Scaling Sustainably

September 3, 2018

There is no shortage of world problems to solve – and no shortage of nonprofits, big and small, trying to solve them.

For every powerhouse global nonprofit, there are thousands of grassroots organizations trying to expand. But not all nonprofits need to have mass scale to make a lasting impact, and for those that do, there is no one golden path to becoming a large-scale organization.

Despite good intentions, promising non-profits and social enterprises can chase growth too fast and too early. So how do you know when your organization is ready? And once you’re ready, how do you scale your impact sustainably?

Nonprofit Sector Composition in the US

*Size of nonprofits refers to expenses (not revenue)
Source: GuideStar, Overall Sector Composition of US Nonprofit Organizations (2017) n= 208,064

Build your foundation

To lay your foundation for growth, begin by defining a strong mission with your destination in mind. Your mission must be a clear and powerful call to action – especially to those carrying it out. But that doesn’t mean having a meticulously written mission statement. Instead, it is about knowing what you want to achieve, setting milestones, testing the waters, and mobilizing your resources to make it happen.

Consider whether your expansion will take a “go upstream” or “expand the picture” approach – that is, whether your growth with pursue the root causes of the social problem you want to solve, or address all aspects of the problem.

Following the model set by The Bill and Melinda Gates Foundation, growth often requires “disciplined design” informed by practice, research and iteration.

“Disciplined design requires research and evidence, but it also welcomes new ideas and unintended consequences. It allows for messiness, iteration, and deep inquiry into what exactly works and why.”

While the strength of your mission is important, expanding your impact also depends on your human resources, experience, cost model, financial stability and appetite for the risk involved. The best way to assess your readiness is by piloting to scale. Use a test case to gain insight into your strengths, weaknesses and the overall feasibility of your organisation at scale – and leverage your findings to develop an expansion plan iteratively.

Know your growth strategy

There are three general trends by which a non-profit can grow:

Source: Is Your Nonprofit Ready to Grow? Bruce Holley and Wendy Woods, Boston Consulting Group. July 2016

1) Steady-state growth – following a constant rate of growth each year

Steady-state expansion is the typical experience for small to medium-size nonprofits. With a slower but predictable growth rate, you’re able to set realistic targets, budget effectively, and accommodate for operational challenges as and when they arise. The benefit of this is safety and time to adjust. The drawback is – it may take longer to achieve the impact that you want and, following a bad year, it can be difficult to recover.

2) Ramping-up growth – slow growth at the outset of the expansion plan, with significant increase over time

Ramping-up growth allows for flexibility. As your organization grows, so do your costs and strains on resources. But there are also unknowns – gaps in capabilities and processes that only come to light in your pilot. The ramping-up strategy gives you time to consider your options and build capacity with a long term view in mind, before the force of rapid growth kicks in.

3) Accelerating-growth – strong growth in the short term, increasing thereafter

Accelerating-growth is about taking advantage of a window of opportunity, but this can be tough to execute if your organization is not prepared for a pivot or acceleration in strategy (for example, seeking a partnership that can help your organization without first considering what value you offer them). These windows of opportunity don’t last forever, so when they do arise, it’s essential to have done the legwork and placed your organization in a strong position to act quickly.

Leverage strategic partnerships

Working with like-minded or complementary organizations can increase your nonprofit’s scale of impact exponentially – provided you have aligned goals and expectations.

Similar nonprofits are the most logical alliance that support growth through an exchange of knowledge, skills, capital and even fundraising sources. By leveraging partnerships, your organization can seek out broader geographic impact and tap into resources to help you carry out your mission more effectively.

Nonprofits can also partner with for-profit corporations or social enterprises that see the wellbeing of the community and environment as fundamental to their long-term profitability. This collaboration can lead to funding opportunities or access to strategic support such as brand awareness or consulting services.

For example, 180 Degrees partners with market-leading consulting firms to provide training programs for our Consultants. This enables our branches to offer a professional quality of service to nonprofits and social enterprises without the price tag of a corporate management consulting firm. In exchange, these consulting firms gain brand and reputational benefits, as well as access to our network of high-achieving, socially minded graduates.

Regardless of planning or partnerships, managing a nonprofit effectively is not an easy task. Growing it sustainably is even harder. Not only do nonprofits need people with incredible ambition and patience, but you also need a dose of good luck and good timing. What you can control is the readiness of your organization to seize opportunities and achieve a lasting impact at scale.

 

Contact us to learn more about how 180 Degrees Consulting can help your organisation grow sustainably.

 

 

 

 

 

Sources:

From Small to Scale: Three Trade-offs for Smaller Nonprofits Trying to Get Big. Peter Kim, Suzanne Tollerud and Gail Perreault, Nonprofit Quarterly (May, 2018).

Can Nonprofits Scale to Solve Community Problems?. Charley Ansbach, Comstock’s (April, 2018).

5 Ways Nonprofits Struggle (and how to overcome them). Fast Company (March, 2018).

Strategies to Scale Up Social Programs: Pathways, Partnerships and Fidelity. Sam Larson, James W. Dearing & Thomas E. Backer (September, 2017)

What Does the Nonprofit Sector Really Look Like?. Kerstin Frailey,Guidestar (June, 2017).

Is Your Nonprofit Ready to Grow?. Bruce Holley and Wendy Woods, Boston Consulting Group (July, 2016).

Three Things Every Growing Nonprofit Needs to Scale. Kathleen Kelly Janus & Valerie Threlfall, Stanford Innovation Review (November, 2016).

Four Approaches to Nonprofit Sustainability. Rachel Light & Ariel Zwang, Stanford Innovation Review (September, 2016).

Scale and Sustainability – What’s a Funder to Do? Carina Wong, Nonprofit Quarterly (December, 2015).

Challenges and Considerations in Scaling Nonprofit Organizations. Clement and Jessie V. Stone Foundation, Education Grantee Convening (2009).