This blog is reposted with permission from Bridgespan.org. The author, Paul Carttar, moderated a panel at this year's Social Impact Exchange conference.
Remarkably, the scaling of high-performing nonprofit organizations seems to have taken on a certain glamor. In our sector, we are typically eager to talk about such exciting topics as the design of promising interventions, the development of sophisticated organizational capacities, and, perhaps most alluring of all, the raising of growth capital from "investors" to fuel a program or organization's expansion or replication.
Yet there is a sobering reality, an "unsexy" side to scaling that we too frequently avoid: with each upward ratchet in size, as a nonprofit expands facilities and hires more employees, it also increases the amount of money it must raise each year simply to maintain its operations. And if it can't do this, it can no longer build scale.
Accordingly, I was pleased to see the recent Social Impact Exchange Conference on Scaling Impact devote a significant chunk of time to the need to develop revenue models that enable growing nonprofits to thrive at each level of size attained. At the conference, I had the privilege of facilitating a plenary session on "Financial Sustainability at Scale" with several experts, who together provided foundational answers to four of the biggest questions on the subject: