As someone involved in a non-profit social venture (www.MoveSmart.org), the the question of scale is inextricalby linked to the question of success. We are planning to pilot our idea in one market and, only when we're confident that the model is both sustainable and successful, explore other markets we can expand into. For us, the Hull House "model" is how we're planning that expansion - we'll find local partners who know and understand the actors in their communities and co-sponsor new versions of the site for their neighborhoods. We'll handle the tech (something that it doesn't make sense to build anew in each place) while local actors handle the rest and reap the vast majority of the revenues.

the traditional business definition of scaling means growing at low cost, rather than bearing the full cost of duplicating everything in each location; there are economies of scale in traditional industry, and in areas like software, the cost to grow gets lower as adoption increases, and you become an increasing returns business.  scaling in social enterprise usually means some mix of the use of those meanings. the people i know who are obsessed with scale are obsessed with the size (scale) of the problem(s) they are addressing. fair trade in the u.s. needs to grow. people need to bcome conscious consumers, not just cost conscious consumers. it matters.

I guess my answer to the question posed would be "not all of them, but a lot of the organisations that fund and support them are".

The point is that most social entrepreneurs, like most entrepreneurs, will operate at a local / regional level. Many set out to address an unmet need at that level and don't have the ambition , willingness or capacity to expand / replicate.

Similarly, too many support / funding orgs assume that scale means expanding an organisation rather than replicating an idea through other methods (on the spectrum between open source and central control are a whole range of franchising, licensing and partnering options).

To say this is not to be anti-scaling; clearly we have big problems in a lot of areas, and some organisations / leaders have the ambition, capacity and model to scale. At SSE, we've done (and are doing!) this as a social franchise in order to expand in line with our principles, and to ensure we don't become a hugely hierarchical / bureaucratic organisation at the centre.

The final thing I would say is that what we also need to scale up is the numbers of people involved in this movement. Because this movement can transform through how it operates as well as through the services it deliver; and the people usually referred to as 'beneficiaries' can also be social entrepreneurs (something Paul Farmer pointed to in his speech at the Skoll Forum earlier this year). If we make people feel like it's an exclusive club for huge social enterprises led by stellar social entrepreneurs, that won't happen.

Finally, I'd point to my post / slideshow dealing with all of the above in the <A href="Long Tail of Social Entrepreneurship">I guess my answer to the question posed would be "not all of them, but a lot of the organisations that fund and support them are".

The point is that most social entrepreneurs, like most entrepreneurs, will operate at a local / regional level. Many set out to address an unmet need at that level and don't have the ambition , willingness or capacity to expand / replicate.

Similarly, too many support / funding orgs assume that scale means expanding an organisation rather than replicating an idea through other methods (on the spectrum between open source and central control are a whole range of franchising, licensing and partnering options).

To say this is not to be anti-scaling; clearly we have big problems in a lot of areas, and some organisations / leaders have the ambition, capacity and model to scale. At SSE, we've done (and are doing!) this as a social franchise in order to expand in line with our principles, and to ensure we don't become a hugely hierarchical / bureaucratic organisation at the centre.

The final thing I would say is that what we also need to scale up is the numbers of people involved in this movement. Because this movement can transform through how it operates as well as through the services it deliver; and the people usually referred to as 'beneficiaries' can also be social entrepreneurs (something Paul Farmer pointed to in his speech at the Skoll Forum earlier this year). If we make people feel like it's an exclusive club for huge social enterprises led by stellar social entrepreneurs, that won't happen.

Finally, I'd point to my post / slideshow dealing with all of the above in the Long Tail of Social Entrepreneurship.
http://tinyurl.com/267kgn</A>.
http://tinyurl.com/267kgn

Thanks everyone for your comments.

Kevin, to your point, this post is more focused on the nonprofit part of the spectrum; that's where the quote was aimed at the above NetImpact conference. I think that points two and three are absolutely more aimed at nonprofits.

But I think that even your questions bring up the need for a greater level of understanding of the social capital market as an ecosystem where the needs and opportunties of one type of organization (or capital) are related to but not necessarily the same as organzations or capital with difference risk/reward equations, different incentive structures, and different prioritization between the blended and social value they're trying to create.

Because your absolutely right when it comes to something like something like fair trade, although I think that I (and probably you too) would argue that its not just about the efficiency that economies of scales bring but the capacity to provide consumer data and demonstrate a market that gets mainstream retailers to open up their shelves.

Still, think about the nature of the quote above, that nonprofits doing similar things should merge. Would we tell Alter Eco, Crop-to-cup, and a dozen other small fair trade importers to merge because its silly that they're just being repetitive? Of course not, we would tell them to look for opportunities for partnership (and yes, sometimes merges) that allow them to better and more fully meet their mission with more effective utilization of resources.

Nathaniel - have you ever been asked to merge with other organizations?
have you tried to officially come together with other organizations.
In my try in the past about merging organizations, i have found that even though organizations want to work together, the daily operations keeps them so busy that they dont ever get to it. or sometimes the agenda and the process of the same end goal is not mergeable. Somehow, in nonprofits, we have a very hard time with merging or loosing our identity. In reality, a lot of nonprofits is about power, ego and......
just a thought of criticism.

Thanx for a thought provoking piece!

My observations in scaling up for non profit social enterpreneurship:

1. Scaling up adds on tasks and functions which are not creative or even productive. They are supervisory and managerial - collecting information, MIS, physical and financial verifications, centrally conducted monitoring and evaluation. The sense of single brand ownership and credit seeking adds to these tasks.

2. Community wants to simplify problems and their solutions. Scaling up adds to problems which add on the complexity. Eg In India, an anganwadi (early child care centre) has to maintian 14 registers! The problem she has to solve is prevent malnutrition and child deaths. Both of these are complex problems. Her role otherwise is simple - provide supplementary food and simple medicines to sick children. But, scaling up has adds on burden and makes the problem even more complex.

3. Sharing costs while scaling up is another hazard. Supervisory, managerial and monitoring tasks adds on to cost. In order to reduce the cost, the ultimate implementer, producers, service provider donot always gain the advantage of scaling up.

4. Scaling up ceases (or even 'seizes'!) creativity, innovation and flexibility. Again, anganwadi is a classic example. It introduced standard recipe. It took away the flexibility of recipes depending on the local tastes, recipes and the providers cullinary art. 

Scaling up if it has to avoid all these hazards and to remain simple requires a 'nano'solution of complex problems. This means that all the tasks have to be decentralized. Flexibility, creativity should be inbuilt in the scaling up phenomena. Multibrand approach must be allowed. (The cinema industry allows it - the producer, distributer, sound, animation, music, financer's brands are shown.) Except the censor boards, even its monitoring is left to community and the cinematographic institutes and experts.

Scaling up should be of the processes and not of products. A scaffold should be laid out. Let it be filled in by those who are producing it!

several of these posts point out that organizational complexity and redundant reporting are problems of non profit scale that do not exist on the for profit side, typically. scale in a for profit sense, adds some simplicity to reporting, and reduces other costs. scarcity thinking and competition for scarce resources coupled with the power dynamics of foundation funding makes merging and adopting other organization's procedures in a cooperative way a problem.
scaling is not the problem. it's that the non profit system is not built to allow enterprises to scale, but instead to keep them at the proof of concept level.

I think you are definitely right to point that out Kevin. Certainly the flip side of my "long tail" / 1000 flowers bloom argument is that this will cause a huge amount of duplication, wasted resource etc. And that these smaller solutions will never truly address the scale of the problem. Similarly, it's also fair to say that scaling is more/less difficult (and more/less appropriate at times) depending on your model, your stakeholders and so on.

I guess I would just say that some social entrepreneurs are not held back by a system at a certain level, but because that was the level they wanted to operate at; addressing a particular local need in an innovative way that creates positive social impact.