THE BLOG
12/04/2014 01:26 pm ET Updated Feb 03, 2015

A New Measure for Scaling-up

Social innovation is alive and well across America. There is really no shortage of great ideas and passionate socialpreneurs working to make society a better place -- but the majority of them fail. Like many for-profit start-ups, charitable start-ups fail primarily because they, too, run out of money. But we are not talking about huge sums of money in these cases; they are not burning through wads of cash on a monthly basis. They are typically lean, frugal and pragmatic -- they just need a little help.

Earlier this year I established a 501(c)(3) nonprofit to provide that help. The Bindu Project is all about making small investments in big ideas. Its mission is to support nonprofits during their formative stage as they work on execution, sustainability and scale; as they pilot new ideas, refine new models and develop new capabilities. Think of the Bindu Project as an accelerator for charitable start-ups, or "angel" investing whereby the ROI is measured in societal or community capital rather than margin or profit.

When I started on this journey, I thought that scale was key. I was meeting with smart socialpreneurs with these terrific ideas struggling to get to a place where their work and supporting infrastructure are sustainable. Struggling to get beyond proof-of-concept to that somewhat vague next level so they can shift from survival to growth. Struggling to get to a point where they have the track record, bench strength and time to access government funding and corporate and private foundation grants.

Wearing my corporate hat, I assumed that scale would have the same kind of multiplier effect that I had seen in business. Certainly, a minimum scale is necessary to be viable. Even when growth is not part of a nonprofit's impact strategy, a minimum scale is necessary to foster social change. But should scaling-up really be the goal for charitable start-ups?

While size does matter, and in some sectors it matters a great deal, I realized that I was focused on the wrong thing. And that realization came from my experience as a volunteer board member of Goodwill Columbus.

This organization has been improving the quality of life and providing work opportunities for individuals with disabilities and other barriers for 75 years, a considerable length of time even for prominent for-profit companies. For comparison, the average lifespan of a company listed in the S&P 500, a U.S. stock market index of 500 large companies with common stock listed on either the NYSE or NASDAQ, is surprisingly brief at only about 15 years. This is down from approximately 67 years back in the 1920s. So Goodwill's 75 years of continuous service is quite an accomplishment.

When I joined this board two years ago I thought I knew a lot about the organization. I was wrong. Its programming is diverse -- from support for seniors and specialized rehabilitation programs to career training and commercial services to businesses, but it is all mission-driven. It is focused on supporting those individuals with disabilities and other barriers as valued members of our community. Quite simply, the mission is the arbiter of investment decisions and the lens through which all decisions are assessed.

Now, let's be clear. This is a nonprofit of some scale. Each year, Goodwill Columbus provides over 2 million hours of service to more than 3,800 people building their independence. It diverts more than 5.5 million tons of waste from landfills and generates more than $9.2 million from its retail operations to support its programs annually. And it is among the top 50 employers in central Ohio. But scale has never been the end-game. Goodwill Columbus does not exist to be the biggest nonprofit in central Ohio or among the 181 independent member organizations of Goodwill Industries International. Its mission defines the end-game and that end-game is, well, the achievement of the mission.

Scaling-up has a whole different connotation in this model. Scale is measured, and valued, at Goodwill Columbus based on impact. Scaling-up impact may mean a shift in services, or capabilities or asset allocation. It may mean exiting certain programs or shifting responsibility to other providers. And it may also mean an expansion of its retail footprint or the scope of its business services. Make no mistake, Goodwill Columbus is scaling-up. It is scaling-up outcomes. It is scaling-up its ability to maximize social impact. It is scaling-up to best serve its mission. And by any measure, that is the best scale of all.