The strategy of “scaling up” effective nonprofit programs — born nearly two decades ago in the heady advent of venture philanthropy — has seen ups and downs. It may be on the rise once again.
Over the past 20 years, interest in scaling has aided the growth of some well-known groups, including KIPP, Teach for America, and Nurse-Family Partnership. But as systemic social problems persisted, the strategy lost some sizzle. In recent years, it has been overshadowed by broader strategies that also pay close attention to data and outcomes, such as the collective-impact approach, in which local organizations work together to solve problems.
The fizzled experiment known as the Scaling Marketplace marked a low point for the strategy. Unveiled with some fanfare in December 2013, the marketplace hoped eventually to attract more than 1,000 foundations to its website, where grant makers and donors would be matched with fast-growing charities. At the time, the marketplace boasted that 69 foundations had committed $62 million for eight highly effective charities in health and education. But commitments have risen only modestly since then, the site is still in beta testing, and long-promised “funding areas” focused on poverty and impact investing have never materialized.
Quiet Success
But some of the strategy’s biggest proponents are sticking with it. In 2007, the Edna McConnell Clark Foundation and its grant-making partners collectively invested at least $30 million apiece in three charities. Nothing from Clark in recent years had eclipsed the 2007 effort — until January, when it stunned the nonprofit world in announcing a $1 billion fund to help accelerate the growth of high-performing youth organizations. Clark and its collaborators in the fund, known as Blue Meridian Partners, will make unrestricted multiyear grants worth up to $200 million to four to six organizations.
“We cannot address today’s daunting social challenges if we don’t mobilize capital to help nonprofits with empirically proven programs realize their full growth potential,” says Nancy Roob, chief executive of both Clark and Blue Meridian.
Longtime supporters of the strategy say it has been quietly succeeding, even as the focus of the nonprofit world has shifted elsewhere. For example, the Nonprofit Finance Fund issued a report in 2014 documenting strong returns from its efforts to help charities attract “growth capital” from 2006 to 2011. The 11 charities examined in the report, including DonorsChoose.org, Year Up, and GlobalGiving, increased revenue 28 percent a year and improved their program accomplishments, such as the number of youths served, at an annual clip of 23 percent.
“If that were a venture-capital portfolio, you’d say ‘Wow, that was pretty good,’ " says George Overholser, who led those efforts for several years before departing the Nonprofit Finance Fund in 2010.
The outcomes from early efforts at scaling, Mr. Overholser says, “are the most important experiment that no one is paying attention to.”
