IMPACT AT SCALE


3rd Nov 2021

IMPACT AT SCALE


3rd Nov 2021

IMPACT AT SCALE

Development work is hard. Making change happen at scale is complex and there is not a linear path. Yet, achieving impact at scale is a goal many grantmakers, philanthropists, social and impact investors aim for – but this goal is not often nor easily achieved.

Of course, we must also recognize that the ability to make impact in any particular focus area or development portfolio is hugely dependent on the context in which any given organization operates. And with the global pandemic we have also came to understand how unrealistic it is to presume that change can be driven by one organization operating in isolation.

But first, what do we mean by impact at scale?

The long-term goal in the social development / humanitarian sector is often described as ’doing ourselves out of a job’ – making social change work redundant by ‘solving’ the social problem. The simplicity of this statement can be deceptive. Whether a particular social issue is ‘solvable’ is very dependent on how it is defined. For example, while the reality is that we will never ‘solve’ mental illness, we can affect the likelihood and severity of suffering, and change how society responds. Perhaps that means doing ourselves out of the specific job required today, but support for mental health will always be needed.

Solving the problem may be integral to the long-term vision but is often not sufficient alone in defining what success looks like to mobilize action.

Scaling at an organizational level

‘Scale’ in the social change sector is often viewed as growing an organization. This understanding of scale is transferred from the private sector. However, our goals in the social sector are different – they cut across organizational boundaries. Although expanding the reach of an organization may be an important route to impact at scale, it is not the end goal. It also may not be the best route to impact at scale in every issue or context. Limiting understanding of scale to the growth of organizations also fails to recognize that impact at scale is a collaborative endeavor that is rarely achieved by a single organization.

Scaling at a funding level

Money is often a necessary ingredient in scale, but it is a means and not the end. While it may be an important enabler, an organization or issue that secures significant funding has not automatically scaled impact.

Scaling at a beneficiary or reach level

Ultimately, the goal of the work is about people and their lives. However, focusing only on the number of people reached risks neglecting the importance of work to shift systems and attitudes. If impact at scale is reduced just to numbers of people reached, it could describe widespread delivery of an intervention in response to a short-term pot of funding that does not transform people’s experience long term or last after the funding has gone. It may also miss the importance of prevention, where change is achieved by fewer people needing support in the first place.

Given the timescales involved in achieving impact at scale, it is likely to be decades before we reach the end goal of the work we are doing today. Looking at examples of where lasting change has been made, we identified a number of ‘building blocks’ that can be used to understand whether you are heading in the right direction.

These building blocks could potentially be:

  1. Creating and increasing supply and demand: Supply and demand are fundamental to scaling and sustaining the provision of any product or service. While often viewed as a ‘for profit’ term, the concepts are just as important in a grantmaking system. In short: are there enough people who want it and can pay for it, and enough people who can provide it? A range of approaches can be used to enable widespread provision through creating supply and demand: making the business case, fostering the supply and/or demand side, and addressing structural barriers
    1. Making the business case – a key step, especially for new services or practices, is to make the business case to funders or to the market to create demand. This can be done either theoretically or in practice through pilots that demonstrate a new way of working and build evidence of the social and financial impact.
    2. Fostering supply – a lack of people or organizations with the skills needed to deliver a service well is often a barrier to scaling impact. Providing training and other support to build the capacity of service providers to expand a market or build expertise in existing players can address this bottleneck.
    3. Fostering demand – those in control of the funding sometimes face barriers too. For example, it could be that new expertise is needed to contract in a different way or that stimulus funding is needed to create the first wave of demand.
    4. Address structural barriers – sometimes there are regulatory or technical barriers to market development which can be addressed by making contracting easier. This can be done through technical guidance and tools or explicit guidelines.
  2. Unlock capital: Creating or providing access to new sources of money to fund support for all those who need it. This can take several forms:
    1. Unlocking public capital – this is often seen as the route to long term sustainability –by persuading or working with government to introduce new budget lines for issues or interventions.
    2. Private, long term investment – strategies may also focus on bringing in new sources of capital – for example, through building communities of investors or creating new institutions.
  3. Design for mass reach: Designing the product or service specifically to scale – for example, by designing simple, cheap or easily replicable solutions.
    1. Designing a simple solution (product, service or practice) that can be easily and/or cheaply replicated or adopted is one strategy for scale.
    2. ‘Plug and Play’ – designing for mass reach might also mean designing an offer that can be easily taken up by others.
  4. Expand the organization: Perhaps the most common interpretation of ‘scaling’ – expanding the reach and scale of the organization or initiative that delivers a particular solution, product or practice.
    1. Expanding the reach of a particular organization can be one lever to scale impact, and many organizations think of organic expansion first. In some cases, growing the organization can be the driver of scale, although this is rare in the social sector given the nature of the systems and their challenges. Demonstrating a model or solution’s viability in multiple contexts or places can also be an important step in driving its broader adoption by others or influencing change in the system. It is always important to question whether and when growing an organization – rather than looking beyond its boundaries – is the best route to scale.
    2. Mergers and acquisitions, though rare in the charitable sector, can enable a step change in impact.
  5. Use new vehicles: Using new vehicles that can enable a step-up in scale while retaining some degree of control over a model to enable impact and/or scale delivery. Many organizations pursue impact at scale by growing their own reach and delivery capacity. However, there are limits to how far and how fast an organization can grow ‘organically’. There is also a risk that an organizational focus on growth can be in tension or direct conflict with the potential for impact at scale. Alternative approaches to operationally scaling a model include:
    1. Franchising – an approach that can unlock faster growth while retaining some revenue and control of brand, intellectual property and quality assurance.
    2. Licensing – in a similar way, licensing can be used to expand reach, bring additional income and maintain quality.
    3. Joint ventures – where a new entity is formed to establish shared ownership. This can leverage impact and reach while sharing risk.
    4. Mergers, acquisitions & transfers – in some cases, an organization may decide that another organization is best placed to take a particular product, service or practice to scale, and seek to transfer the intellectual property or ‘know-how’ IP.
  6. Adapt business model for scale: Adapting an existing model with the goal of scaling it – for example, through reducing cost to enable replication, unbundling elements, building a platform or open sourcing.
    1. Technological innovation can offer routes to reduce cost and increase access.
    2. Streamlining or unbundling your model in other ways can also support growth.
    3. Cross subsidy models harness the value a product or service can add to a range of consumers and use the profit margin from those who can pay to subsidize the delivery to those who cannot.
  7. Develop talent: Developing workforce or leaders with the right skills and expertise to deliver new approaches and/or proactively drive change across a system.
  8. Harness collective effort: Bringing organizations from different sectors together to work on a joint agenda to drive change.
    1. Collective action models or movements bring organizations together under a common purpose or strategy, to create greater power for change than any individual actor can wield alone.
    2. Peer-to-peer networks – harnessing the power of existing networks and developing more deliberate communities of practice or peer champions can increase the take up of a particular approach across a community or sector.
  9. Build the evidence base: Using evidence to unlock scale by making the case for wider change. Sometimes building an evidence base is key to unlocking scale – by making the case to funders, professionals or the wider public. It might be used to demonstrate that change is needed and possible, or to encourage the adoption of new ways of working
  10. Use data for transparency and insight: Strategies that use data to shine a new light on problems, change how people understand issues or galvanize action.
  11. Alter or reallocate funding: Strategies that seek to change or redirect the way funding is allocated. Funders, both private/philanthropic and public, can shift systems by unlocking new capital, but also by changing how and where they allocate their existing funds.
  12. Establish new institutions: Creating a new body with the authority to pursue long term change in an issue. One of the risks in social change is that progress is lost when the issue is no longer on the public agenda or when there is a political transition. One model used to embed change over the longer time is to institutionalize it in an individual or new establishment.
  13. Improve regulation and standards: Use regulation, compulsory or voluntary standards to drive change and enshrine better working practices. This work to improve standards can be done in several ways. This could be by putting in place new performance standards that are universally used or embedding principles in existing structures.
    1. New performance standards or models can encourage or incentivize services to shift their focus, work or behaviors. Shared standards or frameworks can embed change across a system by moving multiple agencies at the same time.
    2. Embed new principles into existing structures – especially where these are already widely adopted, this can be a faster route to impact at scale than seeking to roll out a new model.

For most issues, multiple building blocks will need to be in place to create a solid platform for lasting widespread change. These building blocks as explained above are opportunities for both social purpose organizations as well as funders of these organizations to enhance and support their journey towards impact at scale.

Next Generation Consultants work with all players in the social sector by developing impact strategies not only to achieve outsized impact, but impact at scale. For more information reach out via info@nextgeneration.co.za

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