1. APS 1015H: Introduction to Social
Entrepreneurship
Class 8: Managing for Social Impact
Monday, November 7, 2011
Instructors:
Norm Tasevski (norm@socialentrepreneurship.ca)
Karim Harji (karim@socialentrepreneurship.ca)
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2. © Norm Tasevski & Karim Harji

3. © Norm Tasevski & Karim Harji
Agenda
• Rockefeller Foundation
• Managing for Social Impact
• Preparing your investment pitches
• Next Week
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4. Managing for Social Impact…
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5. © Norm Tasevski & Karim Harji
Two Main Responsibilities as a Manager of a
Social Enterprise…
Achieving financial goals
Achieving social goals
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7. © Norm Tasevski & Karim Harji
Achieving Financial Goals
Key Concepts
• Focus on your mission
• Know when to say “no”
• Build a business independent of yourself
• Test (prototype) often, and fail fast
The 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
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8. Achieving Social Goals…
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Exercise: From Intentions to Impact
When did you
volunteer?
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Exercise: From Intentions to Impact
How do you know you made an impact?
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Impact vs Net Impact
Is your effort better than what would have happened
anyways?
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Impact vs Net Impact
Is your effort better than what would have happened
anyways?
NET IMPACT is what matters
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Achieving Social Goals
1. Identify your social goals
– Theory of Change (defining your social value)
– Embed them within/across your operations
1. Measure the social value created
– How do you measure your goals?
– Address the common challenges in measurement
1. Communicate your impact
– Know what to say and who your audience is
– Be creative around your message
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Step 1: ID Your Social Goals
• What Social Benefit are you creating?
• How do you decide?
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Embedding “Social” across the Business
Model
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Cautionary Tale
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Exercise:
Balancing social & financial value
$ +
+
-
-
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Step 2: Measure the Social Value
Created
Why 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. © Norm Tasevski & Karim Harji
Why is Measurement Important?
“Not everything that can be counted
counts, and not everything that counts
can be counted”
“You can’t manage what you can’t
measure”
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Challenges 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)
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A 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.
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23. © Norm Tasevski & Karim Harji
SROI Snapshot:
TurnAround Couriers
Overview 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)
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Acumen Fund: social performance
measurement 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
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25. © Norm Tasevski & Karim Harji
Simple 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

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Step 3: Communicating Your
Social Impact
How?
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28. Break
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29. Your Investment Pitches…
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Elements 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
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31. © Norm Tasevski & Karim Harji
Elements 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
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An Example…
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