Homelessness, illiteracy, chronic unemployment: nonprofits struggle to address society’s most intractable problems. And yet, as Bill Clinton noted, in reviewing school reform initiatives during his presidency, “Nearly every problem has been solved by someone, somewhere.” The frustration is that “we can’t seem to replicate [those solutions] anywhere else.”
With a few exceptions, the nonprofit sector in the United States is comprised of cottage enterprises—thousands upon thousands of programs, each operating in a single neighborhood, in a single city or town. Often, this may be the most appropriate form of organization, but in some—perhaps many—cases, it represents a substantial loss to society overall. Time, funds, and imagination are poured into new programs that at best reinvent the wheel, while the potential of programs that have already proven their effectiveness remains sadly underdeveloped.
One impediment to replication is the prevailing bias among funders to support innovative, “breakthrough” ideas. Another is the fact that, for many people, the concept conjures up images of bureaucracy and centralized control. Such images are uninviting in any sphere, but they are especially problematic in the nonprofit sector, where local “ownership” by donors and volunteers plays such an important part in organizational success. Add in the fact that for many social entrepreneurs, autonomy is an important form of psychic income, and it becomes easy to understand why implementing someone else’s dream tends not to be nearly as satisfying as building one’s own.
In practice, however, replication is anything but a cookie-cutter process. The objective is to reproduce a successful program’s results, not to slavishly recreate every one of its features. At the heart of replication is the movement of an organization’s theory of change to a new location. In some cases, this might entail transferring a handful of practices from one site to another; in others, the wholesale cloning of the organization’s culture. Whatever the specifics, the right choice—including whether to replicate at all—will be strongly influenced by the complexity of the organization’s theory of change and the degree to which it can be articulated and standardized.
Before turning to replication in the social sector, however, it is worth spending a moment on its for-profit sector analogue, franchising. Born in the 1920s, the franchise has become one of the dominant organization forms of our time, accounting today for roughly 50 percent of all U.S. retail sales. Franchise organizations align the energy and investment of local entrepreneurs with the strength of a network that may encompass hundreds or even thousands of units operating under the same trademark in different locations. While there are sharp differences between the forprofit and nonprofit sectors, which limit the analogy, franchising offers some thought-provoking lessons for social enterprises seeking to grow.
First is the value of a proven program. Leveraging the knowledge developed by someone else can enable a new site to increase the speed of implementation and the odds of obtaining the desired outcomes. Independent start-ups in the for-profit sector face a much higher failure rate than new units in a franchise chain. The Small Business Administration estimates that approximately half of all small business start-ups fail within five years. The comparable rate for franchise units is half that, or about 25 percent. Quite simply, replication can reduce the risk of failure.
Adopting a recognized model can also make it easier to attract resources. A well-known franchise will attract customers even in a new market, because they associate the brand name with deliverables they know they can count on. Comparable benefits can accrue in the nonprofit sector. For example, prospective Habitat for Humanity volunteers know what the organization is trying to do, what to expect when they volunteer, and what the results of their work will be. Likewise, prospective donors, who want to be sure their gifts will have an impact, know that the organization is building on the experience of others who have used the same program successfully.
Finally, by virtue of being part of a larger system, local programs may gain access to resources and expertise in areas such as fundraising, human resources, and legal services that might be unaffordable for a single unit. They will also be able to tap into ideas and knowledge generated by other sites. A network provides a natural environment for experimentation and learning. McDonald’s Big Mac, Filet-O-Fish, and Egg McMuffin were all innovations conceived by local franchisees. Similarly, City Year’s Young Heroes program, which engages middle-school students in service and has spread throughout the system, was developed in Providence, R.I., not at the organization’s headquarters in Boston.
The core of a franchise is a proven (which is to say a profitable) business idea that can be replicated in multiple sites. What makes replicating social ideas so complicated, and how can the key issues be addressed?