Enabling Effective Social Impact: Towards a Model for Impact Scaling Agreements

Abstract

Scaling is a critical organizational phase for social organizations: their upfront financial needs increase dramatically. This paper responds—on the basis of initial research on capacity, up-, and deep scaling strategies—to the need for integrated knowledge on financing processes within the context of social organizations’ impact scaling phase. An exploration of a market leader’s processes uncovered both strengths and struggles, which in turn enabled new levels of understanding related to the research question, “How can impact scaling agreements enable effective social impact?” The fact that the financial provider examined in this empirical study lacked alignment in its scaling approach, goals, and reporting processes over time hampered its effectiveness and sustainability. The findings from this qualitative inter-temporal content analysis enable the development of a model for impact scaling agreements. This shows ongoing flows between the provider and recipient of financial and nonfinancial resources and impact information, as well as decision-making and reporting processes. The outcome of researching the question “how can impact scaling agreements enable effective social impact?” was the identification of three success enhancers for effective social impact scaling agreements to enable social impact: (1) Financial provider alignment pre- and per-engagement in terms of expectations with regard to scaling approach and goals; (2) Scaling approach coherence in terms of understanding and acting upon the inter-relatedness and, in fact, mutual dependency between capacity, up-, and deep scaling; (3) Impact reporting alignment of the target group with the financial recipient and the financial provider. This research makes a twofold contribution to the literature. First, the pivotal role of internal alignment between mission, strategy, reporting, and decision-making processes is explored; second, the three scaling strategies of capacity, up-, and deep scaling are established as interrelated dimensions of the same phenomenon.

F(i)unding Your Way: A Managerial Compass for Social Organizations

“…This contribution builds on previous research of one of the authors [10][11][12]. Each of these three papers relates and refers to many other published papers by other researchers, while at the same time having a similar fundamental theoretical framework based on both the resource dependency theory and the nonprofit theory of finance.…”

“…While there is separate analysis for the different components [6][7][8][9], financing strategies as a pre-requisite for all ensuing activities play a key role and need to be included in the management frameworks used for social organizations. This contribution aims to provide this conceptual overview of the different strategic elements building on previous empirical research [10][11][12] of one of the authors. These studies contributed to the understanding of the interplay between social organizations and social financial providers from different perspectives and in different contexts, identifying their interconnectedness.…”

International Expansion of Social Enterprises as a Catalyst for Scaling up Social Impact across Borders

“…An important line of enquiry on growth and scaling up of social impact in SEs has emerged in the last decade. Existing research has mainly focused on classifying and describing the forms or types of scaling strategies deployed by SEs [3,15,23,[27][28][29][30][31][32][33][34][35][36][37], proposing a variety of classifications according to different criteria (for a review, see, e.g., Han and Shah [14]). In a landmark study, Lyon and Fernandez [32] identify a wide array of scaling alternatives available for SEs, which involve either maximizing the impact internally (through new activities and more sites) or growing beyond the confines of the organization (through social franchises, use of kite marks, training and networks).…”

“…As claimed by several authors [4,13,43], the extant scholarly literature on social enterprise growth and social impact scaling is largely biased toward success stories, and, therefore, "the negative side, particularly the tensions and risks, in the scaling process is largely ignored" [4] (p. 16). Only a few studies have explored the limitations faced by SEs to grow and scale their social impact and the challenges experienced by these organizations when they engage in the process of scaling up their ventures [4,13,15,37,43,44].…”

“…Other studies have focused on the consequences of scaling for the sustainability of the social venture, revealing that growth might impose critical challenges to preserve democratic governance practices, imprinting of the founder's values and morals, and connections and identification with the community, thus potentially resulting in legitimacy deficits from stakeholders that might deem growth as a threat to the fulfillment of the social mission [4,15]. Indeed, some studies have illustrated how SE expansion and organizational growth is not always conductive to an increase of social impact [13,14,37]. For example, Datar et al [13] builds upon the case of the microfinance industry to elucidate how SEs in this industry significantly expanded their operations and achieved greater size but failed to deliver on promises of scaled social impact.…”