Lessons from The Other Side of Scale

The best conferences send you back to the office with a notebook full of “notes to self”—things you want to try or think about doing differently.

Last week I had the opportunity to join a workshop for non-profits and funders on realizing impact at scale, held by The Bridgespan Group and Harvard Business School. It was exciting to hear from so many ambitious organizations from around the world, which are improving lives in fields like education, health and homelessness reduction. Some of the most inspiring participants were those already operating at what would commonly be considered scale—including a number of organizations reaching millions of clients and beneficiaries. They candidly reflected on what they’ve achieved so far, what they’re grappling with as they shape their next phase of growth and impact, and what funders could do to be more helpful. The challenges they described facing on “the other side of scale” provide foundations like ours with some food for thought:

Innovating at Scale—In the private sector, profitable growth can fund greater investment in R&D, improvement of core offerings, and expansion into new products and services. Companies that make progress toward scale can also more easily access external financing for innovation.

Organizations that have scaled in the social sector can confront a kind of inverse problem, such as that experienced by the leaders of a large South Asian education NGO. Funders were eager to support the organization’s proven model, which reached millions of youth with demonstrated results. Yet recent research suggested that this model—a “high dose” intervention approach—might not be necessary to achieve key educational outcomes. Shifting to a more efficient operating model with the same level of impact would be a true win-win, but the organization struggled to identify a funder willing to invest in experimentation when they could stick with the core program and its proven outcomes. So are nonprofit organizations, particularly those for whom earned income is not viable, supposed to find the capital to experiment with new approaches and address emerging needs?

At the Foundation, we’ve made a number of investments to deepen innovation capacity among existing social sector organizations, but there’s more we and other funders can do with our support on this front. What might we do differently to enable the organizations with a track record of impact and scale to adapt and improve?—lest success at scale become a kind of (not so) “golden handcuff” that limits innovation in organizations otherwise equipped to deliver.

Grappling with Government Engagement—A number of organizations we heard from had reached an initial level of scale without relying on the government for funding or infrastructure. But as they pushed themselves to contemplate a “10x” or “100x” increase in reach and impact, government increasingly appeared to be a critical partner. Yet in their growth trajectory, these organizations hadn’t built institutional capabilities or relationships to engage effectively with government.

Here again, funders can play a key role—through funding and other mechanisms—to support organizations that have reached some level of scale to make the most of government as a potential partner.  Examples include:

• Network access: Funders tend to have robust networks and convening power, and can create spaces for grantees to connect to government and test the potential for productive engagement.
• Capacity-building: Resource-constrained non-profits will likely require dedicated funding to invest in policy and external affairs-oriented roles.
• Measurement that matters: Funders can encourage—and financially support—rigorous measurement approaches that generate the kind of evidence that will attract government attention and resources. One workshop participant elegantly termed this “M&E for influence”. Of course, this would be a build on, and not a replacement for, M&E focused on assessing program efficacy itself.

Building Technology Infrastructure for Scale—A final theme, discussed with real urgency by participants, related to technology. Many of the non-profits present had developed IT systems in a necessarily scrappy way, and were feeling the strain at scale. Data management constituted one area of concern. Operating at scale generates a tremendous amount of data, but participants noted they lacked the technology infrastructure and internal capacity to make the most of this data for measurement, learning and improvement. Additionally, many non-profits sensibly see technology as a lever for realizing greater efficiencies and amplifying scale. However, some I talked with at the workshop feel they lack the requisite expertise to take advantage of opportunities technologies afford, or—as noted above—the funding for sustained experimentation that can be necessary to get a tech solution right. Funders could help bridge this gap by:

• Building technology support into grants, either as part of a broader commitment to institutional capacity building or a as a strategic investment in the sustainability of a given project
• Hiring technologists into their own program staff to spot opportunities and ensure tech-savvy thinking is built into the grant-making process
• More broadly, as recently called for by Lucy Bernholz, including people on their foundation boards who understand digital technology and the attendant opportunities and risks for our sector writ large

As funders, we invest significant time and resources in identifying and supporting the models and organizations most likely to scale. What more can we do to ensure they thrive—and multiply their impact—once they get there?