First Book founder Kyle Zimmer talks about the hybrid model that’s key to the nonprofit’s success.
In the early 1990s, Kyle Zimmer was a practicing attorney who spent her free time volunteering at a soup kitchen in Washington, D.C. Working with struggling families made her realize that many children do not have access to new, high-quality books, which are the building blocks of education. She did her research, came up with a plan and launched First Book, a social enterprise that has distributed millions of books and other items to children in need.
But it’s not run like most nonprofits. First Book charges a small shipping fee per book that covers the operating cost of its book bank and it adopted atypical publishing terms so it could buy books at a discount.
Zimmer spoke to Katherine Klein, a management professor and vice dean of the Wharton Social Impact Initiative, about the hybrid business model First Book has adopted that was key to its success.
An edited version of the conversation appears below.
Katherine Klein: I think of First Book as one of the most impressive nonprofit social enterprises I know. You’ve been at it for a long time and are passionate about continuous improvement. How do you describe First Book?
Kyle Zimmer: We are a nonprofit social enterprise. At the highest level, we’re dedicated to equal education. We focus on fixing the lack of physical resources in any space serving children in need, ages zero to 18. We provide books, computers, winter coats when they’re needed — anything that is a barrier between kids and an equal shot.
Klein: Books were the initial starting point. Is that the major focus of your work? What’s the balance when you talk about these other resources?
Zimmer: Books are always the heart of First Book. In fact, we were delighted last year to hit 160 million books distributed over the lifetime of the organization. Last year, we did about 18 million or 19 million books through our system in a single year, and it’s growing 20% a year.
Klein: Who are these books going to?
Zimmer: They go into the hands of anyone serving children in need. It can be the most informal teen drop-in center. It can be a Head Start program. It can be a WIC clinic, a church basement, a barber shop where they’re doing outreach to get neighborhood kids reading, a Title I or Title I-eligible classroom. It’s a gigantic range.
“I was raised by people who believed deeply that education was the road to equality.”
Klein: The name First Book suggests this may be the first book in a kid’s life or in the home. Why First Book?
Zimmer: I fell in love with a poem by Rita Dove that’s called “The First Book.” That’s where the name came from. It has to do with being the first book that really grabs you and turns you into a reader.
Klein: You founded First Book 25 years ago after making the jump from a career as an attorney. What I’ve seen in my role in the social-impact world is that plenty of people have a larger sense of purpose, but they don’t take the plunge. How and why were you able to take the plunge?
Zimmer: I think that I took the plunge for two reasons. One, I was raised to focus on education. I was raised by people who believed deeply that education was the road to equality. To this day, I believe that it really is the next wave of the civil rights movement. That has always been at the core of who I am. When I started, I actually was practicing law. I went in the evenings to a soup kitchen. I just hung out with kids from the neighborhood. It was in the late 1980s, early 1990s. It was a tough period for Washington, D.C., a period of the height of the crack epidemic and very violent. These kids were doing everything right, coming in from a tough neighborhood, looking for adult intervention. I realized that even though I wasn’t a teacher, those hours could be a lot more productive if I just had books and could pull a kid onto my lap and start reading.
The lack of books in that setting set me on a trail of exploration. I started looking at schools in the neighborhood, what resources they had available, reading studies about it. One thing led to another. Like probably every social entrepreneur in the world, I have that split where my head is fundamentally private sector and my heart is social sector. I began to put together a business plan to understand the intricacies of the publishing industry and to start imagining how you develop an actual business plan that would fix the chasm.
Klein: I love how you put this, with the heart in the social sector and the head in the private sector. Another way people talk about organizations like yours is as hybrid organizations. They can be for profit; they can be nonprofit. But there’s a strong social mission and a revenue-generating model as well. How does that work in your case?
Zimmer: At this moment, we have two big jet engines. One is called the First Book National Book Bank. Fundamentally, it’s focused on books, but there are other products as well. It accepts large-scale contributions from really almost every major publisher in the United States and Canada. We take that inventory in, and we make it available through an online system to our expansive network of classrooms and programs who have signed up with us and are eligible to receive resources.
Klein: That is essentially a donor model, where companies are donating books and you’re distributing them.
Zimmer: Right. While that sounds more traditional in its design, the books remain free. But the people who receive them pay a shipping and handling fee. On average, it’s about 55 cents, 60 cents per book. What that fee allows us to do is not only pay shipping and the hard out-of-pocket cost, but it allows us also to pay 100% of the costs related to running the National Book Bank. It’s completely revenue-neutral for the organization. That places 14 million books a year, something like that. It’s a powerful engine.
The second engine is called the First Book Marketplace. About 10 or 11 years ago, we realized that although we loved the Book Bank — it’s wildly efficient and places enormous quantities of books and resources out there — what it doesn’t do is fix the problem for publishing. Publishing is a consignment industry. What that means is that they know that when they hit the print button every year on whatever titles they select, 25% to 30% of that inventory is coming back to them. That means that they elevate the price at retail to reflect that. So, we have a market now where a premium picture book for kids