SVP Conference 2014: role of funders in scaling organizations

 

Emily Davis

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Last week I had the pleasure of participating in Social Venture Partners’ Audacious Philanthropy conference in Austin, Texas, USA. One of the best sessions I attended examined the role of funders in scaling organizations.

The session facilitators, Terri Sorenson from Friends of the Children and Greg Coussa from the International Centre on Social Franchising, provided real-life examples and theoretical framework. Sorenson shared her recent pitch for funding to scale efforts, and Coussa explained models of expansion and recommendations for scaling. This comprehensive session gave me the opportunity to examine scaling from a variety of valuable perspectives.

The pitch

In her scaling pitch, Sorenson clearly demonstrated the need to effectively communicate an organization’s existing programmatic success while also creating a compelling argument for broader reach and greater impact, pointing to goals that necessitate scale, likely within an extremely finite window of time.

The most compelling elements of her pitch included their model, which is based on lifelong mentorship for any individual in the programme. The fact that their mentors are paid professionals was impressive, as were their statistical metrics: for every dollar invested in the organization, there is a seven-dollar return on that investment.

Sorenson shared the ways in which the organization is meeting their mission by finding the best leaders – as staff, board members and volunteers. She shared a powerful case study as a story of their impact, an essential component in any fundraising effort, and clearly broke down the use of the financial investment for scaling purposes as well, ie 25 per cent to be used in demonstrating impact and 55 per cent to share best practices for impact.

What does it mean to scale?

Coussa defined scaling social impact as the ‘process of increasing positive social impact to better correspond to the magnitude of the identified social need’. He then explained theory and examples of scaling. I was interested in the reasons, good and bad, why an organization might want to scale:

  • Spread great ideas
  • Attract investors/funders
  • Deepen impact by spreading mission and vision on the ground.

He also noted that if the primary motivations for seeking to scale are ‘empire building’, where the founder may want to grow just for growth’s sake, or if the organization is simply capitalizing on opportunities and financial incentives to scale without internal capacity and strategy, scaling is likely not the best option.

As a funder myself, I see it as critical for funders to be aware of their expectations and have a holistic understanding of organizations and markets before creating funding or partnership opportunities. An organization’s drive to secure funding could compete with their readiness to scale. The pursuit of this funding could lead to mission drift or failure in scaling that could affect the entire mission.

It’s important to acknowledge there is no ‘right’ answer when determining scaling options. Below are examples of other possibilities:

  • Dissemination models where the costs are covered such as Alcoholics Anonymous
  • Partnerships between organizations which share and deliver impact
  • Licensing models such as Tedx
  • Social franchising where intellectual property is shared

In pursuing any of these options, the scaling organization needs to determine its priorities around flexibility and control. With more control comes less viral engagement and flexibility. With greater flexibility comes potentially expanded reach, but limited quality control of products, services and brand.

One model of the social replication stages includes:

  • Prove replication of impact through readiness assessment
  • Design a replication strategy including business and feasibility research
  • Systemize operations, marketing and legal matters in a user-friendly way
  • Pilot a scaling model in three to six locations with a feedback loop, monitoring and evaluation
  • Scale the model more broadly once there are proven results

I had little experience in the world of scaling prior to this session and now feel more confident in the questions to ask, evaluation to review, and next steps to consider. As a consultant and funder, I spend a good deal of time in the social enterprise space. These tools and strategies will help position me to ask better questions and set organizations up for scaling success.

Emily Davis is president of Emily Davis Consulting, author of Fundraising and the Next Generation author, and a Social Venture Partners International board member.


							

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