1C – GROWING SUSTAINABILITY: INCREASING INCOME AND SOCIAL IMPACT: LEYF STORY ...
Social Innoavation
1. Applying Social Innovation
to Your Organization
Facilitator: Geri Stengel
Thursday, October 22, 2009
9:30am – 1pm
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2. www.supportcenteronline.org
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2§ Discussion Series
3. Facilitator Biography
Geri Stengel president of Ventureneer, an online education and peer
support service, and Stengel Solutions, a strategic planning and
marketing consultancy. An adjunct professor at The New School, she
headed marketing at companies like Dow Jones and Physicians'
Online. Geri co-founded the Women's Leadership Exchange. She is a
past vice chair of Governance Matters and past board member of the
National Association of Women Business Owners – NYC
For questions about today’s workshop, please
email Geri Stengel at:
geri@ventureneer.com
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4. Agenda
• What Is Social Innovation?
• Social Enterprise
• Being Values Driven
• Social Investing
• Measuring Social Impact
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6. What Is Social Innovation?
• New strategies, concepts,
ideas and organizations that
meet social needs of all
kinds
– Working conditions
– Education
– Community development
– Health
– And more
Source: Wikipedia
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7. What Is Social Innovation?
• A new idea, method, or device to solve society’s
challenging problems
• The idea / model can come from public,
nonprofit, and private sector
• Method for doing things more efficiently,
effectively, and sustainably
• Some are already innovating:
– Teach for America, Wendy Kopp
– Benedict, Jim Fruchterman
– Grameen Bank, Muhammad Yunus’s
Source: Andrew Wolk, Root Cause
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8. A White House Perspective
• Find the most effective
• Focus on high-impact, result-
oriented non-profits
• Provide the capital needed to
replicate
• Partners with citizens,
nonprofits, social
entrepreneurs, foundations
and.
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9. What Is the Social Innovation Fund?
• Solves some of our nation’s most difficult
social challenges by working with the
grantmaking community to identify what
is working in communities
• Provides growth capital and other
support so that these programs can help
more people
• Improves the use of data and evaluation
to maximize the impact of government
funding
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10. How Will the SIF work?
Social Innovation
Fund
Investment in
Growth Capital to
Research and
Organizations
Evaluation
95% of SIF
5% of SIF
Via Directly to
Grantmaking Community
Institutions Organizations
85% of SIF 10% of SIF
Community Community Community
organizations organizations organizations
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11. Why Work Through Intermediary Organizations?
• Grantmakers know the nonprofit
community and possess the skills
necessary to find the most
promising approaches and help
develop them
• SIF can further leverage federal
dollars by inspiring the
grantmaking community to focus
on growing promising
organizations and matching
federal dollars with significant
private investment
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12. Ten Social Innovations
• Charter Schools
• Community-Centered Planning
• Emissions Trading
• Fair Trade
• Habitat Conservation Plans
• Individual Development Accounts
• International Labor Standards
• Microfinance
• Socially Responsible Investing
• Supported Employment
Source: Stanford Social Innovation Review
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16. What did they do right?
• http://www.philanthropyforum.org/forum/2009_Plenary_6_Vide
o.asp?SnID=807878483
Part 1, 6:30 minutes
Part 2, 10 minutes
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17. Who Gets It
• Founded Pam Omidyar
• Combines intensive research with
cutting-edge technology to
improve the health and quality of
life of tweens, teens and young
adults with chronic illnesses
• Create fun, innovative products
• Re-Mission, video game ,for
young people with cancer.
Improves treatment adherence
and other key health outcomes.
• gDitty combats sedentary
behavior in children as a way to
fight the effects of childhood
obesity.
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18. Who Gets It
• Headquartered in NH
• Helps people acquire fuel-efficient,
affordable and reliable vehicles
• Helps clients build
creditworthiness and provides car
selection and purchase assistance
to help low- and moderate-income
individuals create savings,
improve their access to health
care, and reduce carbon
emissions into the environment
• Since 2001, Bonnie CLAC has
guaranteed over $12 million in
loans for more than 1200 clients,
most of whom fall below HUD low-
income guidelines.
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19. Who Gets It
• Houston-based
• Trains and employs high school
students to perform technical
services for major corporations
• Seeks to enable economically
disadvantaged high school
students to enter the economic
mainstream by providing them
with the knowledge and work
experience required to succeed as
technical professionals
• Over 95 percent of Genesys
Works graduates go on to college.
Genesys Works has locations in
St. Paul, Minnesota and Houston,
TX and is planning to open a
Chicago location in 2010
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22. Trends in Social Enterprise
• Recognition that we need innovative
approaches to social change and
that the status quo is not sufficient
• Desire to harness private ingenuity,
resources, and energy for the public
good
• Appreciation for the value of socially
entrepreneurial behavior
• Interest in drawing on business
methods and markets, where
possible, to craft sustainable
solutions to social problems
• Need to learn more about what it
takes for socially entrepreneurial
efforts or endeavors to succeed
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23. Teach a Man to Fish, and You Feed Him for Life
• “Give a man a fish, and you feed
him for a day. Teach a man to
fish, and you feed him for life.”
• Experimentation with for-profit
and hybrid forms of organization
to serve social missions or
deliver socially important goods
and services
• More “strategic,” “engaged,” and
“outcomes-based” approaches to
social sector funding
• More attention paid to issues of
impact, scale, and sustainability
with the hopes of increasing
SROI
• Growing experimentation with
market-based approaches and
business-inspired methods
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24. Broad Categories
• Cause marketing
• Licensing
• Government purchase social
services
• Retail or Thrift Store
• Temp Agency
• Housing / Property Management
• Clerical Services
• Consulting Services
• Restaurant or Café
• Packaging and Assembly
• Employee Assistance Program
• Maintenance
• Technology Related
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25. Specific Examples
• Ben & Jerry’s in Times Square is
operated by a non-profit that is
using the store to make money
and place youth in part-time jobs
• An education foundation sold the
rights to a textbook it developed --
- commercialize intellectual
property
• a US based non-profit sells
licenses to use its programs in
other countries -- - expand
mission
• Girl Scout cookies – although
there are programmatic benefits,
there is no doubt that the cash
from the sale of cookies is critical
to the funding stream - generate
funds
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27. Types of Values Driven Businesses
Types of Values Driven Businesses
Products/services
that improve the
quality of the life in
the community
Invest profits in
Operate in a
social
social
environmental
responsible way
causes
Values-Driven Business:
How to Change the World,
Make Money, and Have Fun
By Ben Cohen, Mal Warwick
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28. Five Dimensions of Values Driven Businesses
Five Dimensions of Values Driven Businesses
Environment
Employees
Your
Community Suppliers
Company
Values-Driven Business:
How to Change the World, Customers
Make Money, and Have Fun
Environment
By Ben Cohen, Mal Warwick
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29. Employees
• Do your workers reflect the
ideas, spirit that define the
character of the organization?
• Does the organization reflect
the employees value to it?
– Wages
• Profit sharing
• Stock options
– Benefits
• Health, EAP, health club,
• Retirement
• Flex time, maternity leave
– Flex time
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30. Employees – cont’d
– Support, encouragement,
respect, opportunity
• Training
• Recognition
– Advancement
– Self expression
Benefits: lower turn over,
employees more productive,
attend to details better, easier
to recruit, higher quality
people, lower theft/fraud
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31. Employees – cont’d
Given the economic times,
how could you control costs
and add value for employees?
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32. Suppliers and Vendors
• They are a source of innovative
ideas, market intelligence, feedback
on operations and products
• You can have greater expectations of
them
– Supplier diversity
– Environmental friendly practices
– Vetting for child labor (Nike, site visits)
– Fair trade practices
– Employee practices
– Community orientation
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33. Suppliers and Vendors – cont’d
• Besides a fair price, what
expectations do you place on you
suppliers?
• How can you pressure them to
become more socially and
environmentally conscious?
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34. Customers/Clients
• How do you listen to your
clients to improve your
service?
• What improvements have you
made based on client
feedback?
• How can you go further to
improve their?
• Can you educate them to be
more socially and
environmentally conscious?
Benefits: customers more loyal
and forgiving when something
goes wrong, some customers
prefer companies with a cause
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35. Community
How can you partner within the
community to improve your
organization and the community?
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36. Environment
• How can you reduce
waste in production and
packaging process?
• How can you recycle?
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37. Determine Screening Matrix
• What values do you care about the
most?
• How much do the tactics within the
value costs?
• Which tactics have the most impact?
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40. What Is Socially Responsible Investing (SRI)?
An investment process that
considers the social and
environmental consequences of
investments, both positive and
negative, within the context of
rigorous financial analysis
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41. In What Do Socially Responsible Investors Invest?
• Environment
• Health
• Consumer-product safety,
• Diversity and human resources
policies
• Human rights and the supply
chain
• Community impact
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42. In What Don’t Socially Responsible Investors Invest?
• Make or sell weapons
• Alcohol
• Tobacco
• Pornographic products
• Poor environmental record
• Exploit labor in developing
countries
• Gambling or casinos
• Don’t respect animal rights
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43. Socially Responsible Investors Are Customizing Issues
Countries with poor records on
labor standards and human rights
or where conflict, civil strife,
terrorism, or pandemic diseases
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44. Who Are Social Responsible Investors?
• Individuals • Hospitals • Corporations
• Businesses • Foundations • Religious institutions
• Universities • Pension funds • Nonprofit organizations
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45. The Numbers:
From 1995 to 2007
• SRI assets grew 324%
From $639 billion in $2.71 trillion
• Overall assets under management
Grew 260%
From $7 trillion to $25.1 trillion
• $1 out of every $9 U.S. is involved
in socially responsible investing
From 2005-2007
• SRI assets grew vs. overall assets
under management
18% vs. 3% respectively
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46. SRI – Not a Fad
• Socially/environmentally screened
funds have substantially grown
• Money managers are increasingly
incorporating social/environmental
investing
• Shareholder resolutions on social,
environmental and governance
issues rose dramatically
• A growing number of institutional
investors support shareholder
resolutions on social, environmental
and governance issues
• Shareholder advocacy produces
changes in corporate practices
• Community investing has grown
significantly
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50. Metrics: Understandable, Inexpensive and Useful – Acumen
• What social impacts is your
venture aiming to achieve?
• What is the relationship
between these impacts and
the activities of your venture?
• How well is venture achieving
them? What are you learning
about how to improve this?
• Can you afford to regularly
produce these impacts?
• How much value is being
created for society as a result?
Source: Social Impact Assessment and Building Your
SROI, Cathy Clark Faculty Advisor, GSVC Director,
Research Initiative on Social Entrepreneurship Columbia
Business School
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51. GSVC Defines 3 Steps
1. DEFINE social value
proposition:
Theory of Change
2. QUANTIFY how you’ll track
social value:
Impact Value Chain: top three
social output indicators
3. MONETIZE intended social
value:
Social Return on Investment
(SROI)
Source: Social Impact Assessment and Building Your SROI,
Cathy Clark Faculty Advisor, GSVC Director, Research Initiative
on Social Entrepreneurship Columbia Business School
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52. Step 1. Define Your Social Value Proposition:
Tool 1. Theory of Change
• Focused: concise IF-THEN
statement or statements that define
the intended social impact and how
the operation intends to cause it to
happen
– “If poor women in East Africa have
access to a microbicidal contraceptive,
then AIDS will spread less rapidly in
those countries.”
• Detailed: fine-grained set of cause
and effect assumptions at the core of
a strategy to create social change or
achieve social impact.
Source: Social Impact Assessment and Building Your SROI, Cathy Clark Faculty Advisor, GSVC Director, Research
Initiative on Social Entrepreneurship Columbia Business School
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53. Step 2. Quantify Top 3 Social Indicators
Identify your top indicators of
social value
• These are outputs you can
measure directly as part of your
business operations
• They should relate in a compelling
way to the ultimate desired social
outcomes of the venture
• We call them “indicators” or “social
outputs.”
• Competition requires that you
specify the 3 most important.
Source: Social Impact Assessment and Building Your SROI, Cathy
Clark Faculty Advisor, GSVC Director, Research Initiative on Social
Entrepreneurship Columbia Business School
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54. Tool: Value Impact Chain
Inputs è Activities è Outputs è Outcomes è Goal
Alignment
What is put Venture’s Results that Changes How well
into the primary can be (increases or outcomes
venture activities to measured by decreases) to align with
produce the venture – the social intended
financial and Social system goals; activity
social value Indicators and goal
adjustment
Source: Social Impact Assessment and Building Your SROI, Cathy Clark Faculty Advisor, GSVC Director, Research
Initiative on Social Entrepreneurship Columbia Business School
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55. Tool: Value Impact Chain
Inputs è Activities è Outputs è Outcomes è Goal
Alignment
What is put Venture’s Results that Changes to Activity and
into the primary can be the social goal
venture activities measured system adjustment
-
What would
have
happened
anyway
= Impact
Source: Social Impact Assessment and Building Your SROI, Cathy Clark Faculty Advisor, GSVC Director, Research
Initiative on Social Entrepreneurship Columbia Business School
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56. Step 3: Monetize Impact
Identify the dollar value equivalent
of your projected social impact to
create a social return on
investment.
• There is no standard methodology
in current use to monetize social
return and teams are strongly
encouraged to build on existing
work, innovate, and rigorously
defend your decisions.
• That said, we will walk through the
social return on investment (SROI)
model used to date in the GSVC
and by REDF. (www.redf.org)
Source: Social Impact Assessment and Building Your SROI,
Cathy Clark Faculty Advisor, GSVC Director, Research Initiative
on Social Entrepreneurship Columbia Business School
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57. Tool 3: SROI Steps in Calculation of SROI
1. Quantify outputs/outcomes where
possible
2. Translate into economic equivalent
where possible using proxies
3. Develop social cash flow projection
4. Subtract outputs/outcomes that
would have happened anyway (refer
to proxy data)
5. Where outcome is qualitative,
discuss what it is and how you will
know it’s happening
6. Cite your sources and assumptions
clearly
Source: Social Impact Assessment and Building Your SROI,
Cathy Clark Faculty Advisor, GSVC Director, Research Initiative
on Social Entrepreneurship Columbia Business School
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59. Suggested Reading
• Obama Pushes For Social Innovation
http://www.nptimes.com/09Jul/bnews-090701-1.html
• Stanford Social Innovation Review
http://www.ssireview.org/
• http://andrewwolk.com/
• http://www.fullcirclefund.org/
• Values-Driven Business: How to Change the World, Make
Money, and Have Fun, Ben Cohen and Mal Warwick
• On www.socialvc.net under Resource Library SROI examples.
• Human Service Fellowship
http://socialvc.net/index.cfm?fuseaction=Page.viewPage&page
Id=108&parentID=58&nodeID=1
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