Nonprofit organizations nominated to the Scaling Marketplace go through a rigorous due diligence process led by funders focused on specific fields who are members of the Exchange Working Groups. After completing due diligence, if Working Group members provide lead funding for a nonprofit, it is then shared broadly with other grantmakers across the country whose funding aligns with the nonprofit’s work. Distribution to a wide number of funders is accomplished through the Exchange’s online marketplace, via collaborations with existing national and local funder affinity groups and funder networks, as well as through peer-to-peer relationships.
Here, two nonprofit CEOs share their impressions and experiences in the nomination and due diligence process, the benefits from participating in the Scaling Marketplace, and the results they’ve seen thus far.
How would you describe the Scaling Marketplace?
Ellen: This is the first time I’ve ever seen this kind of thing – where a group of funders get together to identify top-performing nonprofits, conduct their own due diligence, and then provide other funders with an inside view. It’s a unique and missing piece. This kind of marketplace shares information and creates important efficiencies that I think are missing in the sector. It provides funders with a set of organizations that have gone through an incredible due diligence process, highlights those that are evidence-based and can scale and have greater impact, and provides an opportunity to co-support them financially.
Sanjeev: Agreed. It’s about a marketplace that speaks both to the demand and supply side. The premise is that funders have a desire to use their philanthropic dollars more effectively, and that there are worthy nonprofits that are looking for funds to scale their operation. The nomination and due diligence processes incorporated into the Scaling Marketplace offer a way for those on the funding side to share best practices for the benefit of one another – to use the common wisdom in specific interest areas to share information about programs that can produce even greater impact if they’re able to scale globally or nationally or even locally.
What are the benefits to your organization in being part of the Scaling Marketplace?
Ellen: So far, the Scaling Marketplace has been an exhilarating and informative experience. To go through the process and ultimately be selected as one of 8 is pretty special. The due diligence portion was by far the most rigorous we’ve ever been through. It showed us the kinds of resources we needed to pull together to demonstrate our scaling capability. The nonprofit sector suffers from not having sufficient capital to scale dramatically. When my organization spun off from a university I learned firsthand how undercapitalized nonprofits are and how tough it is to scale. The light bulb went on around why so many great nonprofits stay small.
Sanjeev: We have a mission to serve underserved patients. We are involved in the Scaling Marketplace for three key reasons: first, because of the knowledge that is proffered to better understand the perspective of funders. The team at the Exchange helped us package our story in a way that responds to how funders like to see information, data, etc. – which is often different than how we traditionally describe ourselves. Second, participation in the Scaling Marketplace is an excellent way for us to communicate with a large group of funders. Third, because there is an independent, external evaluation, due diligence, and opinion by the Health Working Group, it validates the value of our program.
Would you tell us about your nomination and due diligence experience, and the process of writing a growth business plan?
Sanjeev: A lot of work, extensive, time intensive, a serious review. My whole team has been involved. It’s been very helpful to go through this process because it gave us the opportunity to look at our organization from another perspective, through a different lens. It’s been a reflective exercise to write the plan, requiring us to think through very specific details so we could put them down on paper.
Ellen: Arduous, rigorous, definitely worth it! We had prepared our own business plan but needed to do a new one for the Scaling Marketplace. I am on the phone regularly with staff at the Exchange – we’re working closely together, and getting introductions to new funders. But we shouldn’t get trapped into thinking this is an automatic ‘dollars in the door’ kind of thing, because this is a new collaborative funding model for philanthropy and will take time to gain their trust. But, clearly, it has much potential for us and others that seek capital for scaling.
What results have you seen thus far?
Sanjeev: It’s difficult to answer this question because it’s far too early for that. The time between when a funder sees an idea and actually funds it can be very long – a year or longer. Grantmakers have a very robust process that takes an extraordinary amount of time for proposal reviews, approvals, etc. Even so, my sense is that people have read the ECHO prospectus and I hear that they have seen it via the Scaling Marketplace. As new funders support us we will learn how they get to us, so I am certain we will know the effect the Scaling Marketplace is having on our campaign.
Ellen: We are getting closer to our goal. Although we knew many of the funders that are supporting us now, I am sure that their thinking was reinforced by the due diligence conducted by the Scaling Marketplace. Sharing this information has to have had an impact in generating financial support and I know it will continue to amplify our voice and the potency of our work. Being part of a larger marketplace is very exciting. In the broader context, we are definitely seeing momentum of growth and scaling and impact. But this is a process that won’t happen overnight – creating a new system for financing scale that engages funders and is collaborative in nature. Actually it’s quite forward thinking. Can this marketplace help transform America? Can we look at major social issues and broadly scale top initiatives to have the greatest impact on the underserved? I think hope lies in this concept. We could really improve lives if we dramatically scale the best ideas out there – that’s the potential of the Scaling Marketplace.