Archive for December, 2009

We are happy to be teaming up as a media partner with Villgro for their UNCONVENTION this week in Chennai. As part of the Villgro Awards, Beyond Profit is in the running in the Media Category. We’re up against DARE and India Today for the media house that covers social entrepreneurship the best. Wish us luck!

Meera Seshadri from Villgro shares her views on the importance of building the rural development ecosystem and why the UNCONVENTION will be a pathbreaking event.

It’s quite a heavy-handed statement to call your first-ever conference the ‘UNCONVENTION.’ Talk about pressure. The expectations and hopes that lie in the details of the day, not to mention in the days that follow, are paramount. But that’s what makes Villgro so special. We’re ready to take on the social entrepreneurship and innovation sectors in a BIG way – we don’t want to take baby steps, we want to make huge efforts to shed light on the ecosystem in a way that has never been done before. And we hope we can create a revolution.

Villgro is bringing something new to the table with the UNCONVENTION. Though there have been numerous forums in India where either innovation or social entrepreneurship have been discussed and knowledge has been shared, there has been no single forum that has addressed both of these ideas – and has brought in the most important element – the rural poor. India houses 70% of her population in her villages. Villgro, with its 9 years of experience in linking innovation, social entrepreneurship, and the rural poor, realizes that they cannot be left behind in the revolution. » Continue reading “The Unconvention”

The greatest challenge in the social enterprise space: scale. How do you move beyond a few cases of great work and great impact to a sector that has the potential for scale? How do you institutionalize and build good organizations around the successes that many social entrepreneurs have had with small pilots? There seems to be a lot of hype around some small scale organizations, but there needs to be a big push – a big push to create models that are actually scalable, cost effective, and efficient; a big push to attract investment; and finally, a big push to attract talent to the sector.

This is what Neera Nundy, Managing Partner of Dasra and leader of the track on Intellectual and Human Capital at the Khemka Forum on Social Entrepreneurship tomorrow, emphasized when I had the chance to sit down with her last week. According to Nundy, “As organizations think about growing their outreach, they need to think about growing thier teams in terms of expertise and skills.” Funding needs to be thought of as not only supporting programs, but being used to hire the people that you need to grow. » Continue reading “Building Alternative Talent Pools”

[microfranchising [mahy-kroh-fran-chahyz-eeng] noun – the systematization and replication of enterprise models that are designed to alleviate poverty]

Microfinance Institutions have built the relationships and framework for delivering market access to the poor. But credit and entrepreneurship alone cannot build a strong economy. How can we use microfinance channels to deliver additional value that strengthens local economies and tackles poverty? Microfranchising, says Melissa Richer, the Founder of Ayllu, could be the way forward.

Microfinance is booming, and support systems such as research, consulting, and advocacy have emerged to help the industry mature. This consolidation process is making it easier to evaluate microfinance’s successes and limitations.

Grameen Bank argues that MFIs should act as a platform for many products and services, rather than offer just one financial product. This is because the poor, and especially the destitute, need access to more than just credit in order to repay a loan. They need access to social services like healthcare, housing, and food.

An obstacle for organizations that deliver social services is forming relationships with the poor, which is an expensive process that takes years. A key to MFI success is high-quality relationships with their clients. In fact, according to Alex Counts, CEO of Grameen Foundation USA, an MFI’s most important asset is its relationship with the poor, not its loan portfolio (Alex Counts, Reimagining Microfinance).

MFIs can leverage their high-quality relationships to act as a distribution channel for social services. A platform approach prepares borrowers for success, thus increasing an MFI’s potential for long-term success. It also encourages MFIs to constantly innovate by experimenting with new offerings (either directly or through partnerships) that can help overcome industry-wide limitations.

Microfranchising, the systematization and replication of enterprise models that are designed to alleviate poverty, can help MFIs meet their social and financial bottom lines. Unlike traditional franchising, a microfranchise is a branch of the franchisor that can be owned by a corporation or by the franchisee. In exchange for operating the microfranchise, the franchisee is insulated from market shocks, and receives training and mentoring from the franchisor. The best franchises operate with a strong community feedback loop where experimentation, continual learning, and adaptation can take place. » Continue reading “The Next Generation of Microfinance: Microfranchising”

We were happy to have teamed up as a media partner with the Skoll Centre for Social Entrepreneurship at Oxford’s Said Business School for their inaugural Skoll: Emerge. Our Beyond Profit UK Representative, Eugenia Afonso, shares her thoughts on the conference.

A record inch and a half of torrential rain fell across southeast England last Sunday. The Skoll:Emerge event for students held in Oxford that day, however, laughed in its face. From the moment coffee was served in the morning to the last applause in the evening, the conference kept on pulling the best punches. The calibre and quality of the speakers was matched only by the ideas and enthusiasm of the students.

Entrepreneurship, a much debated term laden with nuances, can be an innate quality belonging to those gifted few, but it can also be something learned, born out of careful nurturing. It is based on this second premise that centers like The Skoll Centre for Social Entrepreneurship at Oxford’s Said Business School have chosen to school this generation’s most hopeful entrepreneurs – through directed research, education, and collaboration.

Skoll:Emerge was structured around the many facets the field encompasses. Four tracks guided the diversity of interests. The practical and operational “starting out as a social entrepreneur,” the advice giving “careers in social entrepreneurship,” the macro-level “global challenges,” and the inspiring “ideas workshop” allowed students and others alike to get a true feel for what social entrepreneurship means – out there in the ‘real world.’

While creating a cocoon of positive energy, Skoll:Emerge also spelled out the challenges and did not shy away from bringing them to the fore. The speakers latched on to this approach as well. From Laila Iskandar Kamel (CID Consulting) we heard about how politics can try to put an end to your efforts; from Caroline Casey (Kanchi) we understood the scarcity of funding sources; and from Pamela Hartigan (The Skoll Centre) we learned about the the need to foster and encourage a stronger ecosystem that supports not only the “heroic individual” but those that support initiatives as agents of changes themselves. In addition, an honest and open discussion about the perils of consultancy and a mini open careers session were very much appreciated and welcomed by the students.

The content of each session I attended was genuine quality. The best, in my opinion, was perhaps the least obvious of all the talks. It was entitled “The Middle East: Innovations in a Cultural Medley,” during which we were treated to an hour in the company of Naif Al Mutawa (Teshkeel, the “99” project) and Nader Khatib (EcoPeace). Both these gentlemen are testament to the principle values of what constitutes social enterprise. Both innovative, both winning admirable social gains, and both working in environments that would seem to be anything but amenable to change, they have overturned judgments and surpassed expectations. Naif has redesigned the concept of the super-hero and in so doing has fostered intercultural understanding.  Nader heads the only organization that still works across Israeli-Palestinian borders—proving  that shared values transcend many divisions.

As an event designed for students; it could not have provided a more holistic forum for mentorship, networking, and idea pitching. Not only were there stories of success, but practical career steps were addressed as well as a true “mapping” of opportunities and possibilities available. It created the space that is so vital for students to grow and take those first steps.

On that note, I leave you with the star speaker Caroline Casey’s top five tips on becoming a social entrepreneur. It would be churlish to keep only the students in the know!

1. Learn to be the duck; gliding with ease and paddling frantically below the surface.
2. Use failure as a necessary feedback tool; learn the lesson and move on
3. Be prepared to view the knock backs as motivation
4. Good friends are essential along the way; make sure you have the right support network
5. Self-awareness; know why you are doing what you are doing

Yesterday, Katie Hill, India Portfolio Manager of the Acumen Fund explored the importance of measuring performance for social enterprises. Today, she explores the challenges.

This blog entry is part of Beyond Profit’s media partnership with the Khemka Forum on Social Entrepreneurship in Hyderabad, India on December 8-9, 2009. As part of our media partnership, we have invited the leaders of three of the Forum’s tracks – Financial Instruments, Building Alternative Talent Pools, and Performance Metrics – to contribute to our blog.

Clearing the Biggest Hurdles

The challenges of impact measurement may seem infinite. I am just going to name a few biggies.

Getting the Data

The sheer logistical challenge of data collection is often overlooked. Bootstrapped social enterprises often don’t have big budgets or extra staff to complete wide customer surveys. So, we need to use what we’ve got. GEWP, for example, can use their 1-year warranty cards to collect impact data. LifeSpring hospital, a maternity hospital chain targeting low-income families, can use its registration process for new mothers to collect pertinent data, such as education backgrounds or household income levels.

From the investor seat, Acumen Fund experienced data scarcity challenges in our early days, and we’re still making improvements here. Simply collecting 5-7 meaningful data points every quarter, let alone the 30 we strive for today, at first seemed like a Herculean feat. Now, we get monthly data from our investees.

Inconsistency of Metrics in the Field

It seems like every new organization is reinventing the measurement wheel and, therefore, each investor is using slightly different metrics. One solution is IRIS. Evolving out of the Global Impact Investor Network (GIIN), a small group of stakeholders came together to think about a taxonomy of consistent metrics for social and environmental impact. The result has been Impact Reporting and Investment Standards (IRIS), which is an open source of common terms and indicators for financial, operational and social metrics on initiatives ranging from agriculture to education to healthcare. This common language is the first step towards truly building an industry.

Analyzing the Data

There is no point in collecting numbers unless you’re learning something from them. So, how do we go about calculating meaningful indicators from a slew of data?  It doesn’t have to be fancy. Use a pencil and paper, Google spreadsheets; use whatever works. As companies scale up, with high volumes of data and multiple locations, more sophisticated tools might be necessary. These could be standard MIS systems like Tally or Salesforce.

As investors, we faced similar challenges of moving from bulky spreadsheets to something more functional; we could not find an appropriate off-the-shelf software tool. So, we co-developed Pulse with Google.org. Pulse is a web-based platform for tracking and managing social investments. Pulse has already been used by a number of peer investors and is now being taken to the next level with the support of Skoll Foundation, Lodestar Foundation, and Salesforce.com.

Correlation vs. Causality

One of the trickiest points on impact measurement is whether we can ever have confidence that our initiative caused the intended outcome. For example, if patients from LifeSpring Hospital demonstrate improved health indicators in mothers and babies, is it because of their visits to LifeSpring (causation) or is it because of another aligned factor—the family cares about their health, so they both visit LifeSpring and engage in a number of other healthy activities, like drinking safe water (correlation).

Randomized control trials, through players like MIT’s Poverty Action Lab, are the “gold standard” in proving causality. In India, IFMR is also making great strides. These evaluations can be costly and are very time-intensive. They should be used strategically and will require additional resources, as most social enterprises with thin margins can’t afford this line item.

Cost-Effectiveness of Measurement

To the point above, there is a general sentiment that social and environmental impact measurement is expensive and social enterprises don’t have an endless budget. It may be helpful here to distinguish between social outputs and social outcomes. For example, if SKS Microfinance distributes HUL’s Purit water filter to its borrowers, the “output” is X number of homes with access to clean drinking water. The “outcome” is the demonstrable impact—reduced incidence of waterborne diseases that result in healthcare cost-savings, higher school attendance, etc.

So, until the cost of doing these rigorous assessments falls, we think it is our responsibility to count the outputs as consistently as possible. The conclusions you can draw from these outputs may not be made with scientific rigor, but can inform businesslike decisions and raise important questions on impact.

Start Somewhere

We would argue that the lack of precision in social impact measurement is no excuse for not trying. Accurate impact measurement will only emerge if we start making imperfect calculations today and constantly improve upon them. There are a handful of impact measurement tools/methodologies out there. Each one in isolation may be problematic, but combined and cross-checked, the effort could lead to collective accuracy. And we need this collective accuracy if we hope to ever demonstrate that the social enterprise hypothesis holds water.

Beyond Profit is happy to be a media partner with the Khemka Forum on Social Entrepreneurship in Hyderabad, India on December 8-9, 2009. As part of our media partnership, we have invited the leaders of three of the Forum’s tracks – Financial Instruments, Building Alternative Talent Pools, and Performance Metrics – to contribute to our blog. The following is a contribution from Katie Hill, India Portfolio Manager, Acumen Fund. She explores the importance and challenges of measuring performance for social enterprises.

I recently visited rural Uttar Pradesh, India and met with a number of customers in off-grid villages who had purchased a D.Light Design solar lantern to replace their kerosene burner. D.Light strives to deliver both a financial and social return; Acumen Fund, my employer, invested in D.Light based on the hypothesis that this light will bring a higher standard of living—improved education from evening study hours, cost-saving from reducing kerosene expenditure, enhanced livelihood from adding more hours of productivity to a general store or tailor. Speaking with the customers in the village, the social impact seems obvious – literally in front of your eyes. But, aside from anecdotes, has D.Light or Acumen Fund “proven” that this impact exists?

Today, I sifted through the quarterly performance data for GEWP, a business selling low-cost drip irrigation products to small-holder farmers across India. Working for a social venture fund, my job involves not only tracking the financial viability of each company we invest in—monitoring revenues, profits, cash flows, and expected exit values—but the social value being generated. Even more, we hope to demonstrate the “social return on investment”—for every dollar we invest in GEWP, how many smallholder farmers double their incomes from precision agriculture? Taking this even further, how do I compare the impact of the GEWP drip unit to the impact of the D.Light solar lantern? These are only some of the many challenges social investors face.

The social entrepreneur’s challenges are different than those of the social investor. Any entrepreneur (social or otherwise) struggles with data collection when he or she has a small team, a limited budget, and rudimentary systems. The social entrepreneur has similar issues which are compounded by the need to collect social impact data, not only to track her double bottom line and to answer to her stakeholders, but also as part of good business management. Consumer data is crucial to identifying growth opportunities or knowing where your business may be going astray. One must understand the customers’ demographics, what motivates them and what they value.

In this short post, I hope to share some of the impact measurement trends Acumen Fund has seen in the last decade, as well some thoughts on solutions to the toughest challenges.

Why Measure?

Why measure? It’s costly. It’s often muddled, and difficult to really “prove” anything. But I would argue that the future of the social enterprise sector—this idea (and it is still only an idea) that enterprises may be a more efficient means of improving the lives of the poor—rests entirely on our ability to get this right.

Social enterprise seems to be reaching a tipping point—new investors and enterprises are popping up everywhere, buzz words are flying. With excitement comes scrutiny. Social enterprises and investors had better be sure that they can answer tough questions:

• Have your products/services actually reached the ‘poor’? (Related: How do we define poor?)
• Are your investments drastically improving lives or only marginally?
• Is the business approach actually the most cost-effective means to reduce poverty or is this hype?

You can take a little sigh of relief. A lot of extremely intelligent people have already put their brainpower towards these issues. I only have space to name a few.

• The “social return on investment (SROI) framework” has contributed a compelling theory for social investors.
• The essay “Measuring Innovation: Evaluation in the Field of Social Entrepreneurship” by Mark Kramer synthesizes a range of ideas around how to develop practical and balanced measures of impact.
• The recent framework, “The Base of the Pyramid Impact Assessment Framework: Enhancing Mutual Value Creation” by Ted London suggests how to account for the positive and negative impact of social ventures.
• The “Catalog of Approaches to Impact Measurement,” by SVT Group, offers a number of useful tools.

To be continued tomorrow…

Monday, November 23, 2009 – Friday, November 27

Whether in the biggest cities or the smallest villages, one of today’s biggest issues is transportation. With rising fuel costs and the cost we pay through emissions of millions of vehicles, transport is hardly affordable nor is it clean. Affordable, comfortable, safe and environmentally-friendly transportation innovations are being explored and commercialized by many organizations worldwide. This week, we’ve picked up only a few of these, which are making pioneering steps in the area.

Tuesday, November 24, 2009

Social Enterprise of the Day – Tata Nano

As its tagline goes, the Tata Nano is “the people’s car” in every sense. With its compact design and unbelievable price point of INR 1 Lakh (US$2100), the Nano has created history in the automotive sector with its “never-done-before” most affordable price. What began with a dream to provide comfortable travel to entire families that balance themselves on unsafe two wheelers is today giving hope to many who aspire to have four wheels.

Wednesday, November 25, 2009

Social Enterprise of the Day – Reva Electric Car Company

India’s first and only electric car Reva is a battery-powered electric vehicle designed for low speed, congested, urban conditions.  The fully automatic two door hatchback runs on batteries and as compared to other electric vehicles has an onboard charger to facilitate easy charging which can be carried out by plugging into any 15 Amp socket at home or work. As simple as charging a mobile phone!

Thursday, November 26, 2009

Social Enterprise of the Day – Institute for Transportation & Development Policy

Founded in 1985, the Institute for Transportation and Development Policy (ITDP) works towards  the promotion of environmentally sustainable and equitable transportation policies and projects worldwide. Focusing on program areas such as developing high-quality, low-cost mass transit, planning and advocacy for cycling and walking, and strengthening the bicycle and rickshaw industries, the ITDP helps build local knowledge and skills while generating greater public awareness of viable sustainable transport solutions.

Friday, November 27, 2009

Social Enterprise of the Day – Institute for Affordable Transportation

The Institute for Affordable Transportation (IAT) is a not-for-profit public charity devoted to improving the lives of the world’s poor by providing simple, low-cost vehicles in order to facilitate community transformation. IAT’s goal is to connect missionaries, churches, NGOs, community leaders, and volunteers who share a goal of bringing hope to the developing world through effective transportation. IAT open up possibilities for faster water delivery to remote villages, for quickened access to medical care, and for the safe transport of goods and people through rugged terrain.