board

In her SSIR article, "A Roadmap to Better Boards,” Kate Hayes, director of the nonprofit board leadership program Direct Impact, writes, “There’s a causal relationship between diversity and groups that are more innovative, creative, problem-solving, and better performing overall. If we want to optimize the social sector’s potential to create impact, diverse nonprofit boards are not a ‘nice to have,’ they are a ‘must have.’” Diverse boards include people directly involved in the organization's work, whose deep organizational knowledge and experience can help the board avoid bias, make more-informed decisions, and develop long-term strategies that align with their missions.

The inaugural board consisted of three women and four men with experience in areas including consulting, Internet technology, media, and corporate social responsibility. They were very interested in closing the educational gap in Korea, regardless of their own socioeconomic fortune. After several years of work on the triangular model, the Google Impact Challenge award in 2016 gave the group a push to advance, and they sought to diversify the board—not to correct a lack of diversity in the past, but rather to experiment with avoiding potential bias and enhancing decision-making for the future.

Jump holds a general meeting at the Heyground co-working space in Seoul, Korea. (Photo courtesy of Jump)

The organization added what it calls “alumni director” and “mentor director” to the board to represent university students and professionals, respectively. After an open recruitment process, the board selected two as members who could both relay the concerns of each group to the board and actively contribute to policymaking. And in 2018, a new “employee director” joined the board to represent Jump employees. Employees nominated candidates for the new position, then voted on who they thought should take the role.

Having volunteer, professional, and employee representatives on the board helps ensure that Jump’s decision-making processes include diverse perspectives and consider the needs of primary beneficiaries.

3. Build a Community That Shares the Organization’s DNA

Every individual involved in a small early-stage nonprofit has significant influence over its success. If each person embodies the organization’s DNA, they are more likely to carry out its mission consistently and efficiently. If people have different understandings of what the organization aims to achieve and where it’s headed, it can waste time and resources, and turn away people who would otherwise engage.

Only members of the Jump community who truly understand Jump’s mission and vision are eligible to participate in decision-making. Student alumni, professionals, and employees who have this “Jump DNA”  can apply to join the board through its open recruiting process. The CEO and co-founder of Jump, Euyhun Yi, calls this “openness within a closed community.”

Jump established this policy in 2014, but it soon came up against challenges. When Jump encountered operational and financial difficulties in the years that followed, some board members argued for bringing on prominent people outside the Jump community who could offer practical and prompt solutions. And in 2016, the CEO of a mid-sized company proposed that they join the board in exchange for a sizeable lump-sum donation.

The board ultimately rejected the proposal for fear that their interests and values might not align, and made a fresh effort to look for new project and funding opportunities. Between grant funding and the renewal of long-term contracts with significant corporate sponsors, Jump eventually achieved financial security. In the process, it learned the value of fostering qualitative growth that reflects the mission and vision rather than quantitative expansion.

Employees also have the Jump DNA. In recognition of the organization’s social value and impact, Jump was nominated as the Social Progress Credit recipient in 2017, a program led by the Center for Social Value Enhancement Studies(CSES) that awards cash incentives to organizations that have created social impact. While the money could have been allocated entirely as bonus compensation, Jump employees voluntarily proposed to put 50 percent of it into savings in case the organization needed cash in the future. This collective decision by employees, which was somewhat controversial for a Korean nonprofit but received the board’s approval after a year-long debate, provided the resources for Jump to build the Songjeong-Dong Community House in 2022. Jump will use the building to host various cultural educational programs for local residents and provide space to small business owners in the local community

In these ways, Jump has managed to achieve steady and gradual growth with the help of its community of like-minded individuals. The organization’s 1,932 university student volunteers, 540 experienced professionals, and 34 officer employees also represent the next generation of leadership and form a strong foundation for sustainable governance.

Employees of Jump celebrate the opening of Songjeong-Dong Community House. (Photo courtesy of Jump)

4. Regularly Revamp Leadership

Like all organizations, nonprofits have life cycles, and each phase—from introduction to growth to maturity—requires a different kind of leadership. Unfortunately, many nonprofits don’t change how they lead to meet the moment, even though it significantly affects whether they will continue to exist. A common example of this is founder’s syndrome: long-term management by a sole representative who doesn’t delegate authority or refuses to adopt new skills or ways of thinking, thereby inhibiting growth or causing the organization to fail altogether.

Yi, Jump’s founding CEO, will likely transition out of his role in 2023. While it’s rare for an organization to undergo a leadership transition during a growth phase, the decision stems from the right reasons—to prevent founder’s syndrome, and support the accountability and longevity of Jump. In 2019, Yi shared his transition plans with the board of directors and employees, and since then, he has been preparing to empower his successor to effectively lead Jump through the next phase of its lifecycle.

5. Build a Transparent Organizational Culture

When everyone in an organization is on the same page, they can communicate more effectively. A culture of transparency also helps ensure that the personal interests of decision-makers don’t have undue influence over policies and other important decisions.

Having witnessed the demise of nonprofits brought on by individual self-interest and a lack of information transparency, Yi made the decision when he came on as CEO in 2011 to upload Jump’s business plans, information on board-level decisions, and details about operations to a shared folder that employees could access any time. Access to this information has allowed employees to better understand the organization and its social mission, ultimately enabling them to carry out the purpose more effectively. Everyone on the team can provide the same level of information to clients, for instance, and sharing information online has helped reduce the length of weekly meetings.

Jump is currently considering ways to more productively and efficiently communicate with employees about the vast amount of information it has accumulated over time. Yi says, “Transparency in information serves as an organizational safety net for our decision-making process.”

A Model for Good Governance            

Jump’s experience navigating organizational change underlines the importance of good governance. The organization’s openness to trying new approaches, such as giving employees access to leadership-level information and changing board and employee responsibilities over time, has contributed greatly to its success so far. While the same lessons may not apply directly to all early-stage nonprofits, Jump provides an example for other early-stage nonprofits inside and outside Korea’s social impact ecosystem of how a socially minded organization can evolve while staying true to its mission.

Read more stories by Kelly Hyunjung Shin, Yumin Jo & Jinwoo Cheong.