In a world where social needs are increasing and resources decreasing, it’s critical to scale organizations that efficiently and effectively address social problems. For the last three years, the Social Impact Exchange has been convening leaders in the field to address this issue.
“Scaling a nonprofit’s programs without investing in its capacity is a recipe for failure,” according to the report Scaling What Works: Implications for Philanthropists, Policymakers, and Nonprofit Leaders, by Edna McConnell Clark Foundation and the Bridgespan Group. This was the overarching theme of this year’s conference. Seven different types of support were touched on at the conference.
1. Business planning: You can’t get where you want to go if you don’t know where you want to go. Nicole Farmer Hurd from the National College Advising Corps, Lisa Jackson from New Profit, Inc., and Meghan Duffy, Manager of Special Initiatives at Grantmakers for Effective Organizations, made this point in their panel.
A business plan makes the case for scaling a nonprofit by defining and sizing the problem and describing the approach the organization will take to solve the problem. A business plan is an opportunity to think things through on paper, which is a whole lot less risky than thinking on the fly as you try to run a project. The business plan is also a sales document that more and more funders expect to see.
2. Leadership development: Richard Brown at American Express Philanthropy emphasized the importance of supporting leadership training especially when a leader is first starting out. Two things he’s seen work well are 360 degree reviews and coaching. Many of the nonprofit leaders Brown has sponsored report that the feedback they received from an executive coach was transformational.
Other foundations provide coaching in a different way. At Draper Richards Kaplan Foundation (DRF), the portfolio manager plays that role, says Anne Marie Burgoyne.
3. Peer advisory groups: Theresa Regnante of United Way of Long Island talked about the benefit of being part of a group of executive directors who meet regularly with a facilitator to problem-solve. Your peers understand your situation. They’ve been there. They can see what you can’t: opportunities, options, and stumbling blocks. Brown also sees the value in peer advisory groups.
4. A learning community: DRF brings grantees together to learn. DRF specializes in funding early-stage nonprofits so these learning opportunities are particularly important to their grantees. Every year they meet in person for three days. They meet monthly by phone. For issues that all their grantees face, such as board development, DRF has created a library of tools and templates. DRF also brings in an expert to address grantees about a particular, common problem. These meetings also are an opportunity for nonprofit executives to problem-solve in the same way peer advisory groups do, but in a less structured way.
5. Connections: Foundations can be connectors. Nonprofit executives need access to people who can help them. That may be to an additional funder, a potential partner or an alumni who has solved a similar challenge, says Burgoyne.
6. Measurement: It’s a topic unto itself, but in a nutshell — if you don’t measure something, how will you know if it’s working and if it needs improvement? Donors, whether a foundation or an individual, who fund scaling nonprofits expect measurement to be integrated into the overall business plan.
7. Visibility: Some politicians see the light, but for others they need the heat of public opinion to focus on an issue, according to John Govea at Robert Wood Johnson Foundation. Research and advocacy can get attention and raise public awareness of an issue, then put pressure where it’s needed.
If funders want to scale nonprofits, they need to weigh the type of money the nonprofit needs to be successful. It’s not always about providing more services.
“Pay attention to the difference between ‘buy’ money that pays for services, and ‘build’ money that enables an organization to invest in its long-term sustainability. As with any business, organizations need to balance both, and this balance shifts as they scale. Funders need to know whether their grantees need build money or buy money and how to be effective buyers and builders,” said Antony Bugg-Levine, CEO of Nonprofit Finance Fund.
The good news is that over the three years I’ve been attending the conference the importance of capacity building in nonprofits is finally being recognized. The bad news: More foundations and donors need to get on the capacity-building bandwagon if we’re going to successfully scale good nonprofits.