Scaling any business is a challenging task and one that many organizations struggle to accomplish at all, let alone smoothly. But the most successful organizations are those which master the art of strategic growth over time. And while the process of scaling for-profit businesses often follows a clear-cut path, growing nonprofits can require an even more intentional approach. Scaling nonprofits requires the right combination of funding, focus, research, and sound leadership to ensure success.

Perhaps the most obvious challenge in attempting to scale a nonprofit is finding the funding that growth requires. Many nonprofits make the mistake of trying to pursue corporate donors and foundations, believing that those entities have the deepest pockets. Research shows however that only 5 and 15 percent of funding, respectively, typically comes from those channels. The bulk of contributions — 80 percent — can be attributed to individual donors.[1] Thus, it is more beneficial for nonprofits to focus their fundraising efforts on individual major donors instead of larger entities.

Organizations can also overcome funding challenges by identifying and leveraging new resources. For example, pursuing long-term support from government entities in addition to short-term support from individual donors can be a highly effective fundraising strategy, and a little bit of creativity can go a long way. A London-based charity that provides bicycles to asylum-seekers applies this strategy well. They found that women were not participating in their program, because in many of the refugees’ home countries it was not acceptable for women to ride bicycles, and most women simply did not know how. The charity responded by creating a female-only program that provides women with bike riding lessons over the course of 9-12 weeks. This unique initiative earned support from a newly-interested donor fund, giving the organization a three-year runway and enabling it to kick-start the program in a second location. [2]

Another common misstep nonprofits make when attempting to expand is “mission creep,” or the inevitable attempt to take on initiatives that lie beyond the scope of the organization’s original mission. This is an understandable dilemma, as it is often difficult to determine which initiatives to pursue. After all, they all are important. But if programs begin to reach into areas far beyond the organization’s original goal, the level of impact often decreases. Bill Meehan and Kim Starkey Jonker, authors of “Engine of Impact: Essentials of Strategic Leadership in the Nonprofit Sector,”[3] observe that our culture is moving into an “impact era,” when impact is more important than ever in determining a nonprofit’s value. Using real-time data to track impact and determine actual effectiveness is becoming more common — and necessary — to engage potential donors as they become increasingly concerned with outcomes.[4] Growing nonprofits should maintain a clear and focused mission to avoid the pitfall of diminishing support.

Replicating a nonprofit’s efforts in other locations can also be a significant challenge, as there are several to models to consider such as partnerships, franchises, and affiliates. Identifying the best one to adopt can be difficult; this is where thorough, up-front research is essential. In a partnership model, for example, leadership must be prepared to guide the organization so that collaboration and support prevail and duplicate efforts are minimized. The organization must also determine which pieces of its mission and model are nonnegotiable and protect the integrity of those elements while adapting to local needs, assets, resources, and any other indicators that might signify a need for a shift in the model as it grows.[5] Answering the essential question of which model to employ requires a significant investment of time dedicated to research and evaluation, but it is a critical step in the growth process.

Before attempting to scale up in a major way, nonprofits should also appraise their program’s capacity and infrastructure — assessing the effectiveness of each and determining if the organization has the margin to accommodate future growth is fundamental. Accurate, honest assessment also increases the likelihood of buy-in from stakeholders as it communicates that proper research has been done. Additionally, it’s important to assess the health of the organization’s leadership team and determine if there are talent gaps to be filled before expanding. Having a strong group of senior leaders will help ensure that the organization remains faithful to its original mission and will lend much-needed stability as growth challenges arise. Research shows that the most critical leadership hires to support scale are colleagues who can manage the day-to-day, freeing up executives to focus on strategy and fundraising.[6] This principle also highlights the importance of hiring the right people, particularly when attempting or anticipating growth.

Scaling a nonprofit is a formidable task, but one that is very possible if the organization and its leadership employ effective strategies for fundraising, remain focused on the mission, and conduct thorough research to inform decision-making, knowing that these endeavors are fundamental steps on the path to success.

 

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[1] https://www.gsb.stanford.edu/insights/four-ways-nonprofits-can-increase-their-impact

[2] https://lodestar.asu.edu/blog/2017/06/scale-or-not-scale-what-should-nonprofits-consider-deciding-expand-program-greater

[3] https://www.gsb.stanford.edu/insights/four-ways-nonprofits-can-increase-their-impact

[4] https://lodestar.asu.edu/blog/2017/06/scale-or-not-scale-what-should-nonprofits-consider-deciding-expand-program-greater

[5] https://lodestar.asu.edu/blog/2017/06/scale-or-not-scale-what-should-nonprofits-consider-deciding-expand-program-greater

[6] https://ssir.org/articles/entry/three_things_every_growing_nonprofit_needs_to_scale

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