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GLOBAL DEVELOPMENT INCUBATOR (GDI)SCALING UP IMPACT:

WHY IT MATTERS, WHAT IT MEANS, HOW WE CAN DO BETTER

DECEMBER 2018

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GDI helps to build the social sector in China through strategy consulting, capacity building and incubating collective action initiatives

Strategy Consulting

Capacity Building

Incubating Collective Action Initiatives

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NYCDC

NAI

SHENZHEN

= GDI office or representative officeLogos represent previous GDI funders or clients

We are a global organization focused on impact at scale, with offices in Shenzhen, Hong Kong, New York, Washington DC, and Nairobi

HONG KONG

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In April 2018, EPM engaged GDI to help conduct a strategy review to answer two important questions:

Early Stage Growth StageProof of Concept

Impact at Scale (end-game achieved)

"1 to 10s""0 to 1" "10s to 100s" "100s to..."

1. What are the different pathways to scaling up impact

and what are the common success factors?

2. How should funders effectively support these

products / models to achieve impact at scale?

EPM works to help replicate and scale early and growth stage products

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We looked at 10 brand org/product case studies representative of the portfolio to understand what drives success in scaling up

Product Name Brand Org Name Sector Product Intervention Description

1. Grandparent's ClassChengdu HechuanCommonweal Development Center

Child Education Grandparents volunteers deliver 10 cultural education classes for children and youth

2. Rainbow Village AidInitiative

Taishan Xiao He Commonweal

Child ProtectionVolunteers visit beneficiaries at least 2 times per year with clothes and school material. The product might provide scholarship (~1,000rmb), prison visits to parents, summer camps, psychological support, and “assistant mom” pairing

3. River Watcher Action Network

Beijing Watcher Environmental Protection Foundation

EnvironmentRiver watchers walk in the river shores for at least 3h per week, supervising the water quality situation of the river with water testing tool, and reporting environmental issues as needed through the online data platform.

4. Health Ambassador Empowerment Toolkit

Xintu Health careA health ambassadors toolkit: People in the community interact with the toolbox to learn about health and decide if they want to become health ambassadors

5. Shi Fang Yuan ElderlyMind Care Techniques

Shi Fang Yuan Elderly Hospice and Mind Care Center

Health careVolunteers visit dying elders in hospitals and elder homes periodically for half a day and apply the 10 companionship methods

6. Girl's ProtectionGirl’s Protection Foundation

Child Protection Children attend 1 class of 45min about sexual abuse prevention

7. “Da Fu” Community-Based Service

Huiling DisabilityPersons with intellectual and development disabilities attend day activity centers during the day and live in group homes (community-based care)

8. Aflatoun Financial Education

Be Better Child Education Children and youth receive a financial course composed of 6-12 classes of 45min each

9. YiCangChengdu AiyouxiCommunity Culture Development Center

CommunityPeople in the community donate material and money to families in need; and participate in the fly market where they donate part of the revenue back to the community

10. Little Angel Boy & Girl Action

Huanshan Youth Commonweal Development Center

Child Education Children participate in one or more volunteer activities in the city per year

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We visited 30 organizations in 21 cities – each brand org and two of their local org replicators

Product Name City Date Local Org City Date

1. Chengdu HechuanCommonweal Development Center

Shunde 7 SeptemberChebei Dragon Boat Culture Promotion Association Guangzhou 30 July

Luoyang Changle Social Work Organization Luoyang 20 September

2. Taishan Xiao He Commonweal

Taishan 30 August Dongying Volunteer Association Dongying 28 August

Heze Huacheng Volunteer Service Center Heze 30 August

3. Beijing Watcher Environmental Protection Foundation

Changsha 29 September Wuhan Xingche Development Center Wuhan 17 August

Wuhan Love 100 Lakes Volunteers Association Wuhan 17 August

4. Xintu Shanghai 14 September Beijing Xintu Beijing 5 September

Xi’an Xintu Xi an 21 September

5. Shi Fang Yuan Elderly Hospice and Mind Care Center

Beijing 3 September Guangzhou Shifangyuan Guangzhou 24 August

Jinan Shifangyuan Jinan 29 August

6. Girl’s Protection Foundation

Beijing 4 September Jinmen Volunteer Association Jinmen 16 August

Weifang Firefly Volunteer Association Weifang 27 August

7. Huiling Guangzhou 9 OctoberXining Huiling Xining 18 September

Lanzhou Huiling Lanzhou 19 September

8. Be Better Shanghai 12 SeptemberQingquan Volunteer Service Center Changzhou 13 September

Shaanxi Gender Development Solution Xian 21 September

9.Yicang Chengdu 28 September Hengyouai Social Work Organization Jiangmen 31 July

Qingdao You & Me Social Work Service Center Qingdao 27 August

10. Huanshan Youth Commonweal Development Center

Hangzhou 11 September Jinnan Happy Home Social Work Service Center Jinan 29 August

Hangzhou Wode Youth Service Center Hangzhou 11 September

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Today, we will share some of the key findings from the study to answer three important questions

1. Why should the social sector promote scaling up impact?

2. What does it mean to scale-up impact?

3. How can we do it better?

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There has been a debate in the Chinese social sector on whether products should scale-up or stay small and beautiful

Small and Beautiful! Scale up!

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An organisation may stay small and beautiful, but if the product is relevant for a large population, someone should scale-up its impact

1,000,000

1,000,000

7,300,000

33,475,112

40,000,000

142,890,000

148,072,539

169,378,466

646,000,000

Rainbow Village

River Watcher

Huiling

Little Angel

Shi Fang Yuan

Girl's Protection

Grandparent's Class

Be Better

Yi Cang

Estimated "Problem Size" in Number of Persons, based on Brand Org's specified mission

People living in urban cities (>14 yrs old)

Children and youth in rural areas (3-25 yrs old)

Children across the nation (6-15 yrs old)

Children in schools (6-15 yrs old)

Dying elders - hospitalized or in elderly homes

Elementary school children in urban cities (6-12 yrs old)

Adults with intellectual and developmental disability (>16 yrs old)

River watchers needed

Children with one or both parents in prison

• Social problems in China affect large numbers of people

• If a product is relevant for addressing the social problem, there is strong value in the sector helping to scale up the impact of this product and replicating that product across China.

• Therefore, the social sector should promote scaling-up the impact of products (not necessarily scaling up social sector organizations themselves);

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So what does scaling-up impact mean?




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Example: Huiling

There are 7.3m adults with intellectual and developmental disabilities in China

7.3m

Huiling’s products only reach 0.02% of the problem size (1.6% are reached by the whole sector)

To reach global benchmarks1, we would need to serve 2m everyday to achieve “impact at scale”

2m

• Huiling’s product (group homes + day activity centres) aims to impact China’s 7.3m adults with IDD

• However, Huiling’s product currently only reaches 0.02% of this problem size

• Using global benchmarks1, solving this problem at scale would be to provide service access to 2m beneficiaries everyday.

• Huiling alone cannot meet this goal. Instead, Huiling, as well as other organizations, can create products that can be scaled up to reach 2m beneficiaries through replication.

• Replication would be taken on by many local organizations and would require strong government funding and support

• We call this end-game Government Purchase.

1. Various reports published by government, academics and services providers in U.S., Finland and Australia; on average, an estimated ~30% of adults with IDD receive community-based services in group homes and/or daycare centers.

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There are 4 “end-games” that a product can target: they differ by who implements and who pays for the product at scale

Product:

¥

Government Adoption

Government Purchase

Commercial Adoption

Civil Society Adoption

End-game:Who implements the product at scale?

Who pays for the product at scale?

Government departments or government controlled entities (schools, hospitals etc.)

Government budgets

Social sector organizationsPrivate sector organizations

Government purchase + earned revenue

Private sector organizations 100% earned revenue

Civil society: individuals, volunteer associations, community groups, NGOs

Public donations and/or earned revenue

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Achieving successful replication and showing the ability to scale-up is an essential pre-requisite to any of the end-games

Government Adoption • Brand orgs show that their product can deliver a solution to a social problem at scale, with low cost and low risk to the Government

• They also conduct intentional advocacy efforts to influence policy change

• Brand orgs need to do the same thing as for Government Adoption

• The Government will decide to purchase rather than adopt when it is more efficient to outsource and the government does not mind third-parties implementing

Government Purchase

Commercial Adoption

Civil Society Adoption

End-game How the social sector can catalyse this:

• Brand orgs use their product to address a market failure or inefficiency or to create a new market; the result is that the product shows that there is a clear profit opportunity in solving a specific social problem

• Brand orgs create a product that can motivate large scale participation of individuals, volunteer associations, community groups, non profit organizations

¥

Given the scale of social problems in China, showing successful replication of a product is critical for to achieve any of the end-games

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An early consideration is to know what you’re replicating: not all products are made equal and it helps to think of 3 product segments

High

Low

One-Off / Short term Continuous

Leve

l of F

ront

line

Staf

f Exp

ertis

e

Nature of Intervention

Niche Specialists

Regular StaplesMass Boosters

Product Segmentation of the 10 Case Studies:

A short description of the three segments:

• Mass Boosters are generally the easiest to replicate; they can be delivered by any level of frontline-staff once they have completed the relevant training, and are one-off/short term in nature. They are generally well suited for generating large-scale public participation or awareness raising

• Regular Staples are also easy to replicate, since they can be delivered by any level of front-line staff once they have completed the relevant training. However, these require more commitment on the behalf of the local replicators, given the continuous/ongoing nature of the product's intervention.

• Niche specialists typically require more effort to replicate, since the level of frontline staff expertise is higher than the other two segments. There are many social problems which require strong frontline expertise, and these products address those needs.

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Replication happens when products meet the needs of local orgs and local orgs are able to execute the product

Regular Staples

Mass Boosters

Niche Specialists

Early Volunteers

Mature Volunteers Gov. Orgs Early

NGOsMature NGOs

Early Volunteers and Early NGOs generally prefer Mass Boosters - they are the easiest to replicate.

A general guideline to successful "matching" between product segments and local org segments

Regular Staples are more suited for MatureVolunteers that have more stable volunteer bases to run products of ongoing nature. Early NGOs are also a option for this reason

Niche Specialists are the most limited in their choices, generally fitting best with early and mature NGOs who have the resources and passion/aligned mission for the product. Most products, especially those that fit the local

or national government policy agenda, may be inclined to choose Gov Orgs for their strong resources. However, brand orgs should be aware of the stricter requirements that come with such local orgs

Doesn’t Match

Ideal Match

Legend:

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There are different ways to organize this relationship: there are four replication pathways, and each has their pros and cons

Characteristics

Open Source Network Association Franchise

Online platform or learning center that allows anyone to access the information for free

Connected group of replicators that implement the same product

Closely coordinated group of local replicators usually with strong mission commitment and high quality control

Closely coordinated group of local replicators that share the same mission, operating model, governance and brand

Quality Control -

Governance Control -

Shared Organizational Brand - - -

Brand org support for local orgsE.g. online training, coordinated events,

fundraising guidance, direct funding, on-site workshops, strategic guidance

-

Replication pathways

Low presence of characteristic

High presence of characteristic

Legend: Giving local orgs lots of freedom to localize and execute the product has enabled Little Angel to grow rapidly to a network of 350 orgs in 4 years

Monitoring and quality checking local operations has enabled Girl’s Protection to maintain high quality as the number of replicators grow

Being directly involved in local governance has allowed Huiling to ensure mission alignment on the delivery of community based services

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The results of getting this right can be impressive; but expectations of how fast a product scales should differ by segment and pathway

Replication Speed by Product Segment and Pathway(Compound Annual Growth Rate of Local Replicators, from Product Start Year)

320%

223%

190%

58%

100%

100%

86%

53%

20%

12%

Grandparents class

Little Angel

Girls Protection

Be Better

Shifangyuan

Yicang

Rainbow Village

River Watcher

Huiling

Xintu

Mass Boosters

Regular Staples

Niche Specialis

ts

Average�198%

Mass Boosters

Average: 198% CAGR

Regular Staples

Average: 85% CAGR

Niche Specialists

Average: 16% CAGR

FranchiseAssociationNetwork

Mass Boosters are on average the fastest; especially those with a Network pathway to scale

Regular Staples are second fastest. They are slower than mass boosters since they require continuous / ongoing implementation

Niche Specialists take more time and effort to replicate, especially since most are franchises, which have higher levels of control (quality and governance)

Note: Brand orgs adjust pathways based on their needs as they scale-up, and may have more than one pathway at a given time

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So, what drives success?




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We wanted to learn what drove outperformance in scaling up: we found that success factors and challenges fell into four major groups

B. Organization Resources / Capabilities

A. Replicable Model

C. Leadership and Ability to

Change

• Market Potential (Revenue sources, demand WTP, Policy support)

• Replicability (Productization, SOP, Cost of replication)

• Effective (achieves and maintains desired outcome)

• Value provided by brand org pre/post replication (training, shared services, branding etc.)

• Sustainable operation model and resources for the brand org

• Talent acquisition for brand org

• Impact measurement and quality control

• Commitment to scale up

• Ability to mobilize social resource

• Build team and succession

4 CATEGORIES OF SUCCESS FACTORS AND CHALLENGES

D. Enabling Environment / Ecosystem

• Alignment with national policy/direction

• Local Government support

• Media and popularity

• Funders support (foundation, corporation, hub )

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The primary success factor varied by stage from leadership to replicable model to the enabling environment...

Proof of Concept Early Stage

Growth Stage

Leadership - strength of the founder's networks with the local community and/or government

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Leadership - commitment to the mission

5

Enabling Environment -foundation support (seed funding)

3

Replicable Model - Replicability(standardization, documentation -SOP, learning from feedback etc.)

5

Organizational - Value provided by brand org (training and funding)

4

Organizational - Quality control system: including data collection

3

Enabling Environment - Policy Support

3

Enabling Environment - Media Popularity

3

Enabling Environment - Foundation support (training and funding)

3

Enabling Environment -Foundation support (access to networks and connections)

5

Enabling Environment - Media Popularity

4

Organizational - Value provided by brand org (training, funding, replication system)

4

Organizational - Strategy Development

3

Replicable Model - Market Potential (willingness to pay)

3

Success Factors

(# of relevant mentions out of 10 case studies)

The Founder of the product/brand org is critical in the beginning stage -the strength of their networks and commitment to the mission is what to look out for when assessing whether founders are high potential

At the early stage, what matters most is having a strong, replicable product and a clear value proposition and value delivery from brand org to local orgs

At the growth stage, what matters most is getting the word out (networks and media) and developing an operational governance model + strategy to support the fast expansion

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...in contrast, the challenges were almost all organizational in nature, increasing in complexity from beginning to growth stage

Organizational - team-building: inability to recruit full time team or misalignment in the core team

4 Organizational - Talent acquisition (from implementer to trainer)

3

Organizational - Misalignment between brand org and local orgs

3

Organizational - Strategy Development

3

Replicable Model - Poor Standardization

3

Organizational - Talent acquisition (from implementer to trainer, talent for HQ)

6

Organizational - Impact measurement and quality control

5

Organizational - Sustainable operating model

4

Organizational - Misalignment between brand and local org

4Challenges


Those that struggled at the beginning, struggled to find the full time team or to gain alignment among the core team.

At the early stage, challenges were mostly organizational - it's about re-orienting staff from a do-er to trainer positioning, clarifying roles and responsibilities between brand and local orgs, communicating a clear strategy for scaling up.

At the growth stage, challenges were all organizational – brand orgs struggled to train talent toward training others, and to find talent at the HQ level to be able to govern and manage the rapid replication growth. Additionally, organizations that do not have impact measurement, quality control and sustainable operating models before this stage, will struggle greatly


Growth Stage

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Better and more tailored support is needed across each stage

Seed Funding: from foundations or government incubators

6

Product Development Support 5

Introduction to non profit management training

4

Access to networks (especially local government, community)

4

Product Standardization Support 7

Defining your scale-up strategy(pathways, end-games)

6

Developing a SOP for replication 5

Talent Development - skill transition

3

Funding for scaling up 4

Defining your scale-up strategy(pathways, end-games)

7

Talent Development - for HQ 6

Impact measurement 6

Data management systems 5

Replicators management / quality control

5

Sustainable business model development

5

Support needed


The support needed at proof of concept stage can be delivered as one-off, short term, simple interventions

At the early stage, support is a little more complex and requires short term involvement. 1-3 month interventions would be sufficient for most of these topics

At the growth stage, support is much more complex in nature and requires a higher level of expertise to deliver. Engagements could range from a few months to a few years, depending on what type of transition is needed.


Growth Stage

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Unfortunately, there are large gaps in the ability of the sector to provide this support - especially at the early and growth stage

Key Support for Scaling-Up – Brand OrgIn number of Brand Org Mentioned Such Support

2

1

4

4

1

2

4

5

3

3

5

3

5

7

6

6

5

5

5

Seed funding

Product development

Non-profit management training

Access to networks

Product standardization

Scale-up strategy

SOP

Talent development-skill transition

Pathway/Endgame transition strategy

Talent_HQ talent development

Impact measurement

Data management system

Sustainable business model

Replicators management/Quality…

Existing Missing

Proof of Concept

Early Stage

Growth Stage

The social sector ecosystem has not grown at the same pace as growth-stage organizations. The ecosystem is almost non-existent for growth-stage products; there needs to be intentional effort from foundations to build the capabilities to provide this support across the ecosystem

Early stage organizations are finding some support for product standardization and SOP development, but lacking supporting in scale-up strategy development and talent development

The proof of concept ecosystem is doing well to provide access to networks, and some seed funding, but could improve in helping to develop quality products and providing introductory training to the non profit sector

Insights

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Creating capabilities to deliver this missing support will require many different roles and players to work together

Scale-Up Stage Missing Support Foundations

Government Departments

Corporate CSR

Hubs (EPM Hubs, gov-backed

hubs)Social org Incubators

Experienced Brand Org

Leaders

Foundation In-house

Team

Strategy Consultants(e.g. GDI)

Academic Researcher

(Universities, Think tanks)

Seed Funding ü ü ü

Product Development üü

NGO Management ü ü

Scale-up Strategy (pathways and endgames)

ü ü

Talent Development – Skills Transition

ü ü ü ü ü

Product/SOP Standardization

ü ü ü ü

Scale-up Strategy (pathways and endgames)

ü ü

HQ talent Development ü ü ü ü

Impact Measurement ü ü ü ü

Data Management System ü ü

Sustainable Business model/ Financing

ü ü ü ü

Replicator Management/Quality Control

ü ü ü ü

Policy advocacy support ü ü ü

Proof of Concept

Early Stage

Growth Stage

Foundations can collaborate and "divide and conquer" the missing support needs

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Working together will benefit all of us – today, we can take the first step in the afternoon conversations

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STAY IN TOUCH: [email protected] DIRECTOR, GDI EAST ASIA

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