3 Ways Funders Can Help Scale Impact

Lauren Earley and Sonja Schut, Arabella Advisors
Posted: July 17, 2013

This post originally appeared on The Greater Good, Arabella Advisor's blog. It is reposted with permission.

Recently, we attended Social Impact Exchange’s 2013 Conference on Scaling Impact. As the name implies, the conference focused on how philanthropy can better address crucial challenges at the magnitude needed to make a real difference in the lives of millions. In addition to introducing several exemplary models for solving social problems and providing practical advice on how to scale, an important theme ran throughout the presentations and panels: funders have a unique role to play in scaling solutions to the levels necessary for lasting impact. Specifically, funders are best positioned to take risks that lead to innovation, help advance proven models, and anchor cross-sector collaboration.

1. Funders can take risks that lead to innovation. Because funders do not typically have the same constraints of other stakeholders, they have often have greater opportunities to support the development of ideas with big, bold, reach. During a panel offering lessons from the private sector on scaling impact, Michael Chu of Harvard Business School called upon philanthropists to recognize the value of innovation. To solve a problem in society (graduation rates, recidivism, homelessness, etc.) a model needs to be able to reach millions of people and become cheaper and better over each subsequent generation. The only way to do that is to innovate.

2. Funders can advance proven models. Just as important as seeking innovation, conference presenters agreed that to achieve lasting impact, funders must also invest in proven and less flashy approaches. Or, as our colleague Eric Kessler has written, be willing to be a little boring. Noting philanthropy’s penchant for using prizes to find that next great idea (and perhaps to stay in the limelight), one conference speaker suggested that philanthropists should consider funding a “replication at scale award” as one way to focus attention on growing existing models that work. Prize or no, foundations can take advantage of their staff’s grant-making expertise to identify and champion organizations with smart ways to expand, collaborate, and sustainably scale.

3. Funders can anchor cross-sector collaborations. Many presenters spoke of how philanthropic collaborations are very valuable but very challenging. Funders can play a unique role by anchoring cross-sector collaborations and securing the partnership of both the public and private sectors. As Audrey Choi of Morgan Stanley noted, collaboration “is not something we [in the private sector] have to do,” and nor is it required of the public sector. Philanthropists, however, have the resources to provide seed funding to reward collaborations and the freedom to take the risks that partners from the public and private sector can’t.

We’ll be continuing this conversation on scaling impact with a forthcoming post from Arabella’s Elliot Berger about the importance of partnerships in the process. In the meantime, we welcome your thoughts in the comments below.

Lauren Earley serves as a senior analyst at Arabella Advisors. She conducts research and analysis for a range of institutional, family, and individual client projects, and helps to support Arabella’s thought leadership efforts. Follow Lauren on Twitter.

Sonja Schut is program assistant for the Managed Organizations team. She provides operational, programmatic, financial, and business development support for hosted projects at the New Venture Fund and the Sixteen Thirty Fund.