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APS1015 Class 9: Managing for Social Impact
- 1. APS 1015: SocialEntrepreneurship Class 9: Managing for Social Impact Wednesday, July 3, 2013 1 Instructor: Norm Tasevski (norm@socialentrepreneurship.ca) Karim Harji (karim@socialentrepreneurship.ca)
- 2. © Norm Tasevski& Karim Harji Agenda • Assignment review • Managing for Social Impact • Preparing your enterprise presentations • Next Week 2
- 3. Managing for SocialImpact… 3
- 4. © Norm Tasevski& Karim Harji Two Main Responsibilities as a Manager of a Social Enterprise… 4 Achieving social goals 4 Achieving financial goals
- 5. © Norm Tasevski& Karim Harji 5
- 6. © Norm Tasevski& Karim Harji Achieving Financial Goals 66 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. © Norm Tasevski& Karim Harji Exercise: From Intentions to Impact 8 When did you volunteer?
- 9. © Norm Tasevski& Karim Harji Exercise: From Intentions to Impact How do you know you made an impact? 9
- 10. © Norm Tasevski& Karim Harji Impact vs Net Impact Is your effort better than what would have happened anyways? 10
- 11. © Norm Tasevski& Karim Harji Impact vs Net Impact Is your effort better than what would have happened anyways? NET IMPACT is what matters 11
- 12. © Norm Tasevski& Karim Harji Achieving Social Goals! 1212 1. Identify your social goals – Theory of Change (defining your social value) – Embed them within/across your operations 2. Measure the social value created – How do you measure your goals? – Address the common challenges in measurement 3. Communicate your impact – Know what to say and who your audience is – Be creative around your message
- 13. © Norm Tasevski& Karim Harji Step 1: ID Your Social Goals! 1313 • What Social Benefit are you creating? • How do you decide?
- 14. © Norm Tasevski& Karim Harji 14
- 15. © Norm Tasevski& Karim Harji Embedding “Social” across the Business Model 1515
- 16. © Norm Tasevski& Karim Harji Exercise: Balancing social & financial value 16 + + -‐ -‐ $
- 17. © Norm Tasevski& Karim Harji Step 2: Measure the Social Value Created! 1717 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
- 18. © Norm Tasevski& Karim Harji Why is Measurement Important?! 1818 “Not everything that can be counted counts, and not everything that counts can be counted” “You can’t manage what you can’t measure”
- 19. © Norm Tasevski& Karim Harji Challenges in Measurement! 1919 • 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)
- 20. © Norm Tasevski& Karim Harji A Note on SROI! 2020 • 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.
- 21. © Norm Tasevski& Karim Harji SROI Snapshot: TurnAround Couriers! Avg Change in Societal Contribu3on (Target Employees): $9,391 Average Number of Target Employees: 10 Current Year Cost Savings to Society: $93,910 Cumula3ve Cost Savings (prior to Y5): $191,170 Total Cost Savings to Date: $285,080 Cumula3ve Societal Payback Period: 1.8 years Cumula3ve SROI: 285% Note: ini3al SCP investment = $100,000 21 Overview of Target Popula;on (sample) • 38% recruited directly from shelters • 23% female • Average age: 21 • 100% unemployed at 3me of hire • 54% receiving social assistance at hire • 54% been involved with jus3ce system • 54% did not complete high school Employment Outcomes (sample) • Increased target/non-‐target staff ra3o to 83% • 69% con3nue to work at TAC (9) • 15% moved onto mainstream employment in window cleaning industry (2) • 8% went on to post secondary educa3on (1) Sustainable Livelihood Outcomes (sample) • 89 youth in total have been hired over 5 years • 100% target popula3on recruited from shelters able to get out of shelter system and secure independent housing within 6 months of employment at TAC • 85% who relied on income support through social assistance at 3me of hire able to get off and stay off
- 22. © Norm Tasevski& Karim Harji 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 22
- 23. © Norm Tasevski& Karim Harji Simple Measures for Social Enterprise: Lessons from the Acumen Fund! 23 • 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)
- 24. © Norm Tasevski& Karim Harji Step 3: Communicating Your Social Impact! 2424 How?
- 25. © Norm Tasevski& Karim Harji 25
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- 28. © Norm Tasevski& Karim Harji Elements Important to the “Social Investor” 28 • Overview and mission • Management and Advisors • Problem – social issue being addressed • Size of the problem – how big is the social issue • Solution – Here’s how it works… • Value proposition – Inc. social benefit • Business model • Competitive advantage • Collaboration/ partnerships • Marketing and Sales • Financial projections • Financial requirements
- 29. © Norm Tasevski& Karim Harji An Example… 29