After I turned 40 a few years back, I felt like I was running out of time to make the change I wanted to see in the world. I run a nonprofit called EARN that creates new cycles of opportunity for low-income American families. We believe that helping people save for and attain financial goals is transformative and fosters prosperity. EARN is one of the two largest providers of matched savings accounts to low-income Americans, and we’ve been very successful—we’ve gained high impact for our clients and strong support from big funders. But after ten years of innovating, and impacting more than 100,000 people directly and indirectly, I concluded that it wasn’t good enough. We needed to increase the scale of our impact.
When our society is facing massive social and economic problems involving billions of people, why is so much funding, brainpower, and attention given to models that will clearly never scale to match the size of our problems? I’m tired of our sector aiming too low.
Many of you may be tired of hearing about scale! But there’s an ugly truth that we need to put on the table if we’re serious about achieving our missions. Scaling solutions to the world’s social and economic problems is already astonishingly difficult. Yet nonprofits, funders, and social ventures make it even harder by falling prey to stifling incrementalism, where “success” is measured just a few marginal increments from the status quo—often still light years from really solving our problems. This positioning quashes real innovation by never aiming high enough and ultimately leads to rationalized mediocrity. We set the bar lower and lower because the problems are hard, and we often declare success despite the fact that our impact is embarrassingly small compared to the size of the problems we are trying to solve.
EARN has been dedicated to scale since our founding in 2001, and we’ve suffered from this kind of incrementalism ourselves. But in 2012, we broke free and announced our goal to open 1 million goal-based savings accounts for low-income Americans by 2022—that’s after opening only 5,000 in our first decade.
The problem that EARN aims to solve—financial insecurity and people remaining poor no matter how hard they work—burdens tens of millions of Americans and is growing. The nonprofit cfed.org recently released a study that said 44 percent of Americans would face catastrophes such as homelessness if their income were interrupted for 3 months. As the number of American working poor has grown from an estimated 50 million to 70 million during the past ten years, I’ve watched too many leaders ask how others can become as “successful” as EARN instead of pushing for the breakthroughs we need to change the country.
EARN’s push to serve 1 million has already revealed a great deal about how we need to change if we are to create the change we want to see in the world. While stifling incrementalism has many dimensions, I see three ways to stop it:
- Stop trying to feel so good. I hate to be a buzz kill, but many of the most effective, efficient answers to our problems are not “high touch” and don’t feel warm and fuzzy. “Success” for funders and boards too often requires an unspoken “feel good” factor that limits the ability of change agents to challenge long-accepted norms to seek breakthrough success. We owe it to the people and missions we serve to use the best answers, not just the most emotionally attractive ones.
- Emulate software entrepreneurs. The social sector relies too heavily on technology to solve information gaps. Nonprofits and social ventures need to think like the greatest software entrepreneurs among us, who push to use technology much more strategically: to measurably alter behaviors, create new markets, and give needle-moving voice to people and communities without power.
- Break the mold of philanthropy, as we know it. Philanthropy, as a capital market, is simply not aligned to support real innovation. In fact, it usually weeds out revolutionary ideas to limit risking scarce resources. While this is understandable on some level, foundations and corporations will see very little innovation as long as they take so few risks. Instead of expecting breakthroughs through incremental change, funders must craft and govern a capital market that rewards merit and aligns form to function. The F.B. Heron Foundation is blazing exciting trails as they change in this direction. I hope others will learn from the shifts they’re making.
We will keep pushing the envelope at EARN, walking our talk of scale as we serve 1 million people in the next decade. I know we’ll take some lumps as we make the hard choices required to give life to this vision, but it is my hope that we’ll inspire many of you to also take bold, visionary risks. The world will be better for your courage.