Good Money

Jitasa is doing well by doing good for non-profits — and employees

In his previous life, Jeff Russell was a high-powered, high-flying business consultant for the world’s largest management consulting company. It was fun. The perks were great. And the work was interesting.

But Jeff wanted more. The lifestyle and work didn’t align with his personal values.

“A month before our wedding, the partner on the project I was working on came to me and asked if we had any flexibility on the date,” Jeff recalls, laughing at the absurdity of rearranging his wedding for a consulting gig.

“That was a pretty clear sign it was time for me to move on.”

The next several years would take Jeff and his new bride — no, the wedding date wasn’t moved —  from Atlanta, Georgia to Portland, Oregon and Bangkok, Thailand for work. Then to New Haven, Connecticut for business school. And finally to Boise, Idaho to launch Jitasa, a technology-enabled accounting and bookkeeping service for non-profits.

It was a path that was built with a sense of intention. Jeff, an industrial engineer by training, originally developed the concept for Jitasa while living and working in Bangkok. Not only did he recognize the obvious (non-profits are cash poor), he also saw how his experience in process improvement and technology could bring efficiencies to the market, dramatically reducing costs.

Jitasa founder Jeff Russell on the phone

Jitasa slogan: "We believe in positive change"

When he came back to the States to attend business school at Yale University, he was neck-deep in plans for Jitasa.

“While my classmates were analyzing economic models for airlines and other complicated things, I was always working on projects about non-profit accounting,” he explains. “Any time I was working in a group, I always suggested we research something about non-profit accounting. I wasn’t invited back to a lot of groups,” he says with a laugh.

What he found in all of that research was a large niche (there are 1.6 million non-profits in the U.S., one for every 30 people) whose accounting needs were being handled by a range of providers, from in-house bookkeepers, one-person bookkeeping contractors, and mid-sized accounting firms. None dedicated exclusively to serving their non-profit clients.

This fragmentation, according to Jeff, looked like a tremendous opportunity. He finished his degree, tightened up his business plan, and headed west to Boise to build a company.

“I was the fourth of four kids and when I was in school at Georgia Tech, my dad moved to Boise to take a job at Boise State,” Jeff says. “We had to look it up on a map to figure out where it was, but when I started visiting on holidays I just fell in love with the place. The outdoors. The skiing. When I decided to start Jitasa, I figured I could start it anywhere. Why not Boise?”

Once here, Jeff began trying to raise money to build Jitasa. It wasn’t easy.

“The first 37 investors we asked said no,” Jeff says. “Ward Parkinson, one of the founders of Micron, was the first to believe in us. He was number 38.”

Jeff stuck with it and eventually raised enough to build a team and begin servicing clients. Today, that client list is quite impressive, including 25% of all Boy Scouts of America councils, the Bronx Children’s Museum, Idaho Conservation League, and hundreds of others. In all cases, Jitasa provides these non-profits with a range of accounting and bookkeeping services based on a flat monthly fee, something that’s still not common in the accounting world.

But it wasn’t always that way.

Two years ago Jeff and Jitasa operated on a more traditional hourly billing model. And while their technology and tools had allowed them to scale the company well, they felt there was something holding them back. But Jeff couldn’t quite put his finger on it.

Jeff ran his situation by some other businesspeople, who seemed convinced he had a human resources problem. But the Jitasa CEO wasn’t convinced.

“We’re pretty good at motivating people,” Jeff says, pointing out that his office, with its ping-pong table and beer on tap is pretty far from your typical accounting firm. “The more I looked at it, the more I saw it was our pricing model that was the problem.”

Jitasa B-Corp poster

jitasa-golf

“It was a fundamental flaw in how we were operating,” he says. “We were basically trying to put the risk back on our customers by charging them by the hour.”

So Jeff and his team developed the flat-fee approach. By having prospective clients answer just 10 questions, Jitasa can determine what services they will provide at what price — a price, Jeff says, that is up to 40% less expensive than their competition.

“Changing that transformed how we operate because employees are not focused on logging time,” he says. “They’re focused on doing the work and providing great service. Everybody’s happy. We’ve had multiple success moments, but with that one we really clicked into a model that could scale.”

Seeing the advantages that scaling Jitasa brought to his clients and employees, Jeff decided to raise more money to accelerate the company’s growth.

And grow the company did.

“We tried to do too much too quickly,” he says. “We started 10 special initiatives and, in our minds, they were all going to work.”

Spoiler alert: they didn’t. Instead, Jeff says, the company over-hired and over spent.

“About a year in, I realized that four of our initiatives were working and six weren’t,” he explains. “In a lot of metrics the business was doing well, but culturally we were running around like chickens with our heads cut off.”

The only way out was layoffs. “That kept me up many, many nights,” he says. “That was probably my lowest point at Jitasa.”

But by acting swiftly and re-prioritizing profitably over just out-and-out growth, the company has found its way back to health. Client growth and client retention are now at all-time highs. Jitasa is spending less by taking on fewer new initiatives, yet is seeing even better results. Why? Mostly, Jeff says, because of the company’s renewed focus on their core and on their employees.

“The big lesson for me as a leader is, as much as I like shiny objects and new opportunities, there is really something to be said for consistency and simplicity.”


Photography by Mike Kerby