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Report guides nonprofits in scaling-up exercises
Written on Dec 5, 2024
Nonprofits face unique challenges when it comes to increasing the depth and scope of their activities. These challenges include generating additional fundings by justifying scaling-up activities to their funders, helping related entities through shared technology or program resources, supporting organizations that supply the mission-critical offerings with the ability to increase their output as the nonprofits themselves scale up and engaging relevant government structures to a greater degree as the nonprofits scale up.
These findings are based off interviews with 28 global nonprofits, most of which are active within low- and middle-income countries, that have proven track records for ameliorating social and environmental problems. The insights have been gathered in Securing Non-profit Funding: How 28 leading organizations secured funding to increase their reach and impact, a new report from Spring Impact.
The report authors offer two criteria for achieving scale. First, the traditional definition of increasing capacity to get closer to solving a given problem. Second, the innovative definition of changing the system in which the problem exists to reduce the size of the problem.
Scaling up most often involves a three-step process, which includes developing and piloting a solution that addresses the problem; refining the solution based on the most promising aspects discovered during the pilot program; and then scaling the solution and arranging for sustainability of the solution.
Each stage incorporates different, but not necessarily unique, priorities and funding opportunities. As the report details, at the development and piloting stage funding is more likely to be drawn from crowdfunding, family foundations and high-net-worth individuals. By the time a solution is ready to be scaled, funding often comes from large trusts and foundations, multilateral institutions, corporations, governments, and end users.
The report offers five considerations for nonprofits seeking to scale up, including:
Working with partners to ensure their supporting partners can readily scale up their deliverables without losing quality. In some cases, this may involve designing solutions that are embedded within their partners’ systems. Once embedded, the partners, such as governments or other non-government organizations (NGOs) expand the reach of the assistance and partly absorb some of the costs of the programs.
Providing ongoing funding assistance to their partners in order to enable partners to meet their responsibilities, especially during times of scaling up. Governments, the report authors caution, may be crucial for enabling scale, but their support often does not include adequate amounts of funding. Among the organization heads interviewed, representatives from 16 nonprofits had prompted others – such as government, private sector participants, or NGOs – to deliver their solutions.
Educating funders that, even after scaling up has been achieved, their support is still needed. Funders often expect grantees will find other funding sources once they have scaled up.
Promoting the idea that unrestricted, long-term funding is the strongest form of financial support for both scaling and sustainability. Among the 28 organization leaders interviewed, 20 indicated they receive more than 50% of their funding as unrestricted funds, including 17 who said MacKenzie Scott, one of the leading advocates of unrestricted funding, had donated to their organizations.
Reviewing their own activities with an eye toward cost effectiveness.