Africa's Moment
Global Social Benefit Incubator
Global Social Benefit Incubator 2008
Exercise 1: Target Market Statement
GSBI 2008
GSBI 2008 Application
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Scale as Program Expansion
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The second meaning of scale refers to the breadth or scope of service, usually measured by the number of clients served.
Going to scale in this sense is thus roughly equivalent to program expansion and reach. When a pilot or project is launched, the goal is often to take it to scale by funding it at a higher level and by bringing the program to more people. There is a sense that a good program can never serve enough people. As soon as an initiative seems to achieve significant results, one of the first impulses of nonprofit managers and funders alike is to ramp up the effort and find a way to identify and serve more clients. In the past, the ultimate ambition has often been to get local, state, or federal funding after a launch with private money.
There are a number of powerful forces propelling nonprofits and their funders toward program expansion:
• First, funding scale as expansion appears fair and equitable in that it rewards past performance. Funding decisions can be justified by the results that are actually achieved.
• Second, growing a program will allow it to achieve greater operational efficiency, as the marginal cost of administration decreases as the program expands.
• Third, this approach creates incentives for nonprofits to develop and deliver successful projects. If nonprofit managers know that funding to grow their programs is dependent on how well their programs work, they will work harder to make them succeed.
• Fourth, it allows funders and recipients to work together over longer periods of time than they otherwise might under typical project funding.
Nonprofit organizations are especially comfortable with the idea of scale as program expansion. It represents a natural way to evolve a nonprofit from a small community organization to one that has a broader presence and impact. For nonprofit managers, aiming toward scale as program expansion is important. Because general support funding is scarce in some fields, program growth is essential to achieving some level of financial stability. Growing programs is seen as equivalent to professional success and can be a key to advancement. Moreover, the financial incentives in the sector provide a strong correlation between budget size and salary, with managers earning more depending on the scale of the program they oversee. As both a signal of success and as a tool for advancement, scale as program expansion is thus attractive to many nonprofit organizations.
From the perspective of the funder, allowing an organization with a proven track record to expand its operations represents both a high return activity and a relatively low-risk proposition. After all, the nonprofit has already demonstrated its ability to implement a given program. All they are seeking is funds for program expansion so that they can do more of one particular activity. This is a proposition that can be considerably less risky than the design and creation of a new initiative.
There are a number of powerful forces propelling nonprofits and their funders toward program expansion:
• First, funding scale as expansion appears fair and equitable in that it rewards past performance. Funding decisions can be justified by the results that are actually achieved.
• Second, growing a program will allow it to achieve greater operational efficiency, as the marginal cost of administration decreases as the program expands.
• Third, this approach creates incentives for nonprofits to develop and deliver successful projects. If nonprofit managers know that funding to grow their programs is dependent on how well their programs work, they will work harder to make them succeed.
• Fourth, it allows funders and recipients to work together over longer periods of time than they otherwise might under typical project funding.
Nonprofit organizations are especially comfortable with the idea of scale as program expansion. It represents a natural way to evolve a nonprofit from a small community organization to one that has a broader presence and impact. For nonprofit managers, aiming toward scale as program expansion is important. Because general support funding is scarce in some fields, program growth is essential to achieving some level of financial stability. Growing programs is seen as equivalent to professional success and can be a key to advancement. Moreover, the financial incentives in the sector provide a strong correlation between budget size and salary, with managers earning more depending on the scale of the program they oversee. As both a signal of success and as a tool for advancement, scale as program expansion is thus attractive to many nonprofit organizations.
From the perspective of the funder, allowing an organization with a proven track record to expand its operations represents both a high return activity and a relatively low-risk proposition. After all, the nonprofit has already demonstrated its ability to implement a given program. All they are seeking is funds for program expansion so that they can do more of one particular activity. This is a proposition that can be considerably less risky than the design and creation of a new initiative.
