Demystifying Scaling: Part 5

In the last four posts, I’ve shared the findings of some of Taproot’s research and explored the six—and only six—discrete models for scaling nonprofit impact. The critical distinction of this series is scaling for impact—real, measurable progress toward meeting an organization’s mission—not scaling for size. Any organization has the potential to scale its impact, not just those that can grow in size. Recall the three myths surrounding nonprofit scaling: 1) it is an amorphous concept with no clear definition or discrete path for achievement, 2) nonprofits need to be exceptional across all competencies and functions to scale, and 3) some nonprofits are born to scale. In fact, the paths to scale are finite and more science than art. They require that nonprofits are exceptional only in a few functional areas, and these areas determine how they can design their own path to scaling. Many nonprofits don’t start with scaling in mind but are drawn in that direction once underway.

The framework described in this series can be very useful in guiding funders on the best ways to support grantees’ scaling efforts, ultimately creating a lasting impact with their grantmaking. These six models make it easier for funders to recognize patterns and develop a lens for identifying indicators of organizations with the potential to successfully scale for impact. A common framework also allows funders to focus their support on the most appropriate functional area for a given nonprofit to see the greatest success in scaling.

Let’s take another look at two organizations that have successfully scaled their impact—Upwardly Global (UpGlo) and The Center for Employment Opportunities (CEO)—and explore how funders helped to make it happen.

UpGlo you will recall, is a Service Enterprise. It engages talented volunteers to maximize impact by expanding service delivery. Doing so requires an infrastructure to coordinate volunteer efforts as they expand in geographic scope, and for this model, the most valuable grantmaking practice is multiyear unrestricted support that can be used to cover general operating expenses. Upwardly Global faced scaling challenges due to grants that were geographically restricted. Local foundations that impose geographic restrictions hinder the growth of nonprofits that strive to become national.

The Robin Hood Foundation and Tipping Point Community have provided UpGlo with unrestricted funds and capacity building support. These funders are engaged in grantees’ missions and understand that to support growth, they must provide opportunities to strengthen the nonprofit’s core. New Profit was also a critical pillar of support. UpGlo’s Managing Director Anne Kirwan explained, “New Profit provided multiyear funding to Upwardly Global and had a representative on our board. Draper Richards and Ashoka were also early funders of Upwardly Global and provided critical strategic planning support.”

CEO scaled its impact through the Scaled Operations model. Codifying programs and replicating operations in new locations spread out costs and maximized service delivery.

Foundations that want to support the growth of nonprofits overlook the fact that long-term involvement is needed to ensure that the nonprofit has a sound infrastructure before scaling. The Scaled Operations model, similar to Service Enterprise, maximizes impact by bringing services to a broader geography.

REDF and the Edna McConnell Clark Fund provided CEO with much more than funding; they offered to be part of a community. The foundations support community-building opportunities by providing formal and informal occasions for nonprofits to gather, and to share lessons learned, leading practices, and more. Offering nonprofits the chance to be part of a coalition promotes both the funder’s and the grantee’s goals in creating impactful programs and providing better service.

CEO affirms that its funders are brilliant on the basics. They listen, pay attention to the nonprofit’s needs, and are respectful of their time. This reassuring environment created by grantmakers enabled the organization to go on, as well as provided the mechanical expertise and dedication needed to drive CEO’s growth.

Ultimately, our research identified eight best practices that funders can harness to assist nonprofits in scaling impact, keeping in mind that the right practice depends on the particular strengths of the nonprofit and which scaling model makes sense, and that timing is everything:

1. Provide long-term, multiyear investments, and invest for realistic timeframes.
2. Provide general operating and unrestricted funding.
3. Offer capacity-building support in conjunction with funding.
4. Support coalition/community-building opportunities.
5. Provide support to influence the network/sector.
6. Develop a collaborative relationship with grantees.
7. Provide support along the different layers of the philanthropic ecosystem.
8. Be brilliant on the basics.

While nonprofit organizations are ultimately responsible for their model, impact, and approach to scaling, funders play an essential role. Funders with the right kind of supportive relationship with their grantees can leverage their grantmaking practices for maximum impact.

Read more stories by Aaron Hurst.