This question comes up often on grant applications. "How does your organization demonstrate scalability?" and it drives small businesses and newer nonprofits crazy.
In simple terms, scalability refers to the ability to manage growth. For a very small entity, the first private reaction is usually "I don't know…give us the funds to grow and we'll figure it out!"
A natural but fatal flaw in understanding what the grantor is asking.
What the grantor wants to know is that you have a plan and procedures to facilitate growth. The larger the grant sought, the more formal the procedure becomes.
When I work with a very new organization, I often call this developing a what-if strategy.
What if you actually won a million-dollar grant?
What procedures do you have in place that even a brand-new employee could understand?
For instance, let's take Human Resources. What procedures do you have (beyond advertising to fill job openings) to assure grantors that the people you hire have qualifications that fit their roles?
A hiring procedure manual will outline what educational and experience profile new hires have to meet. It will cover things like job descriptions, who conducts background and reference checks, where they look for that information and what they should do with it when they obtain it.
On the grant application you might summarize this by saying "Our hiring procedure manual clearly outlines the number of new employees needed for expansion, who can place the order for new hires, and defines the step-by-step procedures needed to verify applicants to ensure they meet the standards required."
BTW…I have seen more than one grantor that required actual copies of procedures at the time of the award decision. There's nothing scarier than receiving a letter that says "You have been selected as a grant recipient, contingent upon receiving documentation within three working days of _________ as stated in your application" and realizing you don't have hard copy.
Believe me, you usually can't create that kind of document out of thin air and get the appropriate board approvals and/or management signatures in 72 hours.
Notice that I said board approval. Any document that sets policy for an organization should be reviewed by the board and carry a signature page showing it was approved, and that approval should be read into the minutes of the board meeting.
The usual procedure for all that is to introduce the policy at one meeting, have it reviewed by the appropriate legal and financial staff, and then approve it at the next board meeting.
Of course a $500 grant from your local big box retailer or community foundation isn't going to require all that, but part of growth is thinking beyond the moment.
In short…plan ahead to get ahead.
Need a policy manual? I can help. Contact me at firstname.lastname@example.org for more information.