Continuing my series on defining and exploring key terms in social innovation, I’d like to take a look at scale. In an earlier post defining social entrepreneurship, I discussed the key part that scale plays:
Absolutely essential to the idea of social entrepreneurship is the idea of scale. A pattern changing idea, by definition, creates a new model. And to do so, it can’t just exist in one school, in one district, in one city. To truly be social entrepreneurship, the new idea must grow to scale, to reach all of those who can benefit from the solution.
However, just as there are various ways a successful business can grow to scale, there are different ways a nonprofit can grow to scale. There is the franchise model that we see with organizations like Teach for America, Citizen Schools, or College Summit. These organizations have a successful model with dramatic results that they want to replicate in other areas of the country. They raise growth capital that will allow them to import the model to other cities and regions; they bring in or recruit a staff and build the new chapter. This can be a very successful model.
In a session at this month’s annual Net Impact (an organization for socially-minded business school students and alums) conference, panelists had some provocative ideas for how nonprofits scale. Aaron Hurst, founder of Taproot Foundation, an organization that provides pro-bono marketing, IT, and HR consulting to nonprofits, took the franchise idea even further arguing that there must be great consolidation within the nonprofit sector:
We need to talk about how we get foundations to stop giving inefficiently…the multitude of nonprofits with similar missions…[are like] the hundreds of Chinese restaurants across New York City. All the restaurants serve dumplings, lomein…[to be efficient] they should all be one Panda Express.
I’m not sure that is the answer. Nathaniel Whittemore, founding Director of the Center for Global Engagement at Northwestern University argued in his blog on Change.org that scale for nonprofits needs to be thought of a bit differently. Because of the social, consensus and local nature of nonprofit organizations, you cannot simply franchise a good idea from one city to the next. He makes a very necessary distinction between scaling an organization and scaling a solution. The former forces a model onto the next community, without taking into account local processes, norms, behaviors, beliefs, etc. The latter approach molds the basic solution to the new area. He believes the successful model is Jane Addams’ Hull House, one of the first settlement houses offering social services to the poor.
For [Jane]…[scale] meant helping other socially concerned citizens found their own organizations with similar but locally appropriate models. She was far less concerned with franchising and branding the Hull House name, but cared that poor people in every city had access to the same quality of services with dignity that her organization offered.
That’s not to say that organizations like Teach for America, Citizen Schools and others don’t meld their model to be locally appropriate, but it is still very much a franchise model. And as you grow that model overhead becomes more expensive, quality assurance standards become harder to enforce, and ultimately, the solution may creep farther away.
The franchise model also necessitates significant growth capital. For example, College Summit has had to raise tens of millions of dollars in growth capital to expand to 8 states with their current program and 6 additional states with a pilot program. And growth capital can be very difficult to find.
With a model more like Jane Addams’, scale is less about the organization that brings about the solution and more about the actual solution. You are not building a nationwide organization with a very specific solution, but rather you are building local organizations that mold the solution to be most successful in their communities. However, because the latter is less rigid and more decentralized it would be more difficult to ensure the quality and effectiveness of the solution, and perhaps much more difficult to track outcomes.
There is much more to be learned as social entrepreneurs continue to grapple with how best to grow to scale – what that means, and what it looks like. But it is a very necessary discussion, because the true impact of social entrepreneurship does not lie in the ideas that social entrepreneurs create. I don’t think we have ever lacked good ideas. But rather, true solutions come when a great idea can grow to scale and fundamentally alter an old, broken model. How that scale happens most effectively, however, is yet to be determined.