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Tactical Philanthropy Track: Scaling Social Impact

Deyan October 6, 2010

This is a guest post by Adin Miller, owner of Adin Miller Consulting.  Follow him on Twitter: @adincmiller

The second session of the Tactical Philanthropy track at the 2010 Social Capital Markets Conference (SOCAP10) presented three examples from the education field of nonprofit social enterprises and their different paths to scaling their organizations to grow. The session was moderated by Steve Goldberg, author of Billions of Drops in Millions of Buckets and consulting project lead for “Charity Navigator 2.0,” a collaborative partnership to guide more money to effective nonprofits.

The three presenters each represent organizations working in education and job creation to a lesser extent. They included Shawn Bohen of Year Up, Lance Fors, Board Chair of the New Teacher Center, and Jennifer Davis of the National Center on Time & Learning. The panel was set to examine the tradeoffs between scaling an organization and scaling impact through the sharing of process with other organizations. However, the conversation focused much more on the panelists’ respective effort to scale their organizations.

Steve framed the initial discussion by noting that developing social innovations and scaling them are two very different things. As he states, organizations good at coming up with solutions for social problems are not necessarily good at scaling for impact. He also stressed the importance of distinguishing between the concept of organic organizational growth and scaling for impact. Nonprofits can generally grow and provide services to innovators and early market adopters; but, the significant growth needed for a nonprofit to extend its services to the majority of mainstream customers often remains unattainable. As such, of the millions of people who need innovative solutions from nonprofits, only a handful of thousands will be able to actually receive them. The panel presentations offered three examples of such potential growth.

The first speaker, Shawn Bohen, provided a quick overview of Year Up, which aims to close the opportunity divide by “providing urban young adults with the skills, experience, and support that will empower them to reach their potential through professional careers and higher education.” (Year Up website) A ten-year old organization, Year Up is now celebration it s 10th year of operation. Since its formation, it has support approximately 4,000 students disconnected from mainstream societies.

Recognizing that it can do more to focus on the 4.3 million disconnected young adults, Year Up created a long-term strategy to grow to scale that focused on testing and proving its service model (phase 1), testing and proving the program adaptability and experimenting with indirect impact (phase 2), and establishing a national program driving direct and indirect impact phase 3).

However, Year Up also identified some limitations to its growth plants. Its initial growth strategies will fulfill its current goals; but, even by scaling up its program to 25 cities it would still only reach a fraction of the target population. Repeatable sustainable public funding streams are also in limited supply and its overall business model remains an anomaly.

As a result, Year Up reached the decision that its mission to close the opportunity divide requires that it go beyond scaling direct service and also adopt a policy focus that would indirectly affect its target population.

The second speaker, Lance Fors, highlighted the New Teachers Center approach to improving academic performance generating more effective teachers. It applies a master teacher program in which experience teachers serves as mentors to new teachers over a three year period. To date, it has mentored 30,000 teachers who have taught 2,000,000 students. The organization aims to increase that number to 50,000 teachers that have taught 4,000,000 students.

The New Teachers Center model depends largely on fees for service (90% of revenue) and a limited percentage of philanthropic resources (10%). With the economic recession and reduced education funding, it has further focused on reducing its expenses and started to develop a process to grow financial resources for future funding. That policy focus has led to increased education funding at the state level and new Federal resources through programs such as Race to the Top Fund and Investing in Innovation Fund (i3)

The last speaker, Jennifer Davis of the National Center on Time and Learning, highlighted the organizations efforts to change the American school schedule, which is 180 days longs with 6 ½ hours of instruction per day. Incredibly, this model hasn’t changed since 1860. Given the unrelenting achievement gap, the narrowing of school curriculum’s especially in urban centers, decreasing teacher quality, and increased international competitiveness, the need to focus on changing the school schedule became paramount.

Some success has already been achieved. Charter school programs, like KIPP, have focused on increased the number of instructional hours provided to each school; nearly 700 schools have broken with the traditional school model. But the National Center on Time and Learning remains challenges to grow in scale and positively affect more than 1 million students.

The federal resources now available have helped supply funding that could be used to grow to scale. But, as the organization scales up, it has to ensure that it maintains and ensures successful impact of its efforts. If the scaling is not conducted well and does not attract high quality teachers, overall impact will suffer.

The challenges to growth for the three organizations are not insignificant. The New Teachers Center requires funds to support a R&D process to monitor and reassess its ongoing priorities. Year Up needs a constant flow of feedback on its revenue model while the National Center on Time and Learning has to continuously adjust because of the constant change of key players on different government levels.

The speakers also noted that education-focused social are investing in the education sector and their organizations, have become more focused and more aggressive as they attempt to scale. The investors have rallied around student achievement as a critical metric and the incremental cost and investments in funding enterprises to grow to scale.

What remained unclear after the presentation ended was if there were other existing and future revenues streams available for other organizations to use to scale their projects. The dependence on governmental funding also suggested that future growth resources could evaporate under new political leadership and electoral mandates. Last, the session did not examine scaling for impact by extending the model and letting it be adopted by other enterprises. Hopefully, that discussion can begin on Day 3 of SOCAP10.

This blog post is part of the Tactical Philanthropy track at SOCAP10.

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