Scale and Social Entrepreneurship: Is Bigger Better?

Kriss Deiglmeier, Executive Director of Stanford's Center for Social Innovation, recently wrote a blog post on the nature of scale. She's pondering the urgency of growth, as described in nearly every entrepreneurship competition, pitch-fest, or best practice. She specifically hones in on the role of locally-specific, effective, but un-scalable solutions. She asks, "It is well known that social issues are interconnected; health, education, environment, and economic development are all intertwined. This is particularly evident across the world in low-income communities. Challenges such as hunger, poor health and poverty impact a child's ability to learn or engage in education. Thus, there is evidence and research that supports the need for comprehensive solutions—which are often too complex to be "cookie cutter" scalable. Yet are they not also worthy of funding?"

I wrote a little more about this in Wicked Problems—where my emphasis was on the generalizability of the solution itself. This is a relevant issue when scaling is attempted across cultures, as if proving the efficacy of a solution in Vietnam implies that it will work successfully in Cambodia.

A design solution always begins with a local insight. For many designers, this is taken to an extreme, as it's an insight about themselves or their personal surrounding. It's a personal process, one made only slightly more sociable by participatory design or other forms of co-design. Scale is an external force that's applied or encouraged, often through manufacturing, operationalization, or the amplification effect of digital technology. The externality of scale is artificial: the design solution works and exists independent of the number of people served.

So why an emphasis on serving a large number of people?

For many, it's a question of ethics, or "goodness". I once encountered this argument from an extremely wealthy woman, one who gives a great deal of her money to important social causes. She viewed her giving as a selfish act: she was working to improve the quality of the world around her so that she and her children would have a better place to live. As such, she took great pains to research and understand the recipients of any money she provided, and took a self-declared "rational approach to giving" so that her money would "benefit the most people possible." She thought about it like this: if I'm going to act to help people, I need to be aware of the cost/benefit tradeoff of my actions. Most of us have a practical limit on resources like money; in her case, the scarce resource was her time. And so she based her philanthropic giving on the rationality of maximizing her scarce resource. If it takes 100 hours to evaluate a potential grant recipient, she wanted the most social return on her investment—the most people helped, per hour invested.

The ethical question can be turned around by examining breadth of impact in respect to depth of impact. Pretend we have $100,000 to give to the broad cause of "literacy in the developing world," and consider this simplistic argument.

Vietnam has approximately 7 million students enrolled in primary and lower secondary schools [pdf link] , and government expenditures per primary school student are an abysmal $23 [pdf link - worth reading in its entirety]. We could take our $100,000 and spend $1 to provide some basic materials to 100,000 students, thus increasing the expenditure per student, for 1.5% of all students, by a small amount. They may purchase books, pencils, or other basic supplies with this money.

Or we can spend $20 to provide more materials, or materials of a higher quality, to 5,000 students, having a more powerful impact but on a limited scale. $20 will appear significant to the students, parents, and teachers, as it represents a doubling of their current resources. This might buy chairs, desks, chalkboards, textbooks, basic electronics, teacher training, benches, more teachers (and therefore more classes—consider that "In Vietnam, more than 90 percent of children in rural areas attend schools with two or more shifts, resulting in an average class time of only 3 hours and 10 minutes per day" [pdf link]).

An ethical argument can be made, successfully, for either of these investments. But I don't think the ethical conversation happens at the funding level (although I know it happens in excruciating detail at the execution/program level). I think the first investment is broadly assumed to be the best because it touches more lives. It is probably the best in the case of commodity solutions, such as medicine. I don't think that's true for most conceptual, qualitative, subjective issues, such as education.

I think scale is also a question of fame and positive press. While the internet has made it possible for massive awareness of an extremely narrowly focused campaign (Kony, for better or worse, provides an example), typical foundation thinking around PR seems to be conservative: a press release describing the massive financial scale of a grant, with the number of people helped as a byline. I'm not smart enough to do the mental arithmetic to figure out what $10B to save more than 8 million children by 2020 means; I also would typically not research child deaths in developing countries to see if 8 million people is a lot or a little (turns out it's about how many children die each year in the world). Instead, I would marvel at the large numbers, because millions and billions are indeed large numbers, and that would shape my casual view of the effort as extremely positive.

Deiglmeier points out that she hears "... over and over again the frustrations of community driven organizations because funders immediately want to know the 'scaling' model of such organizations—and that funders dismiss them if they cannot provide it." I hear that, too, and I've seen extremely impressive solutions ignored because of their perceived lack of scalability. I would like to see more of a conversation around the need to scale—particularly from the big name funding agencies and foundations—and more questioning of the assumptions around bigger, broader, and more. Design-driven social entrepreneurship can push deep impact, and can provoke meaningful change, without necessarily touching thousands or millions of lives.

Originally posted on Fri, 13 Jul 2012