Beau Necco is the Mid-America regional honoree for the 2022 YPO Global Impact Award. The award focuses on YPO members making impact outside the organization that is both sustainable and scalable, affecting people, prosperity, peace or our planet.
Edward “Beau” Necco had one mission in mind when he founded Necco in 1996: to change the face of child welfare. Today, the company is a USD104 million provider of adoption, foster care, independent living, residential living and behavioral health services. With 850 employees in 34 offices across the U.S., the company has facilitated over 10,000 adoptions for children from all over the world.
The typical child available to adopt in the U.S. foster care system will, on average, wait 3½ years and live with 4.8 different families before finding their ‘forever’ home.
“Those are unacceptable numbers,” says Necco, founder and CEO of Necco, “because more time means additional trauma experienced by the child, and it simply doesn’t have to be that way.”
If you want to prove that unleashing the entrepreneurial spirit on a social problem works, then you better come up with an equation that allows you to scale. ”
— Beau Necco, Mid-America regional honoree for the 2022 YPO Global Impact Award share
Invest in data to quantify impact
Like any successful businessperson, Necco, a YPO member based in Cincinnati, Ohio, knew that in order to maximize social impact, he had to find a way to quantify it.
“What really matters most for a child when you’re trying to get them adopted?” asks Necco. “How do you get through that process with as little trauma as possible? We narrowed it down to one metric: How many foster homes does a child have to be shuffled through before adoption?”
Necco first set out to measure where his organization stood on this metric, and then, improve it. At the time, their success placing children was about the same as the national average of 4.8 families.
“We spent seven years laser-focused on that one number,” he says, “because trauma is a tremendous burden not only on the child, but to the sustainability of the entire system. And we got that number down. Now, 90% of our children are placed in their forever home the first time.”
Improving the fit between children and potential adoptive families took considerable hard work and a fair amount of science. Necco explains, “what does it take to stick the landing, to get a placement in one shot? It’s data.”
Necco and his team went outside social services to find the needed expertise, hiring people who have been doing things like artificial intelligence and predictive analytics in other industries.
“We simply applied these same tried and true business practices to ours,” he said. They also introduced customer relationship management and related technologies to drive out inefficiencies and waste in the system.
“When you can capture your data, you can learn from it. Then you can start to draw conclusions,” he adds.
Every child we meet is just one caring adult away from having the trajectory of their life changed. ”
— Beau Necco share
They found that certain social and demographic characteristics of a foster home are strong indicators of which children would thrive in that environment. “There are all these different characteristics, and we use them to build profiles of our families. We go back and learn through the years what works. You start to see patterns, and you turn those patterns into repeatable processes.”
Necco’s approach has garnered national attention, placing the company 53rd on the Inc. 500 list in 2003, earning Necco the Ernst & Young Social Entrepreneur of the Year award in 2017, and a national congressional Angels in Adoption award from Sen. Joe Manchin (WV) in 2019.
Social impact is a family tradition
Necco says his chosen profession was perhaps fate. “I always knew I would work in social services, that I would do something with social impact.”
His parents worked with special education children in their Appalachian community. His father was a college professor working with children with behavioral disorders and his mother ran a Head Start program.
Necco studied international business and Eastern philosophies in college, where he “envisioned a social enterprise where the best idea wins regardless of structural power.” The opportunity to test this idea came as he completed his MBA in 1996, the same year U.S. Congress passed legislation to allow funding to private, for-profit adoption and foster care companies for the first time.
“I had a first-row seat to the theater of social services growing up,” Necco says. “Social justice was always part of our dinner table discussions. With both my parents working for numerous social enterprises, I got to see firsthand both sides of the equation – the funding side and the operational side. I also saw the lack of accountability and bureaucracy.”
“That opened a whole new world; we could finally unleash the entrepreneurial spirit on a social problem,” Necco says, adding that slow and bureaucratic might serve a purpose but not when it comes to child welfare. “The cargo is too precious. We don’t have that kind of time. The quicker we get children into stable, caring homes, the better chance we have of changing the entire trajectory of their lives. And that generates a massive social impact.”
Unleashing an entrepreneurial spirit in social services
Necco drew on his entrepreneurial drive and his business network to reimagine the typical approach to social services.
“If something doesn’t work right away,” he says, “we adjust our swing and try something different. If that doesn’t work, then we try something else.” It is the ability to fail – and learn – that has fueled his company’s success and that he would like to see repeated throughout the social services industry.
“You have to be big enough to matter, otherwise you become an anomaly and people think you’re just an individual heroic effort,” Necco explains. “If you want to prove that unleashing the entrepreneurial spirit on a social problem works, then you better come up with an equation that allows you to scale.”
He points to his company’s scalable, repeatable processes.
“That’s why we go to the business community,” he adds. “That’s why we go to YPO and why YPO has been so incredibly valuable to me. I can come in and ask questions of people who have expertise in other areas that have nothing to do with adoption yet are so applicable to our adoption. It’s about getting every brain in the game. That’s what maximizes social impact.”
Funding the impact
His advice for anyone who wants to start a social enterprise: You better have a revenue source.
There is funding available for the work he does – whether it is through the government or health insurance. “We don’t do any fundraising,” he says. “When you focus on fundraising, your core competency becomes fundraising. We focus on innovation.”
Necco balances what he calls his “double bottom line,” which is like a teeter-totter.
“We engage in performance-based contracts with insurance companies, so they will reward us for reducing trauma,” he says. “That’s really the future. You have to prove your impact.”
Being data-centered drives down cost for Necco, which frees money for investments in innovation. “Being able to fund our research and development increases our social impact. We have to spend money on innovation,” he explains.
“We have to reinvest our profits. We’re not really interested in making money. What we’re interested in doing is maximizing our social impact, but to do that you have to have money.”
He adds, “It’s difficult, but it’s absolutely worth it. My motivation comes from this purpose-driven mission that we’re on. Regardless of what trauma a child experiences, regardless of what bad hand they’ve been dealt, every child needs a family.”
Necco is proud that they have reduced trauma for thousands of children by getting to 90%. But for him, it is not good enough, “we want to be at 100% – so we’re chasing perfection.”
Looking up at the oversized photos on his office wall of children he has helped over the years, he admits, “Of course, it’s hard, but I know nothing greater than living a purposeful life. Every child we meet is just one caring adult away from having the trajectory of their life changed.”