Preparing for Scaling: Innovating to Think Big and Tackle Barriers

October 29, 2020

One year in, strategic lead Lizz Pawlson reflects on The Studio @ Blue Meridian

 

One year ago, we made our first investments in a select group of social sector organizations whose visionary leaders had bold ideas and strong track records of success but lacked sufficient resources to overcome obstacles and evolve their strategies in order to bring these existing solutions to scale. That was the start of The Studio @ Blue Meridian — an investment portfolio that aims to address a stifling gap in the social sector market: the lack of flexible funding and tailored resources leaders need to test, refine, and prepare to significantly ramp up the most promising solutions to the problems that limit economic mobility for young people and families.

In over a decade of work with social sector organizations, I’ve seen firsthand the consequences of this gap in funding. A new start-up or an established organization seeking dramatic growth could access resources to scale their current model, but few options exist for leaders seeking to innovate or experiment on their model to ensure the viability of a pathway to scaling.  The result? Too often, a lack of access to the right resources at critical junctures prevents our most talented leaders from taking their strategies to the next level. Our goal with The Studio is to accelerate organizations’ readiness for scaling so they can reach their full potential to solve big problems.

“The power of The Studio is essentially ‘come up with some big ideas and we will make some risk capital investment in those big ideas. But irrespective of whether or not they work out, your organization will be stronger as a result of it’. It’s a fundamentally different concept than how traditional philanthropy works.”
— Jean Desravines, New Leaders

 

The Studio was structured to provide tailored advisory support and flexible financial resources of up to $10 million in a similar fashion as other portfolios at Blue Meridian — but also to facilitate innovation and spur experimentation. In our initial model, we’ve had the opportunity to partner with several organizations at once, allowing for a new level of collaboration and knowledge sharing. The Studio provides both Blue Meridian and the organizations we support the platform to test new ideas, iterate, and enhance strategies as we work toward expanding our impact. It also allows us to act upon one of our guiding philosophies: That empowered with unrestricted funding invested in their own plans, social sector leaders are better able to make the right decisions for their organizations and tackle barriers to growth. Our overall aim is to work quicker than traditional scaling investments, with the goal of hastening an organization’s readiness to scale.

We launched The Studio in 2019 with seven organizations from across the country, each with its own promising approach to combating key drivers of poverty among young people and families. For this first cohort, we sought out organizations with visionary leaders, a track record of strong performance, and a desire to address key barriers preventing them from pursuing significantly greater scale. Each organization was matched with advisors tailored to their needs, and, with their input, they developed a 2 year action plan, laying out what they would test in order to break through these barriers. To date, we have invested over $50 million in these seven organizations: LEAD, OneGoal, New Leaders, College Possible, Waterford UPSTART, Compass Working Capital, and the Family Independence Initiative. And in this process, we’ve learned from fellow funders like Valhalla and the Gates Foundation, among others, and aligned efforts when we were funding the same organizations. Now at one year in, it’s clear that these seven participating organizations have raised their ambitions and matched their bold ideas with a sharpened focus and real-time learning.

Of course, that has all taken place against the backdrop of the most immense challenges that social sector organizations have ever encountered.

Six months into the organizations’ implementation of their action plans and our first investments through The Studio, COVID-19 hit the scope radar of the country. As data streamed in, it became clear that vulnerable communities — the very populations served by the organizations participating in The Studio — were being hit the hardest. But despite the enormity of these new challenges, we saw that the organizations in The Studio were adapting well. In addition to being experienced leaders and strategists in their own right, they told us that the tools provided and experimentation encouraged by The Studio set them up to respond effectively to this historic crisis.

“The Studio was a time for us to diversify and really iterate, so that we can make better-informed choices for our organization and our mission.”
-Jesús Gerena, Family Independence Initiative

 

For me and my team, the depth and severity of COVID-19 prompted a moment of self-reflection and forced us to reexamine the approach of The Studio’s next chapter. How could we encourage organizations to rapidly innovate if we did not do the same? Across our organization, Blue Meridian saw the urgency of this crisis and acted quickly to provide emergency relief funding. But we also knew the pandemic would demand a longer-term, strategic response.

Likewise, the nationwide reckoning over deeply entrenched racial inequity reinforced our existing efforts to seek out organizations with diverse leadership teams in close proximity to the issues they tackle. Not only were there disproportionate impacts of COVID-19 on communities of color, but research published by Echoing Green and The Bridgespan Group this summer demonstrated how funding gaps remain a huge hurdle for Black and Latinx leaders. We are proud to say that The Studio’s initial group of participating organizations includes several Black and Latinx leaders; at the same time, we recognize that we must continue to make intentional efforts to build on this start.

We resolved to make a concerted effort to more rapidly support organizations built for this moment — those whose services are in greater demand as the nation navigates through the crises of COVID and racial injustice. To meet our ambitions, we are preparing to significantly increase our investments through The Studio in the next few years and explore alternative approaches beyond the cohort model.

As The Studio moves forward with new resolve and urgency, we welcome the chance to partner with individual funders and foundations who share our goals. By exchanging knowledge and complementing our efforts with fellow philanthropists, we believe that we can activate capital to flow more effectively and to support more organizations to ready themselves for significant scale. Looking ahead, I am hopeful that The Studio — alongside the organizations we support — will continue to experiment, refine, and push the boundaries of what’s possible, bringing us closer to a country where every young person can realize their full potential.

Lizz Pawlson

Managing Director; Portfolio Strategy & Management 

Strategic lead and managing director, Lizz Pawlson, provides executional leadership on critical business priorities and leads innovation efforts which will expand Blue Meridian’s work as it evolves. She explores new philanthropic investment opportunities, oversees and conducts due diligence on potential investees, and manages relationships with current investees. In addition to these responsibilities, Lizz leads all pipeline building work housed in The Studio @ Blue Meridian.

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