Although many funders like the idea of “going to scale,” the number of initiatives accomplishing scale under any of the three definitions remains small.  Only around 200,000 nonprofits out of some 1.5 million have revenues above $25,000.  The number of very large and successful nonprofits is considerably smaller than 100,000 and probably closer to 10,000, the majority of which are universities and hospitals. 

The achievement of scale thus remains an elusive goal and one that raises a number of questions: 
• When and why should any of these five different scale strategies be applied?
• Why does scale sometimes fail?
• Does the ideal of scale fit better in the business sector than in the nonprofit sector?
• Can commitments to scale and equity be embraced simultaneously?
• Are the less successful attempts at scale simply examples of domains in which public policy should be allowed to operate?

Most of these questions remain unanswered even though scale has become a major target of organized philanthropy.  Rather than engage these difficult question, it is far easier to simply fall back on arguments about spreading the benefits more broadly and achieving efficiencies.

The fundamental problem with the concept of scale, as understood in the philanthropy field, is it assumes that the scope of public impact achieved through philanthropy correlates with the public value created. Scale seems an obviously desirable objective by virtue of the simple math seeming to lie behind it, namely that assisting 10,000 clients, all things being equal, is better than assisting 1,000. This assumption is particularly hard to defeat in the context of philanthropy because it is difficult to measure the quality of nonprofit programs.

With all the obstacles preventing precise measurements of effectiveness and program quality in the nonprofit sector, it is very easy to use size as a proxy for impact and to embrace the idea that programs serving large numbers of people are contributing more to public welfare than those targeting smaller populations. In this sense, scale is much easier to measure than effectiveness and it represents an appealing way to change the conversation.

But the danger of such a move lies, of course, in the fact that scale is not a particularly good proxy for effectiveness and that many large programs do not deserve the support they receive, while many smaller programs deserve greater acclaim. Scale is not the problem in the nonprofit sector, nor is it the answer.

Strategic giving requires a nuanced and guarded stance with regard to scale, one that is grounded in a clear understanding of the many meanings – and limits -- of scale.   

Scale can be achieved by formulating and diffusing an idea or concept. Precipitating a major shift in a given field creates a wide-ranging and lasting impact. This shift changes the way people think about their work and carry out their programs.

Creating a new doctrine is different from other forms of scale because it seeks to infiltrate broadly by changing the conceptual and intellectual frame surrounding a particular field, be it early childhood education or drug treatment. A successful effort at doctrine building will lead to a wholesale reevaluation of a field’s standard operating procedures and operational assumptions. While an operational model may be associated with a new doctrine, new ideas can and do triumph in the absence of clear applications.   

Pursuing scale through doctrinal shifts is appealing to funders for a number of reasons. Unlike other modes of going to scale, this approach is not limited to the boundaries of the organizations receiving funding. It is possible to propagate an idea or theory and to change service delivery models without spending money on implementation, but one should be able to point to at least one concrete application of the doctrine.

One key to successful paradigm building involves to be the penetration of small networks of policy elites and nonprofit leaders. Once an idea or concept is embraced by opinion leaders, it can filter throughout a field quickly. Influential doctrines have emerged from think tanks and university researchers and from practitioners who can articulate a clear theory supporting their work.

One significant shortcoming to this approach to scale is that the outcomes of such efforts are very hard to predict. Sometimes ideas and frameworks emerge as powerful tools for transforming practice, but ultimately find no audience or willing adopters. Other times, second rate ideas spread like wildfire within fields and are broadly adopted. The process of spreading a doctrine is not amenable to a great deal of control.

When a particular initiative or service model proves successful, many dissect the essential elements of this model in order to reconstruct the effort elsewhere with different personnel and under different circumstances.  Replication is one way to achieve scale, a technique that has been tried and tested in the business sector over a long period of time. 

Replication can proceed in two quite different ways:
- (1) within the organization through a set of more or less closely linked chapters or through a franchise system linking independent organizations;  or
- (2) outside the organization through independent efforts to create similar programs.

The chapter or affiliate way of replicating services has proved critical to the expansion of many of the older and more established service organizations and civic associations. Opening chapters in cities around the country enables an organization to achieve scale quickly yet maintain some degree of control through centralization. Often, chapters are established in a hub and spoke arrangement, in which funds and resources flow back and forth between the center and the periphery.

One obvious problem with this approach is that it can be difficult to achieve uniformity and consistency across chapters so that the message or mission is clear and consistent.  Not surprisingly, one of the biggest questions that this approach raises is the amount of autonomy that should be granted to the chapters or affiliates. Some organizations have successfully implemented loose confederations, while others have long operated tightly controlled networks.

The competing franchise approach to replication is based on the simple assumption that once a model has been established, the real work involves copying and multiplying the model in as many places as possible. Franchising has become popular with younger social entrepreneurs who see this model as providing swift action. By licensing a “brand,” nonprofits can go to scale quickly. A key challenge of the franchise approach is locating skilled people who are capable of taking a model into a new city or community and implementing it. The brand name must be protected by some form of quality assurance. Achieving consistency and measuring quality are both difficult propositions in the nonprofit sector, however.

There are some clear difficulties to both chapter and franchise replication.  Replication is not an approach that can easily be initiated or directed by funders.  Although funders may be able to foster some replication through the use of grants and incentives, most externally directed replication efforts will struggle with the vast unruly and idiosyncratic tide of nonprofit organizations that resist imitation and convergence. While some innovations and ideas have been replicated, large numbers of projects are unable to find any takers, even when they have shown great promise. Replication may rest on the shaky assumption that nonprofits are amenable to cookie-cutter duplication.

Moreover, some funders who experimented with replication strategies discovered that some initiatives successful on a small and local scale defy replication when they are taken out of their initial contexts. This seems especially true when the nonprofit is working with disadvantaged populations, where trust and credibility are crucial.

Replication also ensues if the philanthropist creates a pilot or model program and then allows government or other funders to take the effort to scale. The philanthropist Eugene Lang, for example, had the novel idea of “adopting a class” of middle school students at the inner-city school he attended years ago. Lang promised all the students in one grade that if they worked hard and stayed in school, he would guarantee to pay for their college education. When the New York State got word of this offer, it did not take long before a scholarship program was devised for other disadvantaged students.  This proved to be problematic. Critically missing from this public sector imitation was the direct personal involvement that was a central part of Lang’s innovative educational gift.

Thus while it is tempting to think that replication model involves the simple multiplication of existing programs and institutions, in reality, this process is more labor intensive. Embedded in many successful programs is the vision and commitment of an individual. When the program is replicated in other sites, this personal connection is often missing and the organizations may pass from being an expression of one person’s values and beliefs to a more instrumental attempt to produce certain public benefits.

Under this definition, the coordination problems inherent in the nonprofit sector’s division of labor and proliferation of programs is overcome by bringing under one roof an integrated set of activities and interventions.  Comprehensive community-based initiatives are seen as a remedy to the problems of categorical funding, one that aims at “system-wide” reform. 

Comprehensive community initiatives began in the twentieth century with the settlement houses.  From Hull House to the modern community-focused initiatives launched by large private foundations, there does not seem to be any decrease in this type of initiative. The belief that comprehensiveness is the critical ingredient to scale emerged from years of experience with isolated project funding. Seeking to create synergies by funding integrated sets of services, many donors see scale as being closely linked to building a dominant local presence.

Viewing scale as comprehensiveness is thus embedded in the idea that program linkages are as important or more important than the creation of new programs. By focusing resources in one geographical community, some funders see bridge building as the best way to create a sizable presence and a more fundamental and lasting impact.

Achieving scale by weaving together disparate programs and efforts into a cohesive whole requires that four important problems be overcome:
• First, inter-agency collaboration requires that difficult governance issues be worked out so that all parties can work together productively.
• Second, this approach emphasizes the goals of inclusion and diversity, and those leading such an effort must show leadership in this area and be sensitive to the heterogeneity of many community groups, programs, and networks.
• Third, comprehensiveness depends on the effort gaining legitimacy and support from the grassroots, not only from community elites.
• Fourth, any focus on collaborative strategy must address the issue of sustainability and the development of new funding streams.

Inevitably, due to the size and ambition of many of these programs, government is often involved, which can be a source of support or frustration

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.

    Large institutions such as museums and universities have achieved scale because they have visible institutional profiles and reputations for excellence across the nation, occupy large buildings or campuses, and possess the financial wherewithal to persist indefinitely.  Scale on this account is equivalent to financial strength and sustainability, often secured by endowment or by large operating budgets with dependable revenue streams.  In a sector in which financial crises are commonplace, scale means being able to withstand the test of time by being big enough to ride out the storms.  The number of nonprofits that have gone to scale under this definition remains small and many are concentrated in a few categories of nonprofit activity. 

    In principle, there are very few obstacles to taking any single organization to scale. Though philanthropic resources are limited, if concentrated on a small number of institutions, funds are now available to create a new cadre of very large and durable institutions. In practice, many of the organizations that have achieved financial scale have been and continue to be supported by individuals or family foundations with living donors. Many recipients of this sustained largesse, such as private colleges and cultural institutions, are the beneficiaries of support from elites and provide benefits to them in return. Interestingly, in the case of private educational and cultural institutions, it is often the visibility, prestige, and competition with other donors that encourages supporters to give, and give more, year after year.

    Large private foundations do not seem to embrace this notion of scale as readily as individuals, though there are some notable exceptions to this. Picking any single nonprofit organization as the one that will be taken to scale may appear unfair and capricious. It implies that a single donor should be able to disturb the competitive landscape and decide who wins and loses in the nonprofit arena.  While this may be precisely what an individual would like to achieve, few foundations want to be perceived as inequitable and heavy-handed. As a consequence, they shy away from tipping the scales completely in favor of one organization over another. Moreover, foundations may be less likely to bring an organization to scale because their interests are not in the organizations they fund per se, but in the specific programs and outcomes which these organizations deliver.  The foundations have priorities that overlap somewhat with the agendas of nonprofit organizations. When these priorities change, funders can and do find new organizations.

    Another reason that individual nonprofits are not often brought to scale through the infusion of large amounts of money may be connected to efficiency concerns.  While giving a nonprofit the ability to withstand the vicissitude of the nonprofit marketplace sounds reasonable, it may not be the most efficient way to use philanthropic resources.  Endowments are often established with a projected 4 or 5 percent draw rate.  Funding a large programmatic agenda from an endowment therefore becomes an expensive proposition.  There is also the concern that taking a single organization to scale will eliminate the leverage that funders have over nonprofits, because the funds will free the organization from the usual relationships of dependence. 

    After all, if a nonprofit has enough money to conduct its programs without the continuous input of new contributions, an important performance incentive may be removed.

Being effective means more than just carrying out an initiative well and meeting the needs of a small group of people. Effectiveness also involves reaching many people and taking the social leverage that an intervention creates and amplifying it even more broadly.

Given the interest in having a real impact, donors speak variously of taking program to scale, going to scale, and scaling up.

What exactly is meant by scale? 

At its core, the idea of scale is focused on creating a lasting and significant impact. Beyond the broad idea of more or larger impact, the idea of scale becomes more enigmatic when it is subject to sustained scrutiny.  

Scale has at least five overlapping meanings in philanthropy, which are often collapsed in practice. Scale can refer to:

• (1) financial strength
• (2) program expansion
• (3) comprehensiveness
• (4) multi-site replication
• (5) accepted doctrine.

Peter Frumkin, professor at the University of Texas at Austin and author of Strategic Giving (The Art and Science of Philanthropy), first wrote about engagement on Social Edge (see the eight posts below this one).

He is now starting a new series on "The Five Meanings of Scale" (above this post).