ENTR4800 Class 8 - Managing for Impact


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  • Outcome Area 1 - Catalyzing collective action platforms Platforms exist for impact investing industry leaders to coordinate investment and promote the infrastructure, activities, education, research and collaboration needed for the impact investing industry to tackle a wider range of social challenges more efficiently. The Global Impact Investing Network is recognized by industry participants as the industry’s leading voice and, by its active members, as an organization that facilitates more efficient and scaled impact investment. Outcome Area 2 – Developing industry infrastructure Organizations, processes and capabilities exist that can sustainably support impact investors to tackle a wider range of social challenges with for-profit investment efficiently and to understand and improve the performance of the industry. Outcome Area 3 – Supporting scaling of intermediaries Organizations and structures (such as private equity funds and investment clubs) exist and are widely used to aggregate institutional-scale impact investments and place them Initiative in Execution: Impact Investing 3 Update efficiently with investees who use this capital to improve the lives of poor and vulnerable people in a range of areas (including improving agricultural productivity and enhancing access to healthcare and decent housing) and geographies. Outcome Area 4—Contributing to fundamental research and advocacy “Impact investing” is a term widely used and understood by relevant constituents while an improved fact-base to understand the extent and influence of impact investors facilitates accelerated adoption of impact investment practices by institutional investors and supportive policy reforms by targeted governments in both countries whose investors are a major source of impact investing capital as well as those whose enterprises are major users.
  • Design thinking:Firstly it is not only convergent. It is a series of divergent and convergent steps. During divergence we are creating choices and during convergence we are making choices.relies on an interplay between analysis and synthesis, breaking problems apart and putting ideas together
  • Design thinking:Firstly it is not only convergent. It is a series of divergent and convergent steps. During divergence we are creating choices and during convergence we are making choices.relies on an interplay between analysis and synthesis, breaking problems apart and putting ideas together
  • What did you do as a volunteer?
  • What is your reaction?Why do some people see these types of images and act, and others not?Is there a difference if you are living it as opposed to seeing it from afar?Reflect on this for your term assignment
  • Focus on the distinction between entrepreneurand enterprise
  • Focus on the distinction between entrepreneurand enterprise
  • ENTR4800 Class 8 - Managing for Impact

    1. 1. ENTR 4800: Introduction to Social Entrepreneurship Class 8: Managing for Social Impact Monday, November 7, 2011Instructors:Norm Tasevski (norm@socialentrepreneurship.ca)Assaf Weisz (assaf@socialentrepreneurship.ca) 1
    2. 2. © Norm Tasevski & Assaf Weisz
    3. 3. © Norm Tasevski & Assaf WeiszAgenda• Rockefeller Foundation• Managing for Social Impact• Preparing your investment pitches• Next Week 3
    4. 4. Managing for Social Impact… 4
    5. 5. © Norm Tasevski & Assaf WeiszTwo Main Responsibilities as a Manager of aSocial Enterprise… Achieving financial goals Achieving social goals 5
    6. 6. © Norm Tasevski & Assaf Weisz 6
    7. 7. © Norm Tasevski & Assaf WeiszAchieving Financial GoalsKey Concepts• Focus on your mission• Know when to say “no”• Build a business independent of yourself• Test (prototype) often, and fail fastThe Market or the Mission? (Brinckenhoff)• The market is always right• The market is not always right for you• The mission should be your organization’s ultimate goal 7
    8. 8. Achieving Social Goals… 8
    9. 9. © Norm Tasevski & Assaf WeiszExercise: From Intentions to Impact When did you volunteer? 9
    10. 10. © Norm Tasevski & Assaf WeiszExercise: From Intentions to ImpactHow do you know you made an impact? 10
    11. 11. © Norm Tasevski & Assaf WeiszImpact vs Net ImpactIs your effort better than what would have happenedanyways? 11
    12. 12. © Norm Tasevski & Assaf WeiszImpact vs Net ImpactIs your effort better than what would have happenedanyways? NET IMPACT is what matters 12
    13. 13. © Norm Tasevski & Assaf WeiszAchieving Social Goals1. Identify your social goals – Theory of Change (defining your social value) – Embed them within/across your operations1. Measure the social value created – How do you measure your goals? – Address the common challenges in measurement1. Communicate your impact – Know what to say and who your audience is – Be creative around your message 13
    14. 14. © Norm Tasevski & Assaf WeiszStep 1: ID Your Social Goals• What Social Benefit are you creating?• How do you decide? 14
    15. 15. © Norm Tasevski & Assaf Weisz 15
    16. 16. © Norm Tasevski & Assaf WeiszEmbedding “Social” across the BusinessModel 16
    17. 17. © Norm Tasevski & Assaf WeiszCautionary Tale 17
    18. 18. © Norm Tasevski & Assaf WeiszExercise:Balancing social & financial value $ + + - - 18
    19. 19. © Norm Tasevski & Assaf WeiszStep 2: Measure the Social ValueCreatedWhy Measure, and for Whom?• Management – Performance management (meeting needs/objectives) – Organizational sustainability, attract new investment – Demonstrate the value created by organization• Social Investors (inc. funders) – Impact of grants, mission alignment – Accountability measures – Assess organization value, relate to risk/return (of investment)• Government Programs/Policy – Make the case for investment in organization/approach – Accountability measures 19
    20. 20. © Norm Tasevski & Assaf WeiszWhy is Measurement Important?“Not everything that can be countedcounts, and not everything that countscan be counted” “You can’t manage what you can’t measure” 20
    21. 21. © Norm Tasevski & Assaf WeiszChallenges in Measurement• Outputs vs. Outcomes• Attribution vs. Contribution• Qualitative vs. Quantitative• Prove vs. Improve• Rigour vs. feasibility “Metrics and evaluation are to development programs as autopsies are to health care: too late to help, intrusive, and often inconclusive.” (Trelsad) 21
    22. 22. © Norm Tasevski & Assaf WeiszA Note on SROI• Discounted, monetized value of the social value that has been created, relative to the value of the investment.• Pioneered by Roberts Enterprise Development Fund (REDF) and Jed Emerson• Various uses for, and approaches to, SROI• Despite “hype” around SROI, it can be resource-intensive, and issues around feasibility, replication, reporting still remain. 22
    23. 23. © Norm Tasevski & Assaf WeiszSROI Snapshot:TurnAround CouriersOverview of Target Population (sample) Avg Change in Societal Contribution•38% recruited directly from shelters (Target Employees): $9,391•23% female Average Number of Target Employees: 10•Average age: 21 Current Year Cost Savings to Society: $93,910•100% unemployed at time of hire•54% receiving social assistance at hire Cumulative Cost Savings (prior to Y5): $191,170•54% been involved with justice system Total Cost Savings to Date: $285,080•54% did not complete high school Cumulative Societal Payback Period: 1.8 years Cumulative SROI: 285%Sustainable Livelihood Outcomes (sample) Note: initial SCP investment = $100,000•89 youth in total have been hired over 5 years Employment Outcomes (sample)•100% target population recruited from shelters able to get out of shelter system •Increased target/non-target staff ratio to 83% and secure independent housing within 6 •69% continue to work at TAC (9) months of employment at TAC •15% moved onto mainstream employment in•85% who relied on income support through window cleaning industry (2) social assistance at time of hire able to get off and stay off •8% went on to post secondary education (1) 23
    24. 24. © Norm Tasevski & Assaf WeiszAcumen Fund: social performancemeasurement in the investment process• Due Diligence – Literature review: state of practice – Estimate # of people served over the life of the investment – Assess how delivery of those “outputs” compare (more or less favorably) to the “best alternative charitable option”• During Deal Structuring – Conversations on how to think about performance management over the life of the investment, not just “mandatory reports”• Post-Investment – Quarterly reporting – performance, capacity, strengths/weaknesses – Semi-annual “forced ranking” across portfolio against investment criteria - financial sustainability, social impact at scale, breakthrough insights, and high-quality leadership - as well as actual performance to date and the investment’s potential for impact in the future• Closed Investments – Short “exit memo” looking at results generated, financial return, and lessons learned 24
    25. 25. © Norm Tasevski & Assaf WeiszSimple Measures for Social Enterprise:Lessons from the Acumen Fund• Culture matters far more than systems – Tolerance for / learning from failure• If you build systems, start with a pencil and paper – Start simple; technology is an enabler not the solution• Think on the margin – Performance is always relative to what you had been doing before (past), to what your competition did over the same time period (peers), and to what you should have done (projections)• Count outputs and then worry about outcomes – “the conclusions you can draw from these outputs may not be made with scientific rigor, but they can inform businesslike decisions and raise important policy questions”• Don’t confuse information with judgment – Balance qualitative and quantitative – Use informed judgment, hold oneself accountable (to them) 25
    26. 26. © Norm Tasevski & Assaf WeiszStep 3: Communicating YourSocial Impact How? 26
    27. 27. © Norm Tasevski & Assaf Weisz 27
    28. 28. Break 28
    29. 29. Your Investment Pitches… 29
    30. 30. © Norm Tasevski & Assaf WeiszElements Important to the “Social Investor”• Overview and mission • Business model• Management and • Competitive advantage Advisors • Collaboration/• Problem partnerships – social issue being • Marketing and Sales addressed • Financial projections• Size of the problem • Financial requirements – how big is the social issue• Solution – Here’s how it works…• Value proposition – Inc. social benefit 30
    31. 31. © Norm Tasevski & Assaf WeiszElements Important to the Angel Investor• Overview and mission • Business model• Management and • Marketing and sales Advisors • Financial projections• Customer problem • Financing requirements• Market opportunity/size• Solution – Inc. social issue being addressed• Value Proposition• Competitive advantage• Where the solution fits 31