Rodney W. Nichols, past President and CEO Emeritus of the NY Academy of Sciences, is Senior Advisor to the Alliance. Rod.email@example.com The Innovation Fund of the Alliance For Global Good is not mostly about “scaling,” but it can help.
What if your non-profit social service organization is sailing along nicely, with a reliably funded budget of, say, $5-20 million per year, yet you realize you have little or no margin to experiment with new ideas? And what if, on a fateful day, you see the prospect of the old reliable governmental support eroding just as you hear the news that a long time donor may cut back a little? Well, try the Innovation Fund. It may stabilize your program – AND it may give you the margin you’ve always wanted by earning revenues. With the added revenue, longevity-giving stability can emerge.
But how about the next phase, your possible expansion? What if your added revenues accelerate and confirm your success? Then what happens after this success? What about the demand for “scaling” – broadening and expanding the “impacts?”
Scaling may be accomplished in diverse ways. For instance, it may come from exploiting higher efficiency to benefit more people per unit funding. It may emerge by using well established methods to reach more “customers” or “beneficiaries.” If that latter course were chosen, the challenge is to recruit and train the human capital for a larger staff.
Scaling of a different sort might be achieved through transferring your approach to other groups and other places. This path is what Ashoka does in its remarkable “Globalizer” program, supported early by AFGG. With that course, extensive training for the new staff in a new culture will be essential. Moving to a new city or continent is never easy, but it can be done, and has been.
An entirely different path to scaling might be achieved by merging with a complementary group. Or perhaps the scaling can work best by forming alliances with or pooling resources with, one or more groups serving closely comparable missions. Whenever one group is superior in overall performance – measured against a range of standards – or in terms of its use of available resources – such collaboration is desirable. The result could be lifting the performance of an entire ensemble of diligent organizations.
Moreover, these ideas of broader and tighter cooperation, driving for greater “collective impact,” are becoming a compelling frontier for potentially much more effective social action. Jerry Chasen, the COO of AFGG, has studied this potential and sees many opportunities for it to be attempted. But such organizational plans are hardly simple. Success turns on resolving many issues: likely organizational change; the construction of shared metrics with a common backbone of all the cooperating groups in order to monitor data and shepherd necessary refinements in action; the possibly contentious decisions on allocation of pooled resources; the possible consequences in layoffs among the least effective groups; and the political complexity of managing intersecting boards. These are among the most important barriers to collective action as a path to scaling.
In short, “scaling” in the non-profit world rarely looks like the spectacular diffusion of, say, iPhones across borders. Yet the challenges in scaling (up) a non-profit’s successful program are comparable to those confronted by for-profit organizations that aim to stretch their market and lift their sales. Although non-profits often possess murkier incentives and struggle with more ambiguous metrics than do firms, leaders of social missions should not despair. To foster the necessary transformations, the AFGG’s Innovation Fund lowers the barrier to effective change by providing the capital for inventive diversification that can lead to more reliable scaling.
In October the AFGG’s pitch panel will meet in NYC to advise on the merits of the six finalists in the 2013 competition for the Innovation Fund’s grants. To restate the reason for convening the pitch panel, AFGG needs an independent, private sector-oriented panel of experts – people who know the non-profit landscape as well as the entrepreneurial world—is to double-check on the realism of the best experiments.
Part 3 of this series will review the larger global trends calling for new strategies.