Asset-Based Community Development

Asset-based community development is a methodology that seeks to highlight the potential to make use of the strengths within communities as a means for sustainable development. This method focuses attention internally, identifying internal strengths by helping communities discover, map and mobilize their local assets. This approach becomes important in development efforts, as it looks primarily at a communities needs.

This is the focus of a paper by Coady Institute authors Alison Mathie and Gord Cunningham, “Who is Driving Development: Reflections on the Transformative Potential of Asset-Based Community Development.”

The paper takes a look at some aspects of Asset-Based Community Development. Particularly it offers a set of principles and practices to mobilize and keep sustainable community development. It also makes lines of distinction between these principles and practice — such as the concept of social capital, social psychology, enhancement of capacity to engage communities and so on. Finally, the paper offers challenges to implementing asset-based community approaches to sustainablility.

For more on the article, click here.

Working Wikily

Several grassroots level organizations today utilize online networks for communication and mobilization. Online networks was often seen as a secondary activity. But not since US President Barack Obama’s election. Obama rallied more than 13 million supporters and raised a record-breaking $745 million through out his presidential campaign using  what the Monitor Institute has termed  “Working Wikily.”

“Working Wikily” is a phrase that describes the new ways that people are applying network theory and networked technology to do the work they have always done in a more collaborative form.[1] A  Stanford Social Innovation Review Summer 2010’s research paper, “Working Wikily” by Diana Scearce, Gabriel Kasper and Heather McLeod Grant, looks at the way this phenomenon has grown to represent  greater openness, transparency, decentralized decision making, and collective action.[2]

The Benefits of “Working Wikily”

The research paper indicates that online social websites such as Facebook, Twitter and blogs are widely practiced by nonprofit organizations, however, only a very few of these organizations are utilizing these social tools to fundamentally change their operation and enhance their social impact. Kiva and Ocean Conservancy’s International Coastal Cleanup are the rare exceptions. The authors identified five prime reasons why people should use a network to achieve social impacts: weaving community, accessing diverse perspectives, building and sharing knowledge, mobilizing people, and coordinating resources and action.

The Challenges of “Working Wikily”

However, challenges of working wikily exist: In some cases, a more traditional operation of centralized and closed approach works better than the open community platform. For example, a website  that holds restaurant reviews from ordinary patrons  may not serve as well as an authoritative gourmet critiques from New York Times. A dominant opinion channel hold by experts may work much better in the organization that needs to take firm control of a product or process in order to maintain certain quality or when responsibility needs to be clearly assigned. For social change leaders, the challenge is to understand when it is best to maintain tight control and rely on the skills of experts, and when it is best to let go and rely on networks to yield the best result.[3]

The Lessons Learnt from “Working Wikily”

To wrap up the paper, the authors address five suggestions of how to work wikily based on their experiences and lessons learned from the pioneers in the area. 1. Design projects around a problem to solve, not around the tools. 2. Combine top-down and bottom-up approaches. 3. The rules of relationships still apply. 4. Understand your position within networks. 5. Share what you’re doing and learning. In sum, working wikily is not all or nothing. Hold on to control where it is necessary, but also look for small, strategic opportunities to let go.

[2] Diana Scearce, Gabriel Kasper, Heather McLeod Grant, “Working Wikily”, P32, Stanford Social Innovation Review, Summer 2010

[3] Diana Scearce, Gabriel Kasper, Heather McLeod Grant, “Working Wikily”, P35, Stanford Social Innovation Review, Summer 2010

Can Social Enterprise Scale Through Franchising?

The benefits of franchising are well understood – the franchisor bears lower capital expenditure to expand, yet derives revenue through the franchise, the franchisee does not have to invest time and energy in building a brand or a captive market, moreover he inherits the parent company’s best practices, systems and technology. The model is fairly standard and widely used in the corporate world – from car rental agencies, to fast food, to supermarkets.

One of the benefits that the model brings with it is the ability to replicate fast, and to scale. This fits perfectly into the challenge several social enterprises face. So can the franchising model be used to replicate and scale social enterprise, and therefore create a greater impact?

This is the topic of a publication by the Association of German Foundations, “Social Franchising: A Way to Systematic Replication to Increase Social Impact.”

At the outset, the report begins by building a clear benefit for social franchising. The opening section talks about the benefits of not reinventing the wheel, and the need for scale. Social enterprises it says, have an “obligation” to scale, seeing that many people are still not reached by existing projects and that social needs remain high. Often non-profits succumb to the idea of developing something new, rather than perfecting and scaling what they know already works. The imperative to scale therefore is high. And this is the case that the report builds.

Further, the report takes a closer look into how replication can be achieved, including franchising. It goes on to define some of the characteristics of commercial franchising, as well as drawing a distinction between the former and social franchising.

The third part of the report enumerates the opportunities and challenges for social franchising. The principal opportunities include: faster and more cost-effective replication of non-profit programs, improvement through systemic transfer of know-how and ongoing learning, financial gains and benefits in network synergies.

Of course, franchising is not without its risks for social enterprises. Some risks documented in the report include: risk of changing initial mission, risk of negative reputation, difficulties of monitoring and evaluation, difficulties in standardization, and competition over fundraising.

Further, the report highlights a framework for implementing social franchising, including suggestions to make models sustainable.

The report draws from several case studies including the work of the Annapurna Conservation Area Project in Nepal, Reach a program of Freedom from Hunger and Aflatoun.  Its depth and detail provide for a good guide to any social venture looking to expand and grow via the franchising model.

Read the entire report here.

“Social Innovation” and “Social Enterprise”: A Powerful Combination

When we use terms like social entrepreneurship, social innovation and social enterprise, terminologies and definitions can be vexing and it can get overwhelming with the numerous debates and discussions around the same. In his article, “Social Innovation” and “Social Enterprise”: A Powerful Combination, author Jerr Boschee tries to present his insights in a concise commentary that presents the definitions out for debate while proposing a strategic framework of combining social innovation with social enterprises as the sustainable way forward.

His commentary makes it easy to break down the issues of social enterprise and innovation for social entrepreneurship into three basic aspects:

Firstly, theory and academic research in this sector and the correlations with field practitioners- the chicken and egg story.

Boschee agrees with recent thought leadership on framing theories for social entrepreneurship and abandons the typical academic approach of “building management practice from theory” for this sector. The proposal is to adopt instead the approach of building management theory from practice and to have an academic approach rooted in practical experiences. Boschee also applauds recommendations for further research to be conducted at the interface of innovation and enterprise as this intersection seems to be the only practical solution for viability as gleaned from learnings of on-field practitioners.

Secondly, Boschee looks at the opposing views in traditional definitions of social entrepreneurshi.

The crucial need for defining the domain in a felicitous way is emphasized and Boschee brings to the fore that the best way of framing this new field lies at the intersection of the two dominant schools of practice and thought: the Social Enterprise School and the Social Innovation School.

It is the opposing perspectives of these two dominant schools of thought that have led to the contrary definitions for the sector leading to a sort of status-quo where one mandates social good through innovation and adaptation where entrepreneurs serve as change agents for creating and sustaining social value. While on the other hand, the other side argues that earned revenue is the sine qua non of social entrepreneurship because only earned income will ever allow a non profit to become sustainable and that the entrepreneurial component comes from ensuring financial viability which is essential to effect social good in a self sufficient manner.

Thirdly, Boschee takes a look at the powerful combination of innovation and enterprise as the way forward for achieving social impact in a self sufficient sustainable way.

Boschee believes he has finally found common ground and describes a migration from innovation to entrepreneurship as the way for non profits to move towards sustainability and self- sufficiency which he further describes in his book carrying the same title. He describes how he sees innovation and enterprise to be like siblings or flip sides of the same coin- different yet very deeply interlinked.

Boschee gives insights into the frustrations and operational struggles and inherent uncertainties experienced by innovators and hence requiring the enterprise approach for scaling up and to bring in the viability component to ensure sustenance. This he believes is the true differentiator between initiating new projects (innovation in concept and design) and sustaining the projects for ongoing social impact which is the underlying mandate for the social entrepreneurship sector. He perhaps implies the need for moving away from donor driven projects to self sufficient market driven initiatives as the solution for sustainability for the future.

Boschee believes social innovators are vital to any hopes we have to address the ills of the world and commends their chutzpah which is inspiring. Nonetheless, he also strongly believes that social enterprise is the tool that can move social innovators towards financial viability.

Summing up, Boschee urges the need for working together to create a harmonious eco system of innovators, entrepreneurs, academics and practitioners. He formulates a three step process for success in the social entrepreneurship sector:

• Start with practitioners
• Build theory from their experiences
• Create a strategic framework of innovation and enterprise for the next generation of practitioners to enable sustained impact.

Read Boschee’s entire article here.

This abstract has been contributed by Yeshesvini Chandar, a Villgro Fellow 2010.

Being Intentional About Innovation

Innovation is often about what is new, what is being done differently. Innovation in the social sector is also rife. But can one develop a strategy around innovation, to maximize social value? Can being intentional about innovation contribute to the creation of more consistent and reliable commodity for social good?

The WB Kellog Institute commissioned a study, “Intentional Innovation: How Getting More Systematic About Innovation Could Improve Philanthropy and Increase Social Impact” to explore these questions. The work has been carried out jointly by the Monitor Institute and Clohesy Consulting.

The purpose of the report is to help non-profits and philanthropists understand that innovation is not necessarily as organic as it might seem. Drawing from several case studies, reports, books, and conversations, it lays down a framework for building a “Creating a Culture for Innovation.” The framework it points to has five sections:

1. Setting the Conditions and building the committmenent to innovate.

2. Defining the Problem or Opportunity. In short identifying the targets for innovation.

3. Generating the idea

4. Engaging in piloting and prototyping.

5. Diffusion and scaling the innovation.

By understanding the framework and the process of innovation, the report provides a tool for donors and philanthropists to formulate ways in which they can be ‘intentional’ about creating innovation, and thereby increasing their social impact.

Read the entire report here.

The Algorithm of Social Enterprise

Can social enterprise be brought down to an algorithm? And through that medium can it be proved to be sustainable? That’s what Jeff Trexler of Pace University, USA, looks at in his piece “Social Enterprise as an Algorithm: Is Social Enterprise Sustainable?”

Trexler begins his piece by taking a look some of the reasons for some of the inherent problems in understanding what a social enterprise is, and how the terms used are often quite contradictory. One reason is that there is poor understanding of organizational structures and mediums. In the beginning of his piece, he also takes a closer look at the term ‘sustainability’ and how it applies to social entrepreneurships. Trexler argues that the terms and ideas used to associate the industry –  for example, the notion that social enterprise is the first mode of organization to respect natural system ecologies – leads to a level of rhetoric about the sector, which might not be based in any principle.

To enable social enterprise to move beyond being the latest fad in doing good, Trexler puts the industry through an assessment of its links between system dynamics and social institutions.  The aim of his paper to this end is to:

• To offer a new definition of social enterprise, one that looks at delivers a concise explanation as well as explains the diverse values and ventures within the industry.  Trexler sets out to accomplish this through moving away from trying to identify a “prescriptive mission or an array of common characteristics.”
• He also aims to provide an explanation for the social enterprise sector’s organizational altruism that goes beyond it being a social fad. Trexler argues that social enterprise is not so much of a disruptive innovation as it is viewed. Rather, it works on the recurring tendency of those engaged in charity to adopt traits of potential supporters, which in themselves are sustainable.
• Lastly his article sets out to explain why social enterprise is transitional. His view is that social enterprise is a particular organizational technology, and that every enterprise is a social enterprise. This he says flows from the very nature of corporate identity, and not from ethical imperatives.

Trexler provides some compelling reasoning to the notions of social enterprise. Most interesting is the point he keeps reiterating, that social enterprise is transitional, that its greatest contribution would be to remind the world of what corporate identity is. That there should not be a distinction between “social” businesses or non-profit/for-profit businesses. His argument for his is that the distinction slots social enterprise as a niche sector, inherently assuming a conceptual divide between social and business values.

Read Trexler’s entire article here.

Double Bottom Line Investment Methodologies

As a tool of investment, double bottom line methodologies are a relatively new concept for socially consicous investors. As the distinctions between several kinds of investors start to blur, the focus has shifted on measuring social returns.

Measuring double bottom line investments is limited by several factors including the lack of established standards and best practices. The Double Bottom Line Project supported by the Rockefeller Foundation aims to help practitioners apply a rigorous and useful method to assess social returns.

The recommendations are found in the publication, “Double Bottom Line Project Report: Assessing Social Impact in Double Bottom Line Ventures.” The report provides a complete analysis of different methods, as listed below:

Theories of Change as applied by New Schools Ventures Fund

Balanced Scorecard as applied by New Profit Inc.

Acumen McKinsey Scorecard as applied by Acumen Fund

Social Return Assessment as applied by Pacific Community Ventures

AtKisson Compass Assessment for Investors as applied by Angels with Attitude

Ongoing Assessment on Social Impacts as applied by REDF

Social Return on Investment as applied by REDF

Benefit-Cost Analysis as applied by Abt Associates and AmeriCorps

Poverty and Social Impact Analysis as applied by the World Bank

Each tool is classified further by applicability to a ‘Process’, ‘Impact’ or ‘Monetization,’ as well as where its primary application lies — with non-profits or for-profits. Further, the report goes into details of how each tool has been applied, drawing from each principal user’s experience.

Read the complete manual here.

Understanding Social Impact Assessment

There is a common thread that holds together those who work in the development sector: creating social change, creating an impact. Donors, investors, practitioners, governments, enterprises — they are all concerned about the change they effect. It is after all their raison d’être.

It seems ironic, therefore that measuring or understanding impact is a concept that is rather nebulous, often secondary, and sometimes scoffed upon. Part of the reason might be that their isn’t a widely accepted way to measure impact, since every organization finds value in using a particular system, as do each set of investors. Sometimes enterprises themselves don’t see value in spending time on measuring impact, preferring instead to just “get on with the job.”

As an investor in social enterprises, Villgro Innovations Foundation is among several other investors which could potentially find value in not just measuring impact, but shifting to a more strategic form of investing – impact investing

According to the Global Impact Investing Network(GIIN), “Impact investments aim to solve social or environmental challenges while generating profit. Impact investing includes investments ranging from producing a return on principal capital to offering market-rate or even market-beating financial returns.”

It is important to contrast Impact Investing as defined above from the concept of Socially Responsible Investing (SRI). The latter employs a method of “negative screening” – avoiding bad or harmful investments. Impact investing on the other hand seeks to invest in companies with the aim to harness their power of enterprise.

A recent Monitor Institute study, “Investing for Social and Environmental Impact,” illustrates the concept further. Take for example the investments made by E+Co, a nonprofit mezzanine fund focused on making debt and equity investments in businesses that develop and sell modern energy services. Because of their work, in Tanzania a student is reading at home by the light of an electric bulb powered by a solar panel her mother bought on credit from a local distributor.  Or the small business in Cambodia that is expanding with debt from a microfinance bank. The bank is originating new loans after accessing commercial capital markets through a $110 million loan fund structured in 2007 by Blue Orchard, a Swiss microfinance-focused asset management company, and Morgan Stanley. The loan fund, rated by Standard & Poor’s, was syndicated on commercial terms among institutional investors, such as pension funds, in Europe and the United Kingdom.

So how do investors implement an impact investing strategy? The Rockefeller Philanthropy Advisors in a publication titled “Solutions for Impact: From Strategy to Implementation” offers solutions. The 70-page publication serves as an excellent starting point for framing impact investing.

It details the processes to consider, broadly classified into two sections – Establishing a Strategy and Implementing and Maintaining Strategy. The processes for both involve the following stages:

• Articulating Mission and Values
• Creating Impact Themes (or focus-areas such as water, energy, climate change and so on)
• Defining Impact
• Developing an Impact Investing Policy,
• Generating a Deal Flow (to identify organizations that are best suited to meet your impact policy)
• Analyzing Deals (in short, due diligence)
• Evaluating Impact (to evaluate your projects, and guide future investment)

There are several tools/methods available to evaluate impact. Some  organizations develop their own metrics to measure impact. Recently, there has been a move towards developing a common frameworks and tools to measure impact. Some commonly used frameworks and methods are listed below:

• Impact Reporting and Investment Standards (IRIS), which is beind jointly developed by the Global Impact Investment Network. IRIS is working to develop a “common language” that will allow for comparisions and communication across a breadth of organizations using a set of indicators.
• Social Return on Investment is another commonly used method. SROI is essentially derived from a cost-benefit method of analyzing value the valued created and destroyed by an organization in the course of making a change in the world. (Source: http://www.proveandimprove.org/new/tools/sroi.php)
• Global Reporting Initiative (GRI) is a tool which consists of core and optional indicators to report on the level of compliance for six dimensions of social performance – environment, human rights, labor practice and work place, society, product responsibility, and economic impact. (Source: www.microfinanceinsights.com)

None of these tools are meant to be a comprehensive way of measuring impact. It is up to investors and enterprises to choose how best to adopt available methods to measure impact. One thing remains certain though, in the business of “doing good, and doing well,” evaluation and measuring of impact is a question of necessity.

Tell us what your experience has been with measuring impact. What tools have you found useful? What impact investing policy does your organization have in place?