The Challenges of Accessing Funding for Scale

Summary

Nonprofit Leadership Podcast Episode Summary
Title: The Challenges of Accessing Funding for Scale
Host: Dr. Rob Harder
Guests: Ali Metcalf & Mohamed Asman, Co-Authors of the Spring Impact Report
Release Date: January 21, 2025

---

1. Introduction and Episode Overview

In this compelling episode of the Nonprofit Leadership Podcast, host Dr. Rob Harder delves into the pressing issue of scaling nonprofit organizations amidst funding challenges. Drawing on the latest research from Spring Impact, co-authored by Ali Metcalf and Mohamed Asman, the discussion provides actionable insights for nonprofit leaders aiming to expand their impact effectively.

Key Focus:

• Strategies for scaling nonprofit organizations
• Navigating funding obstacles in a dynamic economic landscape
• Real-world stories from successful nonprofit leaders

---

2. Understanding the Spring Impact Report

Dr. Harder introduces the episode by highlighting the extensive Spring Impact report, which surveyed over 120 nonprofits across 70 countries to uncover what drives successful scaling. The report focuses on identifying the "secret sauce" behind organizations that have effectively navigated funding challenges to amplify their impact.

Ali Metcalf explains the research scope:

“We created an initial database of over 120 nonprofits who we believed met our definition of scale... We interviewed 28 nonprofits across 70 different countries, covering over 10 different issue areas.”
[04:20]

---

3. Key Challenges in Accessing Funding for Scaling

Mohamed Asman emphasizes that the primary hurdle for scaling nonprofits is the scarcity of accessible funding:

“Funding is often quite challenging to find. There's no shortage of good ideas, but the way funding is allocated undermines scale.”
[03:31]

The discussion reveals that even organizations with effective strategies to partner with "doers" (other organizations or government bodies) face significant resource demands to maintain these collaborations.

---

4. Working with Government Funders

The role of government funding emerges as a double-edged sword. While crucial for scaling, partnerships with government entities are fraught with challenges.

Mohamed Asman notes:

“Governments are often squeezed for money and have competing priorities. However, solutions designed with the government from the beginning are more likely to scale.”
[08:20]

Ali Metcalf adds that cultural differences between nonprofits and government bodies can hinder effective partnerships:

“Nonprofits are very innovative and agile, whereas governments may lack this responsiveness, making partnerships challenging.”
[09:34]

---

5. Corporate Partnerships and Revenue Generation

Exploring alternative funding avenues, the guests discuss the potential and pitfalls of corporate partnerships.

Ali Metcalf shares:

“Organizations have built strong CSR offerings where corporations fund projects like bridge building in Uganda through volunteer programs. This contributes around 20% of their income.”
[20:48]

However, establishing such partnerships requires significant time and alignment to avoid mission drift.

Mohamed Asman encourages nonprofits to consider corporate partnerships as a viable strategy:

“This report will inspire others to explore corporate partnership models as a way to raise more funding.”
[22:36]

---

6. Demonstrating Impact and Evidence Building

A critical theme is the difficulty nonprofits face in measuring and demonstrating impact, which is essential for securing funding.

Ali Metcalf highlights the challenges:

“Nonprofits often work in areas with multiple outcomes, making it hard to build evidence for specific impacts. Successful organizations invest in large-scale RCTs to prove effectiveness.”
[12:19]

Mohamed Asman expands on the high standards set for impact measurement:

“The high bar for impact evidencing forces nonprofits to narrow their focus, which can limit the demonstration of broader societal changes.”
[13:34]

---

7. End User Income Models

Generating revenue directly from beneficiaries can be a sustainable funding source for nonprofits, though it's not universally applicable.

Ali Metcalf explains two successful models:

1. Product/Service Sales:

   “World Bicycle Relief sells high-quality bikes below market rates, enabling multiple positive outcomes like improved school attendance and healthcare access.”
   [27:09]

2. Microfinance:

   “Organizations providing financial services such as loans and savings products can charge interest, generating income while supporting entrepreneurship.”
   [28:52]

These models require maintaining high-quality support to ensure beneficiaries’ success, often necessitating additional philanthropic funding.

---

8. Lessons for Funders

Funders play a pivotal role in enabling nonprofits to scale effectively. The report underscores the importance of long-term and flexible funding relationships.

Mohamed Asman advises funders to:

“Provide longer-term and flexible partnerships. Being generous and trusting allows nonprofits to learn, iterate, and embed solutions effectively.”
[29:14]

Such an approach ensures that funders receive a better return on their investment by supporting sustained impact rather than short-term projects.

---

9. Lessons for Nonprofits

Nonprofit leaders can glean several strategic takeaways to enhance their scaling efforts:

Ali Metcalf recommends:

1. Cost Effectiveness:

   “Be relentless in identifying who can fund and support your solutions while maintaining a low cost per outcome without compromising impact.”
   [30:28]

2. Building Evidence:

   “Continuously demonstrate impact to funders, even for multifaceted solutions, through robust evidence gathering.”
   [30:28]

3. Partner Diversification:

   “Access funding from multiple payer types—philanthropy, corporates, government—to mitigate volatility and ensure sustainability.”
   [30:28]

4. Testing and Adaptation:

   “Engage in continual testing, learning, and adapting to stay responsive to ecosystem changes and funding landscapes.”
   [30:28]

---

10. The Role of Technology and AI

While not a primary focus of the current report, the potential of technology, particularly AI, in scaling nonprofit operations is acknowledged.

Ali Metcalf admits:

“We didn't explore AI in depth in this study, but technology plays an important role in solution delivery.”
[25:10]

Mohamed Asman envisions AI as a future game-changer:

“AI could allow us to leapfrog current solutions, provided it’s implemented ethically and efficiently.”
[25:32]

Dr. Harder connects this to broader industry trends, noting major corporations like Microsoft and Amazon leveraging AI to support nonprofit scaling efforts.

---

11. Importance of Scaling and Future Directions

Addressing societal issues requires nonprofits to adopt a "hockey stick mindset," aiming for exponential rather than incremental growth.

Mohamed Asman emphasizes:

“Scaling is critical to solving expanding societal problems. It requires reimagining solution delivery to reach more people quickly and sustainably.”
[23:36]

This urgency underscores the necessity for nonprofits to innovate and scale effectively to meet the growing demands of their missions.

---

12. Accessing the Spring Impact Report and Additional Resources

For listeners seeking deeper insights, Spring Impact offers a wealth of resources:

• Website: springimpact.org – Access toolkits and additional reports.
• LinkedIn: Follow Spring Impact for updates and insights from the report.
• Scalemail: Subscribe to their weekly newsletter for ongoing scaling strategies and tips.

Ali Metcalf encourages engagement:

“Visit our website and sign up for Scalemail to access our scaling insights and toolkits, all available for free.”
[34:02]

---

Conclusion

Dr. Rob Harder wraps up the episode by thanking Ali Metcalf and Mohamed Asman for their invaluable contributions. The episode serves as a vital resource for nonprofit leaders and funders alike, providing evidence-based strategies and real-world examples to navigate the complexities of scaling in the nonprofit sector.

Closing Remark from Dr. Harder:

“Thanks again for being on the show and providing such helpful information for nonprofit leaders and funders.”
[34:21]

---

Additional Resources:

• Podcast Availability: iTunes, Spotify, Amazon, Google Podcasts, and more.
• DonorBox Sponsorship: Learn more about optimizing donations at donorbox.org.

---

This episode is a must-listen for anyone involved in nonprofit management, offering both a comprehensive analysis of current funding challenges and practical solutions to achieve scalable impact.

Transcript

[Dr. Rob Harder]

This is Dr. Rob Harder with the Nonprofit Leadership Podcast Making youg World Better. What does it take to be an effective nonprofit leader today? What are the biggest challenges? What are the biggest obstacles? How should nonprofits fundraise in an economy that is constantly changing? All these reasons combined led me to start this show and it's my hope that through this series people can learn not only what it takes to be an effective nonprofit organization, but to hear from effective leaders who who are successfully making a positive impact in their communities. We hope you enjoy the show as together we hear how they are making their world better. Welcome to the Nonprofit Leadership Podcast Again, Happy New Year Here we are into a brand new year and I think it's really appropriate for this conversation because this conversation is going to cover a lot of ground when it comes to how you can scale your nonprofit. And what we're going to dive into is a report by Spring Impact that did a quite a extensive survey around the world with different NGOs and nonprofits about who was successful at scaling how they did that. Well, the two guests I have is Ali Metcalf and Mohamed Asman and they are the co authors of this report. And it's going to go a lot into how do you scale, how do you work with government funders to help scale your organization? What are maybe the pitfalls and the challenges of working with a government funding organization? And what about working with corporations or what about developing your own social enterprise and what they call end users? You know, maybe you sell thrift store items or you sell clean water or things like that to help scale your organization. They're going to look into all of that though they have with this report. And the data points they bring up I think are very helpful for all of us. Regardless of the size of your organization, whether you're small, wanting to grow or you're medium or you're already a large organization, but you're ready to go to the next level and really exponentially scale your organization. I think you'll learn some new insights from Mohamed and Ali and as always, always glad that you've tun in today. Now on to the show. This podcast is sponsored by Donorbox Donor Box, helping you help others with the best donation forms in the business. Well, welcome to the Nonprofit Leadership Podcast. We're so glad you're tuning in today. We've got Muhammad and Ali with us today to talk all about nonprofit leadership and fundraising and they've got this very unique report you'll see in your show notes as well. We're going to Talk all about what this report is really revealing about the nonprofit sector. But first of all, Muhammad Ali, thank you so much for showing joining me on the show today.

[Mohamed Asman]

Thank you for having us. We are glad to be here.

[Ali Metcalf]

Thank you so much.

[Dr. Rob Harder]

Absolutely. Well, they both are part of Spring Impact. And just real briefly, Spring Impact is a nonprofit working to tackle the world's biggest problems at scale. And that's why I think my listeners, I would really lean into this. They've got a lot of experience. They've been around for the last 13 years supporting organizations globally to really to increase their reach and their impact. And so what we're going to talk a bit about is this report that's just released recently. So maybe we could start, Mohammed, by talking about why you focus on this specific issue. And let me lay it out for my listeners. You focused your efforts most recently on why accessing funding for scale is the number one challenge people in the nonprofit sector are facing right now, including the ones you work with directly. Why did you focus on this specific issue? And tell us a bit about a sneak peek, if you will, of this report.

[Mohamed Asman]

Absolutely. I think the biggest challenge we see that people have when they're scaling the solution is that this lack of funding, funding is often quite challenging to find. There's no shortage of good ideas. People have great ideas. People are capable to do well. But often the way funding is allocated undermines scale. It's quite restrictive. It's quite sort of challenging for them to be able to replicate what they're trying to do. And we wanted to understand what has worked for others, what lessons have been learned and how do other people are able to scale their solutions. And we did this research to really inform ourselves, inform the sector and build the field to understand what is the secret sauce, what makes this work. And my colleague Ali will be able to add a bit more on that.

[Dr. Rob Harder]

Yeah, Ali, that's a great setup. Mohamed, talk about how you started and what was the criteria for the organizations to be part of the study.

[Ali Metcalf]

Yeah, absolutely. And as Mohamed said, we really wanted to focus on finding nonprofits who have been able to overcome the challenges around accessing funding. I think as a sector, we know a lot and we talk a lot about the challenges. So we really wanted to find. Okay, so who has managed to overcome those and what can we learn from those organizations? So we created an initial database of over 120 nonprofits who we believed met our definition of scale. And by that we mean having made a meaningful dent in the social or environmental issue and that they exist to address. So we had this long list, this long database and then yeah, we really kind of verified that and had lots of conversations with other kind of intermediaries, scale focused experts to help us get the long list. And then really once we had those organizations down, we interviewed. So was really lucky to have the opportunity to speak to 28 incredibly inspiring nonprofit leaders to really kind of dig into their journeys specifically as that relates to funding. So we spoke to 28 nonprofits across 70 different countries, over 10 different issue areas. Most of those are in low and middle income countries, but we did have a spread globally. And yeah, the other important piece was spent many hours analyzing recent annual operating budgets to really be able to see kind of where's the funding coming from. So yeah, it was a really great opportunity to really dig deep in some really inspiring organization stories.

[Dr. Rob Harder]

Yeah, that's what I've been really impressed with. What I've read about Spring Impact and the research you do and the data collection you do. It provides really good information for nonprofit leaders to really understand what's going on on a global scale. So maybe as you went about this research, I'd be curious, Ali, to start with, what were some of the biggest surprises you found from your research?

[Ali Metcalf]

Yeah, absolutely. And to be honest, we found a mixture of things that were less surprising and some things which were really surprising. Some of the things which were most surprising really is about how I guess the underfunding is really the main theme across all of these things. But a lot of nonprofits are building really effective strategies to find other but we call doers so other organizations, whether they're government bodies, whether that's other nonprofits and to have to find other doers who will be able to implement their solution at scale. And whilst it was unsurprising that that's a strategy which is effective, I think what was more surprising is how even with that model working and having others do is delivering that there's still a huge amount of time and resource that's required to enable those doers to do that effectively. So there's really long term roles that organizations, nonprofits and kind of that's the piece that we found. That's really where there's that funding gap of really the support that they need to provide others to be able to kind of realize their strategy.

[Dr. Rob Harder]

Mohammad, would you add anything to that of surprises or things that didn't surprise you in this project?

[Mohamed Asman]

I think what was surprising for me was that even when nonprofits are able to scale the impact, even when they're able to Pass it on someone else. They still have to be involved in supporting that solution to be effective and to be high quality and impactful. So even when you've been able to scale through government or through other partners, the handover doesn't stop there. So the nonprofit are still involved in iterating and improving the solution. So that for me was surprising because often I thought once you pass the button on, then someone else has to do it. But what they have learned is that actually you still have to stay involved for a long, long time, that part of that involvement is not funded often.

[Dr. Rob Harder]

Very interesting. Thanks for sharing that. And Mohamed, sticking with you, I understand that your study found that governments are crucial stakeholders when it comes to growing things at scale, when it comes to helping enable nonprofits to scale. Talk a bit more about that because I know some, I've had guests on the show that have talked about both really good experiences working with governments in order to scale their nonprofits. And then others have a real struggle working with government agencies and government funding even. So talk about what you found when it came to government funding.

[Mohamed Asman]

It is a mixed bag because governments are often squeezed for money and they have competing priorities and demands on their plate. But often when a solution is designed with the government from the beginning. So if there's a partnership that was built from the start, then it's more likely to scale up than when you bring the government in quite late in the journey to scale. So what we found out is that if you want to work with government, if your ultimate goal is to scale to government, you start building for that in the beginning of your solution. So the government is able to kind of understand, push back, challenge and find a way to support it. So it is a mixed bag. Most governments are stretched for funding, but we feel like if there's a strong partnership and this strong understanding of the solution between the government and the doer, it's more likely to be taken up by government. And it might not look the same once in the government's delivering, but as long as the impact is maintained at scale, I think everybody wins.

[Dr. Rob Harder]

That's very interesting. Ali, I'm curious, kind of building off of that, why do you think it is difficult that nonprofits in government have this kind of a odd relationship at times where it's not always a perfect fit? What have you found again, not just in your research, but just in your experience alone? Why is that not always a perfect fit?

[Ali Metcalf]

Yeah, I mean, I think there are a few things and I think one that's really stood out, I think Particularly in this research is the often the different culture really in the working culture within governments and within nonprofits. Nonprofits generally, or at least the really successful ones that we've spoken to, are very kind of innovative and agile at their core and kind of really responsive to how solutions are working in different contexts, whereas that doesn't happen so much in governments it seems. So it can be really difficult to kind of build that partnership where that kind of agility is valued so much by governments. And I think a lot of nonprofits worry that they'll lose that spirit of agility whilst working with governments. So I think there's a cultural challenge. Obviously bureaucracy in some countries is much more difficult than others. But spoke to some organizations who have amazing strategies and have managed to build amazing partnerships with governments in some countries, as Mohammed said, really getting buy in early on from the Ministry of Health or the Ministry of Education to enable their government workers to deliver the solutions. But the same organizations can be trying to work in a, in another country and financially they've just not been able to find a way through. So I've had to be really creative again to try and find other strategies to not just give up on the countries where it's too difficult to work with governments.

[Dr. Rob Harder]

Thanks for sharing that. Okay, Allie, maybe you could talk about what's some of your advice. Let's get into segmenting donor lists and tailoring emails. Talk about that a little bit more. How have you gone about that, that and what have you found in your research, if anything, on that? When it comes to funding and finding those donors and segmenting them, I think.

[Ali Metcalf]

We were able to really distill down some like key actions and takeaways for organizations one is around like pursuing cost effectiveness. It sounds obvious and I think every nonprofit would think that, you know, they're centering cost effectiveness, but really being like relentless with that and really identifying who might be able to pay for this and trying to understand how much might they be willing to pay for this and then really kind of working to usually demonstrate a low cost per outcome. So it's really not just about trying to make things a bit cheaper, but really kind of centering cost effectiveness and doing that in a way that isn't compromising impact. And that's one of the key things that we found that funders want to see. They want to feel confident that they're going to get return on investment. And again, very much related to that is building evidence of impact and for some solutions working in some issue areas, that's a lot easier if you're providing anti malarials, it's kind of known that they'll work. But for some organizations who are working with with solutions that have so many multiple outcomes, it can be difficult to demonstrate that impact. So again, we found these successful organizations have had to fundraise a lot of money to do big and complex RCTs to really get that irrefutable evidence that what they're doing is impactful.

[Dr. Rob Harder]

Yeah, thanks for sharing that. Why do you think it is so difficult to demonstrate your impact from what you've seen? And Mohamed, you could also chime into this, but Ali first. Yeah. Why is it such a hurdle sometimes for certain nonprofits to truly show and demonstrate the impact that they're having?

[Ali Metcalf]

I think there are a few things. One is the more kind of systematic challenge, which is the lack of funding available to do these things. It can be hard for organizations to have enough unrestricted funding to cover their core costs, let alone invest in really good systems to be able to capture that impact. But I think another thing is, as I mentioned, lots of these organizations are working in difficult spaces where their solution is enabling so many different outcomes. I guess World Bicycle Relief is one example of an organization that we spoke to, and they are essentially selling high quality bikes in rural areas in Africa. And those bikes are enabling people to go to school, they're enabling community health workers to go to the health facilities. But where there isn't just the one outcome that they really need to try and build that evidence for, and they're pulled by wanting to demonstrate to so many different funders who have their own priorities, that it becomes really difficult to kind of hone in on, like, what's the one thing that we need to measure and how do we build a system around that?

[Dr. Rob Harder]

Okay, no, thanks for giving some more background, Mohamed. Anything else you would like to add to that?

[Mohamed Asman]

I think the challenge is that there's often a very high bar set for impact measurement and impact evidencing, which is harder for nonprofits because they're dealing with a moving target. So they're dealing with the changing environment, culture, society. So there's a lot of moving parts that it's very hard to pinpoint exactly what the difference you've made. And it does force nonprofits to narrow down to very specific small things. But actually, like Ali I said, they implement across the spectrum. So it is what impact is good enough? What impact can you actually show to your donor? And especially when you have multiple donors who require different evidence for the impact, then you are quite stretched And I think for me it's to be able to allow the nonprofits to have a longer term view on impact, to see how are we changing societies, how we change sort of the outcome for children, for women, for girls over time. Not sort of a one year impact measurement or two year impact measurements to allow sort of that impact kind of surface itself over time. Is it really important because it's hard when you ask to Show Impact in 18 months when you just started implementing.

[Dr. Rob Harder]

Right. No, thanks for saying that. I think you're absolutely right. And another thing, you know, going back to what was not surprising, what I read from your report so far, is that the point that philanthropy remains really a lifeline, as you call it, for most nonprofits, up to 68% of the funding of the 28 nonprofits you spoke to really said, hey, philanthropy is where we get our funding. Now one of the things you talked about that I thought was really interesting, I'd love to hear have my listeners get a little more information on this. Many successful nonprofits fund impact at scale by embedding solution delivery costs in other doer systems. There's a lot in that phrase talk about what did they do, how did they actually embed those solution delivery costs so that it was something they could scale with?

[Ali Metcalf]

Absolutely. So yeah, we saw, as I said, lots of organizations doing this and I think particularly within government systems. So just to give some of the sorts of examples for the listeners to what we're talking about, we saw examples of organizations who might have initially developed a program on reducing gender based violence and then have thought about how can we get that embedded within school curriculum so we're not adding a lot of cost to other kind of delivery mechanisms for that solution. Another example is Strong Minds, an organization who provide mental health support for women in sub Saharan Africa. And they started off by having their own staff teams entering those communities and delivering those services to the women, which is great, was really successful, but obviously wasn't sustainable at scale. So they've been able to really think about who already is able to reach our target constituents and who already has those systems and structures in place. So we can really embed that. I guess I want to double down on one example that an organization I love speaking to, an organization called Healthy Learners, so they're based in Zambia and they really exist because they saw a kind of huge gap in health care for school age children in Zambia and they noticed that attendance at schools was much higher than attendance for doctor's appointments and hospital appointments. So they really thought, how do we bring the services that children need to the schools. And how do we do that within the existing systems? So to Mohammad's earlier point, one of the first things they did is they co founded the organization with someone who had a lot of experience working within the Ministry of Health. So someone high up with connections and was really kind of bought into the mission of this. And then they have, instead of again recruiting new staff members to provide healthcare in schools, they train teachers in some of the critical skills of community health workers. So they're using the community health worker curriculum, which already exists. They're using school teachers who are already on payrolls. So the costs are really low. And they've actually calculated their costs are, if they had created a new program, would be five times higher than this process of really embedding things within the system. And they would say that's what's enabled them to attract the funding that they need to. And again, to Mohamed's earlier point, even with that program really embedded within the systems, they still have a really significant role to play. And that's the role that they need to raise funds for. But with their low cost per outcome that they're able to demonstrate, it doesn't sound like they're having too hard of a time fundraising for that. Obviously it's not easy for any nonprofit, but it's definitely a kind of setup which is working for them.

[Dr. Rob Harder]

We'll be right back. Are you looking for an easy and effective way to boost your nonprofit's donations? Well, look no further than Donorbox, the online fundraising platform that streamlines your fundraising efforts, maximizes donations, and simplifies giving for your supporters. With Donorbox, you can create beautiful donation forms, accept digital wallet payments, track donations, and send auto receipts. And the best part, there are no setup or monthly fees and no long term contracts required. So what are you waiting for? Visit donorbox.org today to get started. That is www.donorbox.org. hey friends, thanks so much for listening to the Nonprofit Leadership Podcast. Many of you know that I provide leadership and life coaching. With my 30 years of nonprofit experience, I know firsthand how hard leaders like you work. I also know how important it is to have someone you can call on and to get help with the barriers and leadership challenges you will face both professionally and personally. I really want to help people thrive and become all they were meant to become by providing coaching and consulting services. And it's been so much fun working as a coach, working with clients who are leaders just like you, looking to grow personally and professionally. What you may not know is that I also provide consulting services. Currently, in fact, I'm working with an organization to help them create a clear strategy and plan to raise $3.5 million to expand their organization. So perhaps you're an executive director and you sense your organization has hit a lid on growth and you need a strategy as to how you can scale your nonprofit. Or perhaps the culture you set out to create is not the culture you have currently and it's impacting your staff retention. Or maybe you're facing a major resource challenge and you don't know what to do. That's where I can help. I come alongside leaders and organizations to create strategies to grow their organizations and maximize their impact. If your nonprofit needs help with fundraising strategy or operational effectiveness, reach out today. You can simply email [e-mail] you can go to my website, robharter.com or you can call me 435-776-5173. I would be happy to provide a free sample coaching session or a consult to see how I can best be of help to you and your organization. Well, thanks again for listening. Now back to the show corporations. A number of nonprofits you interviewed sold products and services to corporate corporations to generate income. Talk about that a little bit more. Because generating revenue from corporate partnerships isn't necessarily suitable for every nonprofit. Right. But you found some that did work, maybe give a couple examples of where that really did work and make a difference. So again, they could scale. Again, either one of you could answer this one?

[Ali Metcalf]

Yeah, I'm happy to jump in first. And yeah, it's an interesting topic. I think a lot of organizations were concerned potential for mission drift really in working with corporates. But yeah, they were able to find ways to I guess really kind of supplement income. None of the organizations we spoke to were working with corporates in a way that was really a kind of pillar of their funding was more how can we access more unrestricted funding by finding products and services that corporates would be interested in buying into. So it kind of really sits into in this group anyway. Sits in the gap in the space of yeah, how can we get some more unrestricted funding beyond like how can we generate lots of funding that's going to enable us to scale? But there were like various types of corporate partnerships. There were some organizations who have been able to build strong kind of CSR offerings for corporates. One example, bridges to prosperity. So they enable bridges to be built over impassable rivers in rural areas areas to enable connectivity. And they have developed a corporate program actually where they. It's kind of a volunteering offer for big kind of corporate companies in the US they send over a group of workers to experience building a bridge in Uganda, and they pay for that. And that actually, I think, contributes around 20% of their income. So it's not nothing. But even for them, you know, had lots of conversations with them around the. You know, there's a lot of time invested in that setup and it isn't. The funding is really essential to enable them to do their good, but the program itself isn't something that's generating the impact for their overall organization. So, yeah, a mixed bag again. But yeah, no real stories aside from Rainforest alliance, which people probably think of straight away, which is a slightly different place where they're able to provide that certification. So, yeah, other than Rainforest alliance, more small fry.

[Mohamed Asman]

We hope that this report will sort of inspire others to kind of think about the corporate partnership models, because often nonprofits don't sort of think of partnership with corporates as a first goal and finds ways to connect with them. So it's a way for us to bring that lessons learned to others who are struggling to know how else can I raise more funding for my work?

[Dr. Rob Harder]

I was thinking about this. We're talking about scaling, right? And these organizations that have been very successful in their scaling, but some of the challenges along the way, maybe for the skeptic out there that is listening and says, you know, why do we need to scale? Maybe we're okay with slowly growing and not necessarily scaling in a large way. Maybe. Mohammad, could you could speak to this. What in your estimation as you looked at this research project, what did it look like truly to scale? And did you get to the point, where are their organizations reach a certain level as they scale, where they need to stay? Or is this something where every nonprofit should really aim to continue to scale as long as they can, as much money as they can get funding for? Maybe you could speak to even the kind of. The premise, if you will, of. Right. The importance of scaling.

[Mohamed Asman]

Yeah, no, thank you so much. That's a really good question. Because the challenge we have now is that the solutions that we are delivering and not meeting the size of the problem, the societal problems we have are expanding and growing significantly. And we need to really think about a hockey stick mindset. How do we generally move from a place where we're doing a good enough work, but how do we do exceptional work? How do we really reach more people more quickly to solve the problem they're solving? So I feel like there's imperative with this urgency in what we're doing, the trains running away from us. So how can we really amplify our solutions? How can we be more effective, more affordable, more thoughtful, more sustainable instead of breaking the scale? So I believe that scale is critical. It's critical for us to be able to solve societal problems because incremental growth will never get us there. It will take a long time, a lot of money to get there. But if you can think about a scale which means reimagining completely how you deliver solutions, then we can reach more people more quickly and hopefully turn off the taps of poverty, of misery and whatever is affecting the communities that we want. Really health.

[Dr. Rob Harder]

Thanks for saying that. And I like how you mentioned that. And one thing interrelated. I'm not sure how much your report talked about this. Did you spend too much time on AI and how AI can actually help nonprofits scale more quickly? Going back to the needs are huge and the issues are massive and they're urgent. Did you touch it all with how AI can really speed this whole process up for just across the board?

[Ali Metcalf]

No, I'll be honest. It's not something that we looked into. There's a little bit in the report looking at the role of technology in general, which obviously plays a really important role. And so many organizations, as they should, are thinking about how much of our solution can be delivered through technology. But no, I think some of these interviews were back six months ago, as I think even in that time AI has advanced so much, so maybe one.

[Mohamed Asman]

For the future, we're more looking back and seeing what has allowed you successfully scale. And some of them AI could be an issue right now, but when they were doing this work many years ago, AI wasn't a priority. But I believe AI could be the game changer. It could be what will allow us to leapfrog some of the solutions we're trying to implement. So I'm excited about AI and the potential that it brings. And as long as we do it in a way that is ethical and efficient, I think there's a huge scope for using tech to scale impact.

[Dr. Rob Harder]

Well, I'm glad you mentioned that. I've had both Microsoft and Amazon on the show, among others that are having kind of they have their own social enterprise arm, if you will, or philanthropic arm is probably a better way to put it. And they've talked about how they're really trying to utilize AI to help nonprofits large and small to scale more quickly. And that's their big argument, is they believe they are big Believers in maybe obvious because their companies are so large, but they've put AI to work at their for profit side to their business and they just found that that is such an effective way to scale these services that they help to support. So but then there's all kinds of other issues, right, that come with that, you know, privacy issues, some implicit bias that's built into the technology itself. So anyway, I think it'll be another conversation for another day. Let's talk about end users for a little bit because you definitely talk about end user income, how that can be really an important source of funding given the right circumstances though I thought that was interesting. So talk about that. What were the organizations that really found that this end user income was appropriate and was it worked for them, that really actually helped them to scale.

[Ali Metcalf]

And again, as you said, for some of those organizations it was a really, really valuable source of income. I think for three organizations it generated more than 50% of their organizational income. And really those who are able to charge end users again fell into two categories really. And one of those is settling products and services as part of their core mission. So where their solution itself is a product or service that people are willing and able to purchase. So the kind of general success factors for that were being able to deliver a kind of high quality product below market rates. And yeah, I already mentioned Wild Bicycle Relief, they're a great example. People are willing and able to pay for those bicycles because of the value that they can see that it contributes. And then another organization we spoke to, amazingly, they support entrepreneurs to set up kiosks and they sell safe, clean bottled water across Cambodia. And the end users are paying for that. And it's affordable, it's cheap, but those costs are able to make the model overall sustainable. And the other category was microfinance essentially. So providing loans, savings products, other financial services to their end users and able to kind of charge interest on those that group, they are able to generate some end user revenue from that interest. But what we really saw as the key to success with that model was providing high quality support to those end users to establish profitable enterprises with those loans. And that's very costly, right? So that perhaps they'll be able to generate or are generating some revenue from the loans. Again, really, it's the support that they're providing to those end users which they generally needed to raise through philanthropy.

[Dr. Rob Harder]

Well, now we can move on to lessons for funders because I think I know one of the things you would like to get out of this report or for people that Read the report is there's some lessons for funders and there's some lessons for nonprofit leaders. Let's start with the funders. Mohamed, talk a bit about what you found when it came to the long term investment and the flexible funding that you felt like were really key in getting the return on the investment for the funder. Could you speak a little bit more to that?

[Mohamed Asman]

Absolutely. I think what we found that is that for the many of the partners who have been able to succeed in scaling the solution, they had a funder relationship that was longer term, that was flexible, and they were able to hit that sort of impact sweet spot whereby they are able to learn, iterate, pivot and work with the communities to make sure that the solutions are actually well embedded. Because often funders care about the impact for the work they're doing, but they have very tight time limits. And we are saying to be a little bit more generous, a bit more flexible, a bit more open and a bit more trusting because that allows all the partners to be able to work together and make sure that they can actually achieve that impact at scale. Funders should, I feel like they will have the better return on their investment if they think about longer term commitments whereby the first two years are just sort of building evidence, solutionizing and all that and the later they were able to implement and sort of impact will be realized. So long term, flexible partnership, trusting, all of the words that I'm screaming out now are critical to ensure scale is achieved.

[Dr. Rob Harder]

How about some lessons for nonprofits, Ali? I think this is one of the you kind of specialized in what are the things that they should really take away from this report.

[Ali Metcalf]

Yeah, just to double down on some of the things that already mentioned. So again, can't emphasize enough the importance of cost effectiveness and finding ways to make the solution cost effective without compromising impact really is key. And the point that I mentioned around building evidence, I imagine they're the things that nonprofits already know. And this is more of a reminder, keep doing that, do that more. But I think some of the other kind of perhaps newer things, the push to really think about how to find other partners who might be able to deliver this solution and to absorb some of those costs. So instead of starting from we have our solution, how can we get this solution into other places to think about who else exists in the ecosystem who has the ability to do this, would be able to reach our target groups, but also kind of share the same values mission as us to really build those strong partnerships. And that's really a key way of keeping those costs down. Because just thinking about we're going to do this in lots of areas, when we're really thinking about that kind of hockey stick effect of addressing the problem at scale, the costs become enormous. And then another piece of advice would be continually testing, learning and adapting. And I think that was an interesting lesson for me personally too. When we set out at the start of this study, I was looking for nonprofits who had a sustainable funding model, who were there, they had their model and they could just tell, asked what are the models that are working? But we learned that's not how people see it and that's not the reality. And no one considered their model sustainable. And me even positioning the question in that way, everyone was like, no, no, no. We're constantly needing to adapt and change and can talk us through this is the model that we're using at the moment. But things change and we need to be responsive. So it's really about kind of engaging with what are the different trade offs associated with accessing different types of funding and what makeup of different funding sources works best for us as an organization and how can we be responsive to any kind of changes in the ecosystem. And then related to that, I think my last piece of advice would be diversifying across payer types. Lots of these organizations have learned the hard way that all funding sources can be volatile and again for those reasons that government funding might be cut. But there's also reasons that corporate corporates might change their philanthropic strategy. So really thinking about how to diversify across those payer types, not just let's have lots of revenue streams from philanthropy, but also let's really think about how we can access some more of those different funder types. And within this study, on average, each organization was accessing funding from three of the different payer types and they pull out. So really there weren't many organizations who like we have just scaled through philanthropy or corporate partnerships. And again, that also to do that well requires that kind of agility and being responsive, which is definitely, definitely, definitely come up is really key.

[Dr. Rob Harder]

Excellent. Okay, so for my listeners, there's so much good data in this report. How can they find out more? Again, I'm going to put on my show notes, but is there anything else you could tell them in the meantime of where they can go online to find out a little bit more about Spring Impact as well? If they want to get to know you, where would they find you on the Internet?

[Ali Metcalf]

Absolutely. So LinkedIn is probably the best to find Spring Impact more generally. And we post lots of things about this report on there. And really kind of part of our strategy as an organization now is to be doing more of this and sharing more of what we have learned with the sector. So the report itself, I'm sure there'll be a link below this, but also be able to find that on our LinkedIn and our website. But we also have scalemail, which is a weekly newsletter where we're sharing very small, very accessible kind of scaling insights. So we'd really welcome people to sign up for that. And yeah, we'll be sharing lots of the insights of this study on there.

[Mohamed Asman]

And we have a lot of tools on our website that are free to use. So Please do visit springimpact.org we have a whole toolkit that you can download, you can self drive, you can use it to support your work, you can use it to improve your scaling question and needs. Yeah. And they're all free for the public good. So please visit our website.

[Dr. Rob Harder]

That's excellent. Thank you so much. Well, again, Muhammad and Ali, thanks for joining me on the show. Thanks for doing all this research. I think it's just really helpful information for nonprofit leaders and funders both. And I just think it's difficult to always figure out how best to scale your nonprofit. So providing the insights you have is just wonderful. So thank you again for being on the show.

[Mohamed Asman]

Thank you so much for having us.

[Dr. Rob Harder]

Hey friends. Well, I wanted you to know that this podcast can be found on itunes, Spotify, Amazon, Google podcasts, and wherever you listen to other podcasts. I also want to encourage you to like subscribe and share this podcast with others. This will actually help us get this great content out to more nonprofit leaders just like you. You can also join the nonprofit leadership podcast community, find other resources and interviews of past guests, all on my website, nonprofit leadershippodcast.org well, thanks again for listening and until next time, keep making your world better. This podcast is sponsored by DonorBox, DonorBox, helping you help others with the best donation forms in the business.