May 11, 2016; Politico New York

“I don’t think the question is fully answered on how we can maintain high education quality while we scale up,” Success executive quoted in a 40-page draft of a risk assessment.

NPQ has lately been looking at the issue of rapid growth among nonprofits. We recently spent a good deal of time on FEGS, for instance, which went belly up in New York City after a rapid growth trajectory. This story appears similar in a number of ways.

Ten-year-old nonprofit Success Academy Charter Schools often finds itself in the headlines because of its educational program. Serving New York City’s low-income communities, SACS has grown in a short period of time from a single school to a network of 34 schools serving 11,000 students, and they aspire to grow their system further, aiming for as many as 100 schools in NYC to see their model spread nationally.

Based on its students’ strong annual test results, SACS has been hailed as a national model of what effective charter school education can be and as the prescription for national educational improvement. They have also become a focal point for critics of school reform, who see their “no excuses” educational philosophy as bordering on child abuse and their students’ achievement as an outcome of policies that result in a student body that excludes the most challenging students.

Whether you are a SACS fan or not, there can be no argument that they have grown dramatically in a very short time. With such a successful decade behind them, it is not surprising that managing growth has become a challenge unto itself. A set of internal documents obtained by Politico New York provides a unique position to see some of these issues as they are playing out and for us to learn from SACS’ struggles.

Their mission, as stated on their website, is to “build exceptional, world-class public schools that prove that all children from all backgrounds can succeed in college and life; and serve as a catalyst and national model for education reform and help change public policies that prevent so many children from having access to opportunity.” Three issues that are common to rapidly growing organizations—protecting their mission, keeping their staff strong, and building an organization that can be effective for a large organization—are now on SACS’ agenda.

An internal memo describes the challenges they faced as the current school year began:

Our network has mushroomed with giant departments, and yet we are always out of breath and can barely do the work to support 11,000 kids. We certainly will not be able to support 50,000 kids in 100 schools unless we make dramatic changes and improvements.

Like many other nonprofit startups, SACS is the product of the dreams and aspirations of a single founder and a small group of talented people who joined the effort at its early stages.  For SACS, that individual is its CEO, Eva Moskowitz. But her strength and centrality to the organization can become a problem as well. According to a 40-page draft of a risk assessment from 2014, Moskowitz “possesses unique knowledge of and insight into the Success Academy pedagogy.” However, “absent the CEO, the organization may struggle to achieve outstanding scholar outcome.” Compounding the problem of succession is the recent departure of a number of senior level staff, thinning SACS’s talent pipeline and the ranks of potential internal successors for the CEO.

The human resources dimensions of a larger, more established organization are also proving difficult. The challenge of creating a resilient staff structure in a complicated environment is seen throughout the organization. As reported by Politico New York:

The risk most often cited by senior managers was the network’s ability to recruit and retain its existing staff, including school principals and top executives. “We don’t have a qualified talent pool to fill the spots left by the departing school leaders,” said one executive in the risk assessment. “We are already in the territory of putting people in leadership role[s] who are not quite ready yet.”

“We are growing so quickly that it’s almost impossible to come up with a robust leader pipeline in order to ensure high-quality leadership for every new school,” said another.

As a rapidly growing organization, SACS is faced with the need to build administrative systems that match its size and complexity and have the ability to grow as it grows. One Success executive was quoted saying, “I don’t think the question is fully answered on how we can maintain high education quality while we scale up.”

The network “used to rely on a couple of key employees hacking with spreadsheets late into the night to get things done.” Recognizing that this would not support them going forward, SACS commissioned a $20 million information management system that would serve SACS’s needs and which was hoped to become a national standard.  But to date the new system has not lived up to expectations: Despite the large investment, employees continue to “operate with…less secure products, including a Google Docs account that one executive interviewed for the risk assessment worried was ‘incredibly risky’ because of the amount of unsecured student and staff data being shared by employees.”

For SACS, these challenges are works in progress. Their successes in meeting each will drive both their organizational future and how well a larger SACS thrives. For those of us looking over their shoulder, there is much to learn about the seductiveness and perils of rapid growth.—Martin Levine