Monday, November 21, 2011

Going to Scale, Part 2

(Note: This post comes directly from my new book Smart Stewardship for Nonprofits: Making the Right Decision in Good Times and Bad, to be released in February 2012 by John Wiley and Sons. You can pre-order at Amazon by clicking on the link above.)

Models for Scaling

In the first post on scaling, we looked at whether or not your service could be duplicated. There are other questions as well:
How much time, talent, and treasure do you want to invest?
What's a reasonable (read, safe) growth curve?
Can I develop a model that people can follow?

Lots of complex issues to decide. But if you choose to proceed, what options do you have? What have other nonprofits done? How have they done it? What are the models, methods and structures they’ve used? There are many options but only really two questions to answer.

The first question  might surprise you: How much control do you want of the scaling? Does your board (or management team) feel that tight control is essential to see that the mission is done properly? That’s fine, but costs more money, time, effort and liability. Or, can you give up some control and put the idea in the hands of others? If so, less time, money and oversight are needed. Or, is your need for control somewhere in between? The choice of level of control comes first. That’s the strategic issue.

The second decision is more tactical. What mechanism will you use to scale?

Are you planning on opening more offices under your current 501(c)(3)?. That would result in complete control; control of staff, budget, office location, decor, branding, etc.

A bit less control would come from a subsidiary model, where you open or take over another local 501(c)(3) in a remote community. There could be a local board overseeing a local staff. Perhaps the local gets budget approval from your organization, perhaps not. Perhaps your board has representation on the subsidiary board, perhaps not.

A third option would be for you to brand and deliver; developing a  how-to guide on a website, but to copyright the idea and trademark the brand. This might bring you some funds, but more importantly it would give you some control of the way the idea is used in other communities. You could set standards to go along with use of the brand name, offer on-site consulting, etc.

The least control comes from simply floating the idea, with your experience and a set of suggested processes. I call this the open source option, named after the very common software model, where programmers develop code, either in snippits, or in complete programs, and then put them online for others to use and/or improve. Nonprofits already do this for things like policies and procedures, and websites such as have led the way in facilitating the free exchange of documents. In your case, you would not just share a document, but an entire service concept.

Just remember that once a programmer posts open source code online, anyone is free to use it and, more importantly, to modify it. The original programmer loses control, and so would your nonprofit.

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