The Regional Infrastructure to Attract and Support Nonprofit Innovation

Economic Development
Typography

Introduction

The nonprofit sector is becoming increasingly entrepreneurial. Leaders such as Alan Khazie and Michael Brown from City Year and Wendy Kopp from Teach for America have helped inspire a generation of nonprofit leaders who apply a combination of science and business practices to their approach: build a program, evaluate impact, adjust accordingly, prove a concept, scale it far and wide, and adapt accordingly to each new community. The use of strong assessment metrics and the mobility of program models have made nonprofit “scale” an attractive investment area for a growing number of funders. Organizations such as New Profit, Inc. and the Draper Richards Kaplan Foundation, among many more foundations, have made nonprofit growth the focal point of their funding. In 2010, 22 foundations representing about $80 billion in assets joined a coalition called “Scaling What Works,” committed to the large-scale growth of effective organizations.

The growth capital, talent and strong brands behind organizations such asCollege PossibleLIFTSpark and many more give their leaders the tools and resources to thoughtfully consider where to expand. So what are these organizations looking for when they choose Miami or San Francisco or Philadelphia as their next site?

GreenLight Philadelphia, with our goal of collaboratively identifying local needs and opportunities and engaging outstanding, evidence-based organizations from across the country with capacity to meet these needs, was interested in finding out the answer. In the same way that Select Greater Philadelphia and the Commerce Department work to ensure that Philadelphia is an attractive place for innovative businesses to locate, we are interested in understanding the resources and environment the city needs to attract innovative and proven nonprofits.

Introduction

The nonprofit sector is becoming increasingly entrepreneurial. Leaders such as Alan Khazie and Michael Brown from City Year and Wendy Kopp from Teach for America have helped inspire a generation of nonprofit leaders who apply a combination of science and business practices to their approach: build a program, evaluate impact, adjust accordingly, prove a concept, scale it far and wide, and adapt accordingly to each new community. The use of strong assessment metrics and the mobility of program models have made nonprofit “scale” an attractive investment area for a growing number of funders. Organizations such as New Profit, Inc. and the Draper Richards Kaplan Foundation, among many more foundations, have made nonprofit growth the focal point of their funding. In 2010, 22 foundations representing about $80 billion in assets joined a coalition called “Scaling What Works,” committed to the large-scale growth of effective organizations.

The growth capital, talent and strong brands behind organizations such asCollege PossibleLIFTSpark and many more give their leaders the tools and resources to thoughtfully consider where to expand. So what are these organizations looking for when they choose Miami or San Francisco or Philadelphia as their next site?

GreenLight Philadelphia, with our goal of collaboratively identifying local needs and opportunities and engaging outstanding, evidence-based organizations from across the country with capacity to meet these needs, was interested in finding out the answer. In the same way that Select Greater Philadelphia and the Commerce Department work to ensure that Philadelphia is an attractive place for innovative businesses to locate, we are interested in understanding the resources and environment the city needs to attract innovative and proven nonprofits.

Research Methodology

Research Methodology

To answer our questions, we jointly conducted a study with the Wharton’s Program for Social Impact at the University of Pennsylvania.In particular, we looked at the practices of organizations that have successfully replicated and maintained qualityas they have entered new markets.After reviewing existing literature, wesubmitted a 20-question survey to approximately 60 national nonprofit executives. To dive deeper into the expansion-related motivations, challenges and bestpractices of some of these nonprofits, we conducted interviews with senior executives of seven organizations to better understand scale from a national perspective, as well as executive directors of local offices of these same organizations.

The organizations we chose to survey had each successfully establishedoperations in at least two cities, and we achieved a response rate to our survey of over 36 percent. For the interviews, we focused on medium-sized nonprofits that had gained national attention for their unique, scalable models.

Survey and Interview Results

Survey and Interview Results

Unsurprisingly, the dominant factor in organizations’ decisions on where to grow was access to funding. Some organizations cited sophisticated rubrics and scoring documents that evaluated the local funding landscape; others were more opportunistic as funders surfaced. In addition to funding, we identified four themes that drove these organizations to one city versus another: a local champion, receptive city government, college/university partnerships, and access to space.

Local Champion and the “Pull” Effect

Naturally, relationships with local foundations and local nonprofits were the most-selected positive resources identified in our surveying.However, more than half of the organizations identified a“local champion” as one of the top three most beneficial relationships to have. For College Possible, a college access and completion organization about to open its fourth office, creating a “pull” environment, where a community, often through a local champion, becomes excited to bring in the organization, has become a key part of the expansion model.As College Possible Milwaukee Executive Director Edie Turnbull stated, an organization needs “to have somebody from the community say ‘we need this, and here’s why,’ as opposed to the organization saying ‘you need us, and here’s why.’”For Health Leads, its Baltimore office had a major local champion, the city’s Health Commissioner.The Commissioner provided an immediate network of funders, positive and abundant media exposure, and consistent program model validation.This sped up Health Leads’ growth within Baltimore, as former Health Leads Baltimore Executive DirectorMark Marino noted: “I think the role…elected officials can play is this incredible ability to bring things to scale quickly, even if it’s not financially.”

City Government

Several organizations noted that a prospective city or region needs to have a proactive, innovative policy environment that would respond well to incoming organizations. As Nick Mathern, Gateway to College’s Associate Vice President of Policy and Partnership Development, said, “a policy environment that will not impede the operation of the program and a partnership among the local partners to work toward a shared set of goals [are] critical.”Unstable policy environments can drastically affect many nonprofits, particularly those that may not have a long-established footprint in a city. For example, Genesys Works, which administers an internship program for promising low-income students to attend school and then work at a local corporation in the afternoons, was sought out by then-Mayor Daly to locate in Chicago. However, current-Mayor Emanuel’s approach to education reform is to increase the “time in school,” placing the Genesys Works model at risk.

Colleges/Universities

Of our survey respondents, 47.6 percent identified relationships with academic communities as beingimportant during the pre-expansion phase, and 52.4 percent stated they had these relationships in years 3-5. Several of those we interviewed identified these relationships as critical from a volunteer, research and talent perspective. Health Leads, for example, partners with local colleges and universities to develop a volunteer base. According to Mark Marino, former Baltimore Health Leads Executive Director, he and his staff used the already established network of local colleges and universities (which ranks just ahead of Philadelphia at second in number of degrees granted per 10,000 residents). Marino forged strong relationships with the student communities to both tap into their talent as well as encourage civic engagement post-graduation. Also, the National College Advising Corps partners exclusively with universities, relying on the university community for space, funding, office staff and a talent pool for their college advisers.

Space

Organizations saw access to donated and shared space in new cities as both a financial benefit and means to integrate into the new city.More than 42 percent of respondents indicated that assistance with office and program space was an important resource in the start-up phase.Genesys Works Chicago Executive Director Eric Patton leveraged relationships with other nonprofits within the city to secure initial office space. Several executive directors we spoke with indicated that social-impact incubators, particularly those able to sponsor scaling national organizations, were a big draw.As Sarah Mayeda, Executive Directorfor Spark Chicago, said, having a “common meeting place for sharing ideas, talking about the work, [and] providing some support” is an incredible resource as an organization starts in a new city.

Analysis: Putting a Philadelphia Lens on These Learnings

Analysis: Putting a Philadelphia Lens on These Learnings

Philadelphia has many of the resources in place to be an attractive place for the innovation, talent and outside resources that come with expanding organizations, and through growth and marketing of these assets could increasingly become a hub for nonprofit entrepreneurs.

The Pull Environment: We have seen local champions proactively draw organizations to Philadelphia in the past. In 1996, City Year, a national service and mentorship organization based in Boston, worked with a group of 18 Philadelphia leaders to develop the vision for a Philadelphia site. City Year launched its Philadelphia site in 1997 and today Philadelphia is among the largest City Year programsin the country. The GreenLight Fund has built its model around local championship, and in January launched a Philadelphia site with a talented and diverse Selection Advisory Council to help think about the types of organizations we want to attract and help integrate those models most relevant to local needs and opportunities.

City Government: Spark Founder and CEO Chris Balme noted that one of the criteria he and his board use to evaluate prospectivecities is how open the school districts are to charter schools.While instability in the School District has, anecdotally, made some education organizations anxious about coming to Philadelphia, the prevalence of charters and an increasing emphasis on school autonomy may help draw in innovative models that rely on strong school partnership.Furthermore, in 2011, Mayor Michael Nutter and his staff started the Office of Innovation and Technology.While focused primarily on data and technology strategies, this office signifies the increased emphasis on innovative solutions to problems that drain Philadelphia’s budget, and could help draw both private sector and nonprofit innovation. Leaders at the School District, the Mayor’s office and other city departments can signal their openness to national innovation through policy, staffing and clear points of entry for outside programs.

Colleges/Universities: Within the Greater Philadelphia region, there are 101 degree-granting institutions, including major nearby research institutions (Select Greater Philadelphia 2010). In 2007/2008, these 101 schools granted over 80,000 degrees, providing the region with a robust and continuous supply of motivated, educated graduates.Spark, as one example, is working with the University of Pennsylvania’s Wharton’s Program for Social Impact to pilot a university partnership program of its apprenticeship model to begin in Spring 2013.Through this partnership, 50 percent of Spark’s apprenticeships will come from within the Penn network. The city has the resources in place to market this resource to prospective students and companies considering locating in the city—the same resource can help draw nonprofit innovators looking for a strong base of volunteers, research and talent.

Space: The entrepreneurial community has wholeheartedly embraced co-working spaces and incubators as a means to support innovation in the cities.Organizations lik eDreamIt Ventures, GoodCompany Ventures and the Science Center all actively sponsor and support entrepreneurialism, some with an eye toward social innovation.On the nonprofit side,New Beginnings, a nonprofit start-up incubator started in 1982 by Resources for Human Development, has helped several local organizations launch and grow. Another shared space project called The Exchange (which GreenLight participates in) has been highlighted in this edition of the Philadelphia Social Innovations Journal. These spaces create logical access points for nonprofit innovators and help continue to send the message that Philadelphia is an open market for great ideas that can continue to improve our community.

Matt Joyce is the Executive Director of GreenLight Philadelphia. GreenLight is a growth philanthropy organization, with sites in Boston, Philadelphia, and the San Francisco Bay area, focused on bringing high-performing, evidence-based social innovations succeeding in other cities to help address urgent community-identified local needs and opportunities. Previously, Matt has worked at the William Penn Foundation and was a co-founder of Philly Fellows.

Noble Stafford is currently a second year MBA student majoring in strategic management at The Wharton School of The University of Pennsylvania. Between his first and second years, he interned for the GreenLight Fund, and prior to Wharton, Noble worked as a contract specialist for the Naval Sea Systems Command in Washington, DC. Post Wharton, Noble hopes to work in management consulting.

References

References

Select Greater Philadelphia. (2010, October). The Impact of Higher Education in the Greater Philadelphia Region.Available at http://www.selectgreaterphiladelphia.com/uploads/files/higher_ed1014.pdf.