This year’s U.K. Strategy Challenge winners helped the nonprofit Power2 shape its national expansion to capitalize on demand for its Teens & Toddlers program.
On a spring day in a north London nursery school, eight teenagers fanned out through the classroom to help their young charges with an art project that involved nearly as much paint on hands and faces as on paper and easels. The toddlers alternated between serious and silly as the teens offered earnest advice and encouragement.
Also in the room were five Morgan Stanley employees who observed the fun and mutual benefit on both ends of the childhood spectrum — a prime example of the two-way program philosophy at the heart of the London-based Power2 program (formerly known at Teens & Toddlers). The financial services experts, who had been paired with Power2 as part of Morgan Stanley's fifth annual U.K. Strategy Challenge pro bono program, watched as the "at risk" teen instructors lent their guidance and maturity to the toddlers, while the toddlers reminded the teens of the joy, innocence, and energy of youth.
The centerpiece of Power2's youth-development initiative pairs troubled teens with nursery children in classroom settings. Over 18 weeks, the teens build mentoring relationships that also help them build vocational and interpersonal skills. The nonprofit's immediate challenge: How to expand its successful program most effectively to new school districts across England?
Building Out Success
"After spending time with the staff, we could see that the organization was run exceptionally well," said Paul White, a Vice President in Corporate Services at Morgan Stanley. "To meet their current goals of serving roughly 1,200 teens per year at 88 schools, Power2 has embraced technology to streamline efficiency and establish a robust social media presence to highlight their successes and attract potential donors."
Power2 was already well-known in London and northwest England for its success with Social Impact Bonds (SIBs). First implemented in the U.K. in 2010, SIBs are rooted in contracts between private organizations and public sector entities that pay investors based on public sector savings from improved social outcomes.
One of Power2's more recent SIB achievements was a contract with London's Department of Work and Pensions (DWP) to deliver improved student attendance, behavior, and academic performance at several Greater Manchester schools. Not only did Power2 meet and surpass the DWP's expectations, it also won achievement awards that recognized its outstanding efforts as a nonprofit.
However, the organization's success felt a little intimidating to the Morgan Stanley team. "Ironically, it was Power2's routine excellence that gave us pause," said Cassandra Chandler, a Vice President in Institutional Equities. "Once we had completed our initial deep dive into Power2, it was obvious that they had amazingly qualified talent in their executive team, as well as a program that was unique in their market. So what could we possibly offer to a social service organization at the top of its game?”
A Tale of Two Databases
It wasn't until Power2 presented its ambitious goals, that the team understood the scale of its aspirations. These included expanded programming to reach 2,400 kids a year throughout England. "We recognized the depth of its mission and began to strategize how we could harness preexisting information to shape the expansion, without compromising programming quality or financial stability," Chandler said.
The first thing they needed was information to understand the challenge. The team set out to develop two databases: the "Ramage Scale" — named after Operations Vice President Michael Ramage — covered U.K.-wide school district partnerships; the second — the " 'Nando Scale" after Internal Audit Vice President Fernando Prieto Gonzalez — covered U.K. nonprofit data for identifying similar charities as potential partners.
Together, these databases would help the team set expansion parameters for Power2. "They were essentially the backbone of the package, and we specifically tailored them to the research that Power2 performs daily," said Daniel Hawkes, a Vice President in Investment Management. "We also made them user friendly so that the staff could immediately incorporate them into their regular routine."
But they didn't stop there. To round out their analysis and proposal, the team concluded that Power2 could best hit its growth target by redesigning parts of its business model, namely school partnership identification and development, extra training for staff and volunteers, and more targeted sales and marketing materials. These enhancements would make Power2's national expansion all the more sustainable.
A Different Kind of Victory
"The two databases seem like the standout contributions in the work provided," Hawkes said. "But the other elements really took our solution to the next level, and, for Power2, would lay a foundation that a national, well-established charity would need to service a broad constituency."
After eight weeks filled with early morning and late-night conference calls, countless emails, and seemingly endless presentation edits, the team delivered its findings at Morgan Stanley's London headquarters to a packed room of nonprofit senior executives, as well as colleagues and all the other teams working with the other organizations. Going into their presentation, the team learned that Power2's leadership had already decided to bring their findings to the nonprofit's board of directors for consideration and approval.
The rest was a bonus. "When the judges announced that we had won the Strategy Challenge, we were a bit shocked, but also delighted by the win and that our hard work had been recognized by the judging panel, not to mention our Power2 friends and colleagues," said Hawkes. "The victory was humbling for all of us, but what we had realized was how fortunate we were to have the chance to give back to a nonprofit such as Power2, through a program administered by Morgan Stanley; not something that you'd normally expect from a global investment bank. And to earn the respect and affection of those teens and young children, while knowing that you'll be able to affect them in a positive, profound, and long-term way, that's the triumph that stays with you."