Invest in scaling infrastructure, not just products and organisations

 

Yanni Peng and Warren Ang

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The dominant approach to scaling and replicating impact has been to scale-up one organisation or model at a time – an effective non-profit or intervention is recognised, and resources are given to that non-profit to replicate its model to other partners to increase their reach.

This approach is necessary, but insufficient to scaling up at the scale and speed required, especially for large countries like China. Our case study argues that more investment needs to be made in the infrastructure for scaling up, not just in the product or organisation being replicated.

Here’s why: for organisations or models to scale, they need to solve problems both upstream and downstream. The upstream challenge is to work out whether they have identified the right solution or intervention to solve the specific social problem at hand. The downstream challenge is to get that solution in the hands of the communities that need it most, to do so sustainably and at scale.

Typically, resources driving scaling up or replication tend to focus on the upstream challenge – funders give money to non-profits to refine their models, conduct research to show their effectiveness, to package up the intervention model into standardised training and operating procedures to make adoption easier. However, downstream is where most scaling efforts fail. Good solutions exist, but non-profits are not able to distribute and deliver these solutions at scale and with sustainability. The most common challenges are the lack of strong local partners to work with, the lack of local resources to be able to pay for the services being provided on an ongoing basis, and the difficulties in managing and maintaining quality of delivery across a large network of partners. These are often systemic challenges, plaguing the scaling efforts across all non-profit organisations seeking to grow. These challenges are often too big for any one product or organisation to resolve efficiently and effectively by themselves.

This is why, in addition to allocating resources to specific products and organisations worthy of being scaled, funders should also give resources to building two types of aggregators. We argue these aggregators are much better positioned to address these systemic challenges than a single product or non-profit organisation, and that they can build the infrastructure that would accelerate scaling and replication for everybody. The two types of aggregators we recommend are product platforms to tackle the upstream challenges, and neutral hub organisations to tackle the downstream challenges.

Founded in 2016, the Effective Philanthropy Multiplier (EPM) in China is an early but impressive example demonstrating the power of building scaling infrastructure through these two types of aggregators. As a nationwide product platform to aggregate the best upstream products, EPM has sourced 49 products for different social needs across vulnerable children, disabilities, elderly care and environmental protection, etc. To address the downstream challenges, EPM has created a network of 38 provincial and city hub organisations that facilitate replications at the local level. In just three years, EPM has managed to achieve 49,477 distinct replications through 8,607 local partners, including NGOs, volunteer groups, schools, etc. It has collectively reached 65 million beneficiaries and mobilised an estimated 923 million RMB ($130 million) in funding.

How EPM’s product platform works in collaboration with neutral local hubs.

 

The product platform provides the infrastructure to help funders and non-profits quickly identify which products, interventions, and organisations could be most efficient and effective to solving different social problems. The hub network provides the infrastructure to support products and non-profits in addressing the common downstream challenges mentioned above, such as identifying and selecting the right local partners, mobilising local resources (Government and corporate), and capacity building local partners.

We are still far from the real potential of impact at scale through aggregators in China, however, EPM has provided a good start. More resources are needed to strengthen the product platform (impact measurement, product development to address the biggest gaps for vulnerable children, disabilities, elderly care, etc.); and to capacity build hubs to perform their critical role in representing local community-based organisations, mobilising local resources and capacity building local organisations.

Once the infrastructure is built, we believe a multiplier effect will take place, where all efforts to scale and replicate will improve their probability of success. Products and organisations can ‘plug and scale’ using the infrastructure, rather than having to solve all the same upstream and downstream challenges by themselves. This way, we can all get closer to solving social problems at the scale and speed that society needs us to.

This article was first published by WINGS on 9 December 2020.

Warren Ang is the founder and Managing Director of the Global Development Institutes’s East Asia office, and Yanni Peng is CEO of Narada Foundation.


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