Honest Conversations About Scaling and Sustainability

Scale is such an interesting topic in the world of philanthropy and social entrepreneurship. It’s also an interesting word with lots of meanings – scales of fish, musical scales, scaling a mountain and more – none of which are the ways we use it. Interestingly, the way we use it, to mean growth, isn’t even in Merriam-Webster’s online dictionary.

I remember the first time I heard the term. I was a new program officer at C.S. Mott Foundation. Dorothy Stoneman was discussing YouthBuild and said that they wanted to “scale” the program. In response to my question about the meaning, she said that she envisioned one YouthBuild in every city. This is a frequent use of the phrase – as a synonym for replication. I’ve also heard it used to talk about the appropriate size an organization should be to get marginal costs as low as they can be. That’s a conversation we should have more often but don’t because of public budgets and the politics that go along with distributing the funds. 

Pat McCarthy, President of Annie E. Casey Foundation, in a speech at the 2013 YTFG meeting, argued that scale is about solving the problem. It’s a perspective that is embedded in the collective impact work, or should be. Otherwise, we end up with incremental change. I’ve always found it fascinating that even with solutions, such as Head Start providing early childhood development services to children in impoverished families who might otherwise not be able to access it, we only fund to meet a portion of the need. If I remember it correctly, the federal government funds at a level to meet 40% of the demand for Head Start, probably less these days. 

Discussions about scaling will almost always end up talking about funding. Scaling popped into a fascinating conversation at last week’s YTFG meeting about collaboration between national and local funders. A funder from a national organization that runs big initiatives to address big problems asked when was the right time to engage local funders in the discussion about sustainability and shifting funding to local resources. The representatives of local foundations had a lot to say about this topic:

1. Nationals should talk to locals at the very beginning, not when you start to reduce your funding. Nationals tend to assume that organizations can raise local funds to sustain a program or initiatives and local funders have the resources to do so. However, there are substantial opportunity costs. A few years ago, there was a rush of national foundation and federal initiatives requiring matches. This forced locals donors to direct their limited funding to leverage funds. This undermines the local foundations’ strategies, which are actually rooted in their communities and designed to build on the assets, values, and priorities of the community. By talking upfront and engaging the local funder in co-designing the initiative, national foundations can root their initiatives in the community, ensure local donors have ownership, and strengthen local efforts. It’s a win-win.
2. Costs have to be taken into account, as well as cost-effectiveness. National programs are often designed with all the bells and whistles. This is great for demonstrating effectiveness, but the costs add up and are very hard to incorporate them into public funding streams that have a different cost model. I’m certainly seeing this in New Mexico, where the more expensive afterschool models, such as Atlantic’s initiative on extended learning and Citizen Schools, haven’t been able to find sustainable funding. Local donors need to raise this issue early on with nationals that may not have considered the different funding and policy contexts across states.
3. Some organizations and programs are always going to need funding (or at least for a long, long time) from private donors, as the work they do is outside of the public funding stream. Innovative programs are often operating outside of the public funding stream. Year Up is an example of this. It’s been able to find resources through its model of strong fundraising and employers paying the costs of internships. Others, like youth organizing, are actually trying to change the system and are going to take provocative, if not outright conflicting, positions with public leaders. This means that to maintain their integrity, they shouldn’t be funded with public resources. They often can’t survive without private donors because their membership base isn’t generating income as they complete school or work in minimum wage jobs. I’ve heard non-profit leaders talk about the “myth of sustainability” and even refer to the hypocrisy of the philanthropic sector when we don’t get real about the challenges of on-going funding. 
   
   So whether we are talking about scale as growing an organization, replicating a program, or addressing a social problem, we need to be more honest about funding and sustainability. We lose credibility when we operate under the myth of sustainability. Worse, we make poor decisions that won’t bring us to scale in terms of solving the big problems that are eating away at our country.