Scaling Up NGO Programs in India: Strategies and Debates

Scaling Up NGO Programs in India: Strategies and Debates

By Peter Uvin, Pankaj S. Jain & L. David Brown

Abstract

Scaling up is about ‘expanding impact’ and not about ‘becoming large’, the latter being only one possible

way to achieve the former. The first half of this report presents a politically-focused analysis of the

experiences of five Indian NGOs. It suggests the emergence of a new paradigm of scaling up, in which

NGOs are seen as catalysts of policy innovations and social capital; as creators of programmatic

knowledge that can be spun off and integrated into government and market institutions; and as builders of

vibrant and diverse civil societies. The authors detail the mechanisms by which scaling up impact,

without growing large, can take place.

The second half of this report focuses on the organizational and strategic aspects encountered by NGOs as

they scale up. Foremost, it describes a process of NGO evolution through four stages of institutional

sustainability. It identifies a number of issues of strategic importance faced during scaling up,

particularly during transitions from one stage to the next. This part of the report also poses some serious

questions about the automatic nature of ‘third and fourth generation’ NGOs, as described by Korten

(1990). Finally, the authors introduce the concept of social sustainability and explore some of the

implications of this analysis for donor and NGO policy.Think Large and Act Small: Toward A New Paradigm for NGO Scaling Up*

Introduction

NGOs and the projects they initiate typically start small. Even when successful, they usually remain

rather small, especially when compared to the scale of the challenges of poverty and exploitation that

exist within and between countries, or when set against the scale at which most government agencies and

for-profit enterprises operate. As a result, scaling up—the expansion of NGO impact beyond the local

level—has become an important issue on the agenda of people committed to social change. In the

absence of scaling up, NGO successes remain little more than islands of excellence in a wider economic

and institutional environment that is detrimental to the poor.

In many ways scaling up is a natural, almost organic, process for NGOs. If things are done well,

people—whether beneficiaries or interested outsiders—will ask for more. Leadership, convinced of the

importance of its work, typically opts for wider rather than narrower impact. NGO staff, always on the

lookout for new challenges and career opportunities, are also often spontaneously in favor of scaling up.

And donors who increasingly seek to promote NGOs as supplements, if not alternatives, to governments

are more than eager to fund NGOs they consider successful.

This does not mean that scaling up is well understood or easy to manage, however. It is usually and

rather spontaneously assumed that scaling up is essentially a matter of size. NGOs scale up by becoming

larger organizations, managing larger budgets, and reaching more people. While this is certainly one

possible way to expand impact, NGOs have also chosen other paths to achieve that goal; some of these

paths can exist without organizations becoming larger.

This article will focus precisely on that: how NGOs can scale up their impact without becoming large.

Five years ago, one of the authors of this article published an article on scaling up which constituted the

basis for a research project conducted in 1997–98 with five Indian NGOs (Uvin, 1995). The goals of the

research were to verify and amend the taxonomy of scaling up and the paths to achieve it described in the

earlier article; to draw cross-cutting lessons regarding scaling up; and to provide strategic support to the

participating NGOs for their own scaling up plans. This article grew out of that research. It begins with a

brief presentation of the five NGOs analyzed. It then presents a taxonomy of scaling up, followed by a

description of the variations in the scaling up experiences of the five Indian NGOs. The final section

analyzes some of the questions and key lessons that have emerged from these experiences, focusing

especially on innovative ways to scale up without becoming large.

Methodology

The two papers in this report are based on case studies of five Indian NGOs that work in different

ecological areas, have adopted varied strategies of scaling up of impact, and at the time of study were at

different stages of their evolution. This allowed for exploration of NGO experiences from different

vantage points during their evolution, and provided a richer understanding compared to a study of

* This article would not have been possible without the participation of Minty Pande, Aloysius Fernandez, William

D’Souza, Jagdananda, A. Dash, Cyril Raphael, Seema Gaikwad, V.K. Madhavan, Arvind Ojha, Ashok Khosla,

Roger Braden, John Greensmith, Deepali Khanna, S. Ranganathan, Harish Chotani, Nalini Abraham, Uma Vyas,

Girish Menon.

similarly large programs. The study of each NGO involved field visits to at least two project sites for

approximately ten days, review of internal reports and documents and discussions with officers and

functionaries at all hierarchical levels, from field worker to chief executive. All the NGOs were funded

through a large number of project agreements, in some cases exceeding one hundred, with accounting and

reporting heads varying according to project requirements. Consolidated physical and financial

information for the NGOs was not available in a manner that could be reported in a comparative sense.

The aggregate trends were, therefore, inferred and cross-checked from multiple assessments of senior

officers. The views of NGO staff were cross-tallied with those of beneficiaries and other partner agencies

where NGO domains overlapped with others.

Detailed case studies were prepared for each NGO and then sent to these NGOs for review and

comments. A composite analysis of all five NGO experiences was written as the first draft of this report,

which was also circulated for comments. Later, a conference was held to discuss the analysis and

individual case studies, which was attended by four of the NGOs, two donor organizations and other

NGOs. The conference, and the past work of the authors with a large cross-section of NGOs in Asia,

resulted in an analysis that, hopefully, is informed not only by the experiences of the five NGOs, but by

the NGO sector overall.

The Five Organizations

The research project analyzed the scaling up experience of five Indian NGOs that are partners of PLAN, a

large international child sponsorship NGO known in the US as ChildReach. The Indian NGOs were a

diverse group in terms of size, location and age, but they were more or less active in the same fields:

credit, agriculture, education and, of course, child sponsorship. Their annual budgets ranged from $0.5

million to $11 million; their age from 12 to 30 years, and their staff size from 200 to 400. Yet, all of them

had scaled up significantly since their early beginning.

Table 1: Summary Data

ASSEFA CYSD MYRADA SBMA URMUL

Year of origin 1978 1982 1968 1979 1986

Annual budget, in $ million 11 0.9 5.0 2 0.5

of which from government 50% 12% >10% 70%

Number of employees 200 450 500 280

Number of donors 10+ 30+ 6+

The Association of Sarva Seva Farms (ASSEFA) grew out of the Gandhian–Sarvodaya tradition in Tamil

Nadu. It began with cooperatives for landless people who were voluntarily given land under the Bhoodan

movement. From the mid-1970s onward, ASSEFA began shifting its focus to integrated rural

development based on village associations (Gram Sabhas). In each Gram Sabha, ASSEFA promoted

small activity groups around agriculture, veterinary care, dairy, health, education, small business,

women’s development and housing. From the 1980s onwards, ASSEFA began working intensively with

government programs in the field of primary health care, and primary and adult education. By 1997,

ASSEFA had more than 45 projects in six states, but its main work was concentrated in Tamil Nadu.

ASSEFA is now among the largest NGOs in India, with an annual program budget of around $11 million,

about half of which comes from government.

The Centre for Youth and Social Development (CYSD) began in 1982 on the initiative of a number of

university professors as a support organization for social entrepreneurship development training of youthactivists in Orissa. In the late 1980s, CYSD decided that trainers must have hands-on development

experience and started its field programs, first in the health and education sectors, and later added income

generation activities in forestry and plantation, pisciculture, infrastructure and micro-credit. By the mid-

1990s, CYSD had set up three centers, one for field action programs, one for the original training, and a

third for policy research and advocacy. CYSD now also monitors and provides consultancy services to

around ten NOVIB-funded NGOs.

Myrada was started in 1968 as a project to resettle Tibetan refugees who had come to India in the wake of

the Chinese takeover of Tibet. After it demonstrated success with its original program, communities

living close to the resettlement camps demanded that Myrada also work with them. During those years,

Myrada developed its core approach based on self-help groups (SHGs) of 15 to 25 poor people who

constitute a homogeneous affinity group. These groups are the heart of Myrada programs in the fields of

habitat, sanitation, economic and social infrastructure development, and watershed management. By

now, Myrada has grown to become one of the leading NGOs in India, having 16 projects in the states of

Karnataka, Tamil Nadu and Andhra Pradesh. Its annual budget exceeds $5 million. Myrada is known for

its collaborative work with the government, bilateral aid agencies and other NGOs.

Shri Bhubneshwari Mahila Ashram (SBMA) was formally registered in 1979 as a refuge for destitute

women and children, but its roots and history go back to the much earlier work of Swami Manmathan,

who focused on the promotion of education among hill people in Uttar Pradesh in the early 1960s. In

1984–85, the Ashram started its outreach programs by promoting Women Welfare Groups, crêches and

education programs in nearby villages. In 1991, in the wake of a severe earthquake that left thousands of

people dead, SBMA took the lead in organizing NGO relief work in Uttarkashi. In 1994, SBMA was

chosen for partnership by PLAN for initiating an integrated development program in 180 villages and by

the state government and the World Bank for setting up village drinking water schemes. Currently,

SBMA is implementing approximately ten different projects with various partners.

The URMUL Trust grew out of a successful dairy cooperative in the Bikaner district, a desert region on

the India–Pakistan border. Set up in 1985, it began with a rural health service for the cooperative’s

members, which was extended to all the inhabitants of the region and then moved into other sectors.

From the beginning, the URMUL Trust was supported by government. The organizations that are part of

the URMUL Trust now work in around 280 villages in six districts in Western Rajasthan; their areas of

action include health, non-formal basic education, rural craft and weaving, and savings and credit. This

group is recognized as the largest NGO development initiative in the area and has been consulted by the

state government in various development programs. In 1995, URMUL Trust began with a strategy of

spinning off new units, a process which is still evolving.

A Modified Taxonomy of Scaling Up

NGOs can expand their impact by increasing their size, taking on new activities, influencing the behavior

of other organizations and assuring their own organizational sustainability.

Expanding Coverage and Size

Perhaps the most obvious method in which to increase impact for an NGO is to become a larger

organization, manage more funds, employ more skilled personnel and, foremost, cover a larger number ofbeneficiaries, typically in a larger geographical area. This was termed quantitative scaling up in the

research program's original taxonomy (Uvin, 1995).†

Increasing Activities

Expanding in the total menu of activities undertaken by an NGO was labeled functional scaling up in the

original research. Diversification, or horizontal integration, consists of an expansion in the number and

diversity of the activities undertaken; it is often done upon request by beneficiaries or donors. Vertical

integration occurs when organizations add upstream or downstream activities that complement their

original program, seeking to better control the environment and ensure sustainability of impact.

Broadening Indirect Impact

To understand the third type of scaling up impact, a distinction between direct and indirect activities

needs to be made. Direct activities are those in which NGOs work directly with beneficiaries, seeking to

have a direct impact on their lives. Indirect activities are those in which NGOs seek to affect the behavior

of other actors who work with the poor or influence their lives; thus, they reach their target group only

indirectly, through the actions and decisions of others.

Indirect impact can occur through training, advocacy, knowledge creation or advice. The targets can be

other civil society organizations—youth activists, traditional authorities or other NGOs, for example—

state agencies, from the central to the local level; and private for-profit businesses such as banks and

multinational corporations. The aim in all cases is to change the behavior of these actors in ways that

further the goals of the NGO and benefit the poor.

The concept of indirect scaling up is related to, but significantly broader than, that of political scaling up

used in the original research. The latter only focused on the state while the former adds the market and

the voluntary sector as targets. The previous concept also focused attention foremost on lobbying and

advocacy, while the concept of indirect scaling up opens the door to a variety of less confrontational, but

possibly no less effective, manners of influencing the behavior of other actors.

Enhancing Organizational Sustainability

A final category of scaling up, close to the original concept of organizational scaling up, involves

enhancing sustainability, indicating the movement from the uncertainties of the entrepreneurial

beginnings of NGOs to the long-term solidity of programmatic institutions. Schematically, the authors

propose that the organization and management of many NGOs, including those studied, pass through four

stages of increasing sustainability: entrepreneurial initiatives, task teams, project implementation

organizations and program institutions. (In the second half of this report, the focus is primarily on

organizational scaling up; the matter will not be dealt with in this half.)

Patterns of Scaling Up in the Five NGOs

Expanding Coverage and Size

All NGOs in the sample expanded their coverage and size, often significantly. URMUL’s staff grew from

two in 1986 to 280 a decade later; SBMA went from a handful to more than 500 employees during the

same period. This occurred in spurts, with periods of rapid growth alternating with periods of stagnation

or slow growth. The availability of new donor funding was typically the key factor. SBMA, for example,

saw its budget increase from less than $200,000 in 1995 to 10 times that by 1998 because of two newprojects with PLAN and the World Bank. The support provided by these organizations now makes up 27

per cent and 61 per cent, respectively, of its total budget. Note that a significant amount of NGO funding

came from public sources within India. Three of the five NGOs with whom the authors worked received

more than half of their funding from state governments; the other two had smaller government-supported

programs; however, none were devoid of it.‡

Interestingly, however, a few of the larger organizations had stopped growing in size, and even reduced

their organizational footprint. Myrada saw its number of employees decrease from 750 to 450 over the

last five years (while managing larger total funds), while other agencies, such as URMUL and ASSEFA,

created a variety of more or less decentralized units, so that, while the overall ‘family’ of organizations

had become larger, each individual unit had become smaller. It is only the two smallest NGOs that had

not yet reached this point and were still growing in size. This double movement—rapid growth for

younger organizations and stagnation or decrease in size for older ones—may explain the small

differences in size between the NGOs in the sample; although their budgets varied by a factor of 22, their

staff size varied only by a factor of 2.5.

After a period during which successful NGOs tend to grow rapidly in size, some of them achieve a level

at which they start undertaking deliberate activities to stop organizational growth. From discussions with

their leaders it became clear this was a deliberate process, primarily due to a fear that the organization, as

it becomes large, risks becoming bureaucratic, removed from its beneficiaries and uncontrollable by its

leadership. This level of stagnation—or the fear thereof—arises clearly much earlier than in the for-profit

or government sector, where organizations with less than 1,000 employees are considered small- or

medium-sized and certainly in no need of radical decentralization or streamlining. This may reflect the

fact that a key attribute for many successful NGOs is proximity to beneficiaries and capacity for

innovation. Note, however, that this trend is by no means universal; some of the famous successful

Bangladeshi NGOs, such as BRAC and the Grameen Bank, have more than 5,000 employees.

Increasing Activities

In terms of diversification, the authors noted a similar trend. During their early years, most NGOs took

on an often rapidly growing range of activities. Although they came from different starting points, they

typically ended up being active in a broad and very similar range of income generation and service

provision activities. As they matured further, however, most NGOs increasingly focused on a few

programs in which they did well. As is typical in all organizations, programs were rarely abandoned

altogether; rather, the relative size of some programs increased while others declined. Hence, after a

period of rapid increase in activities, most NGOs—in this sample, all except SBMA, which was still very

rapidly expanding on all accounts—seemed to go through a consolidation of their portfolio mix. In other

words, most NGOs ended up scaling up impact by actually taking on fewer activities, sometimes

collaborating with other, more specialized agencies.

No general pattern was discernible regarding the exact the mix of activities or the order in which

ingredients were added. The only observable trend was that all organizations tended to become active in

certain popular sectors; in India, for example, micro-credit and watershed management were prominent

issues. This may reflect a combination of funding availability and a sense that these programs have the

greatest impact.

Broadening Indirect Influence

The partner NGOs in this study initially undertook programs of direct impact, working with beneficiaries

in communities; it is only after many years that they engaged in activities of indirect impact and thereforetried to modify the policies and behaviors of other actors. In this sample, only one NGO differed from

this rule. With a mission statement defining itself as an ‘enabling institution’ CYSD took up indirect

impact programs as its first activity. It began as a capacity development program, providing training and

support services to change agents. Only after a few years did CYSD add direct, operational programs to

its portfolio, partly to develop experience and credibility for its training program. Its current strategy is

resolutely two-pronged.

For NGOs that began with direct action, indirect activities were initiated as special challenges arose.

URMUL, for example, helped organize a grassroots campaign to force government to develop a policy

against salinization resulting from a new irrigation policy. This observation does not imply that NGOs

are simply passive reflections of the outside dynamics of arising opportunities; for an opportunity to be

grasped, it needs to be recognized by someone, and there needs to be an organizational willingness and

capability to react to it. Some NGOs go one step further and seek to create opportunities rather than

grasping them when they arise. CYSD, for example, has been instrumental in the creation of an

international NGO coalition contributing to the annual report of the Social Watch Institute; it also created

a Centre for Policy Research and Advocacy that involves local people in the analysis and advocacy of

poverty alleviation policies. SBMA created a think-tank specifically designed to analyze and influence

policies in the regional capital.

Enhancing Sustainability

None of the organizations with whom the authors worked was situated on one single level of

organizational sustainability. They all had various elements at different levels. The project

implementation mode was most frequently encountered and the program institution mode least. (An indepth

discussion of sustainability is featured in the second half of this report.)

Some Key Issues in Scaling Up

Types of Indirect Impact

In the earlier World Development article on scaling up, the discussion of political scaling up was couched

in the classical terms of lobbying the state for policy changes or the proper implementation of existing

policies. That article showed how relatively few NGOs—no more than five or so out of a sample of 25—

engaged in this type of activity, for it was considered risky and difficult (Uvin, 1995; Raustiala, 1997).§

Notwithstanding these difficulties, vibrant networks of advocacy are currently developing (Jordan & van

Tuijl, 1998; Miller & Covey, 1998).** In the current sample, two NGOs, Myrada and CYSD, were very

active in such networks.

The present research, however, significantly broadened the understanding of the range of options for

NGOs in using influence strategies. Conceptually, the authors developed the notion of indirect scaling up

to draw attention to the fact that there exist many more influence strategies than traditional lobbying or

advocacy, and that there are actors other than the state whose behavior can be changed. What follows is a

selection of innovative strategies through which the sample NGOs have sought to maximize their indirect

impact.The most employed NGO strategy to scale up indirect impact occurs when government agencies or

private enterprises take over NGO programs after they have demonstrated their potential—a process the

authors termed integration in the earlier article (Uvin, 1995; see also Bebbington & Ferrington, 1993).

Integration is a crucial means of increasing impact of NGO-initiated programs. This research confirms

the importance of integration strategies, based on NGOs developing innovative ‘breakthrough programs’

and getting governments or for-profit actors to take them over on a much larger scale. In the rich

countries, as well, “almost without exception every major social service was originally undertaken by the

voluntary sector.”††

Closely related to integration, and often the first steps to it, are strategies of joint venturing in which the

NGO works with a business or a government agency to carry out a project that that both are interested in

but neither could, or wishes to, execute alone. The NGO scales up its direct impact insofar as it delivers

services to larger numbers of people; at the same time, it has indirect impact to the extent that it gets its

partners to undertake new activities. Joint venturing may lead to integration when the project’s efficacy

has been demonstrated. Myrada experimented in one state with a self-help approach to credit—not unlike

what was developed in Bangladesh—and involved NABARD, India’s giant agricultural development

bank, in the administration of this program from the beginning. NABARD has now adopted this

approach in all states of India, and Myrada has trained hundreds of NABARD officers in the use of this

model. Similarly, SBMA manages twelve non-funded joint ventures with other NGOs, research centers

and government agencies. These projects—involving, for example, the exchange of people, the sharing

of facilities or support to other organizations’ field programs—do not lead to growth in SBMA’s overall

budget. Yet, SBMA’s director is as proud of these projects as of its funded ones, arguing that they create

indirect impact through example, mutual learning and the establishment of good will.

Less specifically, a key component of expanding impact through influencing others is training and

knowledge creation. NGOs that are capable of learning the lessons from their operational programs, can

seek to diffuse the resulting knowledge through training, information sharing, consultancy and advice—

whether to other NGOs, government agencies, or international donors.‡‡ Most of the NGOs in the sample

were active in training, although for some—CYSD, for example—that activity is much more central than

for others. Myrada is uniquely active in knowledge creation. During the last decade, it has sought to

systematize its learning on matters such as watershed management or micro-credit programs; it has also

played a crucial role in the development of Participatory Rural Appraisal techniques.

Myrada has used a strategy of deputation and delegation. It sends some of its experienced staff for up to

two years to work in other agencies, including those of government, to influence them from within.

Myrada staff have been placed as senior managers in government forestry programs and as support staff

in other NGOs.

Myrada and URMUL both have adopted strategies of encouraging spin-offs. Myrada claims to have

contributed to the creation of 49 new NGOs and companies, many founded by former staff. Myrada

supports staff who leave to create their own NGOs for one year. Since 1995, URMUL has had a strategy

of encouraging its staff, and the projects they manage, to separate into independently registered and

autonomously managed NGOs. It, too, provides a six-month period of support before letting the new

NGOs, now numbering 10 to 15, function on their own. These new NGOs are capable of creatingdynamics of their own, raising funds by themselves, developing innovations, collaborating with each

other, and generally acting as elements of a civil society.

Synergies Between Direct and Indirect Activities

There exists great potential for synergy between direct and indirect activities. Organizations with a track

record of success in working directly with beneficiaries have more confidence to enter into indirect

activities and are usually perceived as more knowledgeable and credible by outsiders. Moreover, size

does matter, especially if seeking to affect policies and programs in the public sector. It is easier for large

NGOs, who have experience managing programs on a scale that politicians and bureaucrats consider

relevant to their own mandate, to convince them to adopt new programs. Finally, for training to be

effective, the trainees and the managers of the institutions they come from must have a commitment to

change, a belief in the value of the change desired, and faith in both the organization and people

conducting the training. All of these are positively affected by successful field experiences. When people

can see with their own eyes that certain approaches work, when managers give the signal to their

employees to adopt new behaviors, then training can be effective (Fernandez, 1996). Otherwise, training

sessions provoke little change.

Indirect impact scaling up can also take place through more confrontational activities, including lobbying

and advocacy. In this case as well, a synergy exists between direct and indirect activities, for two reasons.

Once again, money, experience, and contacts all force respect and provide protection against retaliation.

In addition, NGOs that have built strong roots in communities can mobilize popular support more easily.

As a result, government agencies can be subjected to double pressure; from below through grassroots

mobilization and, from above, through pressure by NGO leadership.§§ The superiority of this ‘pliers’

movement of pressure has also been observed elsewhere; it remains, however, a complex and potentially

dangerous process.

This last observation brings us to the main potential conflict between direct and indirect activities. The

latter, especially if more confrontational and directed against the state, may risk provoking repressive

counter-reactions that endanger the operational work of the NGOs. As obvious as this argument seems,

most NGO leaders with in this study did not consider it a serious problem. They believed it possible to

simultaneously pressure and cooperate with government agencies, at least in a wide array of non-sensitive

sectors such as education, health, watershed management, nutrition, and housing . (Some issues,

obviously, such as land reform, may be much more difficult as they deeply touch on vested interests.)

The leadership of Myrada and URMUL, for example, have ample experience in combining advocacy with

collaboration, and insist it can be done as long as the NGO has credibility. This is clearly linked to the

Indian context of democracy, providing civil space for autonomous action, creating a free press, and more

or less constraining laws.

Many NGOs also adopted policies to minimize these risks. CYSD and SBMA created distinct research

and advocacy units that are legally separate from the field operations; URMUL used radical

decentralization among others as a means to allow for political activism without endangering the overall

programs and their funding.*** Myrada, and almost all the other NGOs, put senior, often retired, civil

servants on their boards in the hope that their credibility and personal networks would help protect the

NGO against government maltreatment.Note that governments are not alone in reacting negatively to indirect activities, especially those that are

more confrontational. Donor agencies are also reluctant to get involved in such activities, either because

they fear the repercussions for themselves, or because they consider such activities to be beyond their

mandates—diversions of resources with uncertain payoffs. PLAN, for example, has never funded any

indirect activity by any of its Indian partner NGOs nor had it itself engaged in any such activity,

notwithstanding its 20-year experience in the country. Some of the more progressive donor agencies—

NOVIB, for example, which funded CYSD for that purpose—may be willing to finance explicitly

political activities. These, however, are exceptions.

Decentralization

Among the organizations the authors studied, at least three (four including PLAN) had undertaken major

processes of decentralization during the last decade. They did this while scaling up their impact; or,

rather, as part of their strategy of scaling up. In all cases, their leaders told us they felt that, given the

NGOs’ tasks and mandates, they had to decentralize. They argued that decentralization allows local

communities better geographical and social access to NGO services, facilitates the creation of local

institutions, encourages the induction of capable local staff, and promotes institutional and intellectual

diversity. In short, decentralization, they felt, was the best path to creating a built-in process of

organizational dynamism, assuring quality and sustainability.

The term ‘decentralization’ covers three distinct possible processes: simple deconcentration; spin-offs of

independent units; and delegation to self-help groups. Each of these represents a strategic choice that,

once made, has great impact on the further trajectory of an organization, including the problems it will

encounter.

Simple deconcentration is the delegation of tasks from higher- to lower-level units of the NGO itself.

The importance of the tasks transferred, the number and size of the units to which these tasks are

transferred, and the degree of central control and oversight remaining can vary greatly. ASSEFA, Myrada

and PLAN managed most of their projects in a deconcentrated manner, giving project directors great

autonomy. The role of headquarters typically included ensuring common institutional learning and policy

coordination, public relations and image building, the development and operation of the terms to which

staff will be held accountable, and the provision of an emotional link and social capital.

Spin-offs imply that the units taking on the new tasks are legally separate; there is thus no longer a

hierarchical power from the center over the satellites. Among the organizations the authors studied,

Myrada stimulated spin-offs of new NGOs by its own staff, but not its own projects; URMUL was going

through a radical decentralization process, leading to the creation of more than ten new spun-off NGOs.

Each spin-off was managing existing URMUL projects and undertaking new activities. CYSD and

ASSEFA spun off those projects that could function on their own: a successful Weavers’ Cooperative and

a Dairy Cooperative, respectively. In such cases, the role of headquarters evolved primarily around the

initial development of the new institutions’ capabilities, the promotion of joint learning, and the supply of

social capital—the sense of belonging to a family.

Increasing Impact Without Becoming Larger

One of the key lessons of this project is that there are many ways in which organizations can and do

expand their impact without becoming larger (see also Jordan & van Tuijl, 1998). Scaling up impact

while remaining small is not a result of accident or external constraint but a deliberate choice. All the

methods described in the previous pages serve the dual functions of increasing the sustainability of

benefits to the beneficiaries and increasing the likelihood of successfully influencing other actors in

society.The process of scaling up impact without growing larger includes the three modalities of decentralization

just mentioned; the creation of successful models to be taken over by mainstream agencies, whether

government or market; and the use of indirect activity strategies. For some organizations, focusing on

fewer issues or strategic interventions—functional scaling down, so to speak—has also been part of the

strategic choices made. The aim is then to focus on those areas in which the NGO excels and collaborate

with other organizations in their field of competency whenever required.

Overall, then, it seems that in their attempts to increase their impact, NGOs face continuous strategic

choices between three basic models of promoting and supporting social change and local organizations.

First, and most common in the past, NGOs themselves can provide the support services such as credit,

health or education to the people or the CBOs with whom they work. Scaling up is then essentially

quantitative; it means increasing the size of existing activities with more money, more employees and

more beneficiaries. This path was adopted by all the NGOs in the study in their early years. It is the most

common path throughout the world, and is thus most frequently associated with the term ‘scaling up’.

This choice can be labeled expansion and focuses on NGOs becoming larger organizations. Success is

defined in terms of an NGO’s capacity to become a major, professional player with resources, capabilities

and power similar to governments and for-profit firms—but with different goals (see also Jain, 1994).

Second, NGOs can seek to create and spin off independent institutions that provide support services.

Independent cooperatives, autonomous CBOs, self-managed and self-financed schools or hospitals,

consulting companies, and new NGOs are all possible products of such strategy. NGOs in the study

followed this strategy either for part of their operations, as did ASSEFA and CYSD, or for all of them, as

URMUL is beginning to do. This strategy for scaling up impact, which entails decreasing in size and

focusing on organizational development can be termed multiplication. It involves the quest for a civil

society-like multitude of initiatives and organizational forms, each with their own goals, structures, roles

and capabilities. Success is seen here in the quantity and sustainability of spin-offs and the creation of a

diverse and pluralistic group of autonomous actors.

Third, NGOs can seek to promote changes in other institutions whose mandate should or does include the

provision of such support services. This is the path followed most consistently by Myrada, but all the

NGOs the authors studied tried to do some work along these lines. In this case, scaling up impact consists

of the creation of mechanisms of indirect action of all kinds, including advocacy, lobbying, training,

research, integration and joint venturing. This third strategy can be termed mainstreaming (Wils, 1996).

It consists of NGOs seeking to affect the functioning and behavior of agencies in the two other sectors,

government and private for-profit. Success is defined in terms of a modification of the behavior of actors

throughout society.

With the first strategy, the NGO expands its resources and size in order to increase its impact; the latter

two carry the potential of scaling up impact without becoming larger—of “enabling NGOs to have

impacts vastly out of proportion to their size and resources,” in the words of one observer (Covey, 1992).

While all three strategies may well achieve their aim of providing support services and empowerment for

large numbers of poor people or CBOs, they all create their own constraints and problems. Choosing

between them, then, is a matter of profound strategic choice for NGOs. This choice will be a function of

the ideology and personality of top leadership; the economic, political and social environment within

which NGOs work; the opportunities that emerge, including political and financial windows of

opportunity; and, finally, the type of activity and the public concerned.††† Activities that seem sustainable

by the market or that have high economies of scale—credit, producer cooperatives, small enterprises or

consultancy, for example—can be shed and spun off rapidly. Other activities need continued soft fundingNGOs or integrated into government programs, provided the political context is right. Still other

functions involving experimentation, alternative knowledge creation or advocacy are best harnessed by a

dynamic pluralist NGO sector.

The Two Paradigms of Scaling Up

The first half of this report clarified the concept of scaling up, redefining some of its dimensions and

applying the resulting insights to five Indian NGOs. The case studies suggested the existence of two

paradigms of scaling up. The ‘old paradigm’ is about scaling up through expansion, whereby NGOs

become larger, more professionally managed, more efficient, programmatic institutions. Many NGOs—

the Grameen Bank or BRAC are famous examples—are continuing on that path, often successfully.

Other NGOs are exploring a new paradigm’ of multiplication and mainstreaming through spinning off

organizations, letting go of innovations, creating alternative knowledge, and influencing other social

actors (see also Clark, 1991 and Edwards & Hulme, 1992). Note that these two paradigms are not

exclusive, and NGOs can chose to move forward along different lines simultaneously or successively:

Grameen Bank, for one, certainly does; so did most of the NGOs in the sample.

In the new paradigm, NGOs are seen as builders of vibrant and diverse civil societies, catalysts of

innovations and social capital and creators of strategic and programmatic knowledge that can be spun off

and/or integrated into the two mainstream sectors of society: governments and markets. In that paradigm,

the task of NGOs is not to compensate for government failure or market deficiency by their own actions;

it is also not primarily to manage development projects. Rather, NGOs’ role is about innovation and

subsequent mainstreaming and multiplication—the way Rondinelli (1983) years ago described projects as

‘policy experiments’ rather than as solutions to problems in and of themselves. The starting point for this

paradigm is a recognition of the fact that:

[I]t is difficult to see how NGOs could re-shape the costs and benefits of global change through

stand-alone projects at the local level, funding, or the delivery of basic social and economic

services. Instead, they must build outwards from concrete innovations at the grassroots level to

connect with the forces that influence patterns of poverty, prejudice, and violence: exclusionary

economics, discriminatory politics, selfish and violent behavior, and the capture of the world of

knowledge and ideas by elites (Edwards, Hulme & Wallace, 1998).

The authors label this as “moving from development as delivery to development as leverage.”

In the new paradigm, the extent to which an NGO successfully scales up can be judged not only in terms

of its size, but also in terms of the number of spin-offs it created, the number of projects that have been

taken over by other actors, and the degree to which it contributed to the social and intellectual diversity of

civil society. Its asset base is measured not only in terms of the money, employees and machines, but

also in terms of its networks, credibility and alternative knowledge. Impact, finally, is not only about the

number of beneficiaries or even the specific policy changes won, but also about local capacity built,

intersectoral contacts developed, norms of trust and cooperation strengthened, and democratic space and

social diversity reinforced (Brown & Ashman, 1998; Miller, 1994). This paradigm, then, is about

diversity rather than standardization or profit; process rather than project; social rather than financial

capital; civil society rather than bureaucracy; synergy rather than substitution or competition (see also

Tendler 1997).Scaling Up Impact of NGO Programs: Framework and Strategies

Background

This half of the report is divided into two major sections. The first presents a framework of analysis and a

set of concepts revealed by the case studies, as well as a scheme of classification and taxonomy to

describe NGO scaling up strategies. A four-stage process to trace the evolution of NGO programs is then

described. A concept of social sustainability is identified as a surrogate indicator of financial

sustainability of NGO programs. The second section presents a pattern of strategic choices made by

NGOs regarding various types of scaling up. A final concluding section places this paper in the context

of existing literature on scaling up and outlines implications for different audiences.

Framework of Analysis and Key Concepts

Figure 1

Æ Indirect Impact Æ

· Scale up beneficiary coverage

· Scale up activity portfolio

· Functionally related diversification

· Vertical and horizontal integration

Scaling up

through:

Æ Direct Impact Æ

· Scale up institutional sustainability

· Functional sustainability through progress

over four stages:

1. Entrepreneurial beginning

2. Task teams

3. Project organization

4. Program organization

· Social (financial) sustainability

Taxonomy of Scaling Up

Scaling-up strategies of NGOs can be depicted through a decision tree shown in Figure 1. The program

activities of NGOs can be classified in two categories. Direct impact activities are those where NGOs

directly work with and have an impact on beneficiaries. Indirect impact occurs when NGOs reach their

target group through shaping the capabilities and decisions of others. Examples of direct impact

programs include setting up organizations of target beneficiaries to undertake economic or political

activities or to acquire access to services supplied, and creating delivery mechanism for target groups.

Raising the capability of other organizations through training or staff deputation and influencing and

shaping their policies through advocacy and consultations exemplify indirect impact programs. The

target audience of indirect impact intervention consists of other direct or indirect impact programs. Most

grassroots NGOs focus on the direct impact route, while support organizations tend to adopt the indirect

approach. Increasingly, however, many NGOs are using a mix of both.Indirect impact activities allow an NGO to spread its impact over a large number of other direct NGO

action programs or government programs with large reach. The indirect impact route, thus, has the

potential to produce significant results without the NGO itself becoming large or working with large

numbers of beneficiaries. However, since the usefulness of any indirect intervention on the target

beneficiaries rests ultimately on the performance of the direct impact programs that are being affected, the

effectiveness of former can be seen only in conjunction with that of later.

Within both the direct and indirect impact categories, the authors found the following choices practiced

by NGOs.

Scaling up Beneficiary Coverage. An obvious and common method for enhancing the impact of NGO

programs is to increase the number of beneficiaries served by them. The programs of BRAC and the

Grameen Bank, in Bangladesh, and Amul Dairy in India are well-known examples of such scaling up,

each serving more than a million households through direct impact programs. In the case of indirect

impact programs, the growing size and scope of training programs of Myrada and CYSD in our sample

illustrated the same; the International Institute for Rural Reconstruction in the Philippines is a major

example elsewhere. In some cases, beneficiary coverage is raised through one core intervention while in

others the combined coverage of many activities accounts for the expansion.

Scaling up Activity Portfolio. Another way to raise the impact is to undertake a wider range of

development activities. The different activities can serve either the same or different sets of beneficiaries;

in either case, the development impact is enhanced. The authors noticed two sub-categories within this

domain.

Beneficiary-centered, but functionally unrelated, diversification. Most NGOs see their raison d'être as the

welfare of a chosen target group. To raise beneficiaries’ welfare, NGOs expand the range of program

activities, often upon expression of beneficiary need, but sometimes on donor suggestion. Among direct

impact actions, such expansion can take place in three broad categories. The first type seeks to improve

the economic status of the target group; in India, this, typically, included activities in dairy, agriculture,

weaving, garment manufacturing and micro-finance. The second type seeks to improve access to basic

social services, mainly in education and health, but also in areas such as nutrition and housing. The third

type aims at the sociopolitical empowerment of beneficiaries. In some cases, the political or social action

directed at the latter aim is an explicit NGO program goal, but in most cases, including the sample NGOs,

this objective is expected to come about rather axiomatically as an outcome of building local

organizations around program activities.

Regarding indirect impact activities, diversification normally takes place in the form of addressing

various functions of the target organizations. For example, starting with training NGO personnel in

participatory methods, CYSD diversified its program to include management or project design training.

URMUL started work in the health sector, but expanded its policy lobbying to include irrigation

management, as it had established grassroots credibility contact by then.

Horizontal and vertical integration of activities. NGOs are often confronted with the fact that

complementary activities could greatly enhance the impact of specific programs; for that reason, they may

decide to add such activities to their existing portfolio. This is most evident in the case of economic

programs. Many NGO programs start by trying to enhance the stock of productive assets owned by the

poor through credit or grant support. Some programs then integrate this with production efficiency

enhancement through training and advisory inputs. Some programs also organize input linkages, such as

the supply of inputs and the provision of infrastructure. A few address output linkages by taking up

processing and marketing. In the case of service delivery, a similar effect can be obtained by integratingOne could see a similar phenomenon for sociopolitical empowerment, ranging from the simple creation of

Community Based Organization (CBOs), to increasing their analytical and managerial capacities, to

linking them horizontally and vertically into viable apex structures. It could also lead to spinning them

off as viable autonomous units, unrelated to the demands of specific projects or NGOs. In the sample,

ASSEFA’s animal husbandry program started by helping the poor to acquire dairy animals and expanded to

include feed supply and artificial insemination to improve productivity of these animals. Later, marketing

support was integrated. URMUL Trust started a local organization of weavers to improve the quality of

woven products. This was then integrated with improvement in weaving equipment and product marketing,

and later helped to become an integrated development organization. Among indirect impact programs, this

was seen mostly in the integration of research and training with policy advocacy, or the integration of training

with consultancy, as illustrated by Myrada.

Scaling up Institutional Sustainability. One important way for an NGO to enhance its impact is to

ensure that its program activities remain not only as an indicative model or illustrations of possibilities,

but are sustained on an expanding scale on an ongoing basis. There are two dimensions of this. One

relates to functional sustainability implying the capacity to maintain a required program quality over time

and on a large scale. The second relates to the capacity to mobilize resources that are needed to carry out

the program on an ongoing basis and at the desired scale. Our research revealed some important aspects

related to functional and financial sustainability. Functional sustainability can be seen as a progression

through four stages in the evolution of NGO programs, while financial sustainability can result from

social sustainability.

Four Stages in the Evolution of NGO Programs

NGO programs the authorsre observed to pass through the following four stages in their evolution:

Development Entrepreneurial Initiative

Most NGO programs start out as entrepreneurial initiatives, characterized by the passionate involvement

of an individual or a small group of people with a new task. In this stage, almost no organization or

pattern of activities is discernible. Instead, the initiator works as a catalyst or organizer and general

purpose supporter, who brings people and resources together through personal initiative and works with

them to produce the intended results. During this stage, there is little a priori clarity about what specific

activities would produce the desired result, and tasks are taken up as the need emerges. Even the specific

goals that are to be pursued unfold in steps, as success is achieved or failure encountered. The whole

exercise is characterized by continuous experimentation and learning, where the energy and persistence of

the promoter or promoters hold the key to success. During this stage, the initiator takes up any task or

work that needs to be done. There is a sense of ‘ad hoc-ism’ in the enterprise and total flexibility in the

roles and methods of working, with the needs of the hour dictating what is being done currently.

To illustrate an example from the sample NGOs, Myrada started by assisting in the settlement of refugees

from Tibet who came to India in the wake of Chinese action against their spiritual leader, the Dalai Lama.

The Government of India gave land to these refugees in the forest region of Karnataka State, a rolling

landscape dotted by small hillocks. The core Myrada program was to help the refugees cultivate the land

and set up a multi-purpose cooperative for handling input and output linkages. While promoting

agriculture in the hilly region, Myrada leadership noticed a new opportunity to take up watershed

development. As a result, the chief executive and a small group of staff started learning about and

experimenting with simple watershed treatment methods. This beginning later grew to become a major

watershed development program in Karnataka State.The authors call this the phase of entrepreneurship. The features that characterize a private

entrepreneur—the capacity to visualize an opportunity, passionate involvement, and all-round

competence that could be employed to perform any task needed—are all present in this phase. Rather

than the personal welfare motive of a private entrepreneur, the motive is the welfare of others. There

exists a broad social science literature on the ‘development entrepreneurs’ or ‘political entrepreneurship’

as a causal factor of NGO growth and social movement mobilization, by focusing on the role of dynamic

individuals in identifying opportunities and mobilizing resources. But this current typology goes further,

seeking to describe how these original entrepreneurship initiatives change in nature to become mature

organizations.

Task Teams

Having made a beginning, the development entrepreneur and the beneficiaries learn that a systematic

approach to various tasks will help in getting the desired results on a more sustained basis. They also

observe that various people have different strengths and competencies, and that it will help if the tasks are

allocated to people based on their relative advantages in performing these.

During this stage, therefore, task teams are created that have relatively well assigned responsibilities for

each team member, but the team as a whole remains responsible for all the tasks. It is still expected that

different team members will take up one another's roles should the need so arise, particularly when new

problems emerge. New situations are still encountered often in this phase, and the path to success is not

yet entirely clear. The resource and time requirements of the total task are not fully established for

various components, making it difficult to be sure of input–output ratios or scheduling. Typically, the

availability of resources is highly uncertain and fluctuates during this phase, reinforcing the need for

people to perform multiple tasks whenever needed . In the development entrepreneurship phase, only one

individual, or a small group, initiates a project activity; in this next phase, a larger group is involved.

Still, the membership and identity of this team remains fluid, and the intervention is still in an

evolutionary stage.

In Myrada, the watershed development initiative moved from an entrepreneurial beginning to the task

team stage, when specialist staff were recruited and assigned complementary responsibilities. During this

stage, certain specialization of activities emerged; for example an agriculture scientist identified a suitable

cropping pattern, while a civil engineer organized earth-work, even though all the team members were

involved in most operations.

Project Implementation Organization

When an NGO has learned to achieve success by adopting a certain task technology, and the relative roles

of various actors have stabilized, it moves on to become a project implementation organization. In this

phase input–output relationships, desired scheduling of activities and personnel requirements are well

understood, and the resource requirements of the total enterprise are known and aligned. Consequently,

NGOs are in a position to achieve specified results in a time- and resource-bound manner. Typically,

NGOs commit to undertake specific projects, but the commitment is only to complete the known and

agreed-upon set of activities as indicated in the project document. What is to follow at the end of project

phase remains uncertain.

During this stage, the NGO moves to become a stable organization with its own norms of task

performance, expected behavior, staff responsibility and structure, and corporate efficiency and

accountability. With specialization in roles, a professional work culture takes root, and there emerges a

diversification in funding sources. Many activities are still not standardized during this stage, and asimilar activity—financial support for watershed development, for example—could vary from project to

project, depending upon project scope and financing terms.

When Myrada moved on to implement watershed development projects, it evolved relatively uniform

methods to involve farmers in planning, and employed a given package of watershed treatment methods

that did not require the use of heavy equipment or complex civil engineering structures. Myrada could

asses on an a priori basis, based on past experience, how much financial, physical and manpower

resources would be needed to achieve a given project outcome. The composition of a watershed

development unit and the role of various members were by and large standardized, but still many

parameters such as the subsidy support to be given to participating farmers and the unit cost of similar

watershed treatment could vary from project to project.

Program Institutions

The fundamental differences between this phase and the previous one are twofold. First, the development

activity is now undertaken not as a resource- or time-bound exercise, but as an ongoing one, whose

quality can be maintained over time and expanded in size. To obtain similar quality over time, the key

physical and financial parameters are standardized during this phase. The program and organization

design that contribute to the program outcome, are similarly standardized. Second, the concerns with

efficiency and cost-effectiveness are translated into cost–output ratios that make the program a

competitively superior alternative in its respective domain. This ensures that the resources needed to run

the program could be mobilized on a sustained basis.

The transition from project to program stage signifies a major and qualitative shift that needs to be

correctly understood. The authors take the example of two programs, one from the sample NGO and

another from outside, to illustrate this. Myrada and a Bangladesh NGO, Proshika, adopted a similar

approach to micro-credit. Both of these organizations assisted poor borrowers to form groups of 20 to 30

people, undertake weekly compulsory saving, and hold weekly meetings to discuss joint group activities.

Once the group stabilized and learned to follow certain norms, these NGOs gave a revolving loan fund to

the group, which then lent the money to the members. Members were then required to repay the loan

with interest back to the group, which could either be lent again to members or returned to the NGO with

interest and service charges. Both organizations gave a wide range of training to borrowers but differed

in one respect: Myrada did not take back the revolving loan fund and the group kept the loan repaid by the

members, which again was lent to members; in Proshika, the repaid loan and interest came back to

Proshika, which was again given back as fresh loan to the groups and members. The Myrada intervention

remained at the project stage while, by mid-1990s, Proshika had moved to the program stage. The

authors classify the Proshika intervention as a program because of three major characteristics. First, the

terms and norms that governed Proshika’s relationship with the groups, and the groups’ relationship with

their members, remained the same across the whole of Proshika, while in Myrada, this varied from one

project to another. Proshika standardized the method, resource requirements and time needed to take a

group to its various stages of evolution, while in Myrada, these varied considerably across its projects and

groups. For example, the amount of money that was given by Myrada to various groups was not the

same, nor did the groups give money to members on similar terms. In Proshika, the terms at which

Proshika extended loans to groups, and in turn groups gave loans to borrowers, were the same across all

groups. Second, the result and outcome of groups’ participation in Proshika’s micro-credit programs

showed a similar pattern that indicated a direct relationship between Proshika’s effort/input and its

outcome/impact. In Myrada, the outcome and progress of groups varied greatly across different projects,

as well as across groups within the same project. Third, and most important, Proshika had lined up a

financing strategy to meet both operating costs from a combination of service charges and declining grant

support and capital requirements either from the build-up of its own accumulated capital reserve or by

accessing market resources. Proshika’s program made use of donor grants, but the financing package wasdesigned to sustain the program in perpetuity. In Myrada, the intervention came to close when a particular

project financing arrangement came to its end.

As an NGO moves from the entrepreneurial to program organization phase, it undergoes a large range of

changes in the nature of staff employed, structure, program strategy and time horizon, and the role of the

leader. The movement toward the program phase signifies functional sustainability of NGO activities.

The transition is also characterized by different strengths and weaknesses at each of the stages. The

changing nature and scope of external relations of an NGO is an important feature of this transition.

Table 1 gives the key characteristics of an NGO in the four evolutionary stages.

Table 1: The Four Phases of Sustainability Scaling Up

Entrepreneurial

Initiative

Task Team Project

Organization

Program institution

Staff

specializatio

n

Generalists,

founders

Team members

have somewhat

specialized roles

Projects define

needed staff

capacities and

roles

Strategy defines

specialization needed

for programs

Organization Organized by

founders and core

values

Teams develop

flexible procedures

that utilize special

skills

Organized around

projects that have

defined processes

and goals

Programs have longterm

plans and

priorities

Strategy and

time horizon

Founders respond

to daily demands

Team organizes

for medium-term

Strategy to

expand, add, and

complete projects

Strategy emphasizes

permanent services

and mission

Strengths Flexibility,

creativity, quick

response

Teamwork

expands delivery

capacity; better

use of limited

resources

Better planning;

better resource

uses; project

strategies

Long-term planning;

programmatic

expertise built; social

and economic viability

acquired,¼

Weaknesses Small, founderdependent,

personalized

Small; limited

resources; donordependent

Multiple-project

management;

donor-driven;

limited expertise

Specialist control,

bureaucracy,

non-responsive, noncreative

External

Relations

Limited to the task

environment

Linkages with likeminded

people

and often a donor

Relationship of

exchange with all

elements of

environment, but

dependence on

some donor

Relationship of

exchange with all

elements of

environment, but also

of mutuality

Social and Financial Sustainability

While the progress along the four phases of evolution indicates that NGO activity is becoming

functionally viable, it still needs financial resources to continue functioning. The experience of successful

NGOs can be seen to signal a new concept to indicate their financial sustainability. The authors term this

‘social sustainability’. Some programs, such as the Grameen Bank in Bangladesh and the dairyfor an ever expanding program. This happened even though the Grameen Bank could not cover all its

operating costs from market mechanisms and the dairy cooperatives could not generate the surplus

required to meet their capital and investment needs. Normally, non-market support is expected to come to

a stop after a while; in these cases, however, that did not happen, and outside support remained

continually available to them. The explanation for this lies in the fact that the performance of these

programs is widely regarded as competitively superior among alternate provisions for similar tasks, and

there existed institutional structures to support such programs.

In other words, NGO credibility and program quality can be such that it achieves a situation of social

sustainability when it complements the market-derived income with stable and durable sources of nonmarket

support to meet full operational cost on a sustainable basis. NGOs typically work in many sectors

where the social transfer of resources outside the market is regarded as desirable on a sustained basis.

The permanent provision of primary education or basic health services in most countries, for example,

belongs to this category. The provision of seed capital provision to the poor and life-support for the

destitute belong to the same category. If an NGO operates in these sectors and is seen as the best social

provider in its domain—compared to the private sector or the state—chances are high that it can continue

to mobilize the required resources for expanded operations on a sustained basis. Among the sample,

Myrada's micro-credit program and ASSEFA's primary schools were moving in this direction. The

authors term such programs as socially viable, even if they do not meet full capital and operating cost

from market operations.

Strategic Patterns in NGO Scaling Up and its Management

This section presents the pattern and rationale of scaling up strategies chosen by NGOs.

Scaling Up of Beneficiary Coverage

Scaling up of beneficiary coverage is usually closely linked to the NGO’s progression along the four

stages of evolution. Beneficiary coverage typically grew after an NGO had moved from the

entrepreneurial phase to become a project implementing organization. The main determinant of this type

of scaling up was the success of an NGO to tap new donors or obtain more funds from existing donors.

Typically, this process occurred in spurts, with periods of rapid growth alternating with periods of

stagnation or slow growth. Sometimes beneficiary coverage was even rolled back at the end of a project

period if new project support could not be lined up. When an NGO graduated to become a program

institution, however, it tended to demonstrate a continuous and rising coverage, though at an uneven pace,

within the limits of the geographical region in which the NGO worked. The main reason for this was the

access to funding sources that were relatively permanent in nature. This pattern could be seen in all the

five study NGOs, as well as in many other organizations the authors have observed.

Scaling up of Activity Portfolio

Typically, NGOs started as a development entrepreneurship effort, and the first activity choice was rooted

in the background or the field of interest of the founder or founders. As the NGOs moved to the project

implementation phase, two alternatives emerged. In some cases, an existing NGO project became a

building base to graduate to the program implementation phase, as illustrated by Proshika’s micro-credit

program. In most other cases, the existing projects helped the NGOs to launch other projects. Myrada’s

adding-on of the micro-credit, watershed treatment, social forestry and small enterprise promotion to its

start-up project of resettlement of refugees was a typical case in point. Over the years, some such projects

moved on to become ongoing programs, or expanded or shrank in size depending upon the availability of

project funding.organization, for various related reasons. By demonstrating success in project implementation, NGOs

acquire credibility among donors and beneficiaries as ‘competent’ agencies. Beneficiary demand for a

large range of benefits almost always exists. NGO credibility and beneficiary demand, combined with the

entrepreneurial spirit of NGO staff, including its founder(s), normally leads NGOs to initiate new

activities.

Unlike the case of corporate diversification, the authors saw little functional, resource use, or institutional

complementarity among the activities NGOs took up; rather, they appeared for the most part functionally

unrelated. For example, the micro-credit, education and health programs had little commonality, except

possibly for the sharing of similar accounting and administrative support structures. The staff, resources

and technology were distinct for these different activities, and often even the grassroots structures

employed were separate. The only unifying feature consisted of an over-arching integrated development

framework, which in India normally meant supporting a combination of some farm or non-farm economic

activity, primary education, mother-and-child health care, and sanitation.

NGOs competed for project funding support from various donors, including PVOs and government. This

study did not focus on competitive resource mobilization; more generally an NGO’s institutional

presence, geographical outreach, and leader's credibility and image among donors appeared as the key

determinants of resource mobilization.

Scaling Up of Institutional Sustainability

The movement from the uncertainties of the entrepreneurial beginning to the long-term solidity of

program institutions signified the progress toward institutional sustainability. In South Asia, this process

can best be seen at work in the case of economic activities such as micro-finance or the processing and

marketing of selected commodities. Grameen Bank and BRAC in Bangladesh, and the dairy and sugar

cooperatives in India, were prime, well-known examples of successful moves along these lines. In the

sample NGOs, the micro-credit activity of Myrada, the handloom program of URMUL, and the microcredit,

dairy and primary education programs of ASSEFA exemplified this trend.

A relatively small component of NGO activities in the sample moved from project to program phase.

Three underlying processes were at work that could explain the limited success of NGOs in moving from

project to program stage. During the project implementation phase, NGOs typically enjoyed a large

measure of subsidized funding support, even for economic activities. This was provided with the belief

that the target group is too poor to finance needed activities from its own resources. With assured funding

support at the existing cost of operations, NGOs were under little pressure to improve cost-effectiveness

to a level that would put them ahead of other providers of similar services in the government or market

sector. Second, a large majority of NGOs and donors remained driven by the motive of helping those in

need, rather than of building permanent and sustainable programs or structures. The latter task was by

definition left to the market or government sector. Third, the project format of funding favored by most

donors had a structural bias in favor of time-bound projects compared to potentially ongoing programs. A

majority of NGOs, therefore, did not move from project to program implementation even after a decade

or more of start-up.

The few NGOs that graduated to the program phase mostly attempted integration, both vertical and

horizontal, of their activities. The Amul dairy program and BRAC’s rural program are examples in the

economic domain of programs in which the production, input supply, processing and marketing of a core

product were integrated. SEVA–Rural, Jagadhia, in India, integrated primary health care outreach with a

referral hospital, and GSS in Bangladesh combined primary outreach with school construction,curriculum design, material development and teacher training. In the sample NGOs, ASSEFA exhibited

this phenomenon.

One seemingly evident hypothesis about activity choices in NGOs is that, while moving from the

entrepreneurial to the project implementation phase, they typically try out and maintain many functionally

unrelated activities. Once they graduate to the stage of program implementation, they undertake vertical

and horizontal integration around a core program activity. The sample of organizations studied, however,

provided us with a more complex and varied pattern of movement from one to another phase than

expected. Both ASSEFA and Myrada started by taking on integrated programs, combining asset supply

with productivity enhancement and value addition through processing and marketing. Both initially

worked with cooperatives of poor people that were trying to teach members to utilize agricultural land

more effectively, as well as establish input and output linkages. ASSEFA worked with the poor who

obtained land under Bhoodan, and Myrada worked with Tibetan refugees who came to India after the

expulsion of the Dalai Lama. The URMUL Trust, likewise, helped early on to set up a weavers’

cooperative that undertook the full range of programs from asset improvement to marketing of produce.

Many of the later interventions of these same NGOs were independent entrepreneurial or project

activities. Some of them took up service delivery programs, and within the income-generation sector,

they often took up single activity interventions. Both ASSEFA and Myrada, for example, later aimed to

improve beneficiaries’ asset bases through credits or grants. The same was true for URMUL Trust. In

other words, the activities of the NGOs the authors studied did not seem to follow a standard path towards

higher integration and program implementation; in fact, they sometimes seemed to go in the opposite

direction.

Two features may explain a reverse movement from a program implementation to a project

implementation mode of functioning. First, the embedded logic of international donor funding tends to

support the project format of activities. Second, the entrepreneurial impulse of NGO staff and leaders

propels them to start new activities, even after some NGO activities have reached a stable program

implementation phase. The latter phenomenon is apparent even in large and highly reputed NGOs, where

donor preferences play a limited role in shaping NGO decisions. The Grameen Bank's attempt to take up

tubewell irrigation and, later, rural telecom are illustrative of this.

Transition through Different Stages of Institutional Sustainability

This study revealed some aspects of the transition of NGOs among successive stages of institutional

sustainability. Many NGOs found it difficult to handle the transition from team to project format, and a

much larger number failed to effect project to program transition. Most NGOs emphasized and took pride

in promoting a team culture. The team concept was seen not only as a state of mutual support but also of

joint responsibility. This approach served them well in the initial phase of starting a new activity, but as

the task progressed this needed to be transformed into a relationship of complementarity among various

members, with allocation of distinct responsibilities even at the middle management level. In one case,

for example, an NGO had initiated a new irrigation program with World Bank funding, but it found it

difficult to develop clear norms of performance for different staff. This was mainly due to its deep-rooted

institutional mode of functioning, in which everybody felt part of and responsible for each action. The

top institutional leader was emotionally at ease with this state as every decision came to him as a part of a

consultative process; all the old associates, who were then holding middle and senior management

positions, were comfortable in not being individually accountable for any specific result.

The transition from project to program format posed an even bigger challenge to the ideological

perspective and development worldview of NGOs. Most saw themselves in a transitory mode whereby

their program would empower the target group to learn to deal with the markets and government andreach an acceptable level of socioeconomic development in a given time period. They found it difficult to

visualize and undertake an activity as an ongoing one, the starting step for transition to program thinking.

Many NGOs, accustomed to subsidized donor resources, considered charges for services an inappropriate

burden on poor people. Furthermore, many NGOs did not have the managerial depth and competence to

raise operational efficiency and reduce operational cost so they could compete in the markets—which is

what the program mode ultimately meant.

Scaling Up of Indirect Impact

Indirect implementation activities also normally start as entrepreneurial initiatives, often by the NGO

leader. Two routes characterized this process in the sample. In one, after an NGO had established a

credible performance record of direct implementation, its leader was often invited to participate in policy

consultation forums, or to organize training for other organizations that were performing similar

activities. Alternatively, an NGO leader, having observed a strategic opportunity to highlight certain

issues and influence public policy, took the lead in promoting and articulating the desired policy.

As with direct impact programs, most NGOs assemble task teams around the entrepreneurial initiative of

its leader, but only a few are able to graduate task teams to either a project or a program implementation

organization. Outside the sample, there are many instances where indirect impact activity became project

and program activity, such as the Grameen Bank's attempt to help other NGOs take up micro-finance,

BRAC’s primary education program, and the Amul pattern of dairy programs. Among the sample NGOs,

Myrada had evolved a policy to move in this direction, while URMUL had begun articulating one.

More generally, a key component of expanding impact through influencing others was training. Longterm

training grounded in practical experience, when combined with consultancy and strategic alliance

building, appeared to have the potential to influence the behavior of other actors, such as NGOs,

government agencies or international donors, even in the absence of major policy or ideology changes.

Most established Indian NGOs tried to support other new NGO initiatives, some of which could be started

by the old employees or associates, some by others known to them. The pattern of support varied from

case to case. In some cases, it could be merely advisory support or membership affiliation with a

network. In other cases, it could involve even resource support. URMUL even assumed formal

responsibility to help some project units spin off as independent NGOs. The process was in its early days,

and the role of various partners involved in this exercise was still evolving in 1998, but assisting in the

birth and sustenance of new NGOs appeared to be an important way to make greater impact without

direct implementation.

NGOs recognized that indirect impact allows them to considerably enhance their development

contribution without adding to their resource base or organization size. But a constraint in handling

indirect impact programs was the difficulty in obtaining reliable feedback about the efficacy of such

efforts and where further efforts would be needed. The impact of indirect activities is always mediated by

a variety of factors outside the control of NGOs undertaking these activities. Typically, for example,

managers or overall systemic imperatives are more important in shaping functionaries’ behavior than the

training imparted to them. Similarly, the systemic forces that impinge on a policy situation are numerous,

as is the number of those who are trying to influence these policies. This makes it difficult to determine

the impact of policy lobbying or participation in policy consultations or training. Finally, the impact of

all these outcomes—trained people, policy changes—on the beneficiaries, the poor themselves, is even

harder to determine with any exactitude.

Most NGOs felt that an important way to increase their impact is through influencing existing structures,

mainly government programs. There exists considerable anecdotal evidence of NGO programs becomingmodels for large government programs, a process that is widely discussed in Western countries. Within

the sample NGOs, there were instances where some NGO program features found reflection in

government programs, but it was not clear to what extent this was due to common learning heritage of

both the NGOs and government programs, or due to influence of a specific NGO program. A well-known

government program, Swasthya Karmi, had some common features with URMUL's health program. But

these features were also shared by another older health program at Jamkhed, as well as the other

government program, Shiksha Karmi, both of which were set up prior to URMUL experience and were

widely know in India. In such a case, it is difficult to ascertain with any certainty who influenced whom.

The NGOs also recognized that influencing government programs is not easy. Even when a policy was

accepted as a formal statement of objective, other forces, including systemic ones, could distort its

implementation. To deal with such systemic factors, some of the sample NGOs entered into strategic

alliances with the existing government structures as an effective means of working with and influencing

them on an ongoing basis. Myrada's work with NABARD, India's national regulatory structure for rural

banking, and the social welfare department of the Karnataka state government was illustrative of this. In

either case, the existing structures did not adopt Myrada’s approach entirely. Instead, Myrada entered

into strategic partnerships, whose elements differed from case to case. They mainly included Myrada's

involvement in the planning of programs, developing operating systems, training and selective deputation

of some staff to project agency. URMUL and SBMA entered into a collaborative partnership with state

agencies to implement government programs, albeit in ways that were consistent with their own approach.

It is, as such, difficult to assess the impact of indirect impact programs, but there existed indications that,

as compared to policy lobbying alone, the strategic alliance of an NGO with the government structure had

greater potential to influence the latter.

An interesting feature of indirect impact activities was the changing nature of NGO competitors in this

domain. The established academic and research institutions and development consulting firms have

traditionally performed activities that have indirect impact. By entering this domain, the grassroots NGOs

started competing with these institutions. Wherever an NGO could link its indirect impact activities with

its own direct impact experience, it acquired competitive advantage; in other cases, however, it was not

clear how distinctive an impact the NGO could make. As such, the institutionalization of this role had not

yet taken place in most of the sample NGOs, with future evolution still largely uncertain.

Absence of Modeling and Replication

In spite of the considerable variations that existed among the five NGOs, they shared one common feature

in their programs: an ‘absence of a model’. By a model, the authors mean a given pattern of

organizational structure, a staffing pattern, basic program unit design, standard sequence of activities and

given resource–output ratios. None of the organizations had evolved a model of practice that is replicated

or repeated across different projects in a consistent manner. For example, the beneficiary group size or

staff intensity varied between the micro-credit, watershed development, dairy, education and health

programs across different projects within each NGO. Consequently, resource utilization and input–output

ratios varied greatly across different projects. Equally important, these parameters were changing over

time, indicating not only a process of learning but, more fundamentally, the changing nature of program

needs that itself continued to evolve over time.

The absence of a model is not to be taken as an absence of common principles or practices. The sample

NGOs did have distinctive features in their programs that remained invariant, such as working through

grassroots groups, provision of beneficiary training, or a given personnel policy. However, these are too

general and widely shared among NGOs to be labeled model practices without stretching the meaning of

a model.Various interpretations can be made of this ‘absence of a model’. First, there is no doubt that project

needs vary in different locations and across different time horizons. An image of an invariant project

model, therefore, is unlikely to characterize successful programs that have to respond to changing needs

and environmental imperatives. Equally important, most program components in all of these NGOs were

operating as project implementing organizations, where each project had an independent resource

provider, somewhat different objectives and different contexts. The program parameters, in all cases, had

evolved through the interplay of many factors, among which resource availability and donor preference

were paramount. Under these circumstances, a standard pattern of program parameters could not be

expected to evolve. The absence of a standard model in NGO practice can thus be ascribed to their

functioning in a project implementation mode, where each project remains a discrete activity, and where

the project design evolves sequentially from the past only in parts. Until NGOs move to the program

mode, they cannot evolve standard program parameters and do not acquire the features of a model.

Development literature and thinking is so steeped in the concept of a successful model that a whole range

of NGO and donor practices are aligned to this. Most NGOs devote inordinate amount of energy and

time to seek the model; once a model is seen to work in a situation, its replication is axiomatically

accepted as appropriate both by the donors and the NGO. The observations made in this study, however,

suggests that every NGO program and project needs to be reassessed for its fit with the specific needs of

target group and target intervention. The presence of model features is no substitute for this assessment.