i
Praise for Social Entrepreneurship
“A timely contribution that equips people in organizations and more broadly in society
with the tools, language, and frameworks to effect change and contribute to building a
greener, fairer, and more just society. At once a primer on the social enterprise movement
and a translation of academic research into practitioner action, this book demonstrates
why we must all become social entrepreneurs to face today’s pressing challenges. At a time
of multidimensional crises globally, this is an immensely useful companion for moving
from ideas to impact.”
Julie Battilana, PhD, Joseph C.Wilson Professor of Business Administration,
Harvard Business School, USA; Alan L. Gleitsman Professor of
Social Innovation, Harvard Kennedy School, USA; Founder and
Faculty Chair, Social Innovation and Change Initiative, USA
“Social entrepreneurship and innovation are all about finding new ways to address tough
problems, creating value, defying constraints, and identifying opportunities –​exactly the
transformational work required to shift the status quo. By outlining the social entrepreneurship skill set and mindset, this book empowers individuals to become changemakers
and take up the cause of advancing social justice and equity through the dynamic framework of social entrepreneurship.”
Cheryl Dorsey, President, Echoing Green, USA
“Everybody is a changemaker! We can teach and learn skills that help us make more
effective and lasting changes. This textbook is a valuable guide to get that journey started.
What are you waiting for?”
Bill Drayton, JD, Founder, CEO, and Chair, Ashoka, USA
“Are you working to build a more just, sustainable, and equitable world? Teresa Chahine
has assembled an indispensable, practical manual for the aspiring social innovator. This
book will take you on a journey to shape your strategy, advance your skill set, and demystify the different approaches to driving transformational social change.”
Don Gips, MBA, CEO, Skoll Foundation, USA
“From launching innovations to measuring outcomes,Teresa Chahine breaks down every
critical step of social entrepreneurship and challenges us to think more deeply and powerfully about our impact. Anyone not satisfied with the state of the world (which should be
all of us!) needs to read and apply her lessons.”
Seth Goldman, MPPM, Co-​founder of Honest Tea and Eat the Change;
Board Chair of Beyond Meat, USA
ii
“With the world never having been as polarized as it is today, it is no longer business as
usual. The need for social entrepreneurship has never been as significant, and Chahine’s
book is a timely and invaluable guide to social entrepreneurship for veterans and
newcomers alike. She explains how they can mobilize their resources in innovative and
daring ways to make a real difference in tackling today’s challenges, thereby leaving a
lasting impact on the communities they serve.”
Lubna Olayan, Chair of Executive Committee and Deputy Chairperson of
Olayan Financing Company, Saudi Arabia; Chair of the Board of
Trustees, Alfanar Venture Philanthropy, London, UK
“A super helpful and comprehensive introduction to the field of social entrepreneurship.
Such a wonderful guide to teach students that their innovations can make a difference in
the world!”
Laurie Santos, PhD, Professor of Psychology,Yale University, USA;
instructor on “The Science of Well-​Being” course on Coursera;
Host of The Happiness Lab podcast
“Social business is a special form of social entrepreneurship where the business is devoted
entirely to solving human problems. Chahine’s book will make it easy to understand the
whole spectrum of social entrepreneurship.”
Professor Muhammad Yunus, 2006 Nobel Peace Laureate;
Chair, Yunus Centre; Founder, Grameen Bank, Bangladesh
Peer Reviewers
“This book is the type of resource I would have loved to have when I was in graduate
school thinking about how to scale big ideas that challenge the status quo.”
Elisabeth Becker, PhD Research Associate, Social Entrepreneurship,
Yale School of Management
“Among the myriad of textbooks I have reviewed for use in a graduate social entrepreneurship seminar, Dr. Chahine’s book is my absolute favorite.Well researched and written,
with excellent case illustrations and hands-​on advice for every step of the entrepreneurial
journey. I highly recommend it to anyone interested in effecting sustainable social change
in their community.”
Maria Christina (MC) Binz-​Scharf, PhD Associate Professor of Management,
Colin Powell School of Civic and Global Leadership, City University of New York
“So you wanted a guidebook for How to Change the World? This is it. It’s freaking
brilliant.”
Zoe Chance, MBA, DBA Senior Lecturer, Marketing, Yale School of
Management; Author, Influence is Your Superpower
“This book is a great resource for students, teachers, and social entrepreneurs. It allows for
a holistic understanding of social entrepreneurship while providing a simple roadmap and
tools to excel in your endeavor.”
Alain Daou, PhD Associate Professor of Entrepreneurship Director, Nature
Conservation Center, American University of Beirut
iii
“Teresa Chahine’s Social Entrepreneurship is a treasure trove of innovation theory and practice. It was a great introduction to my freshman at the University of Colorado who love
learning about tools to solve the world’s biggest problems. From PESTEL and SWOT to
inspiring portraits of social entrepreneurship leaders such as Mohammed Yunus, this is an
engaging text for a university-​level course on social entrepreneurship.”
Laura DeLuca, PhD Anthropology & Social Innovation Sewall
Residential Program (RAP) Faculty, University of Colorado
“This is not only a textbook, but a great source for inspiration.You will find out the step-​
by-​step guide on how to find ideas for social entrepreneurship, create a social startup, and
scale it up. If you dream for a better world, you definitely need this book.”
Yulia Fomina, PhD Associate Professor, Department of Economics
Dostoevsky Omsk State University
“It’s rare to find a book that can be equally useful in the classroom and in the field.
Dr. Chahine’s book is just that. Five years ago I made it just a few pages into the previous edition before deciding that this was the right book for my undergraduate course.
Fast forward to today and our organization has used it to conduct workshops for women
entrepreneurs, to refine our own processes, and to align our actions with our mission.This
new edition brings even more relevant material to the reader. I highly recommend it to
anyone interested in making the world a better place for all.”
Marcy Hessling O’Neil, PhD Assistant Professor, Department of Anthropology,
Michigan State University Anthropologist and Co-​Founder,
Three Sisters Trois Soeurs Foundation
“I’ve been searching for an easy-​to-​read textbook that very eloquently delivers a clear
guideline for undergraduate students. I searched online and found this book in a previous
edition. I directly fell in love because the structure is so easy and systematic. It conveys the
basic knowledge of social innovation to funding opportunities for anyone who wants to
build their social ventures. This book is also equipped with case studies, interviews with
social entrepreneurship actors, and intriguing questions to help students consider and
structure their steps.”
Anggun Pesona, MM Core Faculty Member, PPM School of Management,
Indonesia Founder,Terminal Hujan Foundation Strategic Partnership,
PLUS (Social Entrepreneurship Platform)
“Dr. Chahine’s text contributes an important practical guide toward a vitalization of the
field. Entrepreneurship offers new methods and frameworks to re-​imagine the ‘business’
of public health. Coming generations of public health practitioners require pragmatic
skill sets to address health challenges innovatively and effectively. Social Entrepreneurship
is an easily accessible and practical guide for academics and practitioners to navigate
challenges of community engagement, intervention design, sustainability of evidence-​
based programs and services, and more. This work will surely contribute to catalyzing a
new entrepreneurial approach to public health.”
Ross Shegog, PhD Professor, University of Texas School of Public Health
Adjunct Professor, University of Texas School of Biomedical Sciences
Director of Communications, UTSPH Prevention Research Center
iv
“Written in a conversational style and filled with examples and steps to take, Dr. Teresa
Chahine’s new edition is a must buy for all who want to start a new social venture
or improve one that is in place. Using the framework of design thinking and creative
problem solving this book helps you unlock your passion to solve a social challenge with
pages full of practical steps and tools that you will need. Each chapter stands on its own
and can be used to improve any stage of your organization from ideas for networking to
funding and how to grow beyond your startup years.”
Daniel R. Sterkenburg, MBA, DBA, CPA (inactive) Associate Professor of Business
“Professor Chahine’s book assists aspiring social entrepreneurs to navigate through what
I call The Fog of Social Enterprise, with a well-​organized set of tools and information
representative of the field’s best practices and lessons learned.”
Joseph Szocik Strategic Adviser,The Family Success Institute
“I work with social workers who are knowledgeable about understanding human behavior
in the environment, how to work effectively in community, and in utilizing evidence-​
based interventions. However, when pursuing social enterprise, they feel less comfortable.
Dr. Chahine’s book is required reading in my graduate social entrepreneurship class. It
unpacks and translates business and entrepreneurship concepts and provides practical tools
for social workers interested in social innovation and enterprise as a platform for transformative change.”
Marijo Upshaw, MSW, MBA Social Entrepreneur, Activist,
Instructor,Wayne State University
v
Social Entrepreneurship
Social Entrepreneurship provides a 10-​stage framework for building impactful ventures
within and across new and existing organizations.The book summarizes the basic steps and
tools needed to understand a social or environmental challenge of your choice, develop
potential solutions, build a business model, measure outcomes, and grow your impact.
This fully updated second edition builds on the concepts and tools introduced previously,
broadening the scope to those working or preparing to work in organizations globally.
Concepts addressed include intrapreneurship and, for the first time, extrapreneurship,
which considers innovating across organizations to achieve collective impact. Featuring
international case studies and interviews with leaders in the field, this comprehensive
guide spans multiple sectors, including health, the environment, education, agriculture,
commerce, finance, and retail. Summaries, exercises, and key learning points help to aid
and cement learning. A widely regarded and valuable text, Social Entrepreneurship should
be core reading for advanced undergraduate and postgraduate students studying entrepreneurship and social entrepreneurship. The book’s applied 10-​stage approach will also
be valuable for those in executive education as well as professionals and entrepreneurs
looking to equip themselves with the tools needed to succeed in social change.
Teresa Chahine is the inaugural Sheila and Ron ’92 BA Marcelo Senior Lecturer in
Social Entrepreneurship at Yale School of Management, USA. Her research and teaching
focus on social and environmental drivers of public health outcomes, and on the role of
social entrepreneurship as a potential pathway toward achieving the public health mission.
She hosts the podcast Impact & Innovation, and teaches a publicly available course on social
entrepreneurship through Coursera. Connect with her on Twitter at @teresachahine, and
visit www.soc​iale​ntre​pren​eurs​hipb​ook.com to learn more about resources for teaching
and learning social entrepreneurship.
vi
vi
Social Entrepreneurship
Building Impact Step by Step
Second Edition
Teresa Chahine
vi
Cover image: © Getty Images
Second edition published 2023
by Routledge
605 Third Avenue, New York, NY 10158
and by Routledge
4 Park Square, Milton Park, Abingdon, Oxon, OX14 4RN
Routledge is an imprint of the Taylor & Francis Group, an informa business
© 2023 Teresa Chahine
The right of Teresa Chahine to be identified as author of this work has been
asserted in accordance with sections 77 and 78 of the Copyright, Designs and
Patents Act 1988.
All rights reserved. No part of this book may be reprinted or reproduced or utilised
in any form or by any electronic, mechanical, or other means, now known or
hereafter invented, including photocopying and recording, or in any information
storage or retrieval system, without permission in writing from the publishers.
Trademark notice: Product or corporate names may be trademarks or registered trademarks
and are used only for identification and explanation without intent to infringe.
First edition published by Routledge 2016
Library of Congress Cataloging-​in-​Publication Data
Names: Chahine, Teresa, author.
Title: Social entrepreneurship : building impact step by step / Teresa Chahine.
Other titles: Introduction to social entrepreneurship
Description: Second edition. | New York, NY : Routledge, 2023. |
Earlier edition published as: Introduction to social entrepreneurship. |
Includes bibliographical references and index. |
Identifiers: LCCN 2022015261 (print) | LCCN 2022015262 (ebook) |
ISBN 9780367556860 (hardback) | ISBN 9780367556877 (paperback) |
ISBN 9781003094715 (ebook)
Subjects: LCSH: Social entrepreneurship.
Classification: LCC HD60 .C4195 2023 (print) |
LCC HD60 (ebook) | DDC 658.408–dc23/eng/20220405
LC record available at https://lccn.loc.gov/2022015261
LC ebook record available at https://lccn.loc.gov/2022015262
ISBN: 9780367556860 (hbk)
ISBN: 9780367556877 (pbk)
ISBN: 9781003094715 (ebk)
DOI: 10.4324/​9781003094715
Typeset in Bembo
by Newgen Publishing UK
ix
Contents
Acknowledgments Introduction How to Use this Book 1
Definitions 3
Attributes of Social Entrepreneurship 6
Social Entrepreneurship as a Path to Sustainable Development 10
Institutions Supporting Social Entrepreneurs 17
Case Study: Practicing Extrapreneurship through Collaborative Jujitsu 19
Next Steps 22
Chapter Assignment 22
Notes 23
xii
1
1
Researching Your Topic 24
2
Talking to People 48
Understanding a Social Challenge 24
Data Is Power 26
Approaching Your Research 26
Diving into Research: Identifying Your Challenge 28
Diving into Action: Characterizing Your Challenge 32
Tracking and Interpreting Your Investigation 38
Case Study: Health Leads 44
Next Steps 46
Chapter Assignment 46
Notes 46
Understanding the Lived Experience 48
What Is a Community? 48
Knowledge Equity 49
Stakeholder Analysis 51
Community-​Driven Research 52
Reaching Out to People 58
After You Talk to People: Piecing It Together 60
Case Study: Ciudad Saludable 63
x
x Contents
Next Steps 65
Chapter Assignment 65
Notes 66
3
Designing a Solution 67
4
Developing Your Idea Further 91
5
Measuring Outcomes 116
6
Ensuring Financial Viability 136
Innovation and Design Thinking 67
A Design Process to Try 71
During and After the Design Process 75
Tools for Testing and Refining Your Social Impact Idea 77
Beyond Design 84
Incremental Innovation and Disruptive Innovation 86
Case Study: Hippocampus Learning Centers 86
Next Steps 89
Chapter Assignment 89
Notes 90
Getting Your Idea Out There 91
Articulating Vision, Mission, and Values 93
How It Works 94
Evaluating Your Idea 104
Case Study: Daily Table 110
Next Steps 113
Chapter Assignment 113
Notes 114
Social Outcomes versus Social Impact 117
Thinking about Your Success Metrics 117
Challenges and Best Practices in Measuring Social Outcomes 124
Building Systems for Data Collection and Analysis 128
Dos and Don’ts of Success Metrics 129
Case Study: Soufra 132
Next Steps 134
Chapter Assignment 134
Notes 135
Sources of Revenue 136
Payment Models 141
Distribution Models 143
Operational Efficiency across Delivery Models 146
Financial Forecasting 151
Case Study: Aravind Eye Care System 157
Next Steps 159
Chapter Assignment 160
Notes 160
xi
Contents xi
7 Funding Your Endeavor 162
8 Structuring as an Organization 190
9 Pitching and Communications Strategy 218
Overview of the Social Investing Spectrum 162
Sources of Funding 163
Funding Vehicles 169
Evolution of Social Investment 174
Finding the Right Fit at Different Stages of Your Endeavor 180
Nonfinancial Support 181
Creating Your Resource Dashboard 185
Next Steps 186
Chapter Assignment 187
Notes 187
People 190
Process 195
Governance 198
Legal Structure 202
Considerations for Growth 212
Next Steps 215
Chapter Assignment 216
Notes 216
Packaging and Pitching Your Business Plan 219
Building a Communications Plan 227
Evaluating Your Communications 235
Next Steps 238
Chapter Assignment 238
Notes 238
10 Expanding Your Reach Thinking Beyond Your Endeavor 241
Case Study: Catalyst 2030 251
Handing Off 252
Chapter Summary 255
Chapter Assignment 255
Notes 256
Index 240
257
xi
Acknowledgments
Thank you to my students, colleagues, and loved ones for inspiring and supporting this
second edition. There are so many people along the way who have contributed to this
resource and made it possible. First, my dear friend and mentor Omar Bagasra, who
suggested writing a book about a topic I felt passionate about. Second, my colleagues at
Harvard T.H. Chan School of Public Health, who helped me create the first course on
social entrepreneurship at my alma mater and supported my carving out new paths for
public health pedagogy: Nancy Turnbull, Nancy Kane, Rick Siegrist, Jack Spengler, and
John Levy. Third, my public health peers and sources of inspiration, who dedicate their
lives to improving drivers of health.
At the core of this book are the social entrepreneurship practitioners and thought
leaders who shared their knowledge and experience through the case studies, interview
boxes, examples, and sidebars. No field of knowledge and practice is led by any one
person or group of people. Social entrepreneurship especially is a field of trial and error.
With humility and shared evidence and data, we are working to advance our collective
knowledge and practice. Thank you for your generosity of time and spirit.
My peer reviewers, listed in the preceding pages, taught me a valuable lesson in collaboration while crafting this second edition. They chopped it up, mixed it around, removed
and added ingredients, and challenged me to think about things in a whole new way. The
resulting outcome was completely different from anything I could have imagined on my
own. Thank you for your time and brains and brilliance, for teaching this topic, and for
guiding me along. I am so grateful and so lucky to be able to share this exploration with
you. A special thanks to M. C. Binz-​Scharf, who immersed herself fully with me at the
final hour, and to Elisabeth Becker, who continues to support digital content creation
related to this material. Thank you also to my editorial reviewers for paving the path in
social entrepreneurship and for so graciously lending their voices to this book’s messages.
Thank you to my students at Yale School of Management for teaching me to look at
things differently.Your discerning minds and disgruntlement with the establishment make
me hold up a mirror to myself and step up my game. I know you will take everything we
have attempted to build and make it completely obsolete. I expect nothing less from you.
A special thanks to the students who served as research assistants on this book project: Sara Derian, for her work on the social enterprise profiles, and Liam Grace-​Flood, for
his tireless support during the many different stages of the project, most notably designing
the figures. David Sokol, freelance editor extraordinaire, somehow managed to strengthen
both the writing and the writer. My colleagues Andrew Jenkins and Bill Gartner shared
their expertise in measuring outcomes and “sophisticated fumbling around,” respectively,
and gave me the confidence to write and teach these topics.
newgenprepdf
xi
Acknowledgments xiii
My writing group –​David Tate, Zoe Chance, and Stephanie Dunson –​welcomed me
into their circle, shared their homes and hearts and schedules with me, and surrounded
me with comfort and camaraderie in an otherwise scary time.You and your families will
always feel like a second family to me. Most importantly, you taught me that as long as
I have conviction, other people’s opinions don’t matter.
My pod, who got me through the past three years, played an enormous role in this
book. Marie Commuzzo designed the cover and, more importantly, helped bring out new
ways of seeing the world, and myself in it. Thank you for your constant companionship
in my explorations, both outer and inner.You are home. Thank you to Emily and Marzy
for being rays of sunshine and encouragement, and literary inspiration. To my sisters, who
were far away but always in my daily life, you are my pillars and standard of truth and
integrity.
Thank you to Nils for making fun of me, doing my laundry, making beautiful things
for and with me, and managing to offer a smile in the most challenging moments. And
to Sally for always being inside me, being a constant source of strength and my anchor.
Finally, thank you to my parents for being the first to imagine all the different things that
could be, and to believe that anything is possible.
xvi
1
Introduction
Do you ever wonder what the world would be like if each person dedicated a large chunk
of their brains, efforts, and resources to solving a set of social challenges? Have you ever
wished that you could make a difference to the social disparities and injustices you care
about? Many of us, whether living in one of the world’s lowest-​or highest-​income countries, find it hard to ignore the conditions that affect us and those around us. Social and
environmental conditions affect everyone; however, they disproportionately affect the
most vulnerable and underserved populations in our society.
Each one of us has the potential to mobilize resources to change the way things are
today. It is the refusal to accept this status quo that has driven many positive social changes
and advancements over time. A systematic questioning and examination of why things are
the way they are today –​coupled with the tools and skills to investigate, formulate, and
apply potential solutions –​allows us to take the first step in making changes.
If you envision a world that functions differently from what you see today, there is a
social entrepreneur in you. There is an opportunity awaiting you to apply your unique
skills and experiences to the provision of strong and equitable systems, services, and
products that are currently either absent or not accessed by a portion of people and
populations.
Whether you are someone who wishes to start their own venture or someone who
is seeking to innovate within an existing institution, this book will help you assess the
potential paths to making the changes you wish to see. Where you end up may be someplace completely different from what you envisioned, or even better than you imagined.
The only way to find out is to get started. So, let’s begin!
How to Use this Book
This book helps you design, implement, and evaluate an offering that addresses a social or
environmental challenge that’s important to you. Given your particular background, lived
experience, vocational skills, and field of study, you are uniquely positioned to think about
and address your topic of choice. The social entrepreneurship mindset and tools taught
in this book can help you structure your journey of tackling social and environmental
challenges. This does not mean that you need to start a new organization. Sometimes you
do, but most of the time you don’t.You can mobilize resources within and across existing
institutions to create new and effective solutions. Your endeavor may become an organization, project, campaign, or other initiative working toward positive social and environmental change.
DOI: 10.4324/9781003094715-1
2
2 Introduction
The chapters in this book cover the different stages of the entrepreneurial process,
from identifying the challenge you wish to tackle to launching your endeavor. Each
chapter focuses on a self-​contained topic (Figure I.1). If you are using this book in an
entrepreneurship course, you’ll likely work through the chapters in sequence. Others
can head right to the chapter(s) of most interest. In this chapter, you’ll be introduced
to core concepts of social entrepreneurship, intrapreneurship, and extrapreneurship, and
you’ll learn about the different ways that social entrepreneurs connect with communities, scholars, funders, and other stakeholders involved in social innovation. Then you’ll
jump right in and start learning by doing: you’ll be asked to pick a social or environmental challenge of your choice and tackle that challenge using the tools and frameworks
revealed in the 10 chapters that follow.
Each chapter has built-​in exercises and learning tools that include illustrative profiles,
planning templates, thought questions, and assignments. We will also hear from a host of
social entrepreneurs and thought leaders through the interview boxes. Each person will
chime in with their own perspective and ways of doing things. The goal is to hammer
home the idea that there is not one correct way of doing things –​no magical single model
that will solve all the world’s problems. It is up to each one of us to find the model that
works for us and for our challenge. Then, the best we can hope to do is exchange success
stories and lessons learned in order to spread our impact and collectively change the face
of the social and environmental challenges confronting us today.
In the end, you’ll leave with a stronger understanding of how you would apply a social
entrepreneurship approach to creating and implementing new ideas that produce positive change. You’ll also have a pitch deck to share with others. Most importantly, you’ll
be prompted to think about how you might join forces with others to maximize your
impact. None of the social and environmental challenges we face today can be tackled by
one endeavor alone.
You may end up implementing your offering as a startup or within an existing institution. Or you may prefer to use this experience to think about things differently and gain
10. Expansion
9. Pitching and communications strategy
8. Structuring as an organization
7. Funding your endeavor
Introduction
6. Ensuring financial viability
1. Research
2. Talking to people
5. Measuring outcomes
3. Designing solutions
4. Developing your ideas
Figure I.1 Stages of social entrepreneurship
3
Introduction 3
new ideas and skills. Either way, it’s time to buckle up, because you’re going on a journey
that will land you in a place you haven’t yet imagined.
All the concepts and tools in this book were developed over long periods by numerous
individuals and organizations in multiple sectors; the author does not claim to have
invented any of them, and most can be found online in some publicly available format.
References for these resources are cited throughout. This book is simply a repository and
reference for you to use as a guide to build your social entrepreneurship journey.You are
strongly encouraged to be resourceful and conduct your own external research to identify
the formats and methodologies that are best suited to your social venture.
Learning Objectives
By the time you are finished with this book, you will be looking at the world in a whole
new way. At many points along the journey, you may feel intimidated, overwhelmed, and
tempted to toss everything into the wind.This is normal! It’s a sign that you’re immersing
yourself and engaging in the learning process. Remember that each and every social
entrepreneur has felt this way at multiple points along the road (or more like multiple
points in the same day). If we are going to let the magnitude, nature, and complexity of
today’s challenges daunt us, then we will never be able to change them. Just take it one
step at a time, and you will see for yourself that anything is possible.
On completion of this book, you will be able to:
•
•
•
•
•
•
•
•
Characterize a social challenge of your choice in an evidence-​
based manner,
describing root causes, barriers, and affected populations using available data and
statistics
Investigate localized settings, nuances, co-​challenges, and best practices in tackling
this challenge, as well as opportunities to change the status quo
Develop a solution centered on the target population that takes into account existing
infrastructure and networks, and which is designed to maximize access and minimize costs
Test the assumptions linking your solution to the social challenge and specify outcome measures that will indicate whether the intended changes are being made
Build a business model to sustain the delivery of the solution, exploring multiple
financing mechanisms and potential revenue streams in line with the overall mission
Develop the organizational frameworks and team members to deliver the solution in
a sustainable manner
Pitch and present the idea, exchanging information with end users, funders, team
members, and other stakeholders
Develop a strategy to engage stakeholders and create partnerships to ensure success
Definitions
Social entrepreneurship has existed since the beginning of human society. However, only
relatively recently have the science and study of social entrepreneurship evolved and its
terminology and methodology been integrated into general and continuing professional
education.
One of the most widely referred to definitions of social entrepreneurship was put
forth by Greg Dees at the turn of the millennium. Dees was co-​founder of the Center
4
4 Introduction
for the Advancement of Social Entrepreneurship (CASE) at Duke University, one of the
first academic centers in this field. In developing his definition of social entrepreneurship, he built on several historical definitions of entrepreneurship. Dees drew on 19th-​
century French economist Jean-​Baptiste Say’s definition of entrepreneur as someone who
undertakes a significant project or activity, finding new and better ways of doing things.
He also referenced Joseph Schumpeter’s definition from the first half of the 20th century,
which points to the function of entrepreneurs as reforming or revolutionizing patterns.
Dees further pointed to Peter Drucker’s more recent, seminal book on innovation and
entrepreneurship, in which Drucker asserted that entrepreneurship does not require a
profit motive and can include public service institutions. Building on these core elements
of entrepreneurship, Dees proposed the following definition of social entrepreneurs as a
“species in the genus entrepreneur”:
Social entrepreneurs play the role of change agents in the social sector, by:
•
•
•
•
•
Adopting a mission to create and sustain social value (not just private value),
Recognizing and relentlessly pursuing new opportunities to serve that mission,
Engaging in a process of continuous innovation, adaptation, and learning,
Acting boldly without being limited by resources currently in hand, and
Exhibiting heightened accountability to the constituencies served and for the outcomes
created.1
Dees emphasized that social entrepreneurs address the underlying causes of problems
rather than their symptoms; that they set out to not only meet needs but also reduce them;
and that they seek to create systemic change and sustainable improvements.
A few years later, Sally Osberg and Roger Martin built on this emphasis by putting
forth a definition of social entrepreneurship centered on equilibrium change. At the time,
Sally Osberg was the Chief Executive Officer (CEO) of the Skoll Foundation (founded
by Silicon Valley entrepreneur, and eBay’s first President, Jeff Skoll), and Roger Martin
was an academic and thought leader who served on its board of directors. Seeking clear
criteria to select and support social entrepreneurs, they defined social entrepreneurs as
those who:
•
•
•
Identify a stable but inherently unjust equilibrium
Identify an opportunity in this unjust equilibrium
Forge a new, stable equilibrium that releases trapped potential and alleviates suffering2
According to Osberg and Martin, social entrepreneurs do this by understanding the
existing system and status quo, envisioning a new future, and applying creativity and
resourcefulness to build and scale a model for change. They differentiate between social
entrepreneurs and others working on social change, such as social service providers and
social activists. Social entrepreneurs act to transform systems, while social service providers
act to reduce the negative effects of existing systems. Social entrepreneurs take direct
action to change systems, while social activists advocate for legislation to change systems,
which requires the action of others (Figure I.2).
These three modes of action are not mutually exclusive. As you’ll see in this book,
social entrepreneurs often act as both social service providers and social advocates. Many
of them begin with direct service and go on to effect legislative change. In order to
5
Introduction 5
New equilibrium created
and sustained
Extant system maintained
and improved
Direct
Social entrepreneurship
Social service provision
Indirect
Nature of action
Outcome
Social activism
Figure I.2 Different pathways to social change
Source: Adapted from Getting Beyond Better: How Social Entrepreneurship Works by Roger L. Martin
and Sally R. Osberg (Harvard Business Review Press, 2015) with permission from authors.
change the status quo, they must change the behavior of others. In order to transform
systems, they require others to act as well. The common thread is that they take direct
action to challenge the status quo. Most importantly, a successful social entrepreneur never
acts alone.
In this book, we refer to social entrepreneurship as the process by which effective, innovative, and sustainable solutions are pioneered to meet social and environmental challenges.
A social entrepreneur is someone who designs and implements an offering that addresses
a social or environmental challenge that: improves the well-​being of marginalized individuals and populations; has the potential to scale or replicate in a way that expands impact
beyond direct service; and demonstrates financial viability for the purpose of sustaining
and expanding social impact. The offering could be a product or service, or it could be
a system, network, method, or process (Sidebar I.1). We will expand more on this definition in the sections below, and give consideration to the different attributes of social
entrepreneurship.
Sidebar I.1 A Note on Terminology
It is with hesitation that the word “solution” is used in this book to refer to the
offering that you will design and implement to tackle a social or environmental
challenge. This term is used for consistency with other social entrepreneurship
references and resources. The word “offering” will be used occasionally in the text
to remind you that the solution you are working on is one contribution, one intervention, one new and brave attempt to change the status quo. It will not solve the
social or environmental challenge at hand, but hopefully it will contribute to the
collective change that is needed to do so.
Applying the Social Entrepreneurship Mindset and Skill Set in Existing Institutions
There are many ways to apply the mindset and skill set of social entrepreneurship to
create positive change in the world. Not every social entrepreneur has to lead a movement
6
6 Introduction
or start a new organization. We use the word “endeavor” in this book to emphasize that
there are many ways in which you could endeavor to create change.
Intrapreneurship
Intrapreneurship is when this takes place within an existing company or institution. Not
everyone has to start a new organization to be entrepreneurial.You can be a social entrepreneur as an employee or volunteer at a company, nonprofit, or government agency. In many
ways, intrapreneurship has great potential to effect social change, because it can leverage
existing structures and resources and customers. On the other hand, it can be more difficult, because it can get stuck in existing bureaucracies and organizational cultures.
Extrapreneurship
Extrapreneurship is when this takes place across existing companies and institutions.
Rather than working within the boundary of one organization, extrapreneurs think
beyond organizational walls to mobilize the resources of multiple institutions. Examples of
extrapreneurship include public–​private partnerships (PPPs), collective impact initiatives,
and other initiatives spanning the boundaries of multiple organizations.
So, social entrepreneurship takes many shapes and forms! It can be practiced by someone
working within an existing organization, someone starting something completely new,
and someone bringing together people from across institutions to work together in a
different way. The sky’s the limit –​and you can practice more than one of these within
the course of your social venture. We will see examples of all of them throughout the
book. For simplicity, when we use the phrase “social entrepreneurship” in this book, it is
inclusive of all of the above organizational formats. This emphasizes the notion that it’s
up to you to create an entirely new model for social change.
Attributes of Social Entrepreneurship
Social entrepreneurship is a composite of different ways of thinking and acting. It bridges
fields including sociology, anthropology, management, economics, finance, marketing,
and communications. When researchers and practitioners in these fields come together
in a way that breaks silos, strengthens systems, shifts power, promotes collaboration and
mobilizes resources for financial viability, this is social entrepreneurship (Figure I.3). Below,
we’ll talk about the different characteristics and requirements of social entrepreneurship.
Social
innovation
Systems
thinking
Interdisciplinary
collaboration
Figure I.3 Attributes of social entrepreneurship
Building
power
Financial
viability
7
Introduction 7
Social Innovation
Entrepreneurship starts with understanding a problem and seeing an opportunity to
change that problem. Innovation is the process of visualizing and designing a new way to
engage with that problem. A social innovation is a novel solution to a social problem that
is more effective, efficient, sustainable, or just than existing solutions, and which creates
value that accrues primarily to society rather than private individuals.3
You may have seen or heard the terms “social entrepreneurship” and “social innovation” being used interchangeably or to mean different things in different settings. One
of the reasons that many people prefer to use “social innovation” is to underscore the
idea that social change does not require starting a new organization. Because the word
“entrepreneurship” is largely associated with starting a new company, many people equate
social entrepreneurship to starting a new company with a social mission. This is not
necessarily true.
In this book, we use the term “social entrepreneurship” inclusively, referring to the act
of pioneering new offerings (products, services, systems, networks, processes, methods)
that address social and environmental challenges. This could mean creating a new organization or creating a new initiative within an existing organization or across multiple
existing organizations.
Systems Thinking
In the definitions above, we talked about creating systemic change, or changing systems.
What does this mean? Donella Meadows, a prolific writer and scholar of systems thinking,
described a system as “a set of things – ​people, cells, molecules, or whatever – i​ nterconnected
in such a way that they produce their own pattern of behavior over time.”4 Most of the
social and environmental challenges we face are systems problems. They are complex and
governed by the behavior of a multitude of intertwined factors and stakeholders. This is
why these problems still exist! Systems change is about advancing equity by shifting the
conditions that hold a problem in place.
Systems thinking means that when you think about complex social and environmental challenges, you recognize that they do not exist in a vacuum but are part of this
interconnected web. It means that you realize that there are no quick fixes, and that there
is no straight line from point A to point B. Systems thinking means you take time to
understand why a problem exists and how changing one aspect of the system will affect
the rest of the system; you need to be aware of both the intended and the unintended
consequences of your work. Most important, systems thinking means you recognize that
you cannot work alone to create lasting change.
Because social innovation and entrepreneurship aim to challenge the status quo and
create lasting change, systems thinking is an integral component and requirement of
the process. There are many tools to help you apply systems thinking to analyzing and
tackling a social challenge. In Chapters 1 and 2, we will focus on some of those tools
to ensure that you begin your social entrepreneurship journey with a systems lens.
Then we will continually apply systems thinking throughout this journey, exploring
the ways you might work with different stakeholders, consider internal and external
factors affecting your work, and be mindful of unintended consequences, among many
other aspects.
8
8 Introduction
Interdisciplinary Collaboration
By its nature, systems thinking is interdisciplinary. It recognizes the need to break silos,
undo the way we have been trained in linear, short-​term thinking, and think about ways
in which the different parts of a system can work together better. To do this, we can draw
from strengths of different disciplines, understanding weaknesses and limitations of the
disciplines you have been trained in so far. An engineer sees things in a certain way; an
educator approaches scenarios in a certain way; a healthcare professional tackles challenges
in a specific way. Each of these approaches has strengths and limitations, many of which
have been conferred by the training itself. By bringing together these different lenses and
approaches, you can have a more complete picture.
This is important to remember when assembling a team of people to tackle a social
challenge, and when thinking about who you will partner with to tackle that challenge
(Figure I.4).The composition of your team needs to include people from different sectors
and disciplines, and as a team you need to collaborate and partner with many others
across sectors and disciplines. For example, consider the use of information technology
(IT). In the health sector, IT is developed, practiced, and implemented differently from
the way IT is used in other sectors. People working in health IT often cite its limitations
and shortfalls. What if they brought in IT specialists from other sectors to tackle health
challenges with a fresh new lens, without being constrained by the way things are usually done in the health sector? Public school teachers in many countries are trained in a
certain way to deliver a certain curriculum using a certain approach. It’s hard to unlearn
a way of doing things, even when it has been demonstrated to be ineffective. We’ll see
examples of education interventions that leverage the strengths of different sectors to
achieve higher learning outcomes.
Most important, challenge yourself to always think like an extrapreneur –​one whose
vision and practice extends beyond the boundaries of a given organization. How can you
leverage the strengths of multiple organizations and bring together people from different
sectors to introduce changes that will enhance the social equity and performance of
a system? This could entail working across institutions from the start or working with
others to build your own organization to create and grow impact.
Collaborators
Partners
Team
Figure I.4 Interdisciplinary nature of social entrepreneurship, within and beyond your team
Source: Chahine, T. (2021). Towards an understanding of public health entrepreneurship and
intrapreneurship. Frontiers in Public Health, 9, Article 593553. www.fron​tier​sin.org/​artic​les/​10.3389/​
fpubh.2021.593​553/​full. Reproduction permitted through Creative Commons Attribution 4.0
International License (CC BY 4.0).
9
Introduction 9
Building Power
Through interdisciplinary collaboration, different groups of people come together to co-​
create social value and forge pathways to social change. The key is to ensure that this
co-​creation does not happen in an extractive way, but rather in a way that builds power
in a direction that shifts the status quo to a new and more just equilibrium. For example,
aspiring social entrepreneurs often apply design thinking to enhance the process of creating something new. Design thinking is a problem-​solving methodology used to generate innovative solutions to complex challenges. It starts with in-​depth understanding of
the problem, followed by rapid idea generation, prototyping, testing, and iterating, with
constant feedback from users. The idea is that co-​creating with users helps ensure that an
intervention, product, or service will be effective.
But soliciting feedback from end users is not enough to build power. To reach a more
just equilibrium, the design thinking process must be centered on an awareness of power
and privilege. Who holds the power now, and who needs to hold more power for a
new and more just equilibrium to emerge? True co-​creation means that the balance of
power is shifted. It means that the individuals and communities involved have gained
something –​that they are not only passive beneficiaries or consumers of the intervention,
product, or service offered.
The first step is to recognize that people with lived experience of a social or environmental challenge are those who have the greatest knowledge to tackle it. The second step
is to support and grow the capacity and leadership of those with direct lived experience
toward tackling that challenge. Successful social entrepreneurship doesn’t happen when
you’re out to rescue others. It happens when you recognize that knowledge, experience,
vision, and innovations are already out there; you are finding ways to mobilize resources
(whether people, capital, or other resources) to connect and amplify them (Sidebar I.2).
Sidebar I.2 When Design Thinking Meets Systems Thinking, You
Find Yourself Asking:
1. Who is affected by this problem, and how might I work with them in a way
that builds power for them to lead transformation?
2. Who is already working on this problem, and how might I work with them as
an intrapreneur or extrapreneur to mobilize resources for impact?
3. Who has a vested interest in the status quo, and how does this factor into our
planning?
4. What might be the unintended consequences of our work? How can we test
for and prevent adverse effects?
Keep these questions in mind as you set out on your journey.
Financial Viability
Part of social entrepreneurship entails achieving financial viability for your endeavor. In
this book, you will practice building a business model around your offering. The business
10
10 Introduction
Business model
Impact model
Includes:
● Theory of
change
● Logic model
● Outcome metrics
Revenue model
Includes:
● Payer
● Payment
Operational model
Includes:
● Distribution
channels
● Customer
flowchart
● Organizational
structure
Figure I.5 Components of a business model in the context of social entrepreneurship
model will include multiple components: the impact model, the revenue model, and
the operational model (Figure I.5). An impact model includes a theory of change, logic
model, and outcome metrics. We will learn about these in Chapters 3, 4, and 5. The revenue model addresses how the venture will be financially viable in a new or existing
organization, whether through a new payment model or through a cost-​saving model for
an existing budget. We will learn about this in Chapters 6 and 7. The operational model
includes the nuts and bolts of delivery: customer experience, distribution channels, and
organizational structure. These have been integrated into Chapters 4, 5, 6, and 8.
This ordering of components can be deceiving: it rarely plays out as a “first, then” process. It’s an iterative process that goes back and forth between the different components of
the business model until it’s refined in a way that can last and grow. This iterative process
continues throughout your journey! It’s part and parcel of entrepreneurship.
Financial viability does not mean for-​profit versus nonprofit. It just means that there
is a revenue model that can sustain the endeavor. If you can generate surplus revenue,
then you have the choice of operating as a for-​profit business. If the revenue you generate needs to be supplemented with grants and donations, then you will likely operate
as a nonprofit organization. If you are an intrapreneur operating in an existing business,
nonprofit, or government agency, then financial viability could come from new revenue
streams; or you may find a more impactful and cost-​effective way of utilizing existing
resources, thus achieving financial viability through cost savings. The important thing is
that you are producing value to someone who is willing to pay for it. Sometimes that
person is the end user; other times it’s a different stakeholder.
For example, some social enterprises can deliver their offering at a low cost directly
to low-​income customers. Others partner with governments to deliver the offering at a
reduced or no cost. Still others may serve high-​income customers and achieve their social
impact by creating income opportunities for marginalized populations. These are sometimes referred to as “type two social businesses,” whose impact is in their employment or
ownership, as opposed to “type one social businesses,” whose impact is in their offering.5
Social Entrepreneurship as a Path to Sustainable Development
Social entrepreneurs are important players in sustainable development. Sustainability
means that something lasts. This can refer to social sustainability: shifting the balance of
1
Introduction 11
Economic
Environmental
Social
Figure I.6 Growth in multiple dimensions for sustainable development
power to create a new and more just equilibrium. It can refer to environmental sustainability: preserving and replenishing our natural environment and the natural resources
that fuel society. And it can refer to economic sustainability: ensuring equitable economic
growth. Growth along all three of these dimensions is what we refer to when we say sustainable development (Figure I.6).
The way we have grown as a society until now is not sustainable. We are destroying
our natural environment, relying on and depleting natural resources to fuel society. We
are excluding and exploiting marginalized individuals and communities, who are not
benefiting from economic growth and opportunity. Historically, development of one
component of society often takes place at the expense of another –​economic growth
at the cost of environmental degradation, or growth of one nation or subpopulation at
the cost of another. This is still ongoing in our world, and people across governments
and corporations as well as those in civil society and academia are increasingly focused
on ensuring that it is the sum of economic, social, and environmental growth that is
considered as the ultimate goal.
Sustainable Development Goals
One example of the focus on economic, social, and environmental growth are the United
Nations (UN) Sustainable Development Goals (SDGs). At the turn of the millennium,
world leaders came together to address pervasive social disparities and problems that
have persisted over time. The global community declared it unacceptable that in the year
2000, people still lacked access to financial security, food security, primary education, and
gender equity; that women were still dying in childbirth and children were still dying in
the early years of their life; that infectious diseases were still spreading unchecked; that
the environment was being destroyed; and that we did not have the global infrastructure and partnerships to combat these challenges. Governments, grassroots organizations,
businesses, education institutions, and other key players came together to set a global
agenda for development under the umbrella of the UN. They called this global agenda
Millennium Development Goals (MDGs), and they aimed to achieve the following goals
12
12 Introduction
in 15 years: eradicate extreme poverty and hunger; achieve universal primary education;
promote gender equality and empower women; reduce child mortality; improve maternal
health; combat HIV/​AIDS, malaria and other diseases; ensure environmental sustainability; and build a global partnership for development.
While progress was made toward these goals, they were far from achieved in 15 years.
In 2015, world leaders reconvened and launched an expanded set of goals –​the SDGs.
The SDGs are centered on human rights and sustainable, inclusive growth. They are
comprised of 17 broad goals, each with multiple detailed targets (Figure I.7). Many of
the targets refer to the meeting of citizens’ basic needs by governments. What the MDGs
and SDGs did was to place these needs onto a common agenda that multiple stakeholders
worldwide are committed to.This means that, in low-​resource settings, it is the imperative
of multiple parties across the globe to both support and hold accountable the government
in meeting basic needs. These parties could be other governments, businesses, nonprofits,
and civil society.
That is why the role of social entrepreneurship is so important. None of the targets and
indicators of the SDGs can be reached by one party alone.This is underscored by the final
goal: partnerships for the goals. Such partnership is not just about pathways to achieving
the SDGs; it is a goal in and of itself. Even if we were to achieve all SDG targets by 2030,
a new set of challenges will emerge. If we have the infrastructure to work collectively
across sectors, then we will be more strongly positioned to tackle emerging challenges
than we are today.
As far as capturing all of the world’s social and environmental challenges is concerned,
the SDGs are neither perfect nor comprehensive. Even so, they hold a wide range of
Figure I.7 Sustainable Development Goals
Source: The Global Goals. (nd). Resources. www.glob​algo​als.org/​resour​ces
13
Introduction 13
stakeholders accountable for achieving progress against the targets and for mobilizing
resources to support the goals. SDGs also convene disparate players around a collective
action, using a common language. As a social entrepreneur, you can leverage this global
dialogue and community to access partners. These could include thought partners who
have specialized information and perspectives around a challenge you are tackling; funding
partners who have financial resources to support your work; implementation partners
who have experiences and relationships that could help deliver solutions; communications
partners to widen your message’s reach; and evaluation partners to help you understand
your impact and adjust your work so that it is responsive to evidence. A lot of the work
of social entrepreneurs happens locally. Tapping into this global community can help you
strengthen and amplify the work you are doing at a local level.
Role of Business: Stakeholder versus Shareholder Value
Many schools of thought claim that any form of entrepreneurship has positive social
effects, in terms of economic development and the growth of society. If an innovative
person or company produces a purely commercial product –​let’s take the initial creation
of the mobile phone for use in developed markets as an e­ xample –​is this not social? Does
it not increase communication, provide access to information, and create jobs, among
other benefits to society? The answer is absolutely yes –​most commercial enterprises do
in fact produce positive social changes necessary for economic growth, which creates a
plethora of positive impacts and ripple effects socially.
However, not all entrepreneurship is inclusive, and not all businesses create positive
impacts in both economic and social and/​or environmental directions. That is why it
is important to differentiate between social entrepreneurship and other forms of entrepreneurship. Social entrepreneurship introduces new metrics of success and focuses on
increasing access6 to resources and services in a way that either specifically targets and/​or
includes underserved populations (Figure I.8).
While commercial entrepreneurship often responds to a market opportunity, social
entrepreneurship often tackles a market failure. While the bottom line of a purely commercial enterprise is measured by financial profit for a company and its shareholders,
the bottom line of a social enterprise is its social impact. The metric of success to which
the enterprise holds itself accountable is a defining factor. For example, a social enterprise will be held accountable by its stakeholders for measuring and maximizing social
outcomes like quality of life, employment, and other changes, rather than measuring and
maximizing only business outcomes such as units sold and profits, as purely commercial
enterprises do.
That being said, mainstream businesses are becoming increasingly conscious of their
impact on society beyond their shareholders, and of their power to create positive
impact. Many businesses are embracing a triple bottom line approach –​holding themselves accountable not only for financial growth for shareholders, but also for producing
outcomes that result in social and environmental growth for society at large. This recognition that for a business to thrive, it cannot do so at the cost of people and the planet is
sometimes referred to as “conscious capitalism,” and this has huge potential for achieving
SDGs and targets.
That’s why the roles of intrapreneurship and extrapreneurship are so important in
social entrepreneurship. If you already have a job in an existing business, you have more
resources at your disposal than if you start something new. You can be an intrapreneur,
14
14 Introduction
Normal
population
distribution
Shift the tail
end to narrow
the gap
Shift the whole
distribution to
increase access
Both
Little /
no access
Plentiful
access
Figure I.8 Increasing underserved populations’ access to resources and services
Traditional charity:
100% focused on
social mission
Traditional commerce:
100% focused on
profit
Social enterprises can fall nearly
anywhere on the spectrum
between charity and commerce
Figure I.9 Social entrepreneurship spectrum
mobilizing resources to achieve more positive and inclusive outcomes.You may have the
opportunity to reach more people, and to build different kinds of partnerships, than if you
start something new.
It’s more helpful to think of social entrepreneurship as a spectrum than a discrete
category. The world of social entrepreneurship occupies the space between traditional
charity –​which is often neither scalable, replicable, nor financially viable –​and traditional
commerce –​which often creates economic growth without regard to, or even at the cost
of, social and environmental growth (Figure I.9). In many societies around the world,
there is a huge gap between social-​purpose organizations and businesses. Social entrepreneurship aims to fill that gap.
15
Introduction 15
Everybody a Changemaker
The points discussed above are why Bill Drayton, one of the social entrepreneurs you’ll
meet in this book, emphasizes a world in which everybody is a changemaker. You don’t
need to start a new organization to be a social entrepreneur. You need to question the
status quo, challenge assumptions, learn about the root causes and systems surrounding
social challenges, and mobilize resources in a new and different way to tackle those
challenges. This can only be done through partnerships, interdisciplinary collaboration,
and building power for others.
In each chapter of this book, we’ll interview a social entrepreneur or thought leader in
the field of social entrepreneurship and impact. We’ll start with Bill Drayton because he
is one of the people who very purposefully cultivated the field of social entrepreneurship.
His organization, Ashoka: Innovators for the Public, refers to four levels of impact: direct
service, scaled direct service, systems change, and framework change (Figure I.10).
Ashoka’s direct service is to support social entrepreneurs through financial stipends and
by connecting them with a network of other social entrepreneurs and supporters. It scales
this direct service by launching regional offices in different parts of the world to identify and support social entrepreneurs, and by building an ecosystem around social entrepreneurship. Ashoka also creates systems change by helping social entrepreneurs change
policies and laws in the countries where they work, to address the root causes of the
challenges they are tackling. Finally, the organization creates new frameworks for thinking
about things: Everyone a Changemaker is a new framework for society in which every
person recognizes their power to identify problems and contribute to solutions.
You can apply the social entrepreneurship skill set and mindset to becoming a
changemaker. What that looks like will be completely different for each person. This
book is designed to take you on a journey from which you’ll emerge with a new skill
Figure I.10 Ashoka’s four levels of impact
Source: Ashoka. (nd). 4 levels of impact. www.ash​oka.org/​en/​story/​4-​lev​els-​imp​act
16
16 Introduction
set and mindset, which you can then apply to social challenges you care about –​identifying problems and understanding their root causes and surrounding systems, mobilizing
resources in innovative ways to address those problems, and building power through
partnerships so that the impact you create will sustain and grow.
Interview Box: Bill Drayton, Founder and CEO, Ashoka:
Innovators for the Public
You have been collaborating with others to
promote social entrepreneurship as a field for
over 30 years. What changes have you seen?
The world is changing faster and faster; everything
is connected. This is why inequality is growing
exponentially, and this is being reflected in the “us
versus them” politics we observe in the US and
around the world. In areas with a high percentage
of repetitive jobs, relative life expectancy and ecoPhoto credit: Thom Goertel
nomic output have decreased exponentially in the
past 30 years compared to areas with a high percentage of changemakers.That’s why
there is all this inequality. But interconnectedness and rapid change can also explain
successes: more and more areas are having a higher percentage of changemakers.
In the next five or six years, there will be an exponential growth in changemakers.
Everyone has to be a changemaker.You can’t play otherwise.
Tell us more about what it means to be a social entrepreneur and what
it means to be a changemaker.
We need people who are really good at playing the big game. Social entrepreneurs
define themselves as: “My role in life is to change the world.” Meeting social
entrepreneurs is rare. A lot of people could play that role –​they just don’t give
themselves permission.You need to give yourself permission to see the problem. If
you don’t think you have the power to create change, then you don’t want to see a
problem, because you can’t do anything about it. We need changemakers to be the
norm, not an exception: Have a dream. Build a dream. Be powerful now. Everyone
can apply social entrepreneurship principles and skills to be a changemaker. “Social”
means for the good of all. “Entrepreneurship” means systems change and mindset
change.These two feed each other: systems change is when you change the different
organizations that are tied to each other; mindset change is framework change. It’s
an everything-​changing-​everything, connected world. If you don’t see it, you’re
toast. The moment you see it, everything has to change.
What is Ashoka doing to help create a world where everyone is a
changemaker?
We are creating a new framework –​just like how, 100 years ago, humans
decided that every child needs to be literate, now every child needs to be a
17
Introduction 17
changemaker. We are recruiting senior partner entrepreneurs who understand
this. First, introduce new frameworks changing how children are growing up
and changing empathy. Second, how do we help every young person now that
they’re a changemaker –​have they mastered how to function in a kaleidoscopic
“teams of teams” where everything is changing? Humanity is becoming like one
organism. Each person is connected through a system that grows exponentially,
like synapses in the brain.
Ashoka has created new teams for climate change, health, longevity, democracy,
etc. The goal is to clearly articulate the future structure and synaptic architecture
that that field will need. First, invite the right team. Then invent the right synaptic structure that will make that team of teams work. We call this “collaborative jujitsu.” Every one of these players makes the others work better. The Henry
Ford idea of having repetitive jobs, people who do the same thing, is totally gone.
Changemaking means everybody leads it. And when everyone has it, we’ll have
more entrepreneurs. We need big change. Climate change, viral pandemics, a wave
of empathy, artificial intelligence –​they all feed each other. You have to have the
ability to see it. That’s where the framework change happens. Framework change is
social entrepreneurship.
Institutions Supporting Social Entrepreneurs
You are about to embark on a journey that will hopefully last a very long time and evolve
over the years.You should know that you are not alone! Many individuals and institutions
believe in the power of social entrepreneurship to make a difference. There are numerous
organizations, forums, networks, list servs, conferences and other events all over the world
that, like Ashoka, bring together social entrepreneurs and those supporting them. Support
can come in the form of investment, technical support, knowledge exchange, awareness,
and advocacy.We will go into more detail about these different resources in later chapters,
but for now it’s a good idea for you to surf the websites of some leading institutions in
the social entrepreneurship space. Check out a list of a few popular examples in Sidebar
I.3A. Resources posted on these websites will prove invaluable to you as you develop your
own endeavor. Once your endeavor is developed, you might be able to join one of these
fellowship programs or other networks, as well.
Listed in Sidebar I.3B are some of the websites we’ll point to throughout the book.
These offer among them a wide range of knowledge and ideas, tools and templates for
social entrepreneurs.
Sidebar I.3A Examples of Organizations Supporting Social
Entrepreneurs
There are numerous institutions worldwide that were formed to mobilize resources
(knowledge, people, funding) for social entrepreneurs. Below are examples of some
of the organizations that could serve as a resource for you. Check them out and see
if you can find others!
18
18 Introduction
Acumen: patient capital fund based in New York and operating in East Africa,West
Africa, and parts of South Asia and the Americas; Acumen Academy provides
fellowships, accelerators, and online courses (https://​acu​men.org)
Alfanar: venture philanthropy organization based in London, operating across the
Middle East (www.alfa​nar.org)
Ashoka: fellowship program and global network of changemakers, headquartered
in Washington, DC (www.ash​oka.org)
Aspen Institute: education and policy studies organization with fellowships, leadership initiatives and a leadership network (www.asp​enin​stit​ute.org)
Echoing Green: fellowship and investment organization based in New York and
operating globally (https://​echoi​nggr​een.org)
Nesta: UK-​based innovation, research, and investment charity (www.nesta.org.uk)
New Profit: venture philanthropy organization based in the US, focusing on inclusive impact (www.newpro​fit.org)
REDF: investing and knowledge-​building organization with online resources and
tools for job creation and inclusive economy (https://​redf.org)
Sankalp Forum: impact investing and entrepreneurship organization with an
annual summit and awards program, based in India and convening innovators
and investors worldwide (www.sanka​lpfo​rum.com)
Schwab Foundation for Social Entrepreneurship: sister organization of the
World Economic Forum; a global platform and fellowship program to accelerate social innovation models (www.schw​abfo​und.org)
Skoll network: includes Skoll Foundation, Skoll Awards, Skoll Global Threats
Fund, Skoll World Forum, and Skoll Centre for Social Entrepreneurship
(https://​skoll.org)
SOCAP Global: nurtures ideas and brings together social investors, social
entrepreneurs, and others through an annual conference, live and online events,
and online community (https://​soca​pglo​bal.com)
Social Enterprise UK: UK national body for social enterprises, providing membership services and online advice (www.socia​lent​erpr​ise.org.uk)
Social Innovation Forum: Boston-​based accelerator program connecting social
innovators with funders, investors, and volunteers (www.social​inno​vati​onfo​
rum.org)
UnLtd: UK-​
based organization providing support and resources for social
entrepreneurs nationwide and online (www.unltd.org.uk)
Sidebar I.3B Websites with Resources on Social Entrepreneurship
that We’ll Refer to throughout this Book
CASE: courses, publications, videos, a podcast, tools on impact investing, raising
impact capital, managing and measuring impact, scaling impact, and more, from
Duke University (https://​cent​ers.fuqua.duke.edu/​case/​)
DIY Toolkit: online tools, templates, and videos created by Nesta to support
various stages in the social entrepreneurship process (we’ll use their theory of
change in Chapter 3 and customer persona in Chapter 4) (www.nesta.org.uk/​
tool​kit/​diy-​tool​kit/​)
19
Introduction 19
Stanford Social Entrepreneurship Hub: venture planning tools and videos
(we’ll use their Impact Social Business Model Canvas in Chapter 4) (https://​
sehub.stanf​ord.edu)
Stanford Social Innovation Review: written by and for social change leaders
around the world; offers a magazine, webinars, conferences, podcasts, and a
newsletter (we’ll refer to several important and helpful articles throughout the
book in footnotes) (https://​ssir.org)
Strategyzer: resources for innovation strategy, including templates, books, blogs,
and apps; originally developed the Business Model Canvas; see also the Value
Proposition Canvas, the Customer Profile, the Test Card, the Learning Card, the
Team Contract and other templates (www.stra​tegy​zer.com)
Case Study: Practicing Extrapreneurship through Collaborative
Jujitsu
Extrapreneurship can be illustrated by collaborative jujitsu, which Bill Drayton cited in
his interview. This concept incorporates multiple processes of social entrepreneurship,
including social innovation, systems thinking, interdisciplinary collaboration, and resource
mobilization. In Brazil, several such elements came together and allowed the Ashoka team
to practice collaborative jujitsu to change education frameworks.
Jujitsu is a martial art whose name derives from the Japanese words jū and jutsu, together
meaning “gentle art.” Brazilian jiu-​jitsu centers on knowledge of the human anatomy and
physical systems, as well as careful consideration of angles, timing, pressure, and use of
leverage. Ashoka’s work in Brazil relied on these same principles of understanding the
system, identifying levers of change, and engaging in a careful dance with partners that
involved constant assessment of timing, pressure, and angles. Changemakers can apply
these principles in a thinking and decision-​making process to shape adaptive institutions
(as opposed to stable institutions that propagate stagnant power dynamics).
For Ashoka, the social challenge was that the education system was not designed to
support children in becoming empathetic citizens and changemakers, and thus propagated
inequality. The desired outcome of their offering was that empathy in children would
become part of the definition of success for Brazil’s education frameworks. To help create
an Everyone a Changemaker world, Ashoka’s Brazil team identified key players in the
education system; these included teachers, education unions, education and general
publishers, and a select city and state.
Ashoka’s team collaborated with Brazil’s leading Portuguese-​and Spanish-​language
publisher to create new high school material in Portuguese, and it then worked with the
Brazilian government to approve that material. This allowed the organization to reach a
large number of high school students. It also worked to create content for parents, which
opened parents as a market for the publisher and reinforced social pathways to fostering
empathy in children. Ashoka went on to take these products, in Spanish, to Argentina and
Spain, getting the publishing company on board by proposing that it would be a leader
in a changing world. Now, Ashoka is starting to talk to publishers in the US and the UK.
This collaborative jujitsu process entailed going back and forth between key partners
in an iterative fashion, moving steadily toward framework change (Figure I.11). Finding
the right partner organizations was key. This required identifying a publishing CEO with
20
20 Introduction
Teachers
Education
unions
Publisher
Ashoka
Government
Figure I.11 Asoka’s collaborative jujitsu partners
aligned values, to foster the process and outcomes of collaboration: without the partnership of the publishing company, the Brazilian government would not have had the
resources to swiftly introduce new learning materials into the curriculum. Since this work
took place, the Ashoka community and the jujitsu partners have come together again in
“hotspot” teams across multiple metropolitan areas in Brazil.
A key aspect of this case that led to success was the requirement to have a minimum number of five senior partners from relevant groups coming together as “the hub
team” to lead the work. Without the involvement of individuals at this level, it wouldn’t
have been possible to get relevant groups to shift their core strategies. Once the hub
team was formed, the next step was to recruit the institutions to serve as jujitsu partners;
this was done by identifying a team of next-​generation leaders in each institution and
winning them over fully to the vision of Everyone a Changemaker. Then, by knitting
these leaders into the hub team, Ashoka achieved collaborative jujitsu’s “revolutionary
core” of committed peers. In this case, the total number of partners was 120 people. This
included ten social entrepreneurs from Ashoka’s fellowship program in Brazil and five
Ashoka staff members.
This process was repeated in multiple metropolitan areas in Brazil to identify jujitsu
partners –​including schools, government leaders, and education unions –​in different
cities and states. Each metro area had a parallel leadership structure: the hub team of
five fully committed, recognized leaders and the next-​generation leaders within jujitsu
partner organizations forming the revolutionary core. Working together, the members
of the revolutionary core were able to create and mobilize media, news, events, and the
thousands of grassroots groups that formed the third tier of teams.
Jujitsu partners and metro area partners had a mutually beneficial relationship. Jujitsu
partners needed to spread their strategy to relevant stakeholders in each metro area; metro
area stakeholders needed the participation of the jujitsu partners’ local people and the
leverage possible via their broad reach. Each multiplied the impacts and network power of
Ashoka’s social entrepreneurs and others working to create social change, and vice versa.
With this architecture, Ashoka’s strategy was to reach early adopters, who make up
1–​
2 percent of young people, teachers, parents, policymakers, community and faith
leaders, and writers.This allowed them to drive home their framework-​changing message
of Everyone a Changemaker at all levels.
The success of this case also relied on establishing a core strategic interest, or value
proposition, for each jujitsu partner. The partnership will only work if it supports that
21
Introduction 21
partner’s core interest. Here, for businesses in the community, it was their need to have
an Everyone a Changemaker workforce; working with education partners, parents, and
teachers can make that happen. For parents, the value proposition was that if they wanted
their children to be successful in life, they needed to be changemakers. Parents were
mobilized to go to school boards and advocate for the proposed changes. School board
members in turn went to their communities of faith. Teachers’ unions provided a way to
reach millions of individual teachers. Teachers negotiated with school boards; they knew
all the education writers and bloggers; they looked to the local communities of faith.This
jujitsu process gave Ashoka the power to make changes it wouldn’t have been able to as a
small organization on its own. It dramatically enriched the Ashoka fellows’ lives and the
lives of those they were serving.
Collaborative jujitsu brings together elements of entrepreneurship, intrapreneurship,
and extrapreneurship. The social entrepreneurs that Ashoka supports through its
fellowship program envision and implement new offerings to change the face of the
sectors they work in. The team working at Ashoka and its partner organizations practice
intrapreneurship through collaborative jujitsu by innovating new programs and mobilizing resources for these innovations, including human capital, financial capital, and other
resources within their institutions. Then, again engaging in the collaborative jujitsu process together, they practice extrapreneurship by reorganizing the way institutions work
together.
The idea behind collaborative jujitsu is to imagine away stable institutions and recognize that rule systems will lag more and more behind. Ashoka aims to replicate this process
for multiple sectors. For each sector, Ashoka aims to find large-​scale entrepreneurs who
are deeply, centrally, and unambiguously committed to the good of all and who possess a
vision of where the world needs to go for each new need and opportunity. Once these
entrepreneurs are identified, they can be brought together to commit to and launch the
collaborative jujitsu process of making that future become society’s new framework and
pattern. Here, the jujitsu partners and hotspot teams in the metro areas, each reinforcing
the other, form the next stage of the process. The final stage requires putting in place
ongoing and constantly adapting decision-​making systems appropriate for the area. The
goal is to articulate a field’s future structure and symbiotic architecture. For every field, it’s
about the decision architecture: there are trillions of decisions to make each day, so who
gets to decide? How do you get the decision-​making structure right? Once you articulate
that, then you can embark on collaborative jujitsu.
Thought Questions
1. How does this case compare to the way you’ve been thinking about and approaching
social entrepreneurship so far?
2. What do you think are the most challenging aspects of working across multiple
institutions in extrapreneurship?
3. In what situations do you think collaborative jujitsu could be successful, and in what
situations would you feel skeptical about its potential to succeed?
4. Think about a social or environmental challenge you’d like to work on and all
the stakeholders involved. What key jujitsu partners would be necessary to shift
frameworks around that challenge, and what would be the core value proposition
needed for each partner?
5. What new questions did this case study bring up for you?
2
22 Introduction
Next Steps
Congratulations! You are about to embark on a life-​changing journey. That part of you
that has always longed to tackle the challenges facing our world today is about to become
very much alive. With the tools and concepts enclosed in this book, you will build the
skill set and mindset required to tackle the social challenge of your choice. Keep checking
back along the way, because revisiting each previous step will ensure that your solution
incorporates all the pieces of knowledge you’ve accumulated.
In the next chapter, you will be asked to pick a challenge of your choice, and you
will create a solution for it in the subsequent chapters. Don’t panic if you have multiple challenges that you care about and want to address. Pick one for your learning
journey, and you can tackle the others when your solution-​building muscles are stronger.
In choosing your topic, think about what you will be able to realistically implement in
the future. This will depend on your knowledge base and experience, location, networks,
and other resources available to you. Because the nature of this work is already ambitious
by definition, it is wise to start simply so that you can anticipate all the challenges and
complications that will then unfold.
Conversely, if you do not have a topic of interest, don’t panic. Spend some time learning
about the social challenges that affect your community, and learn more about their root
causes. You will find something that speaks to you, whose solution you feel you may be
able to contribute toward. Get out there and talk to people! Social entrepreneurship is not
something that takes place in a living room, classroom, conference hall, or in any ivory
tower setting. You will need to roll up your sleeves and get your hands dirty. This book
will equip you with the frameworks and tools necessary to dig deeper.
It is critical to keep in mind that social entrepreneurship is not linear.You can and will
go back and start over, reassess, reconsider, and redevelop your solution –​and even your
formulation of the challenge you are tackling. It is a dynamic process, so don’t be afraid
to take the first step. You can always come back and go in another direction. Just like in
the spiral staircase in Figure I.1, you are likely to return to each step many times over the
course of your work, each time at a higher level.
The chapters in this book have been arranged in an order that is easy to follow, to
facilitate the development of your ideas and the collection of evidence to build your
venture. However, it is important to understand that this is not always the order in which
social entrepreneurship takes place. Most of the time you are practicing social entrepreneurship, you will experience a great deal of disorder.While you go through the exercises
prescribed in this book, then, you’ll need to open your mind to the idea that solutions are
born in many different ways.
Chapter Assignment
The work starts now! Write down your answers to the thought questions below, using
only one sentence per answer. Being concise is among the skills you will need most as a
social entrepreneur. Spend a lot of time thinking and researching, and then find a way to
summarize your answers in a clear and concise manner.You might write pages and pages
of notes before you’re able to formulate your one sentence. This is good –​hold on to
these notes for later, as you will need them.
1. Thinking back to the information, people, and experiences you have been exposed to
up until this moment, what are the top social challenges you have spent time thinking
23
Introduction 23
2.
3.
4.
5.
about? (One bullet point or sentence per issue.Try to restrict yourself to three to five
social or environmental challenges you have interfaced with the most.)
For each challenge you listed, please answer the following questions:
a. What opportunities have you had to gain insight into this challenge?
b. Has your experience been personal or professional? Firsthand or through reading
or study (or a combination)?
Think back to a failed attempt to tackle one of the challenges you’ve listed above. It
could have been your attempt or someone else’s. Describe what was attempted. Why
didn’t it work? (Use three sentences, total.)
Each one of us holds one or more positions in society, whether as a student, professional, parent, or community member. In your current role(s), what are the available
opportunities and resources that you can leverage toward tackling one of the social
challenges you are thinking about here? (These could be physical or political or
financial resources, including people, knowledge, events, or other.)
By the time you finish this book, what new knowledge, awareness, or skills do you
hope to gain more of? Are there any milestones or targets you’d like to accomplish?
Notes
1 Dees, J. G. (2001). The meaning of “social entrepreneurship,” pp 2, 4 (italics in the original).
https://​cent​ers.fuqua.duke.edu/​CASE/​know​ledg​e_​it​ems/​the-​mean​ing-​of-​soc​ial-​entre​pren ​
eurs​hip/​
2 Martin, R. L., & Osberg, S. R. (2015). Getting beyond better: How social entrepreneurship
works. Harvard Business Review Press. First chapter available at: skoll.org/​
2016/​
10/​
12/​
free-​chapter-​of-​getting-​beyond-​better
3 Check out this classic article which describes the meaning of social innovation: Phills, J. A., Jr.,
Deiglmeier, K., & Miller, D. T. (2008). Rediscovering social innovation. Stanford Social Innovation
Review, 6(4), 34–​43. ssir.org/​articles/​entry/​rediscovering_​social_​innovation
4 Meadows, D. H. (2015). Thinking in systems: A primer. Chelsea Green Publishing, p 2. Online
resources available at: donellameadows.org
5 This definition was put forth by Professor Muhammad Yunus in Building social business: The
new kind of capitalism that serves humanity’s most pressing needs (Public Affairs, 2011). In the
original definition, a type two social business is owned by poor and disadvantaged people,
who can gain through receiving direct dividends or by some indirect benefits. For more, see
the Yunus Centre’s page on social business: www.muhamm​adyu​nus.org/​post/​2113/​soc​ial-​
busin​ess
6 Again, access can mean either access to a resource or service (type one social business) or access
to income (type two social business), as described above.
24
1Researching Your Topic
Chapter Overview
This chapter walks you through the first step in your journey as a changemaker –​
understanding and researching your challenge.You will learn how to:
•
•
•
•
Identify and characterize your challenge
Approach your research and frame your investigation
Collect information on your challenge
Track, organize, and interpret your results
Understanding a Social Challenge
Entrepreneurs tend to notice a problem and identify a solution, and they seek to validate
both. Or, they have a solution in mind and look for a problem that could solve it. The
approach in this book asks you to start with the problem. That is this chapter’s focus.
You are not alone in wanting to tackle all challenges under the sun –​we’ve all been
there. But the best way to fail to make an impact is to not spend enough time characterizing the nature of what you are trying to change. If you want to get anything done, you
need to focus, proceeding one step at a time.
The first step of your journey is to identify and characterize the challenge you are tackling.This chapter will help you focus on one social or environmental challenge, for which
you will build an intervention over the course of this book. Before you even start thinking
about solutions, it is important that you invest time and resources in understanding the
challenge to the extent possible.
Identifying a Challenge
It goes without saying that most social and environmental challenges are multidimensional. Environmental deterioration, poverty, lack of social safety nets, and unemployment
have multiple causal pathways that cannot all be solved with one simple intervention.
Many humanitarian organizations, foundations, private investors, and other funders search
for a “silver bullet” solution to a challenge. If only it were that simple! Social and environmental problems are multifaceted, and so are their solutions.1
By “social challenge,” we mean anything about the world that affects others that you
want to change. This includes environmental challenges. Most social challenges this book
DOI: 10.4324/9781003094715-2
25
Researching Your Topic 25
talks about do not affect everyone equally. People from disadvantaged communities are
the ones who are most affected. For example, climate change affects the entire world
population, but it disproportionately affects people living in poverty in remote rural areas.
The same is true for air pollution and water pollution, which especially affect people
living in informal urban settlements. In the social entrepreneurship approach, we start
with people: we try to understand who is affected by this issue, what its causes are, how
the issue manifests in their lives, and what they think should be done about it.You might
already have an idea or a solution that you are thinking about implementing. And you
might stick with that idea throughout the course of the book. But you also might change
your solution once you start your investigation. This happens very often in the life of a
social entrepreneur. We go through many iterations before we find the right fit.
Characterizing a Challenge
Characterizing a challenge requires two points of view: seeing the problem and seeing
the opportunity. Sometimes, the opportunity is staring you in the face! Other times,
you have to work hard for it. It’s not uncommon for a social entrepreneur to see an
opportunity first.You might see an untapped resource and think about ways to mobilize
that resource to solve a social problem. An example of an untapped resource that could
be turned into an opportunity is a human resource, such as young people who could
be encouraged to volunteer to improve their environment or a group of community
members who could be brought together to form a social fund. But even when you are
concentrating on an opportunity, you need to trace your desired social impact back to
the social challenge you are addressing. For the two examples of human resources, this
would mean understanding how young people could be mobilized to prevent environmental deterioration and how household poverty in this community could be addressed
through a resident-​led social fund. Understanding why the problem exists and the
channels through which it manifests will allow you to better shape your solution around
the problem.
Acknowledging that in-​depth understanding of why things are the way they are today
is important does not mean putting aside imagining how they could be different. Having
a vision of how things could be better is a good place to start, too. The main recommendation here is that you first ask yourself why things aren’t like that already and what
challenges confront people today, and then you can be better equipped to make things
into what you think they should be.
Do you envision a landscape where everyone has access to information through
Internet connectivity so that they’ll know what’s going on in the world around them?
You can make this change –​just make sure to equip yourself with the knowledge of how
things came to be the way they are today and of the players involved. Tackling a great
challenge is best done when you have assessed the landscape, the obstacles, the opportunities, and the resources available to you. Understanding why things are like this today is
part of unlocking the path to a different tomorrow.
What We’ll Look for
In this chapter, you will learn about what it means to characterize a challenge.We’ll focus
on how to frame your investigation, where to look for information, and how to think
about what it is exactly that you’re trying to do when you first set out to characterize
26
26 Researching Your Topic
your challenge. Different forms of evidence, data, and other information will be described.
We will also talk about the various dimensions you should look for to truly characterize a challenge and get a “3D+​picture” of it. Here, the plus sign refers to the notion
that most problems have more than three dimensions. Irrespective of data sources, you
should be looking for the different faces of the challenge you are tackling. These include
its geographic distribution (where it is) and its sociodemographic distribution (who it
affects) as well as the challenge’s scope (how widespread it is and how deep its impact is).
Trends over time are another factor to consider, as are “co-​challenges” –​challenges that
are closely interlinked with the one you are addressing. What social entrepreneurs before
you have learned is that our understanding changes with context. As we discussed in the
Introduction, there are no one-​size-​fits-​all solutions. And do you know why? It’s because
there are no one-​size-​fits-​all problems! While the core needs of the human race are shared
by us all, the realities of each person’s life depend on the context they live in (we will focus
on in-​context immersion in the next chapter). We will approach this by first collecting
information about your topic of choice that is already out there, and then narrowing in
on the context in which you’ll be working and collecting your own information.
Data Is Power
Why is it important to spend so much time characterizing the challenge? It may seem
like a waste to readers who are eager to take action. “We know the problem exists, and
studying it to death will not help anyone,” you might be thinking. However, it cannot
be emphasized enough that, before diving into action, time must be invested in ensuring
that the social entrepreneur has all the information at hand. Data is power. The more you
know about a situation, the higher your likelihood of making changes that result in tangible improvements for the affected population.
It is commonly said that fewer than one in ten funded tech startups succeeds. In social
entrepreneurship, the jury is still out as experts continue to debate whether there is a higher
or lower rate of success. On the one hand, the basic social problems we face today are multifactorial and extremely difficult to solve. On the other hand, social entrepreneurs are armed
with a weapon that, if applied properly, can improve their likelihood of success.That weapon
is decades of data. A wealth of information about the challenges facing various societies and
communities has been accumulated. Researchers from government agencies, universities,
think tanks, private consultancy firms, and nonprofits have spent millions of dollars and
person-​years2 characterizing the root causes, affected populations, and factors influencing
the world’s leading social problems. This is why it is so important to invest the time getting
to know your problem inside out before you start attempting to solve it.
Collecting information about a social problem can seem time-​
consuming and
overwhelming to a beginner. However, do not rush this step. Take the time to familiarize
yourself with key statistics and data sources, talk to people, and keep a record of each
step you take and each resource and piece of information you find. It is not an option
to start your social venture without reviewing available information, synthesizing it, and
thinking about what changes are feasible and how to make them.
Approaching Your Research
Think back to a time when you explained a challenge to a friend or colleague. It could
be a work challenge, personal challenge, homework challenge, or a plot in a book or
27
Researching Your Topic 27
television show. You probably did a good job of conveying the characters involved, the
sequence of events, the physical and social setting, and the various factors (relationships
between characters, backstory, twists in the plot) influencing the narrative. The person
listening to you probably became extremely engaged, wanting to know more and figure
out how it’s all going to end.
This is what you need to do when characterizing your challenge. You need to have
an in-​depth understanding of why it exists, the characters involved, the knowns versus
unknowns, how the physical and social environments influence the challenge, what the
backstory is, and where this is all going.
Most importantly, you need to be able to communicate this effectively. Characterizing a
challenge involves both (a) understanding the challenge for your own purposes and (b) being able to
relay its importance so that others get involved. You will need others if you’re going to effectively tackle this challenge. In the next chapters, we will talk about going into the field to
meet with experts –​those tackling the challenge –​and investigating potential solutions
together. In this chapter, we will talk about wrapping your head around the challenge
before you take that step.
Before you dive into your research, put your investigator lenses on. Look at everything
with a fresh set of eyes, and don’t take anything at face value. Here, there are two pieces of
advice to keep in mind: think like a child and question all assumptions.
Think like a Child
The investigation stage can be fun. Just like an old-​fashioned detective, keep asking yourself “why?” until you cannot ask it anymore. Channel that 3-​year-​old who kept asking
your parents “but why?” over and over again, regardless of the answers they gave you.
You may never understand everything there is to know about this challenge, but you
will have at your disposal the facts that have been collected by humankind so far. The
hard part is deciding what to do about the specific situation you are working in; we will
focus on that in the coming chapters. For now, read, listen to, watch, and observe the work
leading up to this moment. What have others found out that you can use to build your
solution? If you know the various pieces of information linked to your challenge, and if
you are working directly with those tackling that challenge, then you might put together
the different pieces and connect positive factors in a way that overcomes the negative
factors.
Question All Assumptions
Assume nothing. This is another big part of asking “but why?” Just because things are run
a certain way today doesn’t mean that this is how they have to be run. Muhammad Yunus
was an economics professor who was not trained in banking. Banking remains unavailable to millions of people who are excluded due to their perceived inability to pay back
loans. Muhammad Yunus asked, “but why?” Others assumed that if you are poor, you will
not be able to pay back a loan.Yunus and his collaborators formed a new type of village
bank called Grameen (meaning “of the village” in Bengali) where microloans were in fact
repaid in 98 percent of cases. They questioned the assumption that only wage-​earning
middle-​class people could open a bank account. And they believed that even people
living in poverty should have access to financial services. Because they questioned these
assumptions, they were able to break the mold (Sidebar 1.1 – in their own words).
28
28 Researching Your Topic
Sidebar 1.1 Grameen Bank (https://​g ram​eenb​ank.org)
Originated in 1976 as a research project in Bangladesh; founded as a bank in 1983
Goal: To empower poor people to break the cycle of poverty
What they do: Grameen Bank provides comprehensive financial services for poor
people, including microfinance loans.
How it works: Grameen Bank acts on the hypothesis that even the poorest people
could use loans productively to earn income and repay debts. By showing this
is true, Grameen Bank created an entire industry of microfinance and financial institutions for very poor people. Grameen Bank also believes that people
know best what they need, so a loan that one can spend however they like will
be more impactful than what an international development organization might
prescribe. Grameen Bank is financially sustainable and has demonstrated that
its loans positively impact economic and social well-​being both at the individual and village levels. It has grown to $2.8 billion in assets and offers a range
of financial products. The bank has won a Nobel Peace Prize, among many
other awards. Grameen Bank’s success led to the launch of the Grameen Group,
under which many other initiatives are conducted (such as Grameen Shakti, a
social business providing solar energy, which is mentioned in Chapter 6).
Diving into Research: Identifying Your Challenge
If you don’t already have a challenge you’d like to work on, this section helps you select a
challenge to which you will apply the learning tools in this book. Even if you already have
something in mind, it might help to ask yourself the questions outlined below:
1. Lived experience: Which social or environmental challenge do I have firsthand experience with?
2. Geographic and sociodemographic setting: What sociodemographic and geographic
settings am I most familiar with?
3. Needs-​based approach: What are the needs in this setting? What are people asking for?
4. Access to resources: What resources do I have access to that I can mobilize in a
helpful way?
5. Passion and motivation: What are my passions? What drives me in life?
6. Strengths and weaknesses: What skills and characteristics are my strengths and
weaknesses?
Why are these questions important? Below, we’ll explore these one at a time and think
about how they may relate to successfully characterizing and tackling a social or environmental challenge of your choice.
1. Lived Experience
Each one of us, regardless of our location or sociodemographic background, has
experienced life in a different way. Some of us may have struggled with mental health
challenges, others with chronic disease or substance misuse. Others may have struggled
29
Researching Your Topic 29
with one or more challenges related to gender identity, gender equity, and gender-​based
violence.Yet others may have interfaced with the court system, unequal economic opportunity, or lack of financial inclusion. Your lived experience shapes your understanding
of the world. You may have also interfaced with a social challenge indirectly through
someone you love or by being a service provider. The closer you can get to a social
challenge, the more uniquely positioned you’ll be to tackle it.
Try not to pick a challenge you’ve not interacted with firsthand, unless you’re
working very closely with others who have firsthand experience and in a way that
builds power for them and not yourself. Even in commercial entrepreneurship, the most
successful products and services have come from firsthand experience of a problem. The
first questions you’ll get from investors and other stakeholders are:What problem are you
trying to solve, and for whom? Why are you the right person for us to support?
2. Geographic and Sociodemographic Setting
Start local. Start with people you know. Keep it simple. Being familiar with a particular
location and a particular population is a key strength in establishing a social venture. That
is not to say that it is impossible to succeed in unfamiliar territory. Rather, a good way
to start thinking about your topic is asking yourself which places and people you have
experience with.You’ll need to work with others to co-​create new products, services, and
systems. Sometimes you don’t need to look too far from home.
3. Needs-​Based Approach
Thinking about your own experience is helpful in choosing your topic, but don’t forget,
this isn’t about you. Social entrepreneurs respond to the needs and preferences of the people
they are working with. In the setting(s) you are exploring, what have people asked for? Do
you have any firsthand information or secondhand accounts of what people want and need?
We will talk more about this in the next chapter, but it is crucial for you to be thinking
about this from the very start and framing your choice of challenge based on needs.
4. Access to Resources
Making a mental map of the resources to which you have access is another way to start
homing in on your topic. If you work in a large company that offers a product or service
to society, then the processes and resources that go into creating that product or service
could be extended to meeting the challenge you identify. If you are stationed in a university setting or a specific department, then the knowledge and skills of your professors
and peers may be an untapped resource you want to leverage. Of course, once you identify your challenge, you will still need to mobilize resources you may not currently have
access to. But thinking about the resources around you and how you can leverage them
for positive impact is a great way to start.
5. Passion and Motivation
What drives you in life? If you wake up every morning thinking about a certain topic,
then you should follow that lead! Most people don’t necessarily have one topic they
think about every morning, but they tend to gravitate toward certain parts of the living
experience. Some people enjoy working with others. Some people enjoy being in nature.
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30 Researching Your Topic
Some people feel the most alive when they are solving a complicated arithmetic problem.
Ask yourself what you would spend your time doing if you could do anything. Don’t be
paralyzed if you can’t think of one thing –​make a list of all the different options and,
thinking about the various options on that list, perhaps narrow it down to a shortlist. Talk
with your peers and mentors. Then you can look up information on each option, weigh
it against the questions listed previously, and start to get closer to your challenge.
6. Strengths and Weaknesses
Knowing yourself is the first step to becoming a leader. While we are dynamic beings
whose strengths and weaknesses evolve over time, assessing your current skills and
characteristics can help you think about what you have to offer. Are you a person who
enjoys research, digging up facts, and exploring different options before you act? Are you
an ideas person who gets excited about potential solutions but may not always follow
through? Are you a great communicator? Do you enjoy working with people or do you
prefer to work quietly in a less social setting? All these characteristics can be extremely
valuable –​there is no one winning formula. The reason it is important to assess yourself
is that, in choosing your topic, you are effectively matching it to yourself. Are you well
matched to venture into a tropical forest? Are you well matched to code software that can
be used for a mobile app? What activities do you excel at? It is completely okay to get out
of your comfort zone and tackle a challenge that might not be an easy feat for you, but it’s
important to know your propensities so that you can surround yourself with the people,
knowledge, and other resources that complement your skills and strengths.
Again, it is important to drive home the importance of thinking about all these
questions within the context of what is needed. Being a social entrepreneur is not about
building your legacy. As you will observe from the cases and interviews throughout this
textbook, a key characteristic of social entrepreneurs is that they check their egos at the
door. Being a social entrepreneur is about responding to the needs and opportunities
presented by others. So, when thinking about the previous points and aspects, think of
them in the context of assessing yourself as a resource for others. Where can you best serve?
Interview Box: Mona Mowafi, Co-​founder and President,
RISE Egypt
Mona, what led you to found RISE Egypt?
What was the problem you saw, and what
was the opportunity?
Image Courtesy of Mona Mowafi
It all started when I was a doctoral student
conducting field research in Egypt back in 2006–​
2007. I was working on a large study called the
Cairo Urban Inequity Study, measuring disparities in health and other development outcomes
within Greater Cairo. What I noticed at that
time was that there were so many people already
implementing impactful interventions on the
ground. I started meeting with some of these
31
Researching Your Topic 31
leaders to listen to their stories and learn about their needs as well as their dreams
for their communities. What I learned was that access to knowledge and networks
were their top barriers. Money came next. Many of them articulated in one way
or another that they also wanted to better understand if what they were doing
worked well and if there were potentially better ways to achieve their goals. I heard
in those insights an interesting bridge to academia that solved two problems: these
community-​based solutions were real-​world interventions that could be studied and
published (a positive incentive for researchers). And these community leaders could
benefit from data-​driven approaches to scale their work. So, the first opportunity
I saw back then was in creating bridges between academics and social entrepreneurs
solving real societal challenges on the ground in Egypt. Then in 2011 the Arab
Spring happened, and, as an Egyptian American who was passionate to be engaged
in making positive and sustainable impact in Egypt longer term, another gap and
solution emerged: there were few organizations creating bridges between the diaspora and its networks worldwide and these brilliant Egyptian social entrepreneurs.
RISE Egypt was born.
How did research continue to play a role as your journey unfolded?
The seeds of RISE were planted in 2006–​2007, with the original idea to bridge
between the world of research/​evidence/​academia and the world of social entrepreneurship/​innovations/​community-​driven solutions. The idea took shape over time
through conversations with dozens of social entrepreneurs and other stakeholders in
Egypt over the course of several years. But it was the Egyptian revolution that truly
catapulted RISE Egypt and brought it to life. I was one of millions of Egyptians in
Egypt and around the world who wanted to take part in positively transforming the
country. From January 2011 until today [January 2021], it’s been a more than full-​
time journey and a more than fulfilling journey of seeing this dream come to life.
Research has played an important role from day one. Alongside our first flagship
program –​the RISE Fellowship Program –​we launched our first longitudinal
impact research study with one of the first social enterprises in our fellowship
program: Educate Me.To design that study, we rigorously worked together to define
a clear theory of change, develop survey instruments and tools validated in Arabic,
and design a study to measure the impact of this brand new student-​centered community school in a poor, underserved community on the outskirts of Cairo. These
education innovators –​as is so often the case in entrepreneurship –​had to basically
fly the plane while building it. It was an incredible learning experience that enabled
us to test the hypothesis of whether it is indeed possible to bring these two worlds
of academia and social entrepreneurship together. Oftentimes it felt like our job
during the study was to speed researchers up and slow entrepreneurs down! This
may be a perennial challenge we face in bridging research and practice in the social
innovation space; yet it is one that we believe is well worth the investment.
Where is your research leading you next?
We have learned so much from the entire process, and today we are working with
Educate Me to develop a case study of our learning journey; and we are using this
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32 Researching Your Topic
experience to lay down another foundation of work with other education innovation leaders across Egypt to develop policy research that leverages the collective
intelligence of the wider education innovation community across the country. We
hope to make sector-​wide recommendations, looking specifically at where education gaps exist and where education innovators may play an important role in
filling those gaps. All of this will fit into our new flagship initiative called LEEP for
Collaborative Impact,3 which is a platform for social innovators, professionals, and
researchers across Egypt and around the world to engage in peer-​to-​peer capacity
building as well as applied research, leveraging the power of communities to garner
insights and evidence about how to most effectively bridge disparities in development at the national level. So, back full circle to our founding vision, today we are
indeed scaling our approach to build evidence for equitable and sustainable development across Egypt.4
Diving into Action: Characterizing Your Challenge
Questions to Start Answering
Below, we will walk through a simple five-​question framework to help you start characterizing the challenge you are tackling (Figure 1.1). Then we will talk about ways to
collect and analyze available information, to reveal answers. By the end of this chapter,
your objective is to organize available information to answer these questions to the best of
your ability at this point. As you proceed further along in your journey, you will continue
refining those answers.
•
•
•
•
•
What? What is the challenge you are narrowing in on? What is its nature and
characteristics? What consequences does it have on people?
Who? Who are the affected populations? What are their characteristics? Does it affect
some people more than others?
Where? What is the distribution of the challenge, its causes, and affected
populations?
Why? What are the root causes?
How? What are the pathways by which these causes affect the populations you’ve
identified?
As you explore the answers, it is also important to consider the following dimensions:
•
•
Magnitude versus distribution (depth versus breadth), variability, trends over time
Consistency, quality, sources, and types of data
Don’t forget to conduct research on prior attempts to tackle this challenge:
•
•
What has been tried already?
What has and hasn’t worked, and why?
3
Researching Your Topic 33
The challenge
What
Who
Breadth vs depth
Where
How
Variability
Why
Trends over time
The data
Sources / types
Gaps in
available
data
Inferences
Quality
The solutions
What worked and how
What didn’t work and why
Figure 1.1 A framework for characterizing your challenge
What Are You Trying to Change?
Let’s go through an exercise that will help you get started in characterizing your challenge.
Start by writing down what it is you are trying to change.You should be able to state this
in one sentence. This is an exercise that you are doing for yourself, so don’t get stuck on
the wording; you will have plenty of opportunity to edit, change, and develop the answer
before you move on. Describe the challenge and how it affects people.
Who Is Affected?
Next, write down who is affected by this challenge. Try to think of different segments of
society. Does it affect certain ages more than others? Some social challenges affect vulnerable populations, like the youngest and oldest people, the most. Air pollution is one such
example: it affects the heart and lungs of infants and the elderly more than the average
adult. Does it affect certain genders more than others? Lack of access to water is another
example: girls and women in remote rural settings spend hours each day walking to the
nearest water source, collecting water, and walking back. In many cases, this has a detrimental effect on girls’ ability to attend school. Age and gender are examples of what we
call “sociodemographic indicators.” These are descriptive data that capture population
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34 Researching Your Topic
characteristics. Other sociodemographic indicators are income level and occupation: many
social challenges disproportionately affect those with low incomes or certain occupations.
One such example is climate change, which disproportionately affects farmers and food
producers compared to those with urban, office-​based occupations.
Where Are the People?
In addition to sociodemographic distribution, you need to define geographic distribution.
Where is this problem observed? How widespread is it? Does it affect people in different
places in different ways? Answering these questions will help you think about where
you might have the opportunity to change the problem. Don’t be afraid to dig deep.
Oftentimes, data are available only at the aggregate level. This means that you might find
global averages, regional averages, or country averages easily. But you need to look beyond
the surface to understand variability at the local level.
Another tricky aspect of geographic distribution has to do with finding out whether
causes and symptoms are observed in the same places. Knowing there are multiple causes
for each problem, it might help to ask yourself: Which causes are localized, and which
stem from far away?
Why Has this Challenge Arisen, and Why Has It Persisted?
This brings us to root causes. Understanding root causes is the most important part of this
journey. This is not to say you will always be able to tackle a challenge at the roots. But
keep digging until you find the roots, and then you can ask yourself how deep your solution can go. Most social entrepreneurs would agree that given the opportunity to tackle a
challenge at its root, they would go for it –​and if that were not feasible, then they would
at least go as far down causal pathways as possible to maximize the resulting impact.
How Do these Root Causes Affect the Challenge and Its Outcomes?
Don’t be satisfied with listing root causes without understanding of the mechanisms by
which these causes result in the outcomes you are looking to change.Tracing the pathway
of each root cause to its associated outcome is one way to do this.You might end up with
a lot more information than you signed up for. Remember our mantra: data is power.
Later in this chapter, we will talk about ways to organize information to help you step
back and analyze multiple causes and pathways so that you can start thinking about which
one(s) you will tackle and how. For now, putting on your investigator lenses and exploring
multiple pathways to the same outcome will help you identify the opportunities you have
to change that outcome.
Dimensions of the Social Challenge
Try to think in as many dimensions as you can. If this sounds abstract, then think about
a circle you might see from far away. If you get closer and see the circle from different
points of view, you might find out it’s actually a sphere or a cone.That changes the nature
of the object entirely. The same goes for life. When understanding a social challenge, it’s
important to think about its different dimensions.
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Researching Your Topic 35
“Depth of impact” is one example. Is this a problem that confronts many people,
affecting different people in different ways? Is there a small number of people who are
strongly affected, versus many people who are impacted to a lesser degree? The spread
of a challenge versus its depth is one important dimension for you to think about when
getting to know your challenge.
“Uniformity versus variability” is yet another way to look at it. Is your challenge
manifested in more or less the same way everywhere, or is it highly variable? Understanding
the extent to which the challenge differs in various places and among various groups, as
well as the factors influencing this variability, is critical to the design and scaling of your
solution.
Examining “trends over time” is another way to investigate your challenge beyond face
value. Is this problem decreasing, increasing, or staying the same? Are the trends different
in different parts of the world or in different populations? What is causing these changes
and variations?
Dimensions of the Data
It is also important for you to think about the characteristics of the data you are using
to build knowledge. What are the sources of information? Is there consistency in your
results? Not all sources of data are equal.
Different types of research result in different types of data. One type is observational
data. Observational studies can provide a snapshot of a situation, or they can track it over
time.The data can be collected prospectively (by signing up a group of study participants),
or they can be collected retrospectively (by looking into existing archives like hospital
records and government census data). They can also be at the level of the individual, or at
a population level, which is referred to as an ecological study.
For example, in an ecological study, it might be observed that in countries with certain
policies, girls get educated more. It may also be observed that in these same countries,
maternal child health outcomes are more positive. Does this mean that education is a
root cause of positive health outcomes? We can only be certain in cases where individual
women were tracked for both pieces of information and where the study also accounted
for other factors that could influence these results. In this example, it turns out that yes,
it is indeed a root cause. It is difficult to reliably infer relationships from ecological data,
because there are so many different factors that could be responsible for the results. Be
careful when making your own inferences from national statistics and other ecological
data. Read about the work of others who have been studying the field for years, and
immerse yourself in the scientific debate of the topic’s leading researchers.
Another type of study is a randomized control trial (RCT). This is used by researchers
when they want to control the setting in which the social outcome in question is observed,
to be sure that the factors they are studying are indeed the cause of this outcome. This
results in experimental rather than observational data. If we have enough experiment
participants to ensure that the results are not likely to be a coincidence or an exception,
and if the experiment follows proper protocol to ensure unbiased results, then an RCT
can be a powerful type of study for understanding root causes of social challenges.
Another characteristic of data is that they can be “quantitative” or “qualitative.”
Quantitative data are numerical, such as statistics on the number of people who are
experiencing a problem. Quantitative data are usually gathered using questionnaires. This
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36 Researching Your Topic
data can tell you how many people are affected, what proportion of the population this
is, and the level of outcomes (e.g. health or education test results). Quantitative data can
be provided in its “raw” form or as “aggregate” data. Raw data are the original information you collected, such as what a person said or what they earned. Aggregate data are
raw data that have been grouped and summarized; percentages, averages, sums, and other
statistics are aggregate data. Qualitative data are gathered by interviews, surveys, and other
field-​based methods. The data are descriptive and can tell you what people think, do,
and feel about a certain challenge; show how it affects their lives; and provide examples
of personal experiences with the challenge. Both types of data are needed to provide a
complete picture.
It is also important to distinguish between “primary” and “secondary” data. Primary
data refers to information you collect yourself, while secondary data are reported by
someone else. At this stage, you will most likely be using secondary data.
Why is it important for you to understand the different types of data and the type
of study they came from? The answer is that you need to be aware of the different
implications of various study designs, especially the different types of data they produce,
to assess whether and how the results can inform the setting you’re working in. Certain
inferences, such as causality and generalizability, depend on the characteristics of the
studies that generate data. Be wary of websites and publications that assert findings or
claims not backed by rigorous research.
“Causality” is a valuable concept to understand. Understanding the “directionality” of
relationships is important for identifying opportunities. However, showing a relationship
between two factors doesn’t mean that one causes the other. If two factors are related,
but the first doesn’t necessarily cause the second, then changing the first will not necessarily change the second. The second might affect the first instead. Or, they might have a
common root cause, which means you have to keep digging.
“Generalizability” is another dimension you should be aware of. If a study is conducted
in one town or one country, are the results generalizable to any other setting? Or could
they potentially be attributed to the unique qualities of that setting?
Lastly, examine the strength of evidence in relation to consistency of findings. Are you
looking at one study, or are there many studies reinforcing each other’s findings?
The type of information you will be accessing at first will largely be from sources
that have already compiled, synthesized, and analyzed multiple studies. This will make it
easier for you to get a general introduction before diving deeper into the topic of your
choice. But it’s still important for you to keep in mind the different dimensions of a social
challenge and characteristics of the data used to describe it so that you can decide for
yourself what the knowns and unknowns are.
Prior Attempts to Conquer the Challenge
Last but not least, what has been tried before? What has worked and what hasn’t? So many
prospective social entrepreneurs have jumped headfirst into a challenge without doing
their homework. Don’t reinvent the wheel! There are individuals and organizations that
have dedicated their lives to figuring out what works and what doesn’t, so at least start
with this knowledge base as your foundation.
Again, go with the data. Following your intuition is not enough, if your intuition is
not informed by evidence. Be objective, open your mind to possibilities, and start from
scratch like a true detective. Don’t forget, people’s perceptions may differ from reality.
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Researching Your Topic 37
And many get caught up in trends or hot topics.You need to spend a lot of time thinking
about which challenge you want to address, learn everything you can about the multiple
dimensions of that challenge, and investigate what others have tried before you. By taking
these steps, you can help ensure that all the time, effort, and resources of developing and
implementing your solution will more likely make a difference.
A great tool to organize this information is the Impact Gaps Canvas. You can start
filling it out using the secondary research you are conducting at this stage, and you can
continue refining it with the primary research you will conduct next (Table 1.1).
Table 1.1 Impact Gaps Canvas
Challenge mapping
Solutions mapping
What’s happening, what’s the What models are already being
impact of the challenge, and tried, what’s working, what’s not,
what’s holding the challenge and what resources are available?
in place?


Impact gaps
What could close the gap
between the challenge and
the current solutions, where
are opportunities for greater
collective impact, and what
are the key lessons learned?

Guiding questions
How do you describe the
challenge?
How do those most impacted
describe the challenge? How
do they describe the effects?
How is this challenge related
to other challenges?
What is the impact of the
challenge?
What are the numbers?
Who or what is impacted
(where, how many, in what
way)? What does the most
up-​to-​date research say?
What is happening locally?
What available resources could
be drawn on? What efforts are
already being tried that could
directly impact the challenge?
What are the different models?
How are they joined up, or not?
What is happening globally?
What has been tried on similar
or adjacent challenges globally?
What lessons can be learned
from those efforts? How can
those lessons be shared?
What is the cause of the
challenge?
What’s working, and
what’s not?
What is causing the challenge
to persist? Who stands to
benefit from the challenge
continuing to persist?
What can be learned from the
successes and failures of these
efforts? What do those involved
attribute their results to?
Where are the gaps
between the challenge
and solutions?
Who or what is not being
served, and what is missing to
bridge that gap? What actions
can be taken to fill the gaps?
Where are the gaps
within the solutions?
What is missing (specific
regulations, knowledge
sharing, new efforts,
partnership, etc.) that would
further link up the solutions
and achieve greater collective
impact?
Where are the
unaddressed obstacles?
What is being overlooked?
What are the unintended
negative consequences of the
existing efforts? What specific
opportunities could unlock
future impact?
(continued)
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38 Researching Your Topic
Table 1.1 Cont.
Challenge mapping
Solutions mapping
Impact gaps
What is the history and
future of the challenge?
Where is the focus and the
future?
What are the key lessons
learned?
How has the challenge
changed over time? What is
the projected scope of the
challenge in the future?
What parts of the challenge are
focused on, and what are ignored
(specific populations, areas,
etc.)? What is on the horizon
that might impact collective
solutions? What future scenarios
might play out?
What key lessons have
been shared by those on
the ground? Where are the
biggest opportunities for
impact? Who do you need
to talk to in order to dig
deeper?
Learning log and actions
What resources and people can you access to understand the challenge and potential solutions?
Who do you need to speak with, and what do you still need to learn, to fill your knowledge
gaps? What can you do to improve your understanding of this challenge or to start filling a gap?
Source: Tackling Heropreneurship (http://​tack​ling​hero​pren​eurs​hip.com); adapted into table format and
reproduced here with permission of the author.
Tracking and Interpreting Your Investigation
Collecting Information
In researching your topic, you need to be systematic and keep track of everything. A good
way to do this is to record your journey in a logbook, adding information one step at
a time. Even when conducting the most basic Internet search, log the keywords you
searched and the number of hits or pages of hits that you surfed through. Out of these,
how many were relevant to your search? Take notes from each one, recording the website
and key points so that you can go back to them as needed. This is as crucial as it is simple
to execute. Otherwise, it is all too easy to lose track of your results, become overwhelmed
by the information you find, and not be able to go back and review key findings. Not to
mention, you may need your references and citations when you share your results with
others –​even more reason to have a record of everything.
Common sources of information for kicking off your investigation are international
development agencies, universities, think tanks, and international nongovernmental
organizations (NGOs). International development agencies often provide information
on various social and environmental challenges. They dedicate resources (both human
and financial) to gathering existing evidence on topics of interest to them. The World
Bank, regional banks, and various UN agencies like the World Health Organization,
the United Nations International Children’s Emergency Fund (UNICEF), the United
Nations Development Programme (UNDP), the United Nations Environment
Programme (UNEP), and the Food and Agriculture Organization of the United
Nations have focused on many different topics and challenges over time. Most of these
agencies have created portals containing information and resources collected from
other agencies, nonprofits, governments, and universities worldwide on their topics of
interest.
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Researching Your Topic 39
One such portal is the Sustainable Development Knowledge Platform, which
consolidates information on the SDGs.5 Reading the information collected around each
problem, the interventions designed to solve these problems in various settings and by
various players, and what did and didn’t work could provide useful background to your
thinking about the social venture you are building. A wealth of information has become
available on social problems included within the SDGs as a result of resources pledged
by the world’s leading development institutions, academic institutions, and governments
to meet these goals. Further information has been created as stakeholders spanning the
public and private sectors developed programs and interventions to reach the targets specified within each goal. While some progress was made, we are nowhere near successfully
tackling these challenges, and more entrepreneurial approaches are needed.The challenge
you take up could be reflected in the SDG targets, or it could be something completely
different. In either case, it is well worth your time checking out the portal.
A similar global portal is overseen by the World Bank.6 Here, you can look up
statistics from countries around the world and find information on national data sets,
where most countries archive household surveys and other national information
about sociodemographic indicators and environmental and economic indicators. Local
nonprofits may also have small-​scale data that will be extremely valuable to you in completing the picture and assessing variability in your social challenge at the local level.
A good way to approach your investigation is to start at the global level, then look for
regional sources of information, then zoom down to the country and local levels.
Global foundations and think tanks are another useful source of information, as they
often invest time and resources in learning about the challenges they aim to tackle. Other
helpful portals and databases have been created by professional communities working
on specific social challenges. For example, the Center for Health Market Innovations
compiles information on innovative health enterprises, nonprofits, PPPs, and policies in
low-​resource settings around the world.7
Universities are also a great place to find data sources and research. Many universities
have specialized web pages and centers dedicated to specific social and environmental
challenges. Universities often partner with international institutions in data collection and
analysis; they also often partner with grassroots organizations in their immediate communities to collect and analyze local data. Many universities lie at the intersection of academia and grassroots work, and these organizations, as well as others that bring together
academics and grassroots actors, are especially valuable to you. For example, the Abdul
Latif Jameel Poverty Action Lab, a network of university professors and research affiliates
in almost 100 countries, provides a searchable database of more than 1,000 randomized
impact evaluations of social programs.8 Individuals for Poverty Action conducts RCTs
around the world and shares key findings and raw data on its website.9
Yet other universities provide practical tools that help you get started in organizing
information and turning data into action. One example is the Community Tool Box,
which includes resources, tools, and best practices in community building.10 Another is
the Social Entrepreneurship Hub, which contains guidance, videos, and templates to help
you explore complex problems, develop solutions, and understand how to navigate the
challenges of implementing those solutions.11
As you set out on your journey, try to explore as many different perspectives and
sources as possible. Keep in mind that it is very rare for any one source of information to
paint a complete picture. For every article in peer-​reviewed scientific journals, it is possible to find another article with contradictory findings. Therefore, while characterizing
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40 Researching Your Topic
your challenge, always search for a second opinion (or a third or a fourth). Just as you
would diagnose your health by meeting with more than one health professional and
doing your own reading, the same goes for diagnosing and characterizing the challenge
you are setting out to tackle.
For now, start with systematic research using the Internet and/​or a journal database
to find peer-​reviewed journal articles, academic dissertations, institutional reports, and
interviews with subject matter experts. Identify key search terms and gradually narrow
your criteria. Most importantly, keep track of your research methods and your results so
that you can synthesize and analyze these later. In the coming stages, you will build on
this knowledge by speaking with the people directly involved in your challenge and by
experiencing the challenge firsthand, if you haven’t already.
Interpreting Your Results
If you do a good job of asking “why?” over and over again and of recording this process
systematically, chances are you’ll end up with a load of information. When you are ready
to step back and examine the body of information you have gathered, a few analysis tools
and techniques might come in handy.
Data analysis refers to the process of sorting data to recognize patterns. What story do
the data tell? Because you are collecting secondary data at this stage (rather than the primary data you will collect during the co-​creation stage), it might be helpful to start with
visual tools. Researchers collecting primary data use tools that range from laboratory analysis to statistical analysis. The good news is, for now, they have already done this for you!
So let’s talk about some visual tools you can use to organize the information you have
collected from others’ research.These will help you think about that information in a way
that will allow you to get to the bottom of it.
Tables are one way to visually organize your findings, to synthesize and analyze them.
This can help compare different pieces and sources of information across subjects, factors,
or scenarios. For example, if you are conducting a literature review, or even a series of
informational interviews, a good way to organize the information is to type it into a table
that lists each source, website or contact information, and key points. Then you can sit
back and view the information collectively, noticing commonalities and differences in the
key points, as well as gaps that you need to fill through other sources.
Diagrams are another helpful way to summarize and visualize your investigation, especially if you want to show association between two or more factors. This can be as simple
as writing down the different factors related to your challenge and connecting them with
arrows where the body of evidence indicates a relationship between two factors.You can
use lines of different colors, or solid versus dotted lines, to indicate the nature of the relationship. For example, a solid line could indicate a causal relationship and a dotted line
could indicate an association that is not causal. You could add a question mark over a
dotted line to indicate that the evidence is inconclusive, or plus or minus signs to indicate
whether the association is positive or negative. The direction of the arrow shows which
factor influences the next (sometimes the arrow goes both ways). Above the arrows or
next to the graph, you can list the sources of information for each relationship.
Of course, while drawing your diagrams, you may find that some relationships can
be cyclical. Positive or negative feedback loops are common in social outcomes, where
the presence or lack of one factor leads to more or less of another factor, which then
reinforces the presence or lack of the first factor. We see this phenomenon play out when
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Researching Your Topic 41
higher levels of education lead to higher levels of health.You can expand on this: on the
back end, higher levels of income lead to higher levels of education and health; on the
front end, higher levels of education and health lead to higher levels of income, which
reinforces the cycle in subsequent generations (Figure 1.2a). This example is at the population level. At the individual level, an example is sleep. Poverty is correlated with poor
sleep, which in turn is correlated with reduced productivity, leading to more poverty
(Figure 1.2b). A more expanded diagram would include the different factors linking these.
A similar tool for organizing and building on your thoughts is a new take on an old
technique, the Ishikawa diagram –​also known as a fishbone diagram, because it looks like
a fish skeleton. In this book, we’ll use a “flipped” Ishikawa diagram, called the Inverted
Ishikawa, to visualize root causes (Figure 1.3). The original version was initially used
in industrial business, and it was then adapted to the study of social and environmental
problems.12 To start an Inverted Ishikawa, write the central challenge in a circle at the top
Parent
factors
Parent’s
health
Parent’s
education
Parent’s
income
Child
factors
Child’s
health
Child’s
education
Child’s
future
income
Sleep
quality
Income
Productivity
Figure 1.2a–​b Examples of diagrams for organizing information
42
42 Researching Your Topic
Social
challenge
Factors
related to the
challenge
Root causes –
keep digging!
Figure 1.3 Visualizing root causes using the Inverted Ishikawa
of your page and draw a downward line from that circle. From that line, various offshoot
lines emerge to link factors related to the challenge. Because every challenge is influenced
by multiple factors, and thus has multiple solutions, this will help you flesh out possible
scenarios, which then set the stage for deciding how you and various other stakeholders
might possibly work together to tackle it. At the very bottom of the line will be the root
causes; when you are not able to identify any further branches –​when you are not able
to ask “why?” anymore –​then you have found the roots.
Consider maternal mortality. Let’s say you are working in a rural area in a low-​income
country. Some of the factors influencing maternal mortality are lack of prenatal care,
unattended births, and lack of medical facilities. If you keep asking “but why?” then you
can tie these questions even further back to limited resources at the government level
(weak health systems and infrastructure) and limited time and awareness at the household
level (mothers who need to work, don’t have time to travel to the nearest health center,
and don’t have knowledge about health-​related needs and services).You could even trace
your “why” back to geopolitical and historical forces that led to the poverty of this nation
(Figure 1.4).
At this point, naturally, you are feeling overwhelmed. The diagram is shaped like a
thistle because these are thorny and deep-​rooted challenges. “What can one aspiring
social entrepreneur do about all these major forces?” you might be asking. Don’t forget
that at this stage, you are not yet attempting to tackle this challenge.You will have plenty
of opportunity to think about the level at which you want to tackle this challenge, as well
as the feasibility of your solution. For now, your task is to understand the problem to its
core. Understand who it affects, where, how, and why. If you keep asking “why?” until
you get to the roots of the challenge, then you will at least be closer to getting a full picture. In the next chapter, we will step back and assess at what level you might be able to
intervene. You may not have access to government systems or larger geopolitical forces,
but you may have access to knowledge and services you can get to mothers.Your charge
43
Researching Your Topic 43
Lack of
prenatal
care
Maternal
mortality
Limited time and
awareness
Poverty
Corruption
Unattended
births
Lack of
facilities
Weak health
systems and
infrastructure
Unstable
government
Figure 1.4 Inverted Ishikawa visualization for a maternal mortality scenario
is to combine the informational resources at your fingertips to learn as much as you can
about the challenge.
Systems Mapping
As you proceed in defining your challenge and talking to people affected by this challenge
and working on it, you will start getting a sense of the system you are working with.
We talked about systems thinking in the last chapter: understanding that each and every
challenge is part of a complex web of factors and stakeholders that are interrelated, and
that every action you take will affect and be affected by the relationships that exist between
these factors and stakeholders.
For example, if you are working in the US healthcare system, you need to understand the role of different payers, providers, patients, and other players; how they are
interconnected; political and historical factors; alignment or misalignment of incentives;
entrenched interests; change leaders and champions; and potential opportunities for changing the way the different players interact together. Or you may be working with a
smaller, more localized system.
Systems mapping means defining and understanding the system you are working in.This
entails defining the boundaries of the system, identifying the players within that system,
understanding the relationships between those players, and the factors affecting those
relationships. The visual tools shared above, such as causal loop diagrams and the inverted
Ishikawa, can help you start to think about where you would define the boundaries and
actors in the system you are working with.You can also map out the actors and other factors
and processes that make up a system using free software that is available online.13
A helpful visual tool used in systems thinking is the iceberg model, which challenges
you to think about the events that are observable above the surface and the underlying
4
44 Researching Your Topic
patterns, structures, and mental models causing these events.14 To change systems and
frameworks, we need to change these patterns, structures, and mental models.
Case Study: Health Leads
Every new endeavor starts with research on its underlying problem. There are many ways
to collect primary and secondary data initially, but it’s also important to remember that
the research process never stops.Whether combing through what others have done before
you or talking to people about their experience, continual research can help an endeavor
validate its efforts to date. It also allows that endeavor to evolve to reflect new knowledge,
or to adapt its offering to different communities or emerging political and social climates.
Health Leads is an American nonprofit organization that addresses drivers of health.
The term “drivers of health” refers to the social and environmental factors that shape
people’s health: poverty, pollution, education, income, occupation, gender, race, the built
environment, climate, and many other factors, all of which are interlinked.
Health Leads initially started as an intrapreneurship project. As a legal volunteer
embedded within a busy Boston hospital, the founder of Health Leads, then an undergraduate student, observed that the same patients were showing up again and again in the
emergency room. She started by asking “why?” and conducting interviews with patients
and physicians. Investigation into this pattern revealed that patients were being treated for
medical symptoms that were all rooted in poverty. Some of the pathways by which poverty led to these symptoms included poor nutrition, inadequate shelter, and lack of decent
wages to provide for basic needs.
After mapping out these pathways and learning more, she realized that resources were
available to address drivers of health, but that people were not accessing them. Doctors, in
particular, were not asking patients about drivers of health. As one physician said about a
patient: “I know she’s living in a mold-​infested apartment … and I don’t ask about those
issues, because there’s nothing I can do.”15
This further information pointed toward an intervention in which other undergraduate volunteers help people access existing resources to improve drivers of health.
Health Leads was launched in that same hospital in 1996 as Project HEALTH. The
intrapreneurship consisted of a help desk where patients could access information about
community resources and navigate services related to shelter, nutrition, and other needs.
The patient filled out a social needs intake form on arrival at the hospital, and at the
end of the medical consultation, the doctor (who had been trained to talk about health
drivers) would direct the patient to the desk. A volunteer advocate, overseen by a professional social worker, would be assigned to as many as eight patients at a time, following
a case until the patient received the relevant social service. Ninety percent of patients
received a service through their help desk interactions.
Project HEALTH was designed around the theory of change that connecting patients
with resources to address drivers of health improves health outcomes. In 2015, the group’s
help desk at Massachusetts General Hospital was the subject of one of the first clinically
validated studies of a social needs program.That research found a significant link between
meeting patients’ resource needs and improved health outcomes. Around the same time,
22 help desks had been established in six cities. They were consistently serving 11,500
patients per year.
But the initiative was difficult to scale within a clinical setting. In 2001, Project
HEALTH launched as an independent nonprofit organization so that it could fundraise
45
Researching Your Topic 45
and grow. In 2010, Project HEALTH rebranded as Health Leads. And with this name
change came an expanded strategy, which looked beyond the bricks-​and-​mortar help
desk. In response to passage of the Affordable Care Act and encouragement from a
major funder, Health Leads shifted focus from partnering with individual hospitals to an
agreement with the healthcare provider and health plan Kaiser Permanente. The organization launched a call center, whose staffers reached out to patients to screen them
for social determinants of health. Kaiser Permanente also agreed to study the health of
patients receiving nonmedical care as well as associated medical savings. The partnership
with Kaiser Permanente could be described in another way: Health Leads had decided
that relinquishing some control of its offering would speed adoption and create systems
and frameworks change.
From this strategy shift, Health Leads developed into a national hub dedicated to
connecting patients with the social services that can improve well-​being. Some of the
offerings they designed included the Health Leads Screening Toolkit to support health
systems in identifying and screening patients for drivers of health; the Health Leads
Resource Library, a comprehensive and searchable online library of the industry’s leading
resources; the Health Leads Network to bring together healthcare practitioners and
caregivers to collaborate, share, and learn from each other; and a design accelerator called
the Equity-​Oriented Primary Care Innovation Collaborative, bringing together primary
care practices and their communities to sustainably redesign primary care delivery to drive
equitable health outcomes. Through training sessions, road maps and other publications,
online resource libraries, and more, Health Leads is supporting thousands of healthcare
institutions adapt or create tools, technology, and analytics to address patients’ nonmedical
needs. As emerging needs rise to the forefront, the organization develops programs in
partnership with communities to address these needs.16
As its methods evolve with the emergence of new partners and new data, Health
Leads has continually validated the theory that systematically identifying and addressing
drivers of health through screening, referral, and community navigation services lowers
healthcare costs. Not only has Health Leads continuously drawn on research to characterize the challenges and develop solutions; it has also contributed to generating new
knowledge through the implementation of its model. This knowledge, combined with
data from other organizations and research, contributes to the development of models that
can be implemented nationally to serve millions.17
Thought Questions
1. The US healthcare system is a large and complicated system. Health Leads initially
started small by examining one hospital and expanding from there. Where would
you start, to understand barriers to health in your community and opportunities to
mobilize resources in new ways?
2. What are some of the different ways that Health Leads gathered data at different
stages in its journey, and who are some of the important stakeholders that were
involved? What concerns would you look out for while gathering data at different
stages and with different stakeholders?
3. How did the lived, learned, volunteer, and professional experience of different
stakeholders contribute to the development of Health Leads? What investigations do
you feel would be the right fit for you based on your lived, learned, volunteer, and
professional experience?
46
46 Researching Your Topic
4. Spend some time on the organization’s website as well as the links in the footnotes in
this case study. What are some of the ways that different stakeholders are responding
to existing and new knowledge collected by Health Leads and others? What are some
of the obstacles still standing in the way of addressing drivers of health to create more
health equity?
Next Steps
In this chapter, we have taken the first step toward building a solution: understanding the
challenge. The hardest part might be choosing one topic to focus on for the rest of the
book. Give yourself time on this, but then pick something and stick with it. Remember
that you are doing this as a learning exercise. Over time, you will apply all the learning
tools and skills from these chapters to other topics. For now, follow your passion and
follow the need –​ask yourself where you can serve as the most valuable resource.
We have gone over the basic framework for characterizing a challenge and the basic
types and sources of information. If you have done your homework right, you are facing
a huge amount of information! Now it’s time to apply this framework to synthesizing and
analyzing that information, so you may look at this challenge from a holistic point of view.
Chapter Assignment
At this point, you are tasked with identifying and characterizing your challenge. Now
you’ll start building the knowledge base on which you’ll create your solution. Provide
answers to the following questions using only one sentence per question, unless otherwise
specified.
1. Describe what social challenge you will be tackling moving forward. How does it
affect people?
2. Who does it affect? Include statistics on the number of people affected.
3. Where is the affected population? Include information on the distribution.
4. What are the root causes, and what are the pathways by which these causes affect
this population? You can either diagram or write out your answer using one sentence
per cause.
5. What data sources and types have you used? List at least eight references.
6. Fill out an Impact Gaps Canvas using either the template provided in Table 1.1 or the
downloadable PDF at www.tack​ling​hero​pren​eurs​hip.com
Notes
1 They are often referred to as “wicked problems” because they are difficult to define and there are
no easy solutions. For more, see: Cooper, C. (nd).“Wicked” problems:What are they, and why are
they of interest to NNSI researchers? Network for Nonprofit and Social Impact. nnsi.northwestern.
edu/​wicked-​problems-​what-​are-​they-​and-​why-​are-​they-​of-​interest-​to-​nnsi-​researchers
2 Person-​years are calculated as time spent working on something multiplied by the number of
people working on it.
3 See LEEP’s website at: www.leep​4imp​act.org
4 You can learn more at: www.riseeg​ypt.org/​our-​jour​ney
5 The Sustainable Development Knowledge Platform can be accessed at: https://​sus​tain​able​deve​
lopm​ent.un.org/​index.html
47
Researching Your Topic 47
6 See the World Bank Open Data portal at: https://​data.worldb​ank.org
7 Find out more about the Center for Health Market Innovations at: https://​heal​thma​rket​inno​
vati​ons.org
8 See the Abdul Latif Jameel Poverty Action Lab website at: www.pover​tyac​tion​lab.org
9 See more on Individuals for Poverty Action at: http://​pove​rty-​act​ion.org
10 One of the resources mentioned in the Community Tool Box is the PRECEDE model, which
helps you start with a statement of the problem and proceed with intervention mapping.
Originally developed for use in public health, the model was used initially to understand the
quality of life of those affected and the different factors related to the problem. It is part of a
planning tool called PRECEDE-​PROCEED (see https://​ctb.ku.edu for more).
11 See the Stanford Social Entrepreneurship Hub website at: https://​sehub.stanf​ord.edu
12 You can view a short talk by Professor Matt Andrews of Harvard University on this exercise
using a fishbone diagram here: Andrews, M. (2014). Deconstructing sticky problems [video].
YouTube. www.yout​ube.com/​watch?v=​TWOh​d0x-​Ot4
13 One example, Kumu, is available at www.kumu.io/​
14 See: The Donella Meadows Project. (nd). The iceberg model. https://​don​ella​mead​ows.org/​
wp-​cont​ent/​userfi​les/​iceb​erg-​model.pdf
15 From: Onie, R. (nd).What Americans agree on when it comes to health [video]. Ted Conferences.
ted.com/​talks/​rebecca_​onie_​what_​americans_​agree_​on_​when_​it_​comes_​to_​health
16 Learn more at: healthleadsusa.org/​what-​we-​do; and healthleadsusa.org/​about-​us/​our-​history
17 Read more at: Perla, R., & Onie, R. (2016, March 2). Accountable health communities and
expanding our definition of health care. Health Affairs. www.health​affa​irs.org/​do/​10.1377/​
forefr​ont.20160​302.053​599/​full/​
48
2Talking to People
Chapter Overview
The most important part of your entrepreneurial journey is to understand, and
engage with, the people who are most affected by your challenge. This chapter will
equip you with the knowledge and skills required to create meaningful connections
with the community. We will discuss:
•
•
•
•
•
How to identify stakeholders and map community assets
Insights gained from leaders with lived experience
Key lessons from existing efforts to support and strengthen communities
Tools and frameworks for understanding, and engaging with, stakeholders
Hands-​on advice for conducting community-​based research
Understanding the Lived Experience
Now that you’ve selected a challenge and done some homework to familiarize yourself
with that challenge, it’s time to take your research to the next level. Characterizing the
challenge can only be done on paper to a certain extent. Now you have to get out there,
collecting feedback from the people you identified as most affected by this challenge and
who are working to address it. This will be the most important part of your social entrepreneurship journey.
As we discussed, it’s critical to work with a topic you have firsthand experience with –​
because you have been directly affected by it or supported someone directly affected by
it, or because you’ve engaged with that challenge as a service provider or in another role.
If for any reason you have decided to work on a less familiar topic, then it is critical to
identify those with firsthand experience to work with and support.
What Is a Community?
A community is a social group in which individuals have one or more things in common.
These individuals could be living in the same place and facing challenges and opportunities associated with that place, or they could be a subpopulation with a shared culture and
way of living. There is diversity and variability within any community.
Some years ago, a group of public health researchers asked various people what community means to them. The emerging consensus was that a community is a group of people
DOI: 10.4324/9781003094715-3
49
Talking to People 49
with diverse characteristics who share social ties and common perspectives, and who
engage in joint action.1 Common perspectives could involve identities, values, beliefs, and
shared challenges. We talk about community in social entrepreneurship because building
community around a social or environmental challenge is one of the most powerful ways
to shift the status quo surrounding that challenge.
Working in the Community
Whatever challenge you have chosen to focus on, there is community associated with that
challenge. Chances are you are already participating in that community, on the local or
global levels. If you aren’t, then the first step is to learn more about the different communities engaging with this challenge and how you can support their emerging solutions.
That is why this chapter focuses on identifying different stakeholders and mapping community assets as the starting point for engaging with a challenge.
There is a misconception that social entrepreneurship is about disruption. Yes, we
want to disrupt the status quo. But often we unintentionally disrupt the fragile shells of
change that are already being created by leaders with lived experience. The last thing you
want to do is adopt a cause and step in to save the day. It’s all about finding out what is
already happening and opportunities to amplify existing seeds of change.
The most important thing to keep in mind is that you are not the first person to try to
tackle this challenge. So, learn more about how others are engaging with it and you can
join forces with them in a way that amplifies their progress rather than detracts from it.
Who Is Your Community Here?
This brings up an important question. Who makes up the community or communities in
your specific situation, regarding the social or environmental challenge you have chosen
to work on?
First and foremost, the community includes people directly impacted by the challenge.
This is your primary focus in terms of understanding the challenge and the impact of
potential change.You also need to talk to those who are already working on the challenge –​
people who are providing direct support through programs, services, or products. This
second group may include people directly affected by the challenge as well. A third group
of people may be activists who are advocating for policy changes related to the challenge.
Yet another group, then, would be policymakers.There are those providing funding to the
above groups, too. Each of these groups may include one or more communities and, most
likely, conflicting schools of thought, agendas, and approaches to creating change. Ideally,
you want to build community among these different groups so that they can tackle the
challenge as one (Figure 2.1). Lastly, it’s important to identify, understand, and talk to
people who may be resisting change. These may include people who are propagating the
status quo for their own personal benefit. Resistance may also come from people who
live and work on the pathways causing the challenge, whether by their own design or not.
Knowledge Equity
The importance of centering your work on those affected most directly by the challenge
cannot be overstated. A great example of this is the Lived Experience Leaders (LEx)
movement, which is a network connecting, supporting, and strengthening the capacity
50
50 Talking to People
People affected by
the challenge
Researchers
Activists
Industry
Service
providers
Funders
Policymakers
Figure 2.1 Identifying different communities affected by, and working on, your topic
of leaders with lived experience to create systems-​level change.2 It was founded on a
realization that social services, programs, and policies were being designed for various
target audiences without being designed by those target audiences. Funding organizations
were managed by people with no direct experience, and in turn they were working with
people who also lacked experience.Various leaders with lived experience came together
to launch the LEx movement, and they later went on to create and embed it in the Centre
for Knowledge Equity (Sidebar 2.1). Knowledge equity means expanding the definition
of knowledge to include both learned technical knowledge and lived experiences.
Thus, “experts” are not necessarily based in academic institutions or nonprofits, but rather
people most directly impacted by the social or environmental challenge at hand.
Sidebar 2.1 Centre for Knowledge Equity
(https://​know​ledg​eequ​ity.org)
Established in 2019 in the UK
Goal: To unite lived, learned, and practice experience to create the wisdom necessary to solve the social, economic, and environmental challenges of our time
and catalyze transformational change for the future
What they do: The center strengthens the systems-​change capacities of leaders
with lived experience of social, economic, and climate injustice (LEx leaders)
to bring innovative perspectives to knowledge production systems, policy
development, product/​
service design, social investment, and philanthropic
giving.
How it works: In partnership with industry leads, LEx leaders, LEx-​
led
organizations, and coalitions, the center works to innovate funding, research,
51
Talking to People 51
learning, collaboration, and network-​
development approaches. The center
focuses on leadership development, network building, partnerships, and
collaborations across sectors and industries; research and learning across academic disciplines; and innovation and design of bold new ways to drive change.
Stakeholder Analysis
To identify different communities affected by and working on your topic, conduct a
stakeholder analysis. A stakeholder is anyone who will influence or be influenced by the
process or outcome of an intervention.This includes individuals, organizations, businesses,
policymakers, and government agencies affected by the social challenge. Anyone with an
interest in this social challenge, anyone who has a stake in it, is a stakeholder.This includes
those who are part of its root causes. This might be policymakers or indirectly involved
groups, like people who are part of the supply chain of products and services related
to the challenge. These stakeholders will ultimately be part of designing, building, and
implementing new interventions. A stakeholder could also be blocking new interventions.
You will get to know not only stakeholders who will benefit from shifting the status quo
to a new and more just equilibrium, but also those who benefit from keeping things the
way they are.
Start a stakeholder analysis by listing all the potential customers, collaborators,
suppliers, competitors, collaborators, partners, and institutions who interact with this
challenge. How would they interact with a potential solution? How could they contribute to your development and implementation of an intervention? You won’t know
most of the answers at first, but these questions will give you a sense of the information
you should be looking for along the way. As your picture of the challenge and potential solutions solidifies, you will need to update your answers as they apply to potential
interventions.
At each future stage in your endeavor, make time to stop and question current attitudes.
The answer might change each step of the way. Are various stakeholders supportive,
antagonistic, neutral, or undefined as yet? And what are the different roles they might play
in achieving a new equilibrium? Do you want a competitor to become a collaborator?
If stakeholders are neutral, what steps can you take to make them supportive? This will
depend on any prospective solution’s potential benefit or harm to each stakeholder. As
you progress with your research, you may change your mind about the positioning of one
of the stakeholder groups and adjust your plans and resources accordingly –​or better yet,
you could change their minds.
You won’t have all the answers at this point in your journey; once you map out the
different actors and get to know them, you can flesh out your analysis and deepen your
understanding of how to incorporate existing stakeholders into future plans.
Stakeholder analysis can come in many different sizes, shapes, and forms.To keep things
simple, here is one way to go about it:
•
•
Make a list of all the potential stakeholders.
Fill in your answers to the questions described above, to the best of your ability.
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52 Talking to People
Low
High
High
Meet
stakeholder
needs and
keep them
satisfied
Engage key
stakeholders
closely
Low
Stakeholder power
Stakeholder interest
Low priority,
requiring
minimum
effort
Show
consideration
and keep
informed
Figure 2.2 Stakeholder analysis by level of power and interest
•
•
Track this as you go, noting changes in your answers as you get to know the
different stakeholders. This can be a narrative document, a bulleted list, or a summary table.
Optionally, some people like to group stakeholders according to level of interest and
influence or power, to visualize and prioritize key stakeholders (Figure 2.2).
In the remainder of the chapter, we will talk about different ways to get to know your
stakeholders and engage with them as you proceed in your journey, as well as important
tips to keep in mind as you do so.
Community-​Driven Research
Thinking about your stakeholders will help make sure you’ve identified key players. It
also helps you prepare the primary questions you’ll be asking of these stakeholders as you
continue doing research and building relationships.You may have already started to form
a vision of the challenge you’d like to tackle and changes you’d like to see, but your vision
will only solidify into an actionable mission and venture once you hear from the various
people affected by this challenge. What are their priorities? What are their needs? Is the
way you’ve been approaching this and thinking about it aligned with their realities? What
can you do to learn more about those realities and experience them firsthand so that you
may start building a solution?
Key questions to ask yourself during this time are: What characteristics of the local
community can be leveraged as strengths in building your network, solution, and distribution channels? What is the existing infrastructure that you will be operating in? Have
you talked to the different groups of people that make up the community, to understand
different perspectives? No enterprise operates in a vacuum, and this is especially the case
for a social endeavor. As a social entrepreneur, you identify untapped assets and bring
them together to bridge the gap between your challenge and the resources available to
tackle it. By bringing people together and transfusing knowledge across boundaries, you
are breaking silos and generating new resources (Figure 2.3).
53
Talking to People 53
People affected
by the challenge
Researchers
Industry
Catalyzing
knowledge
exchange
Service
providers
Activists
Funders
Policymakers
Figure 2.3 Bringing people together to catalyze knowledge exchange
Investing Time in People
Understanding your stakeholders –​their needs and preferences, how they do things, and
what they feel are opportunities to do things differently –​is the first step in working
together to identify potential solutions.
Many of us fall into a trap of thinking that we have the perfect solution and no time
should be wasted in implementing it. In rushing to get a job done, we assume that once
it is completed, everyone will recognize the merit of the solution and be grateful for it. In
reality, successful responses to social problems and opportunities likely require the collaboration of many stakeholders; involving stakeholders from the beginning is one of the best
ways to ensure that they have a sense of ownership in the solution and a vested interest in
its success. While your drive for results and efficiency may tempt you to act first and ask
later, it’s worth investing the time in mobilizing community from the start.
Obtaining buy-​in from key players at the start is time well spent. No matter how
thoughtful your solution and no matter the scale of its potential impact, you will likely
encounter resistance if your stakeholders do not feel that they were part of its creation.
This is because satisfaction with the process is as important as satisfaction with the outcome. Sometimes it can overshadow the outcome. If your community feels disgruntled
with your process, they most likely will not adopt even the perfect idea. Conversely, if you
are not able to build the perfect solution due to restrictions in the environment in which
you are operating, but the community understands how and why you ended up with your
offering, people will be more likely to accept it and feel that it meets their needs.
Research Tools
Once you have identified your stakeholders, you’ll need to conduct a first knowledge
exchange with each group using different approaches. Some groups might be more
54
54 Talking to People
Different ways of talking to people:
●
●
●
●
●
●
Door-to-door household surveys
Focus groups
Interviews with community leaders
Questionnaires with community members
Roundtable discussions
Conferences and workshops
Figure 2.4 Tools for community-​driven research
amenable to one-​on-​one meetings.This will most likely be the case with local nonprofits
and other grassroots organizations. Meeting like this may offer opportunities for in-​
depth exchange of information and experience. With others, larger gatherings such as
conferences, roundtables, or town hall–​style meetings might be a more comfortable fit.
Tools and techniques for gathering information from multiple stakeholders are
summarized in Figure 2.4. These include door-​
to-​door surveys, focus groups, town
hall meetings, one-​on-​one meetings, and other creative ways to exchange knowledge.
Contests, conferences, and workshops might be used in some cases. Outdoor events that
bring together different groups in the community might be another. It depends on where
you are, what your topic is, and what people are accustomed to. To craft your own combination of techniques, ask for people’s feedback on what techniques they think would
work best. Also keep in mind that getting feedback from like-​minded people will require
a different technique from bringing together diverse groups to exchange knowledge.
Using a Collaborative Approach
What defines community-​driven research is that it is conducted for, by, and with the
community. It’s not studying the to community – most people don’t like to be studied. It’s
about bringing people together to exchange knowledge about their interactions with this
social challenge. Ideally, you’d like to carry this out with a team that includes members
of various stakeholder groups. Try to identify local leaders and champions, including
informal leaders, who understand the challenge and the community. If you need to work
with a community that you have not been part of for a long time, some people might
consider you an outsider, which may hinder them from speaking freely. Engaging these
local champions and informal leaders first will ease your path to hearing different voices.
Before You Start: Some Tips
There is no formula for preparing your questions, nor for the questions themselves. It
depends on the challenge, community, and context you are working in. The guidelines
below can help provide direction as you set out to talk to stakeholders.
1. Keep It Simple
When preparing your questions, whether written or oral, try to limit them in number.
One consideration here is that you want to start with general questions to avoid
overwhelming people. A second consideration is that you want to leave room for the
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Talking to People 55
unknown to emerge. If you have too many questions to get through, there’s no space
for your participants to bring up questions of their own! While it’s important to prepare
a structure for conversation, it’s also important to be flexible, open, and encouraging of
participants to offer new topics or perspectives.
For example, you could start by sharing the results of your desk research and what you
know about the challenge so far. Then ask for feedback and reactions. Ask stakeholders
how they’ve experienced the challenge, what they feel you’re still missing, and who else
they’d recommend you speak with.
2. Listen
Avoid talking too much. You want to create space for others to talk. Limit your role to
asking questions, periodically providing short responses to validate and recap what you’re
hearing. Remember to use the “silent probe” method of allowing the person to respond
in their own time. Try not to have dramatic reactions to people’s stories, experiences, and
opinions. Talking to stakeholders requires a delicate combination of humility and confidence: being clear in your language; being open to others’ experiences without judging
them; and creating space for the unknown (and even the unwanted) to emerge.
Don’t have a predetermined outcome in mind. If you’re coming in with prejudgments
or predeterminations, you won’t hear what people have to say. And your number one goal
is to listen. Start with an empty slate and an open mind each time you talk to someone.
Each person and each group will have completely new perspectives and experiences to
share.Your role is to talk less and listen more. Also, after meetings, debrief with other team
members who were present to learn what they heard. Each person has a way of noticing
nuances, and others might have picked up on observations you overlooked. Stay focused
while conducting your research, and then share your observations after each piece of
research is conducted. This will multiply the information you are able to collect.
3. Be Respectful
By this point you are aware that “community” does not refer to a homogenous block of
people. Rather, each community is composed of subgroups and individuals representing
a vast diversity of values and practices. Looking around at your own community right
now, it is likely composed of various social groups defined by socioeconomic levels, race
and ethnicity, gender, age, or other identities. No matter which community you are a part
of or operating in, take into consideration the values, preferences, and practices of other
members in your community.
Depending on which part of the world you are operating in, this may involve dressing
or otherwise presenting yourself in a certain way, greeting people a certain way or
following other specific social protocols, and recognizing existing social hierarchies. Most
social challenges are cross-​cutting and involve multiple subpopulations, so it’s crucial to
find ways to collaborate across stakeholders. Do everything you can to make sure that you,
and others, go out of the way to demonstrate and earn each other’s respect.
4. Be Aware of Group Dynamics
Before you start, think about sensitivities you should be watching out for. These could
be social, cultural, or political. Various backgrounds and dynamics underlie groups’
relationships and behaviors toward one another. Whatever you do, you need to proceed
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cautiously. This is why it is important to work in a familiar setting or to invest the time to
familiarize yourself deeply with a new setting. Being part of the community and experiencing its social dynamics yourself are always, always the first steps. There are existing
social change agendas for each stakeholder. Don’t form your own without understanding
these, as well as the different ways you can contribute.
Try to keep a low profile in the initial stages, especially during introductory meetings
with various stakeholders. This will help to prevent activating sensitivities unintentionally
and to steadily build a deep understanding of community issues and dynamics before you
start gaining momentum. Once you have that sturdy foundation, you will become more
effective at and feel more confident about holding bigger and higher-​profile meetings
with less of a risk of triggering unproductive dynamics.
How Different Voices Show Up
If you’re not careful to hear all the different voices in a community, you won’t get the
full picture. Some voices are louder than others. Be aware of power differences related
to race, class, gender, occupation, and other factors. How do these variables affect who
shows up to conversations, and how they show up? You may need to seek certain voices
who might not otherwise stand out. One way to do that is to combine research methods,
applying careful thought to who you meet with, when, where, and how. For example, you
could start by grouping together people with similar interests. The more time you spend
in a community, the deeper your understanding of how to create an environment where
people feel safe to share their stories and perspectives.
Relationship Building
All of this requires ongoing ties to the community, connectedness between the stakeholders,
and active relationship building. This is one of the most important investments of your
time. In fact, as your venture develops, building relationships with end users and other
stakeholders may end up consuming most of your time, while technical aspects are
delegated to others.
Community-​driven research requires not only multiple sources of expertise but also
a large amount of flexibility and creativity in bringing people together to exchange
knowledge and perspectives. Don’t rush this stage. Trust takes time to build, and it is the
most important asset you can have. Getting stakeholder buy-​in and continued support
requires that stakeholders trust you and understand your goals. Outside of the formal
research tools and steps we’ll discuss in this chapter, the most valuable way to learn from
people is to spend time with them. Unstructured time might feel like a luxury when
you have a sense of urgency and restlessness to create something new. But this is often
where true insights emerge. When you spend time with someone, doing what they do
without any agendas, that’s when you really get to know them. And that’s when people
start believing that you’re in this with them, that you’re here to stay. That’s when they
open up to you.
Reflective Practice
Social entrepreneurs have a tendency to charge through the planning process without
stopping for breath. Set aside a time each day for reflective practice for yourself and with
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your starting team. What have you learned from your community-​driven research? What
new insights were gleaned from different stakeholders? Have any red flags arisen? What
elements of surprise or confusion or even alarm need further investigation? More often
than not, your learning path will not lead you to a predetermined point in a clear-​cut way.
Stopping to fully digest information is crucial to incorporating it into any future solution
you may develop.
Interview Box: Albina Ruiz, Founder, Ciudad Saludable
Albina, you’ve been working on waste
management in Lima for almost 40 years,
but you waited 20 years before forming
Ciudad Saludable. Why did you wait so long?
I wasn’t sure I could manage my own organization!
Plus, it takes so much time to build results. First we
just needed to focus on doing the work. It took
years to build trust within the waste picker community, and even more years to build partnerships with
local businesses and municipalities.
Tell us more about how this all started.
I grew up in the jungle; my parents were small
farmers. I begged them to send me to the city to
study, and in the end they saved up and bought me
a one-​way ticket. When I got to Lima, I was shocked. I had never seen or heard of
garbage before. In the jungle, we don’t use plastics. And we don’t think of our food
waste as waste –​it’s a resource, we are very careful with it, it has great value, and we
use it for our livestock, fertilizer, etc. In Lima, there were literally mountains of garbage! I couldn’t believe my eyes. I lived in the slums, and I noticed that the garbage
was the worst where the poor people were.
Image Courtesy of Albina Ruiz
What was the first thing you did?
I talked to the government workers and asked why they didn’t remove the garbage
in the slums.They said the poor people don’t pay for their services, that they like the
dirt. I said it’s not true, I am one of them! I went to the dump to talk to the waste
pickers.There were mosquitoes, rats, cockroaches, dogs eating garbage. It was a horrible situation. I made it my goal that there would be zero waste pickers working
in the dump.
So how did you get from that situation to where you are today?
It took a very long time.The waste pickers were afraid to work in the city.They don’t
believe in the municipality or anybody. I told them, “You are the entrepreneurs.”
We had to talk to the municipality, to the businesses in the city, to offer our service.
Now, each year, we have a convocation with the municipality. We worked with the
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national government to give financial incentives to municipalities to work with
waste pickers. We had to advocate for new law. Today, there is a national program
making it mandatory for households and businesses to separate at the source. We
wrote this law! Now, they are not waste pickers anymore; we call them recyclers. It
was a long, long road.
You recently handed Ciudad Saludable over to a new executive director
and you are working in the public sector. What is your new vision?
Recently I had the opportunity to serve as Vice Minister for Environmental
Management. I wasn’t sure about taking this role, but my team and other
stakeholders encouraged me to try to instigate change from the inside. We have
many social entrepreneurs, and we need more public entrepreneurs. I started
working with other public servants on how they can be changemakers in government. Last year, I met with 900 out of 2,000 government workers. I started
asking them why they work with the public sector, and why not implement
innovations to change systems? Many wrote to me saying they’ve never heard of
this or talked about it. This is my new vision. If the private entrepreneurs, social
entrepreneurs, and public entrepreneurs can all work together, together we can
create big changes.
Reaching Out to People
When reaching out to new people you have not spoken to before, use this simple formula
to ask for an informational interview (Sidebar 2.2). Suggest 20 minutes, so the person
knows you’re aware of their busy schedule. People’s attention spans can sometimes be very
limited. Respect their boundaries, and stick to the time you asked for.The goal is to start a
conversation and potentially begin building a relationship. If they become intrigued about
what you’re trying to do, they will switch into collaborative mode and you can spend
more time in conversation with them.
To start, you can arrange a virtual conversation or phone call. If an in-​person
meeting is possible, consider this option as it may help you establish stronger personal
connections.
Sidebar 2.2 How to Ask for an Informational Interview
1. If you have a university email, use it rather than your personal or work email.
2. Write “Request for Informational Interview” as your subject line.
3. Keep your email short.You don’t need more than three sentences:
a. Who you are and what you do
b. Why you want to talk to that person (explain why you’re interested in their
work and what you want to learn from them)
c. A simple closing sentence such as: “If your schedule allows, I would be
grateful for 20 minutes of your time.”
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Structuring Informational Interviews
Once you get the interview, make sure you are prepared (Sidebar 2.3). Approach your
informational interviews with clarity on the key points you want to convey and questions
you want to ask. Make sure you’ve done all your research before coming to the meeting.
Look up your interviewees online and familiarize yourself with any articles or videos
they’ve posted as well as their personal background, their work history, and their organization. This will help you create a stronger connection from the start.
To keep your conversation structured, start out with what you want to accomplish,
both in your own work and in this meeting, and loop back to this at the end. Be vocal
about what you’re doing, why you’re doing it, and how you’re doing it. Save space for
unexpected directions in the conversation; you never know when and where assistance
and great advice will come from. This space also allows the person to ask you questions.
The questions in Sidebar 2.4 are useful to get things started.
As you end the conversation, ask for any recommendations about other people
you should talk to or actions you should take. Here, consider the snowball effect,
asking: “Might you know anyone as helpful or as interesting as you?” Afterward, send
an email within 24 hours thanking them and following up on their recommendations,
and keep track of all your meetings so that you can build on each link in your network,
one at a time.
Sidebar 2.3 What to Do After Scheduling the Interview
1.
2.
3.
4.
5.
Have your questions prepared and keep them limited.
Make sure you’ve done your research.
Explain what you hope to achieve, in this meeting and in your work overall.
Don’t rush –​keep space open in the conversation for unexpected dialogue.
Circle back to your goals for the meeting, and then ask whether they have any
recommendations for other people you should talk to.
6. Send a follow-​up thank you email within 24 hours.
7. Keep track of your informational interviews and any action items.
Sidebar 2.4 Sample Questions to Start a Conversation
1. Share what you know so far about the topic you’re working on, your own
experience of the challenge, and your process for collecting information.
2. Ask them for their feedback and reactions to what you’ve just shared. What
would they add? How have they themselves experienced the same challenge?
Ask for specific examples.
3. What do they feel is still missing? Who else would they recommend you
speak with?
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After You Talk to People: Piecing It Together
Asset Mapping
As you exchange perspectives and knowledge with various stakeholders, you can begin to
map out the landscape you are working in. What is the infrastructure like –​both in terms
of social networks and physical strengths and limitations –​and how will you design your
solution accordingly? Defining what can be changed and what you will work with is one
of the most valuable thought exercises you can undertake right now.
Asset mapping can help you organize this information. Asset mapping is an exercise whereby you identify different forms of community capital: natural capital (natural
resources and ecosystems), financial capital (income, wealth, investment), built capital (infrastructure), political capital (community organizations and government), social
capital (bonds, relationships, and networks between these individuals), human capital
(characteristics of individuals in your community), and cultural capital (heritage and tradition). These are illustrated in Figure 2.5, which is adapted from the Community Capitals
tool and framework for evaluating strategic interventions. This framework was developed
by a group of community researchers based on their analysis of entrepreneurial communities.They observed that communities which were successful in sustainable development
addressed and incorporated the different types of capital into their work. Asset mapping
helps you to identify available resources and to evaluate what resources you need, where
you will get them from, and how you can leverage the strengths of your local setting while
acknowledging its weaknesses.
Knowledge of some of these assets will come out of your stakeholder mapping,
stakeholder interviews, and community-​driven research. Your objective is to build
Community Capital
Natural
capital
Financial
capital
Built
capital
Political
capital
Social
capital
Human
capital
Cultural
capital
Air, soil,
water
Income,
wealth,
credit,
investment
Water
systems,
sewers,
bridges
Voice,
power
Leadership, trust,
networks
Selfesteem,
skills,
health
Language,
rituals,
traditions
Outcomes
Healthy ecosystems, vibrant regional economies, social equity and empowerment
Figure 2.5 Examples of community resources identified through asset mapping
Source: Flora, C. B., Emery, M., Fey, S., & Bregendahl, C. (nd). Community capitals: A tool for
evaluating strategic interventions and projects. https://​aae.wisc.edu/​ced/​wp-​cont​ent/​uplo​ads/​
sites/​8/​2014/​01/​204.2-​Hand​out-​Commun​ity-​Capit​als.pdf
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an endeavor that is feasible within local context, culture, environment, infrastructure,
and economy. Not only that, your goal is for the endeavor to thrive in that setting.
Therefore, it is important to assess that setting and thoroughly characterize it so that
your endeavor will be the right fit to the available resources. Asset mapping can pave
the way, by identifying available skills, points of leverage, and strategies to diminish
deficits.
Like stakeholder mapping, your asset map can take many shapes and forms. Figure 2.5
is only one depiction of the kinds of assets you may find in a given setting.
Piecing Together the Puzzle
In most cases, you will discover that the solution you are seeking to formulate is neither
mysterious nor necessarily sophisticated. Rather, the most likely solution is a simple one
that brings together existing resources at the community’s fingertips. As the social entrepreneur, you are adding value by reframing a value chain that already exists in some shape
or form.The solution is out there; its different components are already within arm’s reach.
The job of the social entrepreneur is to build a new vision of putting those components
together.
This is why your offering is not likely to be a head-​scratching new concept. It’s definitely not something you are going to find in the library, either.You need to get out there
and figure out how people are interacting with this social challenge, what resources are
available, and how people can come together to interact with this challenge to produce a
more positive outcome. You don’t need to start from scratch or reinvent the wheel. The
most impressive and effective social innovations have involved simple mobilizations of
existing resources, including human resources, to work within an existing community
framework. The most challenging aspect is often identifying different puzzle pieces and
finding a way to put them together into a completely new solution. You can do this by
serving as a catalyst and connector.
Catalyzing Change
By connecting puzzle pieces, you are acting as a catalyst. Just as an enzyme brings together
different molecular components that then transform into a new molecule, the connector
brings together different people, ideas, and resources, and catalyzes the formation and
implementation of a new social solution.
The key point to remember here is that you need others. The enzyme only brings
together the components of the molecule; without these components, the new molecule
is not created. Just as we rely on connectors to put us together with new people, we rely
on others to put us in touch with information and other resources.
Social Entrepreneur as a Connector
As a social entrepreneur, one of your most important roles is to serve as a connector –​
keenly observing the different resources, stakeholders, opportunities, and gaps in your
community and finding ways of putting them all together. Have you ever played the
game “six degrees of separation”? This game builds on the idea that all humans can be
linked by (at most) six connections, and it challenges the player to link two seemingly
impossible people. When piecing together the different parts of the puzzle in your social
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challenge, think about the connections that might already exist. What are the six degrees
of separation between Ana, an inhabitant of a remote village, and the healthcare services
she needs? Of course, there may be more or fewer than six degrees, and you may have
already explored many of them using your inverted Ishikawa from Chapter 1. Which of
these can you bring together?
Who has pioneered new ways of interacting with the social challenge you’re facing?
Who has facilitated more positive ways for others to interact with that challenge? Who
are the local entrepreneurs and leaders that people turn to? This is a good place to start
connecting the dots. Find the sources of social capital so that you can extend your own
leverage as a connector.
Identifying the Local Entrepreneurs
Most important, remember what we have been saying throughout the chapter about not
reinventing the wheel. One of the first questions you set out to answer was: What are
the different ways in which things are done in this community? In understanding how
people interact with the social challenge you are investigating, have you identified any
local entrepreneurs’ small-​scale solutions that can be built upon?
In every community, there are people already implementing solutions. By now, you
will most likely have identified them through community-​based research, including stakeholder analysis and asset mapping. How can you learn from these individuals? Sometimes,
local innovations are simply Band-​Aids for symptoms, and sometimes they have the
potential to be built into larger systems. Both cases almost certainly contain clues for further exploration.
As you move along this journey, don’t fall under the delusion that social entrepreneurship means starting from scratch. Continue researching what others are already doing in
your proposed area. If you find someone who is already tackling this social challenge and
it is possible for you to work with them, then join forces! This is one of the key pieces
of advice offered time and again by social entrepreneurs. Working with others still offers
plenty of opportunity to innovate, build social business, create value, and disrupt the status
quo –​in fact, in most cases, the opportunity will be greater than a situation where each
entrepreneur is working on their own.
Making a Plan to Move Forward from Here
How you move forward from here will depend on the resources available to you and
how things are done in your community. A popular way for different stakeholders to
identify resources and ideas for potential solutions is through a visioning workshop. This
is an event, usually lasting more than one day, whereby people affected by and interested
in solving this challenge come together. They start by identifying needs, priorities, shared
interests, and preferences, to establish a common ground. They then formulate common
objectives and a larger vision for social change. This can be a powerful way of building
a sense of ownership of potential solutions and of tailoring those solutions to identified needs and priorities. The key here is to have multiple stakeholders organizing and
implementing the event as partners. Once you have mapped out the assets of your local
context, create a learning plan in detail. What questions remain to be solved? At what
point is it okay to begin? If there are various ideas arising, how will we decide which
idea(s) to test out?
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Case Study: Ciudad Saludable
Ciudad Saludable was built to tackle solid waste management in Lima, Peru. This is
a challenge faced by many cities in emerging or developing nations. Incomplete and
inefficient disposal and management by governments and municipalities, or by private
companies contracted to do the job, commonly lead to overflowing garbage containers,
landfills, and unhealthy practices like incineration. In Lima, as in similar settings, an
informal waste management system, whereby waste pickers would scavenge containers
and dump sites, grew in parallel with the formal system,.
Waste pickers commonly earn a living by collecting recyclable material from garbage
sites and selling it to an intermediary, who then sells it to recycling facilities. This has
been documented in diverse settings around the world. Their work is physically hazardous, as they commonly use their bare hands to sort through garbage that contains
hazardous material including broken glass, medical and industrial waste, heavy metals,
toxic chemicals, and even dead animals. Waste pickers often work alone and travel on
foot. The improper management of waste resulted in environmental and public health
consequences in addition to the injuries and illnesses experienced by the waste pickers.
In many of these settings, waste pickers have come together to organize an existing
community into a social business, transforming themselves from scavengers to service
providers. Ciudad Saludable is one such case. Its establishment was long and multifaceted,
with many moving parts and players. For educational purposes, it can be summarized in
a few broadly applicable steps.
The first step was for the waste pickers to come together to discuss the challenges
and opportunities they faced on a daily basis. The municipality at the time was collecting
less than half of the total waste dumped into garbage containers in many neighborhoods.
By coming together, the waste pickers could scale their operations and find ways to
become more efficient. Thus, the second step was the formation of a social venture to
regularize and expand this work. They invested a bank loan in pushcarts, pickup vehicles,
and carts attached to motorcycles. They began collecting waste at the source by going
door to door. Clients were asked to sort their own waste, but compliance was not high
to start. Secondary sorting shelters were created so that service providers could again
sort the collected waste of many households. Scrap shops were then created to aggregate
recyclables collected by members for sale to the recycling facilities, assuring the members
of a fair price for the collected materials.
When a waste picker works alone, he sells collected recyclables to an intermediary
every day, earning low prices. After organizing and creating a storage center, waste pickers
were allowed to sell larger volumes directly to recycling factories, manufacturers, or
exporters. These large businesses only accept large volumes that are clean. Working alone,
one person in one day cannot accomplish that. But by forming an association, the waste
pickers –​now dubbed recyclers –​were able to meet these requirements.
As an example, if a kilogram of plastic is sold to an intermediary, the price earned is
0.5 sol per kilogram. But if the same kilogram is sold directly to the recycling factory,
the price is 1.5 sol per kilogram.3 That’s three times the revenue. Most important, the
recyclers have gained dignity, recognition, and protection in their work.
Other organizations have achieved similar results in different parts of the world, each
with their own business model. In Pune, India, the SWaCH cooperative collects monthly
fees directly from households, with differential pricing depending on the neighborhood.
The initiative has also increased the average daily income of each recycler threefold.4
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In Malang, Indonesia, a social enterprise founded by medical students invites people to
bring in their recyclables in exchange for healthcare insurance, rather than cash.5 There
are many other examples.6
What business practices allowed Ciudad Saludable to attain these achievements?
Investing in equipment yielded increases in both efficiency and volume. The sorting
shelters and scrap shops built a supply chain connecting service providers to the
source (households) and to recycling factories. Customer service practices were also
implemented: members wore uniforms, practiced punctuality, and learned to professionalize their appearance and interactions with clients. In summary, profit margins increased
because they were able to introduce new components along the value chain, which
enabled them to aggregate their individual production levels.
The driving factor behind this group’s success and sustainability was its community-​
based approach. Starting with the people affected by this problem, empowering them to
be part of the solution and reap its benefits was core to success. This went hand in hand
with the involvement of various stakeholders, from the consumers to the municipality.
Finally, building the social enterprise one step at a time –​from community-​based research
to stakeholder analysis to incorporating available assets to adding different components
and best practices –​allowed the group to co-​create a sustainable, viable, and thriving
community-​based venture.
This allowed the waste pickers to position themselves as leaders in the waste management field. Today, Ciudad Saludable is working on systems change to create a circular economy.The waste pickers speak regularly at government workshops and webinars,
nationally and internationally.They are at the center of proposed packaging laws to repurpose more products, and of the management of batteries, electronic waste, and tires that
were previously managed in the informal sector. They created a toolbox to share their
processes with social entrepreneurs in other Central and South American countries: they
worked with organizations in the Dominican Republic to write the first approved law
on solid waste management, which included many articles about waste pickers; now they
are collaborating with peer organizations in Argentina and Jamaica. At home in Peru, they
helped write the national agreement for a circular economy. This was approved by the
production minister for large industry, and Ciudad Saludable is now trying to expand this
framework to industries like fishing and agriculture. Next, they’re focusing on organic
waste, which comprises more than half of total waste and emits greenhouse gases. The
Ciudad Saludable recyclers are talking with the families they serve about their food needs
and food waste, as well as the possibilities of home composting, urban agriculture, and
connecting innovations in waste management with other social needs.
Thought Questions
1. Describe some of the key stakeholders that the founder, Albina, got to know as she
embarked on her journey.
2. What were some of the assets that she and the team leveraged in building their
solution?
3. How did their endeavor evolve over time, and what were some of the enabling
factors that allowed them to do so?
4. Which aspects of their work (grassroots organizing, operations management, policymaking, relationship and awareness building) can you see yourself doing? Which
would take you outside your comfort zone?
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Sidebar 2.5 Takeaways from this Chapter
1.
2.
3.
4.
You can’t do this alone.
You need to get as close to the problem as possible.
There are no easy solutions or quick fixes.
It’s important to understand how people experience the status quo before you
can understand how they might experience an alternate scenario.
Next Steps
In this chapter, we focused on the importance of getting to know your community and
stakeholders, and investing time to understand the diverse experiences, needs, opportunities, and constraints (Sidebar 2.5). This involves community-​driven research, which can
take place in the form of workshops, conferences, roundtables, door-​to-​door surveys, focus
groups, and one-​on-​one interviews with stakeholders. Stakeholder mapping is a process
that helps social entrepreneurs identify both key players who can influence the success of
an endeavor and the characteristics of potential solutions. Asset mapping is a process that
helps identify key sources of capital, including knowledge and other resources, that can be
leveraged toward creating and implementing new solutions. By exchanging knowledge
with community members who have firsthand experience with the problem at hand and
with experts who have technical knowledge of the problem and potential solutions, social
entrepreneurs can act as facilitators in building local knowledge and capacity toward creating and implementing a solution.
These steps ensure that the community is mobilized so that key stakeholders can have
ownership of a prospective endeavor and a vested interest in its success.Yet keep in mind
that characterizing the formulation, development, implementation, and growth of your
endeavor is an ongoing effort. Involving your stakeholders from the start, identifying and
incorporating local capacities and other assets, and engaging the community in action and
learning plans are all part of ensuring that your endeavor is effective, viable, and scalable.
Establishing processes for information sharing will pave the path for the transparency
and accountability that is essential for you to maintain your stakeholders’ sense of ownership. Continuous communication and immersion are essential to stewarding a shared
vision, managing expectations, assessing capabilities, and ensuring understanding among
stakeholders. Most important, continuously collecting and reflecting on knowledge will
ensure that you do not miss out on opportunities that were overlooked or not linked
together in the past. Thus, you will effectively fulfill your role as the connector. In the
next chapter, we will expand on ideas and tools for refining and testing the design of your
offering.You will also develop your theory of change, which links this design to the social
change you seek.
Chapter Assignment
Although you are only a few chapters in, you have already come a long way! Let’s build
on the research you conducted in the previous chapter, adding your own take to the
challenge characterization you’ve conducted with the community. The first step of
designing your offering is to understand the different ways that people interact with this
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challenge and the different opportunities to bring together and build on a community’s
existing resources. In this context, it’s time to:
1. Prepare your stakeholder analysis. You have the choice of: listing stakeholders and
describing their level of interest and influence in one or two sentences; or, using a
2×2 table as illustrated in Figure 2.2, noting where you’d like each stakeholder to be.
What can they contribute to your solution?
2. Prepare your asset map. Again, this can be a simple list of assets that fall within the categories described, or a visual diagram positioning them according to levels of power
and interest, as illustrated in Figure 2.2. Note to yourself any opportunities you’ve
identified for different assets to interact with each other and build on one another.
How can you leverage these assets to tackle your challenge?
3. List the sources of information behind the two analyses you’ve produced. Who are
the different people and groups you’ve spoken with? Is anyone missing? How can
you bring these people and groups together in a visioning workshop or other forum
to exchange knowledge and ideas? Make a list of steps taken and next steps. If and
when needed, go back and adjust your stakeholder analysis and asset map as you
proceed.
4. Optional: Journal on your reflections about what you learned from the people you’ve
spoken with. What surprised you, what new questions have come up, and what new
insights have you gained? What have you learned by talking to different stakeholders?
What are you struggling with, and what do you wish you could do differently? Are
there any aspects of different peoples’ experiences and perspectives that resonated
with you more than others?
Notes
1 MacQueen, K. M., McLellan, E., Metzger, D. S., Kegeles, S., Strauss, R. P., Scotti, R., Blanchard,
L., & Trotter, R. T., II. (2001). What is community? An evidence-​based definition for participatory public health. American Journal of Public Health, 91(12), 1929–​1938. www.ncbi.nlm.nih.gov/​
pmc/​artic​les/​PMC​1446​907/​
2 See more on the LEx movement at: https://​lexm​ovem​ent.org
3 At the time of writing, 1 sol =​25 US cents.
4 See more on SWaCH at: https://​swachc​oop.com/​
5 See more about Indonesia Medika online at: www.faceb​ook.com/​indo​nesi​amed​ika (in
Indonesian).
6 Case studies are available at: www.no-​burn.org/​tools-​resour​ces/​?type=​case-​study
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3Designing a Solution
Chapter Overview
This chapter focuses on creating innovative solutions to social challenges through
the process of user-​driven design. This approach facilitates the development of
your solution by mobilizing existing resources in a new way.You’ll learn about the
following:
•
•
•
•
Innovation and design thinking
Generating and selecting ideas
User-​driven design and practice of the design process
Tools for testing and refining your idea
In the previous chapters, you selected a social or environmental challenge to focus on
and got to know everything about that challenge that you could. First, you conducted
desk research to understand root causes, distribution, affected populations, and prior
solutions. Then, you spoke to the people affected by this challenge and to those
working on it, to understand what is and isn’t working and to identify opportunities
for improvement.
Now it’s time to put that all together and design your solution. Your solution might
be a new product, service, program, or other initiative. You might implement it through
a new venture, within an existing institution, or across multiple existing institutions. For
the purpose of this design exercise, don’t think about implementation yet. Simply unleash
your creativity in imagining new ways to mobilize existing resources and create value for
others. Next, we’ll discuss some principles of design thinking which will help you in the
process of designing your solution.
Innovation and Design Thinking
Innovation is the process of generating a novel product or solution. Design thinking is an
approach to innovation that centers on human needs; applying a creative problem-​solving
approach to integrate the needs of people; and using tools to meet those needs.1 Below
we’ll introduce some of the important characteristics of design thinking, followed by a
description of the user-​driven design process and how to implement it.
DOI: 10.4324/9781003094715-4
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68 Designing a Solution
Full Immersion
Generating ideas, models, and solutions is not something you can do most effectively
while sitting at your desk at home or in a university or office building. Immerse yourself
in the social challenge you are tackling. If your goal is to improve healthcare, then work
on the frontline of healthcare delivery to provide access to your end users, experiencing
barriers to access, quality, and reach firsthand. If your goal is improving education, then
you need to engage with a learning institution or other organization that is increasing
access and quality of education –​this could be as simple as volunteering as a tutor.
The important thing is you need to be in the middle of the situation you are trying
to improve, not observing it and designing potential solutions for it from the outside.
Remember how Health Leads began with a series of conversations with patients and
physicians at a busy urban hospital; or how Ciudad Saludable was born when Albina
went to the garbage sites and worked with the people there. The solution came together
from that starting point.
Deep Reflection versus Group Dynamics for Design
Identifying opportunities requires a blend of reflective practice and group dynamics, as
we discussed in the last chapter. The design process we’ll follow in this chapter is largely
group based, but alongside it, deep thinking is required to process all your observations,
research, and conversations, and to dig out innovative ideas from your brain. Continue
spending time every day to reflect calmly on your information-​collecting experiences,
and encourage all your collaborators to do the same. Time in solitude will allow you to
explore thoughts, stories, and observations stored in various parts of your mind. Record
your observations from the field and review them, noting patterns as well as your questions.
This will allow you to synthesize the information you’ve collected, which builds the
foundation for generating solutions.
Once you’ve spent time in silent reflection and/​or small-​group discussion, report
back to the larger group of stakeholders with these insights. This will help you create
a catalytic space to build on each other’s ideas; sequentially and cyclically, you will have
generated new insights, ideas, and solutions together. The surest way to make long-​lasting
progress is to inch forward, one step at a time. By iterating back and forth and combining
these approaches, you’ll be able to leverage the power of both deep reflection and group
dynamics.
User-​Driven Design
User-​driven design refers to the process through which interventions, services, products,
and systems are created for and around people’s needs. This has been used in government,
law, health, education, consumer products, community services, and many other fields. It
starts with the characteristics, needs, and preferences of the end user and proceeds from
there.You are taking this one step further by building your solution with the user, which
is why we refer to it as user-​driven design.
Your research process so far has focused on your stakeholders, and your design process
will continue to do so. Designing around the end user is as recommended for social entrepreneurship as it is for any commercial product or service. Software is designed in a way
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Designing a Solution 69
that makes it “user-​friendly.” Refrigerators, baby strollers, video games, bikes, and clothes
are all designed to meet the needs and preferences of the user. Internalize this thinking as
you develop your design.
The first questions you need to ask yourself are: Who am I designing this with? Who
am I designing this for? Now that you’re familiar with the various population segments
that are most affected by this challenge, which one are you targeting? As illustrated by
the previous examples of commercial products, no product can serve everyone.You need
to build it with your end user and tailor it to the end user. This needs to be one segment
of the population, which you are focusing on for now. If you want to reach multiple
segments, then you’ll probably need to design multiple products, services, or systems to
reach them. Remember, there are no one-​size-​fits-​all problems, so it’s not likely you’ll
find a one-​size-​fits-​all solution.
Remember when we said in Chapter 1 that data is power? Well, by now you will have
collected quite a lot of your own data! All the steps you’ve taken so far have provided you
with data to inform your design –​from talking to different stakeholders to immersing
yourself in the community to building and exchanging knowledge about the preferences,
experiences, and needs of the different segments of the population. How can you now
use this knowledge?
Levels of Innovation
At this stage, you are focused on formulating a product, service, system, or process that you
will use to tackle the social challenge. It’s important to point out that there are levels of
innovation: innovation is not one step, nor is it something that happens during one stage
of the process. Innovation means finding new ways of doing things, and this is something
a social entrepreneur applies each and every step of the way. Right now, we’ll talk about
innovation in designing your solution. In later chapters, we’ll talk about innovation in
building your business model, operations, distribution systems, and many other aspects
that will help you create the largest social impact possible (Table 3.1).
Failing Is Part of the Process
To embrace innovation at every step of the process and create a social venture that truly
eliminates your social challenge, you cannot be afraid to fail. The only way it is even possible to create something new is to try something different –​and nine out of ten times, it
will fail. Tangible progress does not always mean success. It also means failures and lessons
learned. These are data too, as they will help others build on your trials. Failure is part of
the process, and each and every failure is one step closer to success.
Experiment with Different Ideas
During the design phase, you’ll have to get comfortable with disorder, as you turn everything inside out to generate different ideas and formulate your solution. You might end
up with something completely different from what you started out with, but we’ll make
sure you tie it all back to your challenge using the theory of change tool introduced later
in this chapter. For now, embrace the unknown! See Sidebar 3.1 for a recap of tips for
user-​driven design.
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Table 3.1 Levels of innovation
Level
Description
Product or service
The product or service or program itself contains new elements that
have not been applied to this social challenge before and which
increase its effectiveness.
• Examples are designs that increase affordability, durability,
and tailoring to the end user, or which are more effective in
producing the desired change.
The endeavor has created financial viability through a revenue model
that has not previously been employed to address this challenge and
by mobilizing resources that have not been utilized before.
• Examples include creating multiple revenue streams, differential
pricing, combining different funding vehicles, and identifying
untapped resources.
The endeavor employs processes that allow it to deliver the highest
social impact at the lowest cost, setting it up for expanding impact.
• Examples are setting up internal systems and processes to increase
efficiencies, innovative M&E systems, and creating effective
feedback loops.
The product, service, or system penetrates the market through
distribution channels that have not been achieved previously and
which allow it to reach new audiences.
• Examples include supply chain innovations; creating new markets
of providers, transporters, manufacturers, and retailers; and
creating social impact through their provision, not just through
the customers.
Revenue model
Operations (internal)
Distribution (external)
Sidebar 3.1 Tips for User-​Driven Design
1. Learn everything you can about the situation and the people it affects. Immerse
yourself by playing a part in the existing system or supply chain, either as a provider or end user.
2. Recruit others to design with you. You cannot do this alone. Make sure to
include experts from the field, who have been working on this topic for a long
time, and newcomers with fresh ideas and perspectives.
*Remember that the number one expert is your end user.*
3. Leverage both the power of deep reflection and the power of group dynamics.
Both on your own and with your design team, ask questions like “why?” and
“why not?” or “what might work?” Start sentences with: “Let’s imagine …,”
“How might we …,” and “I want to … .”
4. Think outside the box and don’t disregard ideas that might sound ridiculous!
(Even if people tell you that your idea is ridiculous, you won’t know if it works
until you test it.)
5. Test out your ideas with your end user.This will require you to prototype them.
Many designers use a rapid-​prototyping method to test multiple ideas before
developing a more focused set of prototypes to test in the field.
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A Design Process to Try
Now it’s your turn to practice! We’ll go through the steps of a design workshop that you
can conduct to start creating your solution. These are:
1.
2.
3.
4.
5.
6.
7.
Assemble a team.
Formulate a problem statement.
Specify your parameters.
Brainstorm.
Select top ideas.
Describe your end user.
Create a prototype.
A design workshop is a structured exercise for generating new ideas about what you want
to work on –​what new ideas you’d like to test –​based on the insights you’ve collected so
far. Even if you already have an idea forming in your mind, you can still benefit from this
process. Set aside several hours to go through the steps to explore different ideas, using the
research you’ve conducted to date as a starting point.
Step 1: Assemble a Team
Design is best conducted with a team. It helps to include people you have already been
working with, but make sure different perspectives are included. You might have team
members with lived experience, professional/​service experience, and learned/​academic
experience –​people who have approached this problem from different angles and seen it
from different points of view.Your design team may include some of the collaborators you
worked with in your community-​driven research, and it may include new people. Not
everyone needs to go on to become part of the implementation.
By including those who have been working on this topic for a long time as well as
those who are fresh to the topic, you can get a wider view. It is often those who approach
a challenge with a fresh perspective who are most able to question existing assumptions. It
may be daunting to find the right balance between working with experts and challenging
existing ways of doing things. In these cases, remember that your end user is the number
one expert. The only way you will learn whether a new way of doing things might work
is to test it out with the user.
Step 2: Formulate a Problem Statement
As you’ve learned through your extensive research, there are many pathways, causes,
angles, and dimensions to the social or environmental challenge you are tackling. The
more you learn about it, the more difficult it can feel to narrow it to a concise problem
statement. Try to choose a specific angle, dimension, or pathway of the challenge that
you want to tackle, using the same techniques you used in Chapter 1 to pick your topic.
Add to that the insights you’ve gained since then by asking:What aspects of the challenge
can you and others do something about? Where are there opportunities to mobilize
resources for more justice? What excites you? Where have others expressed clarity about
specific needs?
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Frame your problem statement as a design question. For example: How might we
reduce maternal child mortality in Alameda County? Or: What would it look like to
address drivers of health alongside patients’ clinical symptoms?
This is your starting point for the brainstorming exercise.You can always go back and
explore other design questions. For now, pick one.
Step 3: Specify Your Parameters
Once you unleash your creativity, the sky’s the limit. Before you start, though, it helps
to specify the parameters of the problem you’re trying to solve. Write down the framing
facts and characteristics you want to remember from your research and exploration phase.
For example:
•
•
•
What are the top three restraints to keep in mind about the ecosystem (people or
place) you’re centering?
What are the top resources and assets you’ve uncovered?
Is there a specific customer for whom you want to focus on designing a solution?
Being specific helps creativity. The more specific the parameters you set for yourself, the
more fruitful the exercise will be. You can always go back and repeat the exercise with
different parameters. But for now, try to be as specific as possible.
Step 4: Brainstorm
The next step is to sit down as a team and brainstorm. Brainstorming simply means generating ideas without screening or judging them. This is the exploratory stage of idea
generation. When brainstorming, there is no need to determine whether an idea holds
promise or is feasible. Simple ways of brainstorming include sitting around a blackboard,
flip chart, or piece of paper and sharing ideas. Group energy allows you to build on others’
ideas, propose the opposite of others’ ideas, or generate multiple ideas of your own. It is
important to create a safe space. Do not criticize or discuss the different ideas; simply note
them and return to them later. No idea is too big or too small. Encourage everyone to
contribute thoughts –​even those that may seem random at first, as these will likely lead
to others.
Check out the brainstorming rules posted on the wall at the Hippocampus headquarters in Bangalore, India, which we’ll read more about in the case study later in this chapter
(Figure 3.1).
This is the time when you compile all the data and insights you’ve gathered from the
field. What have people said they need and want? What would you need and want if you
were in their shoes? Trying out different ideas is part of the co-​creation process; it’s not
something to be intimidated by.To plant seeds of ideas that will snowball and grow as you
proceed, kick off the brainstorming and prototyping with phrases like “What would it
look like if …” and “Let’s imagine … .” Don’t forget to keep applying the basic principles
you’ve been using from the start: think like a child; question all assumptions; ask “why?”
and, more important, “why not?” Let your creative juices flow, shake things up, and let
your imagination run wild!
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Designing a Solution 73
Figure 3.1 “Idea killers” to avoid –​posted on the wall of the Hippocampus headquarters (see
case study)
Source: Poster from the book Creativity in Business by Igor Byttebier and Ramon Vullings (BIS
Publishers, 2015). Free download available at: www.idea​kill​ers.net
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74 Designing a Solution
Desirability
Viability
Feasibility
Figure 3.2 Assess your ideas for evidence of desirability, feasibility, and viability
Step 5: Select Top Ideas
Now that you have a kitchen sink full of ideas, you can step back and screen out some
and zoom in on one or more ideas that you’d like to consider moving forward with. A
helpful way to narrow down your ideas is to think about the intersection between desirability, feasibility, and viability (Figure 3.2). Start with desirability. Which ideas are desirable to people, and who would want this idea to happen? Next, think about feasibility.
Which ideas are you best positioned to implement? Then consider financial viability. Do
some ideas lend themselves to a financially sustainable endeavor? The answers to this third
question are not necessarily deal breakers.You can always find new ways of iterating your
idea to make it financially viable. These are just dimensions for consideration, to help you
narrow your options.
Next, consider the potential for social impact. Which ideas build power? Which
leverage existing assets and opportunities? Which have the potential to tackle root causes
and create long-​lasting change? Consider the multiple levels of impact –​not only direct
service and scaled direct service, but also systems change and framework change.
Lastly, what are you most excited about? What do you want to spend your time
working on? Where do you feel you can make the most helpful contribution? Asking
yourself these questions will help you rank your brainstorming ideas and select one or
more to test.
Step 6: Describe Your End User
It’s helpful to think about a target customer for your solution, even if it is not a commercial solution. The customer is the end user your solution is designed around. One
way to think about this is to specify your value proposition: Who are you helping and
what are you helping them do? Once you can answer this, put some more work into
describing your customer. What do you know about them? What constraints influence
their decision-​making? What do they spend their time and money on?
Note that the “economic buyer” may be a different kind of customer that you have to
provide a value proposition for.That’s how viability figures into ranking ideas. Is someone
willing to pay for this? In commercial ventures, the same customer is using the product
or service and paying for it. Some social ventures are able to utilize this model, too, by
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Designing a Solution 75
finding innovative ways of delivering high-​quality, low-​cost products and services to low-​
income customers. Yet other social ventures may have a customer for whom they have
designed their solution and an economic buyer who pays for it.
Step 7: Create a Prototype
You’ve made some assumptions about desirability, feasibility, and viability while narrowing
your solution. How might you test these assumptions? Prototyping means creating some
kind of model, sample, or simulation that puts your idea into a tangible form. It can be a
sketch on paper, a rough model of a physical object, or a digital representation. The purpose is getting you to think about how exactly it would work, and to test it out with end
users for their feedback.
If your idea is a process or service rather than a physical object, then you can prototype
it by drawing it out and explaining it to potential users, or by role-​playing and asking users
to simulate the process with you.
There are many different elements of an idea, and you can test them in multiple small
experiments; you don’t need to test them all at once. For example, you can create a landing
site or social media page to see whether you generate customer interest. Or you can sign
up prospective customers to try one or more steps in your process, seeing what works
for them and what doesn’t. Or you can mock up an app and test it with potential users.
Making something tangible to represent your idea is critical not only because it forces
you to think about the nuts and bolts of implementation, but also because it can help
you get actual feedback and data to inform your assessment of its desirability, feasibility,
and viability. Then, you can iterate the process above, and your ideas will evolve based on
feedback.Your ultimate solution will likely integrate components from multiple ideas that
you’ve prototyped and tested.
During and After the Design Process
When you start a design workshop, you’ll feel optimistic about finding a winning idea.
You’ll try out a few things, brainstorm, prototype, and test and iterate; the solution might
start to solidify. Other times, a solution might feel more elusive as you go through the
process.This is not where you give up.This feeling is familiar to every social entrepreneur.
Know that merely feeling this way means you are deeply immersed in the process; this is
in fact a step in the right direction.
When it feels like nothing is working and you have run out of ideas, try one or more
of the options below.
Tips and Tricks to Try
Reframe
If you get stuck, try changing the way you’re framing the challenge. Are you imposing
restrictions on yourself by surrounding your topic with a set of predetermined assumptions?
Are you associating certain features of your ideas with qualities that they may not necessarily be associated with? What would you create if this feature was not an issue? You can
always adapt new information to these answers later on; this is just a way to temporarily
remove blocks to your creativity!
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Reposition
To help get a new perspective, try changing your mental and physical positioning. Have
you experienced the challenge from different perspectives? Try shadowing people who
might be interacting with it in a way you haven’t yet considered, or try asking others to
propose solutions that you can test out. Being on the receiving end puts you in a completely different position, which might give you a whole set of fresh ideas.
Conduct a Premortem
One exercise is to ask yourself what you could possibly do to make your chosen social
challenge worse.This is another way of looking at things from a different point of view.Teams
within innovative organizations often conduct a “premortem” about a challenge: rather
than asking what success would look like, they ask what it would look like to not deliver
this solution. Identifying triggers that will push the social outcome in the wrong direction
might spark ideas on how you can do things differently and reverse those trigger points.
Break It Down into Mini-​Challenges
Lastly, it might help to break down the challenge into multiple aspects, rather than tackle
it as one giant topic. During your previous research, which of these aspects has emerged
as opportunities for improvement? How might you tackle each aspect separately, before
putting them back together? This might help you get a fresh insight into multiple opportunities, which you can then combine into one product or service. Don’t forget, this solution might be completely different from what you set out to create! You might end up
focusing on one smaller aspect rather than trying to tackle the whole.
Analyzing and Organizing Your Options
At some point, the sheer number of generated ideas becomes overwhelming. This is
where you allow yourself to step back, applying your judgment and the judgment of your
team members and stakeholders to different ideas. Your previous research will inform
how you move forward with different options. Think back to what others have tried;
what’s worked and what hasn’t (and why or why not); what your end users have taught
you about the way they experience the social challenge; and the different resources available to them and to you. This is where you really need to engage your stakeholders in
assessing feasibility, desirability, and potential impact of various options. Some ideas are
stepping stones to your solution; these can be eliminated from the pool. Once you have
a manageable number of potential models, you can prototype and test them. Remember,
at the end of the day, the solution you are looking for is the one that was generated by
the end users: What did they tell you? What is their experience? What are their needs and
preferences?
Don’t Rush the Design Phase
After all, you’re creating a solution around which you’ll build the remainder of your
venture. You’ll keep innovating right through the business model, delivery model,
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Designing a Solution 77
organizational aspects, and growth, as depicted in Table 3.1. Make sure you’re not rushing
into things until your solution is ready. Focus on creating the best possible product or service for your end user. Much of the time, it will be something surprisingly simple. Once
you’ve conceived it, you might not even believe this is something that didn’t exist before
you started!
Give yourself as much time as needed for this stage.
Tools for Testing and Refining Your Social Impact Idea
In addition to prototyping your ideas and testing them with end users for desirability,
feasibility, and viability, it is also important to put them through some pressure tests to
refine them for heightened impact. In this section, we’ll talk about the AAAQ checklist
and the theory of change, both of which will help you think about how to make sure
that any new solutions you design will have the intended outcomes on the challenge you
are tackling.
AAAQ Checklist
In implementing design thinking for building power, we can draw lessons from
interventions and programming in the field of human rights. When you are co-​creating
with the community, you are following what we call a rights-​based approach to sustainable development. This is reflected in the community-​centered nature of your work,
where you have engaged key stakeholders; and in your incorporation of local context and
landscape. Exhibiting transparency and accountability to your stakeholders is an aspect
of a rights-​based approach. A rights-​based process considers and includes all possible
stakeholders so that the solution is nondiscriminatory to the extent possible.
One way to ensure that your development of a solution continues to follow a rights-​
based track is to apply the AAAQ checklist. AAAQ refers to availability, accessibility,
acceptability, and quality. Availability means providing the product or service. Accessibility
means ensuring that your end user can reach and consume the product or service. This
includes making sure that it is affordable to them, physically accessible, and durable (something is not accessible if its usability or usefulness has expired by the time your end user
needs it). Acceptability refers to the social and cultural environment that may welcome –​
or resist –​your product or service: if you have made something available but it is not
socially acceptable to access it, then how can your end user benefit? Finally, for your
solution to produce the social impact you envision, it must maintain an optimal level of
quality.
Optimizing for all four criteria can be tricky for the social entrepreneur who aims to
produce the most affordable solution. Affordability is often associated with the lowest cost,
but is the lowest-​cost solution always of the highest quality? Often it is not. How does
one find the right balance between low costs and sufficient quality to result in the desired
outcome? Durability is affected by quality, as well.This is why applying this checklist is so
important. None of these characteristics alone will produce the winning solution. Finding
a low-​cost, high-​quality solution that is durable over time is key to effectively tackling
your social challenge. Otherwise, you will be asking your end users to invest in a product
or service that will only perpetuate the existing status quo.
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Theory of Change
An important way of testing your assumptions is to conduct a theory of change exercise.
This links your solution to the change you think it will create. The exercise also asks you
to justify why you think the solution and outcome are linked.
As you narrow down to your winning prototype, you are honing and refining it
throughout.You are also formulating a thoughtful explanation of how your solution will
change the social challenge you are facing. This is what we call your theory of change.
The theory of change both explains and justifies why you are embarking on this social
endeavor, why it will work, and why people should invest resources in your ideas. It is
the essence behind the design of the solution, which will bridge the gap between the
challenge you have characterized and the change you are aiming to achieve.
What design features can optimize response from key stakeholders, given what you
know about the end users? What features can be optimized to increase effectiveness,
user friendliness, and feasibility? Your theory of change determines how the solution will
meet the needs of your target audience in the setting you are operating in. Stating your
assumptions at every step will help you evaluate whether you are designing your solution
optimally. Specifying those assumptions allows you to test them and determine whether
your theory holds.
So, what does this look like? Your theory of change can be as simple as a few paragraphs
of narrative outlining the key pieces of information described above. Various interactive
tools can also help you and your team brainstorm, discuss, build, and strengthen your
theory: many larger organizations use diagrams to map their theory of change and
represent the multiple players involved; others try to summarize their theory in an “if,
then” sentence, such as: If we provide a rigorous and affordable curriculum for early
childhood learning within walking distance, then we can improve education outcomes in
young children in rural India. Some of the systems mapping tools we talked about at the
end of Chapter 1 can help you flesh out your theory of change.2
One of the most basic tools at your disposal is the theory of change table. Once you’ve
described the challenge you’re tackling and the changes you’re setting out to create, this
tool helps you fill in the steps needed to get from one to the other. You can fill out the
columns and rows in whichever order makes sense to you, then revisit each column to
make sure it fits in with the rest (see Figure 3.3).3 You might start by filling in the first
column, which specifies the challenge, and listing underneath it the key assumptions
and available data points regarding the challenge. Next, pencil in the last column, which
specifies the long-​term change you’re setting as your goal. Then, keep your eye on this
last column as you fill in the steps between the first and last columns. Going back to
the second column, questions here include: Who is your target audience? Who does the
problem affect? Which segment(s) of the population does your solution serve? Again, list
the key assumptions about this population. The testing that you conducted with your
prototypes will inform these assumptions. Have you explored the barriers between you
and your audience? Are you assuming that they will be open to and interested in adopting
your solution?
Looking at the third column, how will you reach your end user and what is your
entry point? Since you have spent time on community-​driven research, you will already
have an idea of the context in which you’re going to operate.You’ll have already refined
your assumptions regarding an entry point to reach the end user, too: it could be an
existing supply chain; it could be partnering with an existing organization. The fourth
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What is the
problem you are
trying to solve?
KEY ASSUMPTIONS
What is your entry
point to reaching
your audience?
KEY ASSUMPTIONS
What steps are
needed to bring
about change?
KEY ASSUMPTIONS
What is the measurable effect of
your work?
What are the wider
benefits of your
work?
Measurable effect?
Wider benefits?
Measurable effect?
Wider benefits?
KEY ASSUMPTIONS
Figure 3.3 Theory of change template
Available via license: Creative Commons Attribution-NonCommercial-NoDerivatives 4.0 International
Source: Adapted from: Nesta. (nd). Theory of Change. www.nesta.org.uk/​tool​kit/​the​ory-​cha​nge/​
KEY ASSUMPTIONS
What is the longterm change you
see as your goal?
STAKEHOLDERS
Designing a Solution 79
KEY ASSUMPTIONS
Who is your key
audience?
THEORY OF CHANGE
newgenrtpdf
I want to clarify my priorities
by defining my goals and the path to reach them
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80 Designing a Solution
column asks how your solution works after you’ve achieved your entry point. Walk yourself through each node of change. Note the possible outcomes at each node. What needs
to happen for your solution to work? This will lay the foundation for your future business
plan, which will also require you to think about what to do if things don’t go according
to plan. It is impossible to overemphasize the importance of fleshing out your assumptions
at each junction so that you can continue collecting data to assess those assumptions’
validity –​and to be prepared with a contingency plan if and when they don’t hold up.
For an example, consider an endeavor delivering SMS-​based reminders to mothers to
bring in their infants for vaccination, as part of the maternal–​child healthcare continuum
following childbirth.This solution had multiple assumptions that needed verification.The
team was assuming that: (a) families in the target community want to have their infants
vaccinated; (b) mothers will come in for postnatal care; (c) mothers have access to the cell
phone number recorded in their file; (d) they are able to read and understand the message;
and (e) they are physically and logistically able to bring their infant to the appointment.
How would you go about testing these assumptions? What other assumptions do you
think are being made in this case?
Finally, what measurable changes(s) will your social venture produce? Identifying
measurable outcomes is critical. The challenges you’re facing are sticky; otherwise,
someone else would have solved them a long time ago! So, arm yourself with these data
tools to amplify your chances of success.You’ve already identified a long-​term change as
your goal, but what intermediary changes do you need to create to get there? How will
you know if you’re making progress or need to step back and reassess what you’re doing?
Sticking to the SMS example, if your goal is to reduce early childhood mortality, then
the direct, measurable effects of your intervention are that more mothers will bring in
their children for vaccination, the number of missed vaccination appointments will be
reduced, and the number of children vaccinated will increase.
Articulating your theory of change allows you to flesh out ideas you generated in your
design process, and it answers some difficult questions about how they will work.
Testing and Iterating Your Prototypes
The last step of the design process is to create a prototype. As you test your prototype,
you’ll need to adapt and iterate it to incorporate feedback from users. Where you end
up may be completely different from where you started! Keep running your new ideas
through the AAAQ checklist and theory of change table to strengthen them.
Even if your solution is a process or system rather than an object, you can still find
ways to test it with users and iterate your ideas. Let’s use the example of a new framework
for a hospital waiting room that is intended to improve patient triage and reduce waiting
times in emergency settings.4 You can start prototyping this by writing out the framework,
hanging it on the wall, and asking various stakeholders to go through the procedure as if
they are in a waiting room. Request feedback not only about their use of your model but
also about the supply chain on either end: What transportation did they use to get here?
How long did it take? Did they have to take leave from work? How much are they willing
to pay for this service? Would they return for a follow-​up? What concerns do they have
about the clinical staff? What information do they wish you would provide them before,
during, and after the emergency room experience?
Test your model with prospective patients as well as prospective service providers –​in
this case, clinical and administrative staff. Give them multiple options to test, to create the
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Designing a Solution 81
Spin out the
winning
model
Initial
design
Model /
prototype
Evaluate and
learn
Test
Figure 3.4 Iterative prototyping
opportunity for comparing and contrasting. Think of it like administering a survey. You
want to benefit from answers to both open-​ended and multiple-​choice questions.
Testing your prototypes with end users in an iterative fashion –​that is, model it, test
it, and model it again –​is also known as establishing proof of concept. The only way
your product or service will work in the real world is if it is tried and tested. Testing is its
own multistep process. Those stages include gathering feedback about your prototypes,
developing multiple versions and testing them as you get closer and closer to your end
product, and piloting your end product before attempting to build an organization that
scales it. From testing and collecting feedback, you can develop your solution more fully,
such that you could introduce it to market (Figure 3.4). Even then, however, you will
want to go back and collect feedback on the fully developed version by piloting it (more
below).
The value of testing is demonstrated by Equalize Health, a nonprofit product development company whose mission is to create medical technology that improves the
health and incomes of people living on less than $4 per day.5 After gathering information about the social problem at hand, the team generates conceptual solutions and then
assembles various iterations of the product and collects feedback from users (Sidebar 3.2).
In prototyping a product called Brilliance,6 which treats newborns with jaundice, the
team collected feedback from supply chain stakeholders including procurement officers
(people responsible for purchasing products in hospitals), maintenance officers (who
address product breakdowns or troubleshoot end users’ problems), and healthcare officers
(doctors, nurses, and other medical practitioners responsible for applying the product).
In this case, an interesting twist is that while the end user is the healthcare provider, the
target beneficiary is newborn babies. Therefore, the medical needs of the target beneficiary informed the development of the product initially, but the characteristics of the end
users and the environment in which they operate were key to refining and delivering the
product.
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Designing a System around Your Product or Service
Testing will most likely point out the need to build multiple systems around your solution.
In the commercial space, we see companies building an entire world for their consumer,
selling not only a cell phone but also apps, accessories, chargers, technicians, software,
and complementary products like tablets and computers. They are drawing in the customer for the long term, penetrating the customer’s life to the deepest and widest reach
possible. In social business, this concept is exemplified by the Grameen Group, which
added one component after the other to its interventions: what started as a social fund for
increasing women’s access to financial tools grew into a group of organizations dedicated
to healthcare, education, and other social goods.7 As a simple starting point, the women in
each lending group were provided with health awareness seminars and support to enroll
their children in school as part of microloan programs.
In the case of Brilliance, Equalize Health partnered with a well-​known local manufacturer of neonatal medical equipment after finalizing its design. The partnership allowed
Equalize Health to leverage existing distribution and customers, in addition to accessing
data on key customer needs and markets.The manufacturer already had access to hospitals
and healthcare practitioners through its existing products, so Equalize Health was able to
integrate itself into an existing system. Meanwhile, the manufacturer leveraged Equalize
Health to increase its sales and market share.
Once you’ve begun testing prototypes, think about the systems that could support and
amplify delivery and impact.
Sidebar 3.2 Equalize Health (https://​equ​aliz​ehea​lth.org)
Founded in 2007 under the name D-​Rev as a US 501(c)(3) nonprofit organization
Goal: To close the quality healthcare gap for underserved populations globally
What they do: Equalize Health is a nonprofit company that designs and delivers
medical technologies that close the quality healthcare gap for underserved
populations. Their focus is on addressing the leading causes of maternal and
newborn mortality and creating impact where it is most needed.
How it works: It is rarely viable for for-​profit companies to design and develop
products for the four billion people living in underserved populations. Equalize
Health closes this gap by subsidizing research and development (R&D) and
working with a global network of partners to design disruptive and profoundly
affordable products aimed to improve health. Their products are world-​class,
market driven, and user obsessed, and they have reached over 1 million patients
to date. By relying on grants and private-​sector contributions (such as from the
Bill & Melinda Gates Foundation), they own the research, design, and development stages and then partner with industry leaders to manufacture and scale
the product for maximum impact.
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Designing a Solution 83
Launching with a Pilot
A pilot is a “test run” of your solution’s launch. It is a small-​scale operation that implements
the solution after it has been refined through multiple prototypes. This allows you to
develop the operations and distribution aspects of your endeavor, trying out processes
that prepare for a larger-​scale rollout. One advantage of starting with a pilot rather than
a large-​scale rollout is that it allows for further testing and feedback from your end users,
team, and other stakeholders. Nothing ever goes according to plan, no matter how much
research and testing you’ve done! Another advantage is that it is easier to raise funds for
a pilot, to demonstrate results, compared to a large-​scale implementation. Once you have
those results in hand, you can raise funds for wider implementation. Pilots usually focus
on one site or a small number of sites, as well as a relatively small number of end users
with whom you can demonstrate the value of your solution and measure outcomes. In
summary, piloting is the first step in implementing your solution after you have tested,
refined, and iterated initial prototypes. It follows the initial research and design phases and
precedes scaling and expansion phases. In an interview with the founder of Hippocampus,
an education social enterprise in India (which you’ll read about in the case study later in
this chapter), he talks about their experience in piloting their programs.
Interview Box: Umesh Malhotra, Founder and CEO,
Hippocampus
Tell us how you piloted Hippocampus
Learning Centers.
The question was not seeing if it works. It had
to work. The pilot was to make sure it worked at
scale. We had to break it –​do enough scale that
you can’t manage –​that’s how you build it. Then
you steady the ship and demonstrate the basic
ingredients of scale.
How did you phase this over time?
In year one, we piloted 17 centers. In year
two, we went up to 78. Then, in year three, we
introduced new processes to develop our selection criteria: we pushed the teachers to see what would make them leave and what
characteristics we need for teachers to have. Finally, in year four, we can demonstrate
profit by increasing the average enrollment per center.
Photo courtesy of Hippocampus
What elements did you innovate, and how did you find out what works?
To start with, the education curriculum is nothing superior to what traditional
NGOs are already using; it’s just simplified and designed in a way that it can be
standardized and scaled. The management is also streamlined. A core factor that
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84 Designing a Solution
drives results for us is that the teacher is the boss of the classroom. We don’t want to
impose an external interaction.
What are some other design elements that you had to test before
scaling?
Curriculum length, monitoring and evaluation (M&E) frequency, and the rate of
growth and expansion. We had to ask ourselves: What is the lowest cost that can
deliver quality? This is a dollar-​a-​day situation here; families in these villages earn,
on average, $100 per month and have more than one child. We assessed price over
time and went from charging $2 per month to more than $3, which was an 80 percent increase, and the kids didn’t drop out.The government provides free daycare for
1-​to 6-​year-​olds with milk and lunch, but villages are still asking for our preschools.
What external factors did you need to take into consideration in
designing for scale?
The main external factor, we realized early on, is that we’ll never reach our end goal
through our work alone. We partner with as many stakeholders as possible: government, NGOs, many schools, libraries, and teachers. We provide our curriculum to
other organizations to apply in other states. If you want to reach 150 million children, you can’t work alone.
Beyond Design
Design is only one aspect of innovation, and innovation is only one aspect of social
entrepreneurship. When developing your solution, it is critical to stay focused on the
core challenge you are tackling and the community you are creating it with. You will
circle back to various stages of innovation and design as you begin to grow and implement your solution, but the challenge and community will remain at its core. A few rules
to keep in mind were well summarized by Paul Polak, the late founder of International
Development Enterprises, which creates income and livelihood opportunities for poor
rural households through agriculture, sanitation, and hygiene technologies.8 In his two
books, Out of Poverty and (with Mal Warwick) The Business Solution to Poverty, Polak
presents a commonly understood framework that synthesizes best practices from his
own experience and success stories from development ventures worldwide (Sidebars 3.3
and 3.4).
Sidebar 3.3 Elements of Design for Affordability
Paul Polak’s advice for finding solutions to complicated social problems is
summarized here9:
1. Go to where the action is, talk to the people living with this challenge, listen to
them and learn everything there is to know about the specific context.
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Designing a Solution 85
2. If you come up with a solution to a problem, there is no reason to be modest.
Be ambitious!
3. Think like a child (to find the obvious solutions).
4. See and do the obvious (immerse yourself in the problem).
5. If somebody already invented it, you don’t have to.
Sidebar 3.4 Common Features of Initiatives that have Tackled
Extreme Poverty
According to Warwick and Polak,10 these initiatives:
1. Listen to customers and understand the specific context of their lives.
2. Design and implement extremely affordable technologies or business models.
3. Use market-​based solutions whose implementation is driven/​supported by the
private sector.
4. Use last-​mile distribution while maintaining low costs to succeed through
decentralization.
5. Design for scale from the start.
These common principles emphasize extreme affordability, but it is important to
remember that this only makes sense to the extent that it fulfills your central mission.
Sometimes, the lowest-​cost option will not allow your customers to escape poverty.
“Why would I ever buy a lead shoe?” a researcher was asked during a customer interview,11 pointing to the fact that a lead shoe may be more affordable than a lightweight
shoe but would defeat the purpose of increasing mobility. The researcher was attempting
to design a solar-​powered cookstove, inspired by nomadic communities in the Himalayan
plateau; the point was that if the stove is designed for extreme affordability but is not
lightweight or durable, then it would be defeating the purpose.This points to a new definition of affordability, incorporating not only the dollar cost of the product but also the
opportunity cost of failing to deliver on your mission.
This is elaborated in the S-​shape curve of poverty taught by Professors Banerjee and
Duflo at MIT’s Poverty Action Lab (Figure 3.5).12 The S-​shape curve visualizes the observation that living in extreme poverty lends itself to behavioral economics that propagate
poverty, thus creating a poverty trap.
Buying the cheapest product rather than the most effective or most durable product is
one way in which household poverty is often perpetuated, since the purchase will have
to be made over and over again. This underscores the importance of studying your social
challenge and learning everything there is to know about your end users, their lifestyle,
and the way they make their decisions. It also emphasizes the need to frame the design
of your product within a theory of change, which connects it to the challenge you are
tackling and the impact you aim to create by specifying the assumptions underlying each
step along the way.
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86 Designing a Solution
Income in
the future
The
poverty
trap zone
Outside the
poverty trap
Income today
Figure 3.5 The S-​shape curve and the poverty trap
Source: Abhijit V. Banerjee and Esther Duflo’s Poor Economics: A Radical Rethinking of the Way to
Fight Global Poverty (Public Affairs, 2011). https://​crea​tive​comm​ons.org/​licen​ses/​by-​nc-​nd/​4.0/​
Available via license: Creative Commons Attribution-​
NonCommercial-​
NoDerivatives 4.0
International.
Incremental Innovation and Disruptive Innovation
People talk about incremental innovation and disruptive innovation as if they’re mutually exclusive. They also assume that disruption is the only way to build new markets.
That’s actually not true most of the time. Building evidence-​based solutions requires,
by definition, exercising some form of incremental innovation. Tackling challenges most
likely brought about by market failures means, by definition, that you are disrupting the
status quo. So, by definition, you are doing both.You can make a phenomenal change by
building on the results of others before you.
That’s not to say you shouldn’t pursue bold ideas if you have come up with something
entirely new –​go for it! This is just to say that whatever you do, test it, pilot it, and make
sure it really works in the way you want it to. The stakes are high. Whatever you do will
affect others. And often, there are unintended consequences that can be either positive
or negative. So, proceed with caution, thoughtfulness, and ongoing communication with
your stakeholders.
Remember the importance of building on what others have done before you –​of
learning from those who have attempted to solve this problem. This is where the research
you’ve been so arduously conducting will come in handy. The only way we can go further than those who came before us is to “stand on the shoulders of giants,” as the famous
saying goes. This means that, in the majority of cases, social entrepreneurs will further
the progress achieved by those before them by using all the knowledge they had gained.
Basing your solution on evidence maximizes your chances of success.
Case Study: Hippocampus Learning Centers
The Hippocampus Learning Centers were designed for scale. Headquartered in Bangalore
in the state of Karnataka, India, Hippocampus had over 200 learning centers at the time of
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Designing a Solution 87
writing. In terms of organization, content, and delivery, this social venture was designed
to streamline operations and maximize results.
The Hippocampus team identified a learning deficit in India, especially in rural areas
where children were not exposed to a literacy environment until they entered public
school at the age of 6 (which already disadvantages cognitive and social development).
This challenge manifested in poor learning outcomes, with ripple effects throughout the
life cycle. The Hippocampus team asked: “What if we could provide children with the
best chance at a fair shot in life?” In turn, they developed a preschool system that fulfilled
the criteria of availability, accessibility, acceptability, and quality. Innovation at multiple
levels was a key to ensuring that both the education and management models were robust
enough to be replicated without sacrificing quality.Through user-​driven design, the team
identified two main factors that made this possible: the profile of the teachers recruited
and trained; and the nature and content of the curriculum. Both were simplified and
streamlined to allow for application at large scale.
Rather than recruit teachers from the existing public school system, the Hippocampus
team recruits women from the villages in which centers operate. The women do not
necessarily need to have formal training or experience as teachers, nor are they required to
be proficient in English. Hippocampus’s team trains them in the necessary skills required,
and a large portion of an average day’s curriculum and communication in a Hippocampus
center can be taught in the local language, with only certain keywords, phrases, and
lessons delivered in English. (Besides language, math, and other academic topics, the curriculum focuses on following instructions, behaving in a classroom, working as a team,
and functioning within an orderly system.) The team found that it is more efficient and
effective to train a new corps rather than to work with teachers who would have to
unlearn existing habits.
Hippocampus teachers have a certain degree of autonomy in running their own
centers, and they gain a sense of independence. Each learning center is given independence on multiple levels. Each is financially sustainable, and teachers are responsible for
recruiting students.They also have some freedom to tailor and adapt the learning material
and style to local contexts and cultures. The role of the Hippocampus headquarters is to
develop and update the curriculum, branding, marketing, monitoring, and assessment.
This is the only non-​recoverable cost in Hippocampus’s business model, and it can be
covered by increasing the number of centers so that their small profit margins surpass
the headquarters’ costs. Thus, in designing the organization, it was essential that the headquarters would not grow out of proportion in relation to the number of learning centers.
Hippocampus prevented disproportionate growth through a combination of factors.
One is decentralization and automation of monitoring and assessment. It would be too
costly to send out headquarters staff to monitor the performance of each center in rural
areas. Instead, field coordinators are recruited and trained to serve this role. Each field
coordinator monitors a cluster of centers within a defined geographic area, allowing them
to conduct daily site visits to centers within the cluster and ensuring that each center is
visited once per week for several hours. Automation of data collection was also developed
by equipping each center with a low-​cost tablet for field officers to enter performance
data during their visits, to aid the team at headquarters in M&E.
Additionally, many centers operate as early learning centers in the mornings and provide a remedial English program for children over 6 in the afternoons. For the remedial
English program, Hippocampus’s team researched existing reading programs from all
over the world and created their own Grow by Reading program, which simplified
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88 Designing a Solution
elementary-​grade English into six levels (as compared with more than 20 levels in other
programs). They ordered low-​cost booklets coded by color to reflect the levels, which
makes advancement easy to understand for teachers, children, and parents.
Another design factor involved physical resources. To ensure standardization across
centers, a basic package of educational materials (books, chalk, toys, seating mats) was
created for teachers. Thus, each time a new center is opened, its characteristics and costs
are known in advance, and the procurement of supplies takes place according to a preset
system.
Beyond design, development of robust systems that could withstand the strain of rapid
scale was essential to smoothing growth. Initially, it was calculated that Hippocampus
needed to scale to 600–​700 learning centers to become financially sustainable as an organization. How could the team maintain performance quality at each center and manage
the exponential increase in workload at headquarters? The former was ensured through
decentralization and automation of monitoring and assessment. The latter required clarifying processes and simplifying roles, to streamline operations.
During the startup phase of any organization, a large number of roles are played by a
small number of people. The founding team is responsible for building content, recruitment, assessment, marketing, accounting, and keeping up with growth. As the organization scales, these roles are simplified. Rather than having one person responsible for
the teacher and student recruitment required to open each center, the mature organization will have a recruitment officer who recruits new teachers and a marketing officer
who recruits new students. Similarly, during the startup phase of an organization, many
procedures and decisions are made on the spot, depending on the scenario. As the organization scales, these processes and procedures are evaluated and put into a system.
Hippocampus was initially piloted with 17 centers. This is highly unusual in traditional development fields, where pilots tend to be limited to one center. The founder,
Umesh Malhotra, insisted on designing for scale from the start. He wanted to “test it until
it broke.” From 17 centers in the first year, he grew the organization to 78 centers in
the second year, until things started to go wrong and teachers started dropping out. He
questioned: “How would I need to run this in order for everything to go wrong?” And
he then fixed things so they would not go wrong when the organization grew further.
Things changed very rapidly for Umesh and his team; they had to iterate their model to
find new ways of scaling and sustaining. Five years after its founding, when Hippocampus
had grown to 200 centers, changes in national policies and regulations related to physical and infrastructural requirements of preschools made it harder for the existing
Hippocampus model to expand to 700 centers.The team had to find a way to break even
with a smaller number of centers.They reduced their headquarters team, adjusted pricing
at the village level (this meant increasing prices in some villages and decreasing prices in
others), and created events to attract the community and increase enrollment. Based on
demand from parents, they increased the number of years of schooling in each center,
expanding the solution to grade 10.
Now Hippocampus was piloting a new scaling mechanism, building on the initial
model of recruiting and training local women to become independent leaders of the early
learning centers. Rather than continuing to scale this model themselves, they are testing
a network of women microentrepreneurs who would pay a nominal fee to implement
the preschool program and run their own centers. If successful, this would catalyze 2,000
centers across India, without Hippocampus implementing the expansion themselves. The
microentrepreneurs initiative is a sub-​brand of Hippocampus, using the same curriculum
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Designing a Solution 89
and training, but offering even more independence for individual centers. New teachers
in rural areas are responding positively to online teacher training, thus lowering costs further. Positive changes in the external environment are reinforcing this trend, with competition between new telecommunications providers decreasing costs of Internet access.
Thus, the Hippocampus team continues to innovate at all stages of its endeavor, and at
multiple levels: the product and service itself, the business model, internal operations, and
external distribution. Innovation is not one stage that happens at the start of an endeavor;
rather, it is a cyclical and iterative process that responds to new data and feedback from
the external environment. Each new idea is modeled and tested until there is evidence of
what would make it fail. A new model emerges, in turn, and the cycle continues.
Thought Questions
1. How would you describe Hippocampus’s theory of change in an “if, then” sentence?
2. How did their program design address the AAAQ checklist?
3. What questions would you ask to make sure that Hippocampus is creating the desired
social changes, and to assess any potential unintended consequences?
4. What are some ways that you would go about trying to ensure that Hippocampus
continues to achieve the intended outcomes as it iterates and responds to external
factors?
Next Steps
By this stage, you have generated ideas about how to tackle the challenge you set out to
change, what your solution will do, and how it will work.You might not have it all figured
out yet, and that is completely okay. Don’t think you’re supposed to already have all the
answers.You’re simply supposed to take the time and space to brainstorm different ideas,
test them out with your team and stakeholders, and develop them further until you’re able
to identify a solution that has the potential to work.
The design phase can take months, if not years. Don’t rush it. Your goal is not just to
come up with something –​it’s to come up with something that works. That’s why the
theory of change is so valuable! It doesn’t let you proceed until you can really prove that
the proposed solution will have the intended effect.
Get out there to see what people think. Depending on the feedback, you may need
to go back to the drawing board.You want to come up with something that people want
and need, something that’s financially viable and feasible to implement, and something
that creates the social outcomes you’re seeking. That’s why we draw on the principles of
innovation, the human rights framework and AAAQ checklist, and the theory of change.
Stay immersed, stay focused, and don’t be afraid to come up for air when you need it.
This takes time. There’s no magical button you can push or formula you can follow to
build your solution.You’ll never feel fully equipped; you just need to unleash your brain
cells and start working.
Chapter Assignment
You’ll need to go through multiple iterations to come up with your deliverables, so take
your time. Just make sure that when you’re ready to deliver, you can summarize your
answers in one sentence and with one diagram:
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1. Sketch out your product or service. What is it? How will it work?
2. How can you test it out with potential end users? Who is your audience? How will
you go about collecting feedback from them and incorporating that feedback?
3. Fill in your theory of change table, listing the assumptions underlying each step. Has
your research and testing validated each assumption? What else might you need to do
to prove this will work?
Optional challenge: summarize your solution in an “if, then” sentence!
4. Describe the characteristics and qualities of your solution that ensure availability,
acceptability, and accessibility for your end users. What does it look like for the solution to have the quality necessary to create the outcomes specified in your theory of
change?
Notes
1 Check out this classic article describing design thinking for social innovation: Brown, T., &
Wyatt, J. (2010). Design thinking for social innovation. Stanford Social Innovation Review. htpps://​
ssir.org/​articles/​entry/​design_​thinking_​for_​social_​innovation
2 As an example, check out the two-​part blog on https://​kumu.io by searching online for “how
systems mapping can help you build a better theory of change” and “two approaches for combining theories of change and system maps.”
3 Visit www.nesta.org.uk/​tool​kit/​the​ory-​cha​nge/​ to download a template.
4 For those of you innovating in healthcare settings, check out this helpful resource: Ku, B., &
Lupton, E. (2020). Health design thinking. Cooper Hewitt. See: https://​mitpr​ess.mit.edu/​books/​
hea​lth-​des​ign-​think​ing
5 Find out about Equalize Health at: https://​equ​aliz​ehea​lth.org/​our-​story
6 See: https://​equ​aliz​ehea​lth.org/​produ​cts/​bri​llia​nce. More information is available at: Design
Kit. (nd). Brilliance by D-​Rev. www.design​kit.org/​case-​stud​ies/​5
7 See: www.muhamm​adyu​nus.org/​post/​415/​not-​for-​pro​fit
8 See: www.ide​org.org/​
9 Polak, P. (2009). Out of poverty. Berrett-​Koehler Publishers.
10 Warwick, M., & Polak, P. (2013). The business solution to poverty. Berrett-​Koehler Publishers.
11 Shared by Dr Catlin Powers, co-​founder of One Earth Designs.
12 Banerjee, A., & Duflo, E. (2012). Poor economics: A radical rethinking of the way to fight global poverty.
Public Affairs.
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4Developing Your Idea Further
Chapter Overview
This chapter will help you understand how your idea will interact with the world,
and how the world will interact with your idea. To make this happen, you’ll talk
about your idea to as many people as possible. Here’s what you’ll practice:
•
•
•
•
•
Getting feedback on your idea by talking to customers and other stakeholders
Articulating the mission, vision, and values of your endeavor
Sketching out a customer experience flowchart detailing how your idea
will work
Putting it all together in a social business model canvas
Evaluating your idea with a SWOT analysis
To better understand how your idea will interact with the world, and how the world will
interact with your idea, you’re going to get out there and talk about your idea to as many
people as you can. We’ll start by going over some simple basics about who to talk to and
how to get started. We’ll then work on framing your endeavor using an organizational
compass, which guides your explorations and helps you describe your mission, vision,
and values to others. Finally we will sketch a customer experience flowchart, which starts
fleshing out the details and steps of how your idea will work: how people will find out
about it, what will make them decide to try it, how they will interact with it, and what
changes it will make in their lives. At the end of the chapter, you’ll have the opportunity
to try putting it all together in a social business model canvas –​which we’ll build on in
the coming chapters as you develop your business model –​and to evaluate the strengths
and weaknesses, opportunities and threats around your idea.1
Getting Your Idea Out There
Sketching out your customer experience flowchart and/​or social business model canvas
requires you to ask detailed questions about how your idea will work. It’s too early for you
to have answers to all the questions we will pose in this chapter; the goal is to get started
in articulating the steps and details you’ll need to figure out. Even if –​especially if –​you
don’t have all the answers, now is the time for you to start sharing your idea with the
world.You cannot figure out all the details before soliciting feedback and getting people
DOI: 10.4324/9781003094715-5
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on board. And you will not be able to figure out all the details realistically without talking
to as many people as possible. This is not a hypothetical exercise. Talking about your idea
to as many people as possible is your next stage of research.
How to Do This
We’re going to keep this as simple as possible. Start with who you know. In your journey
to understanding the challenge and the community, who have you talked to already? Go
back to them and share your idea.Who else can they put you in touch with? Systematically
track who you talk to, what feedback they give you, and who else they recommend you
talk to.
Where to Start
Of the many people who can help you on your journey, your customers are the most
important (we’ll talk more about your customers in the sections below). Talk to as many
prospective customers as possible.You don’t have to have a fully fleshed out offering before
approaching them! They can be part of its development. They are the best people to ask
about where they get information, what alternatives they currently turn to, what it would
take to get them to switch, what they would be willing to pay, and what attributes your
offering would need to have. Most important, over time you will be able to build your
customer base through these conversations. For example, if you are building a company
that works with businesses to increase diversity, equity, and inclusion, your customer will
likely be the human resources team in that business. By asking them to speak with you to
better understand their priorities, decision-​making processes, and needs, you are not only
learning about your customer and iterating your idea, but also building relationships with
people who might become your future customers.
Second, talk to others who are implementing their own ideas around this challenge.
One of the most helpful groups of people to talk to will be others who have tried something similar in this problem space. Learn what did and didn’t work, and what they wish
they had known when starting out. How can you build on what others have tried before
you? Another helpful group of people might be those who are part of your offering’s value
chain: collaborators, service providers, and suppliers of knowledge, goods, or services who
can share insights about the way things operate. What do they think of your idea? What
advice would they give you? They can turn your attention to aspects of your idea that you
may not have fleshed out. In the example above, find other similar companies working
on diversity, equity, and inclusion and ask them about their journey. In most cases, people
who have pioneered new paths and tested out new ways of doing things will be happy to
talk to you and share their learnings, and provide feedback on your unique ideas.
Third, talk to anyone who can connect you with others and help you spread your idea.
Yes, there is a chance your idea will be stolen or copied. But in getting as much feedback
as possible, you have a lot more to gain than to lose. Social entrepreneurship does not usually happen in “stealth mode.” Building relationships and collaborations makes your idea
possible. Start with those around you. Your colleagues, classmates, friends, family –​who
can they put you in touch with? The more people you talk to, the better the chances that
people will rally around you.You will need a lot of support in making your idea happen.
It’s all about community. By talking to as many people as possible, you will build that
community.
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Some people will answer your questions and give you feedback, and it will end there.
Others will want to stay involved, introduce you to others, and ask you to come back.
Keep track of everyone, and keep them posted as you progress.
You can also reach out to people with whom you don’t already have a relationship.
In, fact, you should. People you think will help you often do not, and those you thought
wouldn’t, often eventually do. So you have to be willing to talk to as many people as
possible. Find a way to connect and ask for an informational interview, as discussed in
Chapter 2.
Articulating Vision, Mission, and Values
To help frame these conversations, let’s start by putting into words your mission, the
driving vision, and the values that will guide the development and implementation of
your endeavor.This is not merely an exercise. It is a way to (a) have an internal compass for
future decision-​making and (b) convey to others what you are doing and what you stand
for, before you go out there and talk about your idea with as many people as possible.
The vision is your “why.” It describes your vision of the world, which your mission is
striving for. The mission is your “what”: what is the goal of this offering? What do you
hope to achieve? Keep it short and simple. Don’t go into details. The values are the core
guidelines that will shape your team and culture as well as the direction of your organization or initiative.
The organizational compass set out by Health Leads is a great example.2 Their vision
is health, dignity, and well-​being for every person in every community. It’s aspirational. It
drives the organization’s work, while being something much bigger than the organization
itself. The mission is more tangible: “We partner with communities and health systems
to address systemic causes of inequity and disease.” The organization’s values are: shared
leadership, justice through equity and inclusion, empathy and genuine relationships, and
constant and courageous learning.
Imagine what it would be like to work in an organization guided by those values.
Shared leadership means honoring the lived experiences and strengths of each person
and believing that effective collaboration is rooted in mutual trust. Justice through
equity and inclusion means recognizing that systems of oppression continue to shape
society and calling on partners to learn, embrace, and practice equity and inclusion in
all efforts. Empathy and genuine relationships means respecting and appreciating the
different strengths each person brings to the table, embracing moments of conflict and
celebrating the accomplishments of the team and its partners in big and small moments
alike. Constant and courageous learning means contributing to bold change and innovation by continuously building on past and current experiences, learning from and with
each other and community partners. Read more about how mission, vision, and values
are translated into action on the Health Leads website.
When writing your vision, mission, and values, keep the following in mind.Your vision
is a description of how things could be different from the way they are today. Describe
the world you would see if you were able to completely transform your social challenge.
Keep it simple –​sometimes, the most effective vision statement is just a counterfactual
description of the world as it is today. For example, your vision could be something
like: “A world in which every child has the opportunity to fulfill their love of learning.”
Your vision should be aspirational. It is what drives you, and you want it to drive others to
join forces with you. Many people might have a similar vision, each working in their own
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way to make it come true. Clarifying your vision will help you find like-​minded people
with whom you can achieve larger progress than you would alone.
Your mission is the assignment you have given yourself. How are you going to make this
vision possible? The mission is the path you are taking to reach your vision. For example,
a world without poverty is a vision that many organizations work toward.Yet each has its
own mission: increasing the earning power of farmers in Kenya; increasing immigrants’
access to capital in New York City; or educating female heads of households in Egypt’s
urban informal settlements. These three separate missions all work toward the same vision.
Social entrepreneurs serve as leaders by embodying the values of their organization and
inspiring everyone in their organization to internalize and demonstrate those values. In
Hippocampus’s case, the organization’s mission, vision, and values extend to anyone who
was part of the supply chain –​not only teachers in the field and managers at headquarters,
but also local cleaning teams and parents who enroll their children. Anyone who has any
interaction with the centers are encouraged to embody its goals and values.
How It Works
Next, we’ll put down on paper how your idea works, fleshing out the details of your
design.The following sections will ask you to generate questions you may not yet have all
the answers to. At this stage of your endeavor, your goal is simply to understand how the
world will interact with your idea. Once you’ve thought through these questions, you can
start sharing your idea with others and test different aspects of your offering, to collect
feedback and fill in the blanks.
Based on the ideas you designed in the last chapter, walk us through the customers’
experience from the moment they experience the problem to the moment they find out
about your solution to what happens after they experienced your offering (Figure 4.1).
What is needed for each of these steps to happen?
Step-​by-​Step Breakdown
Let’s break down the flowchart, starting with the customers.
Customers
In Chapter 3 we talked about the idea of an end user: the person who is interacting with
your offering. Any challenge you tackle will be complex and multifaceted, with multiple
potential pathways to change.You have developed a theory of change around one potential pathway.Your end users might be the people whose lives you impact at the end of that
pathway or a set of stakeholders along that pathway who play a role in creating change.
Note that you may have more than one customer. The primary customer is the “end
user” who is going to engage with your offering. This is the person around whom your
offering has been designed. Often, this is also the person who will make the decision
about whether to engage with your offering, though in some cases another person may
make that decision –​if your offering is designed around children, for example, then the
“decision maker” could be a parent, educator, or other caretaker.
Another customer may be the “economic buyer”. The economic buyer is usually the
decision maker, but when someone else is paying and making decisions, then that person
95
•
What is your offering?
• How does your offering work?
• How does it solve their problem?
• What will engagement look like?
• What will it cost and who will
pay?
Figure 4.1 Customer experience flowchart
How will customers meet your
offering?
• How will your customers learn
about it?
• What will make them decide to
engage?
•
•
What will be the impact?
What will it mean to people to
engage with your offering? How
will it change their lives?
How will you keep people
engaged and reach more people?
Developing Your Idea Further 95
Who is your customer?
Describe your customer: How do
they identify? What are their
constraints and dreams? What
problem are you solving for
them?
What are their alternatives to
your offering?
newgenrtpdf
•
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is also your customer.You need to provide a value proposition that will get the economic
buyer on board!
Describe your customers in as much detail as possible. First, what problem are you
trying to solve for them? This needs to be an immediate problem, which is one component of the larger problem you have been researching from the start. What is this person
struggling with right now that you can make better?
Second, how do they interact with that problem, based on your previous research?
What alternatives do they currently turn to in the absence of your offering? What
motivates them? How do they make decisions? How do they spend their time? How do
they spend their money? How do they want to feel? Identify questions that you think
are important for you to answer. We will talk about finding answers next.
As you proceed to know more about your customers, you’ll realize that not all customers
look the same.You’ll likely have multiple kinds of end users, decision makers and/​or economic buyers. It may help to sketch out some different customer profiles describing the
common characteristics of different subgroups of end users, decision makers and/​or economic buyers. You can do this by creating customer personas. A helpful resource is the
Personas tool, which is part of Nesta’s DIY Toolkit.3
Value Proposition
Describe your offering in terms of the value you are providing to the end users, decision
makers, and economic buyers you have described above.You can use a simple formula:We
help X achieve Y by doing Z.4
Step back and take a close look at Y. Is Y something that X is really worried about
doing? How are they going about Y currently? What would make them switch from their
current alternative to your offering?
Let’s now examine Z. Does your Z really help X achieve Y? Is Z the best way of doing
it? Is Z something that is desirable to X?
Testing the links between X,Y, and Z for each of your stakeholders is the best way to
start testing your idea.
Articulating your value proposition is very different from articulating your vision and
mission. While social outcomes are long-​term concepts, your customers are focused on
their immediate needs and their lives in this moment. Stay focused on the product or
service itself. How is it making people’s lives better right now? Examples are: We help
children perform well in school by providing top-​of-​the-​line preschool services in local
neighborhoods at prices that parents can afford; we help mothers deliver babies safely
through high-​quality, low cost, culturally competent care.
Pricing
What is your economic buyer willing to pay for this value proposition? This depends on
a few different things:
•
The current cost of the problem you are solving for them: Here, their perception
of the short-​term, immediate cost may be more important in influencing their
willingness to pay than the actual long-​term cost.You may have a complex calculation of the long-​term costs of the challenge you are tackling, but remember that
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•
most people are concerned with the short-​term and immediate expenses in their
daily lives.
Their perception of the added value of the solution you are offering: Is your offering
saving them time, money, inconvenience, distress? Is it making them and the people
around them happier? The value they place on these elements and the amount they
are willing to pay is personal and is also influenced by life circumstances, such as relative abundance or lack of income, time, and social support. Their perception of the
added value of your offering also depends on how you communicate it and how you
place it with respect to current alternatives.
Understanding your economic buyer – what immediate or short-​term problem you are
solving for them; their experience of this problem; what resources they have at their disposal; what their current alternatives are; and their incentives for change are – helps you
start to think about how much they might be willing to pay. At this stage, how you think
about pricing your offering will be more of an initial estimate based on this knowledge;
this will be used to start a conversation with your customers and other stakeholders to
get feedback.
It’s also important to understand that while talking to people is helpful to get feedback
to adjust your initial estimates, what people say and what they do often differs. The only
way to find out how much people are willing to pay is to start offering your solution.
That’s why it is helpful to conduct a pilot: to gather this kind of data.
Competition
Let’s talk more about understanding the alternatives your stakeholders currently turn to
in the absence of your offering. What does each alternative offer to each stakeholder, and
how? What are the strengths and weaknesses of each competitor? You can summarize
your competition research in a simple chart comparing the qualities of your idea with
qualities of existing alternatives (Figure 4.2).
If your solution competes with existing products, services, or other alternatives that
people turn to in the absence of a solution, people will choose you if you can convince
them that you offer more value. This is why you need to understand how your
customers make their decisions. Are they looking for the solution that’s the easiest to
understand, the easiest to access, the most effective, the lowest cost, or some combination of these? Who else is offering related solutions, and what are you offering that
others aren’t?
Your idea
Feature 1
X
Feature 2
X
Feature 2
Competitor 1
Competitor 2
X
X
X
X
Figure 4.2 A simple chart comparing your idea with existing alternatives
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Put yourself in your customers’ shoes by experiencing their journey with other
organizations and service providers. Interact with your competitors as if you were a
potential customer yourself: find out exactly what they are offering, how much they are
charging, and the costs of accessing their offering such as transportation or time off from
work. Talk to your customers. Find out what alternatives they currently turn to and why.
Would they be interested in your product or service, and what characteristics would make
them become your customers or clients?
Oftentimes, your offering is truly unique, providing a solution to this customer that
no one has offered before. Still, you’re competing with something else for their time and
money. What alternatives has your customer been turning to, even if it’s been a Band-​Aid
rather than a solution –​or, on the flip side, something that has been making it worse!
Getting to know people’s activity patterns and decision-​making processes is part of characterizing your customer and of characterizing your competition.Where are they putting
time, thought, attention, and money that you want them to focus on you instead?
Current alternatives may not fall in the same category as your offering. For example, it
has been said that the biggest competition for a soda company does not come from other
soda companies –​it’s water.This is the alternative the customer may consider.The biggest
competition for TV and movie streaming might be sleep. Most of the time, your biggest
competitor is simply the inertia of old habits.
Find out everything you can about these old practices, because you are asking people
to abandon them and develop new practices.You need to find out how to make it as easy
as possible for them to: (1) learn about you; (2) decide to engage with you; (3) make the
move to engage with you; (4) stay with you; and (5) help others find out about you.
Positioning
Based on your research about your competition, you need to decide how to position
yourself. Why would your end user or other decision maker switch to you? Are people
switching to you because you’re more effective, more convenient, less expensive? What is
your unique selling point, and how will you communicate this?
To help visualize and determine your positioning with respect to existing alternatives,
you can use a visual positioning matrix. The traditional matrix compares price versus
quality, as illustrated in Figure 4.3. How do alternatives compare to you? Some may be
cheaper but poorer quality, while others may be higher quality but more expensive. Try
D
E
Quality
Your
offering
B
C
A
Price
Figure 4.3 Visualizing your positioning
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Feature 6
Feature 1
Feature 5
Feature 2
Your offering
Feature 4
Feature 3
Competitor 1
Figure 4.4 A multidimensional visualization
to think of other dimensions as well –​what affects your end user, other than price and
quality? Figure 4.4 provides an example of this more multidimensional analysis (it is
another way to visualize the chart in Figure 4.2).
Filling out a positioning matrix will help you identify your closest competitors. These
will be the ones literally positioned most closely to you on the matrix. It might help to
start with a two-​axis grid comparing the price and quality of potential competitors.Then,
once you’ve identified your closest competitors, you can do a multidimensional analysis
that distinguishes your unique selling point.
Remember, in all cases, you cannot assume that your unique selling point is something
your target audience wants.You need to test this.
Promotion
How will you build a relationship with your potential customers? Whether you’re trying
to penetrate an existing market or create a new market, you still need to attract customers’
attention and provide the information that makes it easy for them to adopt your offering.
This goes back to understanding your customers’ behaviors and preferences, as you’ve
been doing throughout the development of your solution. It’s also very much tied to the
resources at your disposal. If you’re bootstrapping your startup (i.e. funding as you go),
you might not have a budget for advertising. Word of mouth, social media, and other
inexpensive promotion channels may be your best option. It’s also important to understand the sociocultural aspects of promotion. What is acceptable and desirable in your
specific setting? Do people prefer electronic, paper, or in-​person advertisements? Will
you be working through existing channels (placing an advertisement in an existing clinic,
supermarket, website, or social service center) or advertising independently (sending
social media advertisements, advertising by mail, going door to door, etc.)? Mapping out
your promotional strategy involves centering your customers’ behavioral and movement
patterns, your available resources, and the social preferences and customs within which
you are operating.
Existing practices in the market can inform your promotional strategy. Many companies
offer their product or service for free to first-​time customers, to give them an opportunity
to try it and invite them to come back. Another common practice is to offer packages,
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like discounted prices for multiple purchases. Other ventures offer promotions for repeat
customers when they bring in or recommend new customers, providing discounts to
both as an incentive. In yet other settings, people have turned to local culture to help get
the word out, especially in remote rural settings. Examples include advertising through
local musicians, troubadours, and traveling theater troupes! In these cases, no private-​
sector best practice could have been more effective than just working with local culture.
Branding
In thinking about ways to promote your offering and communicate what your customers
will gain by engaging with you, it’s helpful to keep in mind the basic elements of branding.
Branding is a way of eliciting an impression, emotion, and perception in a target audience.
It can involve the way you name a product or service, your choice of logo and typeface,
or the colors and wording you use on your website or other communications materials.
Again, this all depends on understanding what your customer wants.
Branding is how you present your social venture, the image you want to project, and
how it’s captured in all your messaging. Picking the name of your social venture is a
huge part of this! Kiva is a social enterprise that helps individuals and institutions share
resources with others through microloans (Sidebar 4.3). When considering different
names for this endeavor, one reason why the founders went with “Kiva” was its meaning
(“unity” in Swahili). Another reason is that it’s short and has a nice ring to it, and the
founders pointed to the theory that a two-​syllable name has been a successful formula
for many popular brands.5 Your name, logo, colors, abbreviation, and packaging as well
as your behavior, the terminology and tone with which you present information, your
team’s style of interacting with customers, even the way your team answers the phone –​
these are all parts of branding. It’s your image. Consistency is key, and this applies to
every detail from your letterhead, typefaces, website, and business cards to your delivery
vehicles and uniforms. These are referred to as the “identity” of your venture. A great
way to present your brand is through a tagline. This is a short statement presenting your
value proposition in a catchy way. “TED: Ideas worth spreading” is one you might be
familiar with.6
Sidebar 4.3 Kiva (www.kiva.org)
Founded in 2005 in San Francisco, California, USA
Goal: To expand financial access to help underserved communities thrive
What they do: Kiva is an online platform to crowdfund microfinancing loans
around the world.
How it works: Prospective borrowers from 80 countries and five continents fill
out an application for a loan. Many loan applications are to attend school or
start or grow businesses. After the loan is underwritten and approved, it’s posted
to Kiva’s crowdfunding platform, where lenders around the world can choose
which loans to fund.When the borrower repays the loan, the lender can recycle
those funds into new loans. Kiva has a network of field partners who are on
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the ground to screen borrowers, help post loan requests to Kiva, disburse the
loans to borrowers, and collect repayments. The crowdfunding platform creates
access for many more lenders than previously possible, and the field partners
create access for many borrowers. By making loans instead of grants, money
is recycled within Kiva. In this way, Kiva has lent more than $1.6 billion to
4.1 million borrowers to date.
Sidebar 4.4 Newman’s Own, Inc (https://​New​mans​Own.com)
Founded in 1982 in Westport, Connecticut, USA
Goal: To make great food and help kids who face adversity
What they do: Newman’s Own sells a wide range of packaged food products,
including salad dressings, pasta sauces, frozen pizzas, salsa, refrigerated drinks,
cookies, and snacks as well as pet food and pet treats.
How it works: Newman’s Own, Inc is the food company founded by actor and
philanthropist Paul Newman with two commitments: (1) quality must trump
the bottom line; and (2) all the money they make is given away to help others.
Today, Newman’s Own Foundation continues Paul Newman’s commitment to
use all the money that it receives from the sale of Newman’s Own products to
support children, their families, and their communities. Over $575 million has
been given to thousands of charities since 1982.
Branding is your first opportunity to convey your value proposition. When people look
at your name or logo, it conveys something to them. It might convey concepts like trustworthy, tasty, healthy, or even exclusive. Don’t think that social ventures can’t attract
people based on perceived exclusivity. All people, no matter what their socioeconomic
status, want to feel special and believe that acquiring your product or service will make
them happier.
How have some of the social ventures we’ve come across built their brand and company
identity? Hippocampus applies a colorful, happy logo to signs attached to learning centers,
field officers’ vests, the website, and other components of the organization.Thinking about
parents as the end user, it wants to convey a safe, happy, fulfilling environment for children. Part of the company identity is cleanliness. Hippocampus centers are always freshly
painted, their signs are always clean, field coordinators’ vests are always freshly laundered,
and even vehicles are well maintained and regularly cleaned. They emanate an aura of
trustworthiness and professionalism, as if to say: “We bring international standards to your
town to brighten your children’s future.”
In the next chapter, we will hear from the Aravind Eye Care System, which caters to
paying and nonpaying customers by using differential pricing for the same services. Yet
they brand themselves as the best medical care.They don’t tell paying customers that they
are subsidizing someone else’s care, because at the end of the day people don’t choose a
hospital to help others. They choose it to get the best treatment they can possibly afford
for themselves. Aravind sets pricing, messaging, and branding accordingly.
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One last example is Newman’s Own (Sidebar 4.4). This is a brand of food products
ranging from breakfast cereals to salad dressings that was created for the sole purpose
of generating money for social programs. It leverages the brand of famous actor Paul
Newman, but it doesn’t rely only on that brand to sell. It mentions that all profits go to
social programs, but it doesn’t rely on that as a selling point, either. It relies on taste, quality,
and packaging based on market studies of what people look for in their supermarket
purchases. These tactics are based on the knowledge that a shopper may make one or a
limited number of purchases to support a social cause, but what repeat customers actually
want is great taste and value. This is the advice given by Doug Rauch, founder and president of Daily Table, in this chapter’s interview box.
Interview Box: Doug Rauch, Founder and President, Daily Table
What were your guiding principles in
building the Daily Table brand?
Know your customers. This is just good business
sense. The money will follow. If you put the
bottom line first, it’s like driving with your
rearview mirror. Put your people first, and that
means treating both your customers and your
employees well.
Image courtesy of Doug Rauch
What promotional practices have worked
best in your setting?
I find that samples of product are powerful. If a
picture speaks 1,000 words, an experience of our food speaks 10,000. And let your
customers choose. Studies show that if you give someone an apple, they’ll toss it. But
if you get them to choose it themselves, then they’ll value it more.
How can a social entrepreneur craft their value proposition to get the
message across?
Narratives really matter. Hone your narrative, hone your narrative more, have a
story.There’s a great TED talk on practicing your pitch thousands of times. Also, the
presence of positives outweighs the absence of negatives in motivating customers.
Examples from the food industry are abundant –​“contains whole grain” is more
inviting than “doesn’t contain GMO.” What they sell to their customers is healthy
food replacing junk food.
How do you convey the positive health and environmental benefits of
your venture?
We talk about the amount and nature of food recovered, the number of customers
served, the basket size –​how much they bought. We track all these things, and we
track their growth over time. They’re all part of our market strategy. One thing we
decided not to do was directly measure health effects in our customers. People don’t
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want to be measured. They don’t want to feel they are part of a program. This goes
back to listening to your customer and going with what works for them.
Are there any common mistakes a social entrepreneur should watch out
for while developing their business model?
Short-​termism. Five one-​year plans cannot do the same as one five-​year plan. It’s
also crucial to understand the nature of your problem –​and it’s certainly more complex than you think. Another piece of advice I’d give is about building an internal
culture of innovation, a culture of risk-​taking, that permeates your organization
from the start. If you try to introduce a new strategy to the wrong culture, it’s like
transplanting a new organ into the wrong system. You have to embrace, or at least
tolerate, failure. Share your failures internally, fail on purpose, fail around your purpose: this is how we discover things we need to know.
How did you rally people to make this possible?
You need to build mission alignment –​and that means all your people.Who are the
people that already have a stake in this? Cold calls never work. Use your network;
ask who they know. Make sure that when you get that one shot, you give it your
best shot.
Distribution
Once your customer finds out about you and decides to give you a try, what will
interacting with you be like? Describe where and how this interaction will take place.
Tell us more about the part of the world you’re working in, and the unique features of
this context. What kind of environment is it? Are you working in a dense urban setting,
a remote rural setting, or something in between? What is the infrastructure like and what
are the distribution channels like? Is your social venture physical or virtual? Is it mobile
or stationary? Are you opening a new distribution channel (store, website, clinic, school)
or piggybacking on existing channels, and in either case, are you asking your customers to
come directly to you or are you making your product/​service accessible vis-​à-​vis a place
or activity they already experience? Your place and mode of distribution is affected by
and will affect your value proposition, customer base, promotion channels, competitors,
collaborators, cost, and pricing. Ultimately, the leading factor will be your customers’
preferences and needs.
Partnerships and Collaborations
As you think about your customers’ experience related to your offering, list all the entities
involved. Who else is taking on this social challenge and co-​challenges? Other than your
customers and competitors, who are your partners and collaborators? When working
toward a social purpose, you will find that you are not alone.Your mission is most likely
aligned with the missions of other organizations and initiatives, and it is not a zero-​sum
game. That is, others have something to gain by helping you achieve your mission: they
will get closer to achieving their mission, too.
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104 Developing Your Idea Further
Because you have done your research about stakeholders, competitors, and the other
offerings available, you will likely have a lot of information about potential partners at
your fingertips. Are there resources you need, which others have? Are there ways you can
cut costs by tapping into these resources? Can you reach more people by tapping into
others’ client bases?
Resources Needed
As you sketch out your customers’ experience, you may begin to get a sense of the back-​
end operations necessary to deliver your offering. This includes the people and processes
it takes to create this experience for your customers, as well as inputs like funding and
other resources. We’ll focus more on this aspect in the coming three chapters, but for
now, describe what’s happening in the back end at every step of your customers’ journey
to the extent that you can. This will help your conversations with customers and other
stakeholders as you collect information to flesh out your flowchart.
Tool: Impact Social Business Model Canvas
An impact social business model canvas (Figure 4.5) can help you organize the information you are gathering about the moving parts of your endeavor and help you draw
connections between them.7 This tool allows you to examine your central value proposition, key activities and resources needed, and potential partners for bringing these
resources together, as well as your customers and stakeholders and how you will reach
them. Input all your notes about your idea, customers, promotion, and distribution, and
examine how they start fitting into a preliminary business model. What missing pieces
do you still need to figure out? This can help you plan your pilot.
Evaluating Your Idea
As you set out to speak with stakeholders about your idea and piece together how it
works, it also helps to evaluate both yourself –​based on your internal strengths and
weaknesses –​and external opportunities and threats. Common ways of doing this include
the SWOT and PESTEL analyses.
SWOT Table
A SWOT table helps you think about and communicate your strengths and weaknesses,
and external opportunities and threats. Internally, it’s important for you to understand
your strengths so that you can build on them for the success of your endeavor. Strengths
might include characteristics of your idea (e.g. it saves people a lot of time and money)
or characteristics of your team (e.g. you have a strong network of stakeholders to support
your idea, your skills are well matched for implementing this idea, and you have a strong
record demonstrating this) or other factors. It’s just as important to understand your
limitations so that you can have realistic expectations of the outcomes you may be able
to achieve. Again, these could be related to multiple factors including your idea (e.g. your
idea is only desirable, feasible, or viable for certain customers or in certain settings) or your
team (e.g. you don’t have coding skills and don’t know how to go about finding someone
who does, or you don’t have as much familiarity with the setting you’re working in as
you’d like) or other factors.
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Developing Your Idea Further 105
Problem statement
Mission statement
Key
Key
Value
Stakeholder
Stakeholder
partners
activities
proposition
relation-
segments
ships
Key
Channels
resources
Cost structure
Revenue streams
Intended impact
Figure 4.5 Impact Social Business Model Canvas7
As you share your idea with others to gather feedback and garner support, it’s important
to be clear about your strengths and limitations. People support you not only because of
your strong points (e.g. I believe in this person’s/​team’s vision and ability to execute it)
but also because you are honest with yourself and with them about your limitations. No
idea and no plan is perfect, and it’s critical to be clear on the shortcomings of your idea
and your ability to execute it.That way, you can be realistic about your plans, and you can
find those people whose skills and experience complement yours to help achieve your
desired outcomes. This is important in recruiting team members for various implementation roles; advisors to support your idea development and implementation; funders to
seed your prototyping and piloting and launching; and future board members as you build
your organization and governance.
A SWOT analysis (Figure 4.6) asks you to think about how strengths, weaknesses,
opportunities, and threats will come together. Strengths and weaknesses refer to the
internal/​inherent characteristics of your idea and team. Opportunities and threats refer to
external factors, which we will discuss in the next section.
106
+
-
Internal
Strengths
Weaknesses
External
106 Developing Your Idea Further
Opportunities
Threats
Figure 4.6 SWOT table
PESTEL Framework
Part of determining the feasibility of your idea is assessing to what extent your options
are influenced by external factors. In some cases, external factors are positive –​as we’ve
discussed, there might be opportunities for you to leverage existing frameworks to reach
more people. It’s equally important for you to be aware of risks that may influence your
success. In starting to think about how you will implement your idea, it’s helpful to thoroughly chart out the landscape of opportunities and risks so that you can make informed
decisions with your team and stakeholders.
The PESTEL framework asks you to think about the political, economic, social,
technological, and legal factors that could influence your plans.8 While you cannot address
all external factors, it’s critical to be aware of them while developing and preparing to
implement your idea. Sometimes there is nothing we can do to change the nature and
magnitude of external factors, but we can adapt the design and implementation of our
intervention to respond to the external environment. Other times, we can be more ambitious and set an agenda to influence external factors.
Political
The P goes first in PESTEL for good reason. The political environment you are working
in, both at a local and at a larger geopolitical level, is an upstream factor that will influence
the economic, social, technological, environmental, and legal context of your offering.
Conflict states, transitional nations, and secure settings all have their different
political nuances. If you’re operating in a conflict state, the external threats posed by political factors may include your physical safety, the physical safety of your end users and
other stakeholders, the security of your supply chain and thus your ability to procure and
deliver goods and services, and the composition of your end users (e.g. for a social venture targeting disadvantaged populations in a conflict setting, it is easy to imagine a state
of constant flux due to refugees and migrant populations). In a transitional nation (e.g.
post conflict), the physical safety of individuals and assets may not be under threat, but
the political will and administrative capacities required to regulate logistics and the flow
of information, goods, and services at the community or state levels may be weakened.
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Developing Your Idea Further 107
Even in a politically stable situation, there may be political factors underlying the social
challenges you are dealing with. Housing inequities in metropolitan areas are a historical
example. Availability of resources to support social ventures providing services to HIV
patients from marginalized populations is another.
What are the political factors that create obstacles for your endeavor and its stakeholders,
and how will you navigate those obstacles? Are there any positive influences or opportunities provided by the political setting in which you’re operating? Are there any policies or
political debates that could amplify the visibility of your endeavor?
Economic
Whether your endeavor is a for-​profit enterprise, a nonprofit organization, or an initiative
within an existing organization, it will most certainly be shaped by economic trends.You
could be addressing a market need and providing a market-​based solution, or addressing
a gap where the market is broken and may work against you. In both cases, it is essential
to understand the economic landscape around you, whether it will change over time,
and whether you may be able to influence the market over time. Again, just like the political landscape, the economic factors you are facing will likely present both threats and
opportunities.
The size of the market is a key factor. Are you operating in a setting where you are
likely to reach large volumes? Or are you operating in a setting with a limited economy
and market size? Economy of scale is just one factor; trends over time is another. You
could be operating in a large market that is on the decline or a small market that is on the
rise. This can be expanded to issues of inflationary pressures by governments that have
poor economic policies, for which inflation will create both social crisis and business
difficulties.
Another important nuance is the relationship between the difference factors in your
PESTEL analysis. The scale and direction of growth of the economy may change suddenly if you are operating in a politically volatile situation. How will the economy you are
operating in be influenced by political changes? Political instability generally means economic instability, and it is critical to factor that uncertainty and plan for sudden change.
Economic considerations might also influence your investors. The size, trends, and
volatility of the market you’re operating in will determine not only how you build and
structure your endeavor but also how you finance it.
Social
Cultures, values, religions, histories, heritages, and heterogeneity of your end users have
already shaped the design of your endeavor throughout your research, prototyping, and
testing phases. As you roll out your offering, how will these factors continue to shape it,
and how will the introduction of your offering affect the social dynamics caused by these
factors?
What social norms are tied to the challenges you are addressing, and how will your
intervention challenge these norms –​what are the repercussions? Preparing for the social
dynamics already in existence and those that will be introduced by your endeavor goes
beyond the basic procedures such as meeting with stakeholders to ensure ownership and
participation; it involves thinking in a far-​sighted way to build the social networks and
support systems required to produce social change.
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108 Developing Your Idea Further
As a first step, awareness and understanding of these social nuances help you integrate
them into your business model as well as operations, marketing, and contingency plans.
You have to survive in this environment in order to work in it and change it. More
importantly, it helps you shape your organizational strategy and external partnerships and
purposely plan your ripple effect.
Technological
Many social ventures work in low-​resource settings, and technological external factors
can be a barrier. Poor Internet connectivity or speed, unreliable electricity, and high
telecommunications costs are some of the common barriers encountered by social
entrepreneurs all over the world. These are a risk because they can slow down operations
and make it challenging to communicate with end users and stakeholders. Often, they are
also related to social factors such as preference for face-​to-​face communication, which
can require more travel and be time-​consuming and expensive.
At the same time, technological trends around the world can also be considered a positive external influence and an opportunity to introduce new solutions, increase access to
information, and design and create mobile services and products.The way people interact
with social challenges is changing every day due to new technological developments,
such as increased access to cell phones and Internet. This will affect your customers, your
competition, your communications, and your ability to connect with collaborators. What
technological aspects are considered a challenge in the setting in which you are operating,
and what are some aspects you could leverage as a positive factor, or develop new versions
of? How can you use existing technologies to optimize your social impact?
Environmental
How is the natural environment related to your social enterprise? If you are working in
rural settings, especially in agriculture, there will be many external factors related to the
environment (soil, temperature, water, etc.) to account for. But even if you are working in
a digital enterprise, chances are that one or more steps in your supply chain will in fact be
influenced by the environment. Natural resources, such as fuel for transportation, are one
aspect. Will rising fuel prices affect your operations? Or will you leverage this external
factor to introduce renewable energy as part of your venture? What about social trends
related to climate change –​are consumers making choices differently, in a way that will
affect the number of people you are able to reach and the way in which you reach them?
Is your level of competitiveness compared to other enterprises affected by changing commercial and corporate attitudes and initiatives related to the environment? Keeping your
pulse on these changes will help make sure you stay ahead.
Even in a basic social enterprise, seasonal changes and patterns of behavior are
important environmental factors to consider. How are the movement, activity, and
spending patterns of your end users influenced by their physical environment? How do
these influence demand? On the supply side, transportation, storage of goods, and other
logistical factors are all related to external climate, weather patterns, and the physical
infrastructure of the setting in which you are operating as it relates to the natural environment. This is where you take the time to chart out these changes and how they affect
your operations, customers, suppliers, and other stakeholders.
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Developing Your Idea Further 109
As with all external factors, it’s important to understand not only how environmental
factors may affect your endeavor, but also what effects your endeavor will have on the
environment. Regardless of your topic and sector, part of your impact on society will
be your environmental footprint (the natural resources you require and the wastes or
by-​products you emit). This provides an opportunity for you to quantify that footprint
and work with stakeholders across your value chain to understand and optimize your
total impact on the world, finding ways to maximize your net positive effects in the social,
economic, and environmental dimensions of sustainable development.
Legal
Familiarizing yourself with the legal requirements involved in setting up and running a
new venture in the country you’re operating in is critical from the start. Safety protocols,
quality control requirements, and reporting and tax laws will differ by location, and by
sector within each location.The food sector, the health sector, the education sector –​each
line of work has its own rules and regulations, and these vary within and across countries.
So legal considerations are important from the inside out!
Legal aspects are often the last step a social entrepreneur considers, and this can potentially have devastating implications. Depending on where and how you register your
venture, there will likely be legal restrictions on what you are allowed to do and how you
are required to manage your finances. The different legislation in each country impacts
whether the organization is even able to register as a social enterprise to start with,
what goods and services it is allowed to offer, how much tax and external auditing is
required, and other implications related to profit. In many countries, a legal entity for
social enterprises does not exist. In these cases, social ventures are often required to select
a traditional commercial or civil legal form, even if it’s not the best match for them.
Being aware of these legal aspects can help you plan for the necessary technical, legal,
accounting, and other forms of support that alleviate the burden of navigating government rules and regulations on your own, filing the right paperwork, etc. But more than
that, being aware of the legal environment will educate you on the behavior of your
competitors and other stakeholders, the advantages and disadvantages of different sectors
(e.g. private versus civic), and the opportunities for you to benefit from legal structures
that were made to protect you.
Beyond your own interactions with the law, it is important to understand how the
legal system operates in the countries you are working in –​are you working in a setting
where laws are enforced, or are you working in a setting where government corruption,
bribery, and lack of transparency are common? There are various developing and transitional nations in which the risks from these legal factors are too high for you to
operate on your own in an efficient or effective manner. Thus, your PESTEL analysis
may lead you to make strategic decisions, such as partnering or working as part of an
existing organization, whether it be an international organization or an established local
organization.
Last but not least, are there any legal factors you aspire to change? Who are the
stakeholders working on, and affected by, the policies and regulations related to your
social challenge? Is it possible for you to incorporate a legal reform agenda into your
planning, as we saw with Albina Ruiz and Ciudad Saludable in Chapter 2?
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110 Developing Your Idea Further
Case Study: Daily Table
In both commercial and social sectors, innovations are conceptualized in response to a
need and an opportunity, with the business model and commercialization following at
a later stage. A complex interplay of political, social, economic, technological, environmental, and legal factors often underlies both the need and the opportunity. This was the
case with Daily Table.9 Doug Rauch, the former president of Trader Joe’s, a supermarket
chain in the US, saw that a huge amount of food was being thrown away daily across the
country. He also noted that a large proportion of the population had no access to fresh
and healthy foods. In inner cities and other low-​income neighborhoods across the nation,
families relied largely on fast, affordable meals that were high in calories and low in nutritional value.
Putting these two problems together, he saw an opportunity to redirect supermarket
chains’ wasted food to make it available in low-​income neighborhoods. However, he was
acutely aware that ideas are a dime a dozen, and the devil is in the detail. The details of
implementation at first seemed beyond his grasp.
Rauch considered various options. Among the first questions he asked himself
were: Who is already working on this? Of what has been tried already, what has worked
and what hasn’t? His first thought was that he could potentially join forces with existing
initiatives and learn from the past attempts of others.
Among those who were already working on this were food banks. However, the food
banks were run by volunteers and their operations were not streamlined and predictable. Feedback from supermarket chains donating the food said that if corporate managers were to take the time and resources to put aside food, they wanted to make sure it
would be picked up in a timely and consistent manner.10 More important, feedback from
prospective end users indicated that food banks were a last resort. According to Rauch’s
research, the working poor would rather buy low-​quality fast food than accept a handout
meal. They wanted to provide for their families –​not think of themselves as recipients of
charity.
Exploring other options, Rauch considered joining forces with a corporate partner,
such as an existing supermarket chain. This would allow him to leverage that company’s
human resources, operations, distributions, and products supply. However, after looking
into that option, Rauch realized the challenge of piggybacking on existing resources
that were meant to serve a corporation’s primary mission and bottom line: he would be
competing for people, products, and infrastructure that fulfilled the corporation’s primary
work. He needed to build a social enterprise staffed with people who woke up every day
thinking only about getting healthy food to low-​income neighborhoods and providing
high-​quality service, taste, and value in those neighborhoods.
Rauch decided to build his own business. His next step would be to figure out key
components of the business model, including cost, pricing, and marketing. He wasn’t
going to give handouts; he was going to charge customers, so he needed to provide them
with the best value to compete with their current food choices.To achieve highest quality
and service at the lowest price, he sought to lower his costs as much as possible.
Supermarkets spend most on the goods they procure and sell. Rauch first tried to see
if he could eliminate this cost completely. He met with multiple supermarkets to create
a system in which his team would pick up perishable items that were nearing their “best
by” date and would otherwise have been thrown away. Supermarkets purchase their
supplies in bulk, and a certain percentage of groceries that are unsold by the time fresh
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Developing Your Idea Further 111
supplies arrive are thrown out; the opportunity cost of the new goods outweighs the
marginal revenue potential of the expiring goods. For Daily Table, if these unsold groceries could be procured at no cost, then it would be well worth the time investment to
create delicious meals out of these ingredients. Thus, the first iteration of Daily Table’s
business model was tested: Rauch aimed to secure his inventory at only the cost of transportation and staff.
Rauch registered as a charity (known as a 501(c)(3) in the US) so that supermarkets
could receive tax deductions for giving away unsold goods. This step presented a set
of challenges of its own, and registration took more than two years to come through.
Authorities could not figure out why this neighborhood enterprise was trying to qualify
as a nonprofit. After all, Rauch was proposing to charge his customers for goods; instead of
recognizing an innovative business model, it seemed to them he was just running another
business.
Rauch then turned to pricing considerations. To compete with fast-​food options,
he needed to offer better value. He would tackle taste, customer service, and other
components of the value experience, but first and foremost he needed to tackle price.
Initially he considered pricing the goods so that sales revenues would cover the cost of
sales and of running the enterprise, without incurring any profit. But then he realized
that the most effective way to gain market traction in the neighborhood was to price
goods based on willingness to pay. “What would be the best price you could put on this
item, to make it extremely attractive to shoppers?” is the question he now asks himself
and his staff every day. Rauch’s value proposition to customers was great tasting, fresh, and
healthy food at affordable prices, in a great neighborhood place. His unique selling point
was healthfulness, because he was opening his store where no other fresh products were
available.
But would the people want it? How would he know their needs and preferences?
Rauch conducted several focus groups in his target neighborhood to obtain feedback
from prospective customers. He learned that while people did want to feed their families
healthy food, they didn’t want to be bombarded with health information. They wanted
fresh food fast, and it had to taste good. They wanted food that they knew the name of,
not alien ingredients.
A key marketing challenge was conveying that this was high-​quality food, not someone
else’s leftovers. If you conducted an Internet search on Daily Table in the years leading up
to its launch, you’d see media headlines describing this social enterprise as selling garbage.
Rauch needed to make sure that all safety concerns were met and that his customers
knew he wasn’t selling them anything he wouldn’t eat at home. He realized that even
the simple wording of a message can make a huge difference. If you describe his business
model as employing food waste, you’d be using “waste” as the noun and “food” as the
adjective. However, if you use the term “wasted food” instead, then the noun becomes
“food” and the adjective becomes “wasted.” Selling food that would otherwise be wasted
was much more socially accepted than selling waste composed of food.
Rauch also realized that price was not everything. People did not buy fast food only
because of the lack of availability of fresh produce. People also had limited time. Rauch
cites a Harvard researcher who calculated that it costs $2.30 a day to feed fresh meals to a
family. But this study assumed that people would find and prepare the right ingredients,
which can be time-​consuming and requires knowledge of meal preparation. According
to Rauch, the working poor are constrained not only by financial limitations but also by
limitations on their time and knowledge. A mother who is working two jobs and getting
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112 Developing Your Idea Further
home just in time to put food on the table needs a place where she can buy food and have
it on the table within minutes of getting home.
For these reasons, Rauch decided to offer cooked meals at Daily Table, alongside fresh
produce. He recruited a chef from the pilot neighborhood, and they conducted tastings
and samplings in the neighborhood. This also countered the perceived safety risks. The
local population got excited about the newest arrival in their neighborhood. After tasting
the new chef ’s food, they began asking Rauch how soon Daily Table would open.
After getting to know the community and their concerns around dignity and salvaged
goods, Rauch realized his initial business model wouldn’t fly. He needed to find a way
to procure his own fresh produce, rather than depend on donations from supermarkets
getting rid of produce. A number of his potential customers were just not attracted to the
concept, and he had to listen to his customers. After much reflection, today Rauch’s team
picks up fresh produce from bulk sellers every morning.The same producers that sell bulk
items to large stores always have a small amount left each morning, which nobody buys.
Daily Table purchases these goods on a daily basis at discounted prices, then sells them at
a fraction of the market value.With this final iteration, Doug Rauch and Daily Table were
finally ready for business.
The development of Daily Table from idea to implementation took more than three
years, which is not uncommon for a startup. Entrepreneurs with great ideas often underestimate how long it takes. This underscores the importance of planning and forecasting
and analyzing your social, financial, legal, and other risks. It also speaks to the importance
of getting to know your target customer, finding out what drives their decision-​making,
what they really need from you, and what will get them excited.“There are always pivots,”
says Rauch, “no one is immune.” While his initial idea was to recover food that was being
thrown away, this did not turn out to be desirable to customers. To meet his mission of
providing affordable nutrition, he had to change the model. “The ideal meets the real,”
Rauch calls it.
In Rauch’s view, the time horizons of social entrepreneurship are different from those
of the average commercial enterprise. When you are tackling systemic problems like
poverty, it’s very hard to say “mission accomplished.”You are in it for an extremely long
and continuous struggle; there’s no finish line. You have to celebrate small successes.
Today, 24 percent of Daily Table customers on the US government’s Supplemental
Nutrition Assistance Program (SNAP)11 are buying more fresh produce in their average
shopping basket, and they have a 15 percent higher frequency of shopping.12 According
to Rauch, his goal is to establish proof of concept for others to emulate and achieve
greater success –​to him, getting “clobbered” by those future competitors would be
a personal accomplishment. His advice to social entrepreneurs is to “dare greatly … .
Don’t just nibble at the corner. You have to inspire and aspire. Put your heart and soul
in it. Put yourself on the line. Challenge the status quo. Be the sand in the oyster that
makes the pearl.”
Thought Questions
1. How would you have gone about exploring your ideas if you were in Doug’s shoes?
Who would you have talked to? How did Doug go about engaging his customers
and how might you have gone about things differently?
2. Flesh out a customer flowchart for Daily Table. What steps do you have clarity on,
and what steps do you feel you need more answers to?
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Developing Your Idea Further 113
3. What is Daily Table’s value proposition? How would you build your branding to
convey that value proposition? What are some of the strengths and weaknesses in
Daily Table’s branding?
4. What are some community assets Doug leveraged in developing his ideas? How
would you build on community assets and work with local stakeholders to increase
impact?
Next Steps
Idea, meet world! World, meet idea! In this chapter, you’ve taken the design stage one
step further by taking your proposed solution to market. This requires ongoing prototyping and iteration of your solution and testing how people will interact with it.
Continuing the user-​driven design process in this way helps determine whether your
idea is feasible, what your potential market size might be, and what your market strategy
will look like.
The first step is to create a compass for your social venture to guide its development
and growth. The compass includes your vision, mission, values, and the value proposition
you are offering to your end users –​all of which are driven by your theory of change.
Your market strategy is then assembled around your value proposition.
Building your brand means defining the customer experience you want your end
users to associate with your product or service. This needs to be clear, catchy, and consistent. Market research uses the same techniques you’ve applied to defining the different
dimensions of your market strategy. At the end, write down all these dimensions in a
business canvas to see how they will come together into a value chain. Step back and look
at it like a painting.This will help you notice nuances and connections and build synergies
between the different dimensions.
This involves working with your end user, too. Each dimension of your market strategy
needs to be built, tested, and iterated with your end user until you get it just right.You’ll
keep making improvements as you go –​a marketing strategy is dynamic.
You’ve now taken the first few steps in building your business plan. In the next few
chapters, we’re going to continue the design process by thinking more about outcomes,
revenue, distribution, and operations.
Chapter Assignment
Answer the following questions about your customers and how they will experience your
offering. If you need more time to conduct research and talk to people, then get back out
there and do it! When you are ready to put your thoughts down on paper, you can tackle
this chapter’s assignment.
Part One
1. Who were you able to talk to about your idea? What feedback did they provide? Who
else do you want to talk to, and what is your plan for reaching out to them?
2. Write down your vision, mission, and values.
3. Who are your prospective customers and what is your value proposition for them?
If your prospective end user is different from your prospective economic buyer, then
you’ll need to write out separate value propositions for each.You may have multiple
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114 Developing Your Idea Further
4.
5.
6.
7.
value propositions depending on the stakeholders whose behavior you are trying to
change (e.g. patient, provider, payer, and supplier).
Provide one or more customer personas illustrating your typical end user, decision
maker, and economic buyer. You can use the Personas tool (www.nesta.org.uk/​tool​
kit/​diy-​tool​kit) or any other format of your choice.
What would it look like for the above stakeholders (end users and any others) to
interact with your offering? Describe how it works, fleshing out the steps in as many
details as possible, referring to the customer flowchart in Figure 4.1.
What alternatives do the above stakeholders (end users and any others) turn to currently? Where do they spend their time and money? How do they get their information? How are you positioning yourself vis-à-​vis the current alternatives? Why would
they want to switch to you? Summarize your findings in a simple chart as illustrated
in Figure 4.2
Optional: Fill out a social business model canvas using the template provided in
Figure 4.5.
Part Two
8. Fill out a SWOT table using the template provided in Figure 4.6, summarizing your
internal strengths and weaknesses, and your external threats and opportunities. How
will you build on your internal strengths? What limitations are important to account
for in your internal decision-​making and external communications? How did the
PESTEL framework help you understand and summarize your external threats and
opportunities? How can you help mitigate and strengthen your internal limitations
and external threats? Which opportunities do you feel are most important for you
to leverage in creating your desired outcomes? Think about how your strengths and
limitations might influence your approach to specific opportunities and threats.
Notes
1 Author’s note: In my course, I divide this chapter over two weeks (double what I spend on each
of the previous four chapters). During the first week, I ask my students to flesh out their customer experience flowchart and to start talking to as many customers and other stakeholders
as possible for their feedback. We conduct an in-​class exercise to put it all together using the
social business model canvas template. During the second week, we discuss the feedback they
are getting so far and conduct an in-​class exercise to analyze internal strengths and weaknesses
as well as external opportunities and threats.
2 This can be found at: https://​hea​lthl​eads​usa.org/​about-​us/​
3 The DIY Toolkit can be accessed at: www.nesta.org.uk/​tool​kit/​diy-​tool​kit. More information
on customer segments can be found at: www.stra​tegy​zer.com/​busin​ess-​model-​can​vas/​custo​
mer-​segme​nts
4 Made popular by entrepreneur Steve Blank.
5 Shared by the Kiva founders. Learn more at: www.kiva.org
6 See TED’s website: www.ted.com
7 Visit https://​sehub.stanf​ord.edu for more tools on social entrepreneurship; click on “impact
business model” to watch two short videos explaining the different parts of the canvas and fill
out a blank template. Visit www.stra​tegy​zer.com/​resour​ces to learn more about this and other
tools related to value proposition, customer profile, and idea testing from Osterwalder et al., who
originally developed the business canvas.
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Developing Your Idea Further 115
8 A helpful resource for many of these factors is Michigan State University’s Global Edge website: https://​glo​bale​dge.msu.edu
9 See Daily Table’s website: https://​dai​lyta​ble.org
10 Alvarez, J. B., & Johnson, R. (2011). Doug Rauch: Solving the American food paradox. Harvard
Business School Case 512-​022.
11 SNAP supplements the income of households below a certain threshold to assist with the purchase of food.
12 In collaboration with students from Tuft University, Daily Table studied the effect of introducing the Double Up Food Bucks (DUFB) program for SNAP customers. DUFB gives each
SNAP customer the chance to buy up to $20 worth of fresh produce a day for half price. After
studying over 250,000 customer transactions –​both before and after introducing DUFB –​they
found that the program increased purchasing of fresh produce by 24 percent and increased frequency of shopping by 15 percent.
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5Measuring Outcomes
Chapter Overview
This chapter will help you specify what success looks like and how you will measure
it. We will cover:
•
•
•
•
•
The terminology of success metrics
How social outcomes are measured in different settings
Challenges of “impact metrics” and best practices in response to these challenges
How to select the right success metrics for your endeavor
Building an M&E system for your endeavor
This can be one of the most exciting times in developing your social venture. You’ve
learned everything there is to know about the challenge and its context and your target
audience. You’ve designed an exciting and innovative new solution that emerged from
your end users, and you’ve built a theory of change around it to decide how to reach your
audience and change the face of the challenge at hand. The first step of implementing
your solution and manifesting that change is setting your success metrics. Before you start,
you need to ask yourself: How will I know that I’ve succeeded? To set your strategy, you
need to define what success looks like and how you will measure it. Then you’ll work
backward from there!
Your social impact is the basis of all you do; it is the purpose of your work. It defines how
you spend your time, allocate human and financial resources, build external partnerships –​
every component of your work and your organization. How will you know when you’ve
reached your goal? How will you monitor your progress as you work toward that goal?
How will you decide where to spend your time, money, human resources, and other
resources? And how will you convince others to support you and invest in you? This is
why it’s critical to be able to measure and communicate your results.
Measuring and managing success in social entrepreneurship can be rewarding, fun,
and challenging. There’s lots of room to get creative in imagining what changes you’ll
see and how you’ll measure them. Most of the time, in a typical commercial venture,
profit is the main indicator of success. This is used to evaluate the growth of the startup,
its customer base, its sales, and its penetration into the market. In a social endeavor, your
goal is social change, and you need to find metrics to capture and track that. Determining
whether social outcomes have improved and if power has been built requires careful
thought, research, and creativity. And, on top of that, you’ll still be tracking your financial
DOI: 10.4324/9781003094715-6
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Measuring Outcomes 117
viability to make sure that this venture is viable. So, you’ll need more than one indicator
to measure the health, growth, and success of your endeavor. Let’s dive in and see how
others have done it and how you want to do it for your own work.
In the sections ahead, we’ll talk about the different terminology used in success
metrics, the different ways that changemakers and funders measure success, and some
of the challenges that have come up in the field of impact metrics. We’ll also visit some
best practices and responses to these challenges. Then you’ll dive in to think about what
the success metrics for your endeavor will look like. These will include outcome metrics
that capture the social changes you are creating and process metrics that indicate your
milestones along the way. We’ll build on the theory of change you drafted in Chapter 3,
to further develop the logic model for your endeavor. We’ll also review some important
considerations in selecting your success metrics and building an M&E system for your
endeavor. This will help lay the ground work for planning and pilot testing your offering.
Social Outcomes versus Social Impact
Moving forward, this chapter will use the term “social outcomes” rather than “social
impact.” Many people working in the field of social entrepreneurship, especially impact
investors, use these terms interchangeably. Technically, there is a difference.
Measuring social outcomes is not the same as measuring social impact. The official
definition is:
Impact +​Counterfactual =​Outcomes
This definition is used by people who specialize in evaluating impact, such as international development professionals and development economists. These experts refer to
impact as the social outcomes that would not have occurred without intervention. They
use technical methods to attribute social outcomes to a program or venture in question,
teasing out external factors, such as better public health or economic improvement, that
could have produced the social outcomes on their own. The word “counterfactual” refers
to what would have happened were that program or venture not in place.
Your true impact might be larger, or smaller, than the outcomes of your endeavor
indicate.You’ll never know unless you can estimate the counterfactual. We won’t go into
the methods by which impact evaluators and development economists attribute impact.
Here, the takeaway is knowing that different people mean different things when they use
the word “impact.” Most people you’ll meet who are social practitioners or funders are
actually talking about outcomes when they use the word impact.
Thinking about Your Success Metrics
There are many different ways that outcomes are defined, measured, and communicated.
Which metrics are the right fit for you? There are no one-​size-​fits-​all success indicators.
On the one hand, it is practical to use simple, clear-​cut indicators that are common in your
field of practice (we’ll share some examples – such as those provided by the IRIS+​database1 –​later in the chapter). Such standardized metrics may enable others, such as investors,
to assess you and compare you with other social ventures. On the other hand, each situation is unique, and it’s up to you and your stakeholders to choose the measures that best
reflect your goals and the social outcome(s) you’re trying to achieve.
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118 Measuring Outcomes
Using Different Logic Models
The best way to ensure that success metrics are meaningful for your endeavor is to
link them to your theory of change. If you revisit the theory of change you drafted
in Chapter 3, you’ll see that you’ve already specified the immediate and long-​term
effects of your endeavor. The theory of change is what we call a logic model. There
are many different types of logic model. The general definition of a logic model is that
it is a planning tool that helps you describe or visualize your pathway from actions to
outcomes. The theory of change is a logic model that helps you link your idea to the
social challenge you set out to tackle and test your underlying assumptions. Other logic
models, such as the one in Figure 5.1, help you link the desired outcome to a set of
measurable outputs you’ll need to produce to create that outcome – and the activities
and inputs you’ll need to produce those outputs. Then you can set metrics for each part
of the logic model.
When selecting metrics, the important thing is to make them SMART: specific, measurable, achievable, realistic, and time bound. You might have one or more desired social
outcomes, and you will most certainly need multiple outputs and inputs to achieve these.
This will help you visualize success and specify how you will measure it, because each
desired outcome is associated with one or more metric(s) that indicate when or to what
extent it is (they are) being achieved.You’ll also end up with intermediate metrics to help
track your progress through the activities and outputs you’ll produce along the way, which
will serve as milestones. (“Metrics” and “indicators” are other words that are sometimes
used interchangeably.We’ll use “indicator” to refer to the actual statistic itself and “metric”
to refer to the unit of measurement of that statistic.)
A word of advice: When estimating activities and inputs needed for each output, don’t
forget to budget time and money for data collection, analysis, evaluation, and reporting
of your social impact metrics. This may include investing in experts up front, and it may
include hiring an M&E officer. Or it may involve technology to streamline the M&E
process (such as the tablets that Hippocampus procured for each of its facilities), software
Input
May include
financial or
physical
resources,
skills, time
Process
How the
inputs are
transformed
into outputs
Output
Tangible
products or
services
created or
delivered
Outcome
The social
change that
takes place
after the
output
Performance metrics
Ease of measurement
and attribution
Reflective of
social change
Performance measurement includes each part of the logic model
Figure 5.1 A general logic model to help visualize inputs, process, outputs, and outcomes
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Measuring Outcomes 119
available for purchase, or the coders you might hire. All these steps should be factored in to
your activities, time line, and costs, no matter which planning tool you use. In the coming
chapters, we’ll talk more about assigning financial and time estimates to your activities.
Logframe Template
You may wish to consider using one type of logic model that is specialized in program
evaluation, known as a logical framework or logframe for short. Table 5.1 provides an
example of a logframe that you can fill out. The logframe operationalizes the theory of
change. Start by writing your overarching goal across the top of the template. Remember,
when writing your overarching goal, you may need to draft a few versions. If you can
ask “why?” of your overarching goal, then your answer to that question will be a better
statement of your overarching goal than the one you just drafted. Keep iterating until you
can no longer ask “why?” This ultimate draft is basically your mission.
Next, break down that overarching goal into SMART objectives. These are “mini-​
goals” that you can link to your main impact metrics. One objective might suffice, or you
might have two or three.The idea here is that it may be difficult to attain or evaluate your
overarching goal, so you should break it down into SMART mini-​goals. The overarching
goal and objectives reflect the social outcomes you’re working to create. Then, work
backward from those to specify the outputs, activities, cost, and time needed to meet
those goals and objectives. It helps to do this for the initial stage of piloting.
Let’s consider an organization whose overall goal is elevating young people to become
decision makers in society. One of their objectives could be to reduce unemployment
among young people in a certain community. Indicators of success for this objective
could include: the degree to which young people achieve specific learning outcomes
that help them enter the job market; the matching of participants with job placements
and mentors; and retention rates. To achieve each objective, you need to produce a set of
measurable outputs that track your progress along the way: these might include building a
network of mentors and employers, a training curriculum, and an M&E system that tracks
learning and employment outcomes. The activities needed to produce those outputs, and
the time and costs needed for those activities, are all inputs. In this example, inputs include
finding a space to conduct training workshops, advertising the workshops, recruiting
Table 5.1 Example logframe template
Overarching goal: What is the social outcome you are working to achieve?
Objectives
(SMART)
Outputs
needed to
reach those
objectives
Activities
needed to
produce
those outputs
Cost
estimates
for these
activities
Time
estimates
for these
activities
Success
indicators
(targets and
milestones)
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120 Measuring Outcomes
young people and trainers and mentors, developing the curriculum, and reaching out to
potential employers and mentors.
In this same example, a second objective could involve fostering a culture of creativity,
compassion, and social justice that starts with team members and then permeates the
youth trainees and their future employers. Outputs related to this objective could include
a set of company values to foster this culture; the inputs could include recruitment and
training of team members who embody these values.
Pros and Cons of the Logframe
All planning tools have advantages and disadvantages, and the logframe is no exception.
The logframe puts everything in one place, which helps you assess how the different
components of your theory of change will fit together as you grow it into an organized initiative. It helps you specify your objectives, outputs needed to get there, activities required
to produce those outputs, costs of conducting those activities, and success indicators.
Using your theory of change as a starting point lets you start linking the core components
of your intervention to a budget, work plan, and key metrics for assessing progress. For
those who need a planning tool to help develop these long-​term forecasts, the logframe
comes in handy.You can make a shorter term version for just your pilot.
The disadvantage of the logframe is that it can impose rigidity on an organization if the
organization does not incorporate data and feedback collected during implementation.
Social entrepreneurs need to respond to market needs and opportunities, learn by trial
and error, and adapt as they proceed with implementation. Finding a balance between
advance planning and responsiveness to new information is one of the most challenging
aspects of social entrepreneurship. Another common downside of the logframe exercise
is that it is often conducted simply to satisfy funder requirements –​an exercise that does
not truly leverage the logframe’s potential benefits. A happy medium might be to develop
a logical framework for each stage of your endeavor, and to stay open to modifying it.
Check in with your logframe periodically to see whether targets still make sense in light
of new information, inspiration, feedback, or resources that become available.
Setting Targets
In addition to deciding on the metrics that you will use to measure success, it’s helpful to
set targets. The metrics are how you will measure success and the targets are how much you
hope to achieve. Sometimes it can feel arbitrary to set targets not knowing if you’re going
to reach them, exceed them, or fall short. There is no formula for choosing your targets,
but there are several factors that can help inform your decision-​making process.
First, baseline information is necessary. As we have discussed, your targets are most
likely comparative –​that is, you are aiming to reduce or increase the incidence of some
social indicator by a certain amount. If no baseline information is available, then one of
your intervention’s first steps can be investing time and resources to gather this information. Second, setting your targets in collaboration with your stakeholders will help ensure
that the targets are realistic and feasible –​and that your stakeholders are as invested in
reaching them as you are. Engaging your end users, suppliers, providers, collaborators, and
other stakeholders in decision-​making will make the process less daunting.
Third, reflecting on the community attributes you have learned from initial and
ongoing community-​driven research will help inform your decisions. Depending on the
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Measuring Outcomes 121
assets available to you (these include human, physical, and financial capital) and the efficiency of the systems you are relying on for your value chain, you can determine whether
to set a 100 percent target (e.g. fully eradicating mortality from infectious disease for
children under 5 in a community) or a non-​absolute target (e.g. reducing under-​5 mortality to a specified level, taking into consideration infrastructural and other factors).
Benchmarking against other settings is also advisable. What were other communities
able to reach? Has this challenge been completely eradicated elsewhere? What are the
statistics in other populations? Last but not least, consult your own experience and the
experience of your team and wider community. What could go wrong? What external
factors are beyond your control? What are the strengths and weaknesses of your team?
This can help you evaluate and refine your targets to ensure that they reflect both best-​
case-​scenario possibilities and the realities of the environment in which you’re operating.
Assessing risks and external factors will help you form contingency plans for the worst-​
case scenario, too. The results from your pilot test will help validate your targets.
Being Ambitious versus Starting Small
Many social entrepreneurs struggle with two schools of thoughts when setting their
targets: one school of thought says to be ambitious and set high goals because working
toward those goals will achieve more, even if you don’t reach the number you’ve aimed
for. The other school of thought says to start small, picking a number you can definitely
reach, because it is better to under-​promise and over-​deliver. What you choose depends
on your own leadership and management style, but retaining scientific integrity when
selecting targets is recommended: make it your goal to find the number that is likely
attainable.
Remember, this is not an exercise for the sake of it. If you build your endeavor in the
way you would conduct a personal project, then you are at risk of failing those around
you. Human and financial resources are being dedicated to realizing your targets. The
best way to optimize these resources (which also increases the chance of having more
resources at your disposal in the future) is to aim for accuracy when selecting your target,
neither over-​nor under-​projecting. Both extremes are commonly observed among social
entrepreneurs, so for the sake of those around you, try not to make this mistake.
Things to Keep in Mind
Process versus Outcome Metrics
Any logic model you use will provide the opportunity to measure both processes (inputs,
activities, outputs) and outcomes (the desired social change). Just make sure to distinguish –​to yourself and to others –​between these different types of metrics.
Training people is an input. Buying a machine is an input. Distributing bed netting
is an input. But, this doesn’t necessary lead to your desired outcome. For instance, the
machine could collect dust in the corner of a poorly maintained hospital. The netting
could be used as a furnishing accessory rather than a life-​saving device. Inputs are the
processes and steps you implement to reach a certain outcome, and outputs are the tangible results that link those inputs to your desired outcome. If your desired outcome is a
reduction in malaria cases, then increasing the number of people sleeping under bed nets
could be a measurable output. The inputs required to reach this number would be the
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122 Measuring Outcomes
nets themselves, as well as instructions on how to effectively use this input, and end users’
desire to follow them!
Agriculture is an easy-​to-​illustrate case in point. The agricultural tools distributed to
farmers living in poverty is an input. Increased agricultural yield is an output. Increased
household income (through increased sales of agricultural yield) is an outcome metric
because it demonstrates that there is both increased agricultural yield and access to markets
to sell that yield. It is this metric that will result in the desired long-​term change, which
in this case is eliminating poverty.
While measuring outcomes is the focus of this chapter, that’s not to say that process metrics don’t play a critical role in helping you reach those outcomes. Chances are,
you’re not going to reach targeted outcomes on your first try. You’ve already seen how
much prototyping, testing, and piloting have been involved in your journey so far. Process
metrics can help you keep track of internal “control knobs” –​the different inputs and
activities you can adjust to get better results. Consider the uptake of your offering by the
target community –​that is, the number of people in your target audience who are using
it. Do you need to focus on sales and marketing to have a bigger effect? Or let’s say uptake
is high but you’re still not seeing results. Do you have the right monitoring systems in
place to track whether it’s being used, when and where it’s used, by whom, and whether
it’s being applied correctly? The latter can be demonstrated through observation or a
simple checklist. This is not extra work; it is your work. Process metrics tell you whether
you’re implementing your venture in a way that gets results.
This is especially important when the social outcomes you’re working to create take
a long time to observe. Intermediate metrics, such as output metrics, can help assess
whether you’re on your way to your outcome. For example, if your long-​term outcome
is a reduction in infant mortality rates in a specific community, an intermediate metric
could be an increase in number of mothers vaccinating their infants or a decrease in
missed appointments, which is an output metric. If the long-​term outcome is a reduction
of malaria in a community, then an increase in number of households with inhabitants
sleeping under netting, again an output metric, points toward successful eradication of the
root causes linked to that outcome.
Linking to the Existing Evidence Base
In many cases, the link between correct usage of a product or service and improved
outcomes has been demonstrated.These types of intermediate metrics may be sufficient to
measure social impact. For example, replacing traditional cookstoves with solar-​powered
cookstoves has been demonstrated to reduce exposure to indoor air pollution. Therefore,
tracking the number of users and conducting quality control checks are accurate methods
of quantifying social impact. It may be beyond the scope of the organization to measure
population health outcomes over time, such as reductions in pulmonary and cardiac disease. But, given the robust scientific link between these diseases and indoor air pollution
exposure, it is sufficient to measure reduced exposure to indoor air pollution. Another
social impact of solar-​powered cookstoves is a reduction in greenhouse gas emissions,
because they do not require traditional woodburning. There is also a wealth of quantifiable evidence here, so you may directly link your number of users to reductions in
greenhouse gases.
A social venture that increases access to a basic social good –​clean water, education,
healthcare, shelter, or financial or other services targeting poverty reduction –​is a classic
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Measuring Outcomes 123
example. In some cases, access itself is a basic human right and a success metric in and of
itself. In other cases, existing evidence links access to improved social outcomes, which is
sufficient for illustrating success. An important note here is to keep quality assurance in
mind. Providing access to clean water is only a success if you can demonstrate that the
water is clean according to a set of prespecified standards.
Linking to Quality Control
In certain cases, your intervention might entail the implementation of a certain product
or procedure that is reported to improve outcomes. Let’s consider the medical device
designed to reduce neonatal deaths. To track your growth, you might track the number
of target-​area clinics that have implemented this device. Here, it’s important to link the
previous indicator to quality control indicators to ensure that there is no room for error: if
the device is used incorrectly, then the number of clinics implementing this device will
not accurately reflect the health outcomes we’re working toward. It does reflect one step
toward reducing reduced neonatal deaths. It’s important to focus on quality indicators,
because quality could address any shortfalls between number of clinics and number of
deaths prevented.
Direct versus Indirect Benefits
Returning to the example of solar-​powered cookstoves, direct benefits are improved
health outcomes and reduced greenhouse gas emissions –​these are the goals that drove
the social entrepreneurs to launch the endeavor and develop solar cookstoves in the
first place. However, there are numerous indirect benefits that also resulted. The creation
of jobs is an important one. By introducing this new product to the market, the social
enterprise is creating work opportunities for retail distributors and manufacturers, thus
increasing their household income. (It is important to point out that creation of jobs is an
indirect benefit here, while in another example, job creation could be a direct benefit and
the primary goal of the social enterprise.) Increased household income often also results
in increased access to other social goods, such as education and healthcare.Tracking ripple
effects even further, one can point out that increased education also increases children’s
earning power, thus benefiting their future families. Every social venture has direct and
indirect benefits.While the direct benefits are your main indicators of success –​they demonstrate whether you are achieving your mission –​it is often valuable to capture the many
indirect benefits you are producing along the way.
Considering the Supply Chain
Because every social venture involves a supply chain, it is valuable to think about the social
benefits amassed at each step in that supply chain. If your product is an object made of
many parts, where are you getting those parts? If your product involves distribution, who
is getting the product (and the parts that go into it) from point A to point B? If it involves
sales, which individuals and/​or retail establishments are benefiting? Many endeavors build
supply chains that create new jobs and empower marginalized populations –​they foster
change through process as well as outcome. For example, an endeavor providing eye care
is focused on a different outcome from an endeavor that employs people with impaired
vision to sell traditional consumer goods. In the latter case, the number of people with
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impaired vision who are now sustainably employed is the success metric. Even if your
endeavor is focused on a product or service, you still need to think about the process. Both
product and process can be measured, and you want to make sure you are achieving your
intended outcome without incurring unintended consequences along the way. These
things to keep in mind when selecting your success metrics are recapped in Sidebar 5.1
later in the chapter.
Challenges and Best Practices in Measuring Social Outcomes
Social entrepreneurs measure social outcomes for their own internal decision-​making and
for reporting to funders and other stakeholders. The latter can lead to distortions in the
incentives and approaches for measuring impact. Let’s discuss some of these challenges in
the social entrepreneurship ecosystem and what some people are doing to overcome them.
Challenges in Measuring Social Outcomes
Social outcomes are more difficult to measure and communicate than financial results,
in part because there is not one single measure like financial value that captures social
outcomes. Rather, different metrics are used in different endeavors, depending on the
theory of change.
This has many implications, one of the most frustrating being that funders and other
stakeholders don’t have a single metric by which to evaluate and compare different social
endeavors. Oftentimes, they resort to “number of people reached” or “number of lives
impacted” as a comparison basis, which certainly does not capture how these people were
reached nor how their lives changed. Resorting to this default metric is often observed
in younger organizations and in nonprofit organizations, which rely on external funding.
While this challenge may be of less immediate concern in a corporate intrapreneurship
setting, it’s important that everyone involved in creating and measuring social impact
understands the pitfall.
Measuring outcomes often requires significant time and human resources. Organizations
are under pressure to demonstrate that they have reached large numbers of people, created
significant and long-​lasting change, and effected that change specifically thanks to their
work rather than societal shifts that would have happened with or without their offering.
We’ll talk a little about each of these aspects.
Number of People Reached
In nonprofit organizations, social outcomes are often the only bottom line, and nonprofits
compete for funds based on the outcomes they report on. Funders often look for large
numbers to justify their choice of organizations to support. This causes nonprofits to
tailor their offerings to the needs of funders rather than the needs of people they serve.
Let’s imagine an organization whose mission is to decrease unemployment among young
people. If the organization matched participants with employers and provided hands-​on
mentoring and training before and after employment, then it could measure success via
the number of young people employed and additional statistics about the duration of their
employment and generated income.
If the same organization wanted to impress funders with large numbers, they could
instead choose to allocate their resources to large-​scale training workshops and measure
“young people trained” as an outcome. But “thousands of young people trained” does not
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Measuring Outcomes 125
demonstrate that unemployment among young people has decreased. This is a problem,
and it happens in many low-​resource settings where nonprofits have to demonstrate
breadth of influence to compete for funding. Many low-​and middle-​income countries are heavily dependent on international aid for socioeconomic development. Over
the course of years and decades, this may result in a donor-​driven civil society in which
nonprofits tailor their activities to serve donor agendas.
For-​profit organizations can also be exposed to these pressures and pitfalls. With the
rise of impact investing (more on this in Chapter 7), funders are looking to support
profitable businesses that also produce social and environmental impact. It is difficult
to evaluate impact across companies, and oftentimes funders resort to “number of lives
reached” as a comparison metric. This does not capture which lives are reached, and how.
The organizations that are taking the biggest risks and serving the most hard-​to-​reach
populations will always have smaller numbers. Consider a small refugee social enterprise
such as Soufra, described in the case study later in this chapter. Compared to a similar
organization based in a less challenging setting, a social entrepreneur or intrapreneur
running such an enterprise could not compete for funding.
Hard-​to-​Reach Populations
Additional barriers like language and communication are also worth mentioning. It is
often innovators with the strongest social networks who find out about funding opportunities. These innovators also normally have the skills to pursue funding opportunities
(pitching, networking, writing) and the connections and other advantages to win them.
Impact investing has opened many doors and new avenues of opportunity to create and
grow impact. Yet it also has the potential to perpetuate disparities observed in venture
capital and other for-​profit venture funding, where entrepreneurs with access to power
and privilege are more likely to have access to funding. The same is the case in philanthropy. Again in the case of Soufra, due to the small scale of this grassroots effort, its
founder will never be able to compete for funding based on the number of jobs she has
created. However, she is helping hard-​to-​reach populations participate in the market, and
she is changing social norms. This is huge!
Systems Change and Framework Change
Do you remember the four levels of impact, as illustrated by Ashoka in the Introduction (see
Figure I.10)? As a refresher, Ashoka is an organization that supports social entrepreneurs
worldwide. They are focused not only on scaling direct outcomes (e.g. numbers of lives
reached) but also, and even more so, on systems change and framework change. Thus
they are more likely to make decisions around changing norms and mindsets. This is
what framework change means. Some ways that Ashoka captures the social outcomes
created by their entrepreneurs is by reporting policies and legislation to which its fellows
have contributed; whether others have copied its fellows model; and whether they have
reached marginalized populations and changed people’s access to goods, services, and jobs.
These are indicators that their programs are changing systems and frameworks.
Contribution versus Attribution
Another thing you’ll notice about Ashoka’s reported outcomes is that they’re not necessarily attributed to the fellows. No one person or organization can change systems and
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frameworks, mindsets and patterns, policies and practices. They contribute to it. When
social entrepreneurs and their supporters start thinking in terms of contributing to social
change, rather than attributing it to any one organization, the playing field expands. So
do the resulting outcomes.
One group of funders focused on measuring the impact of multiple organizations
working together is Co-​Impact. Co-​Impact is a global philanthropic collaborative that
supports groups of social extrapreneurs who work together to create systems change.
Its first grants went to grassroots organizations working with governments and other
partners to change national frameworks. This approach helps each partner focus on contributing to the outcomes created in partnership with others, rather than on attributing
change to one organization at a time.
Collective action can come in many different shapes and forms. Regardless of how
it is structured, when different organizations come together to create joint impact, the
pressure of competing against each other for funds is removed. Instead of competing to
demonstrate larger outcomes than their peers, organizations pool their resources to work
together toward collective change and use shared metrics.
Funders’ Perspectives
From a funder’s perspective, metrics challenges also translate to missed opportunities.
First, aggregate metrics like number of lives reached do not capture the true results of
their investments. A funding organization that invests in different sectors may be tempted
to aggregate success indicators either for internal decision-​
making (to compare the
impact of two prospective ventures in different sectors) or for external communications
(to report back to those who contributed to the fund and to raise new funds). But the
number of lives reached through these investments barely captures the changes that have
been created. It can help to provide sector-​specific or even investment-​specific metrics
alongside aggregate numbers like total lives reached. For example, if a funder has invested
in both an early childhood learning venture that reports specific education outcomes and
a women’s socioeconomic empowerment venture that reports specific psychosocial and
financial metrics, then reporting number of lives reached passes over a lot of knowledge.
It’s extremely valuable to report the education outcomes (such as children who stayed in
school, children who advanced to the next level of learning, specific skills and competencies gained) and the socioeconomic outcomes (such as women earning money, women’s
contributions to household and community decision-​making, women enrolling their
children in school and healthcare) specific to each venture. Total number of lives reached
ignores valuable information provided by the different ventures.
By selecting investments that either reach the largest numbers and/​or are easiest to
identify because of their networks, funders also are missing opportunities to create change
where it is most needed. A venture like Soufra creates a limited number of jobs for refugee
women. But it is changing not only who participates in the market, but also what it means
to be a refugee and a woman in that setting. The participants are earning income and
they are gaining a sense of agency and becoming agents of change in their communities.
Their families, neighbors, and host community’s perceptions are changing. These aspects
of Soufra’s work could never be captured by number of lives reached, number of jobs
created, or amount of income generated.Yet these aspects will cause ripple effects across
multiple population groups and generations, and potentially shift a stagnant status quo
within and outside this community.
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Measuring Outcomes 127
Impact dimension
Impact data category
What
Outcome level in period
Outcome threshold
Importance of outcome to stakeholders
SDG or other global goal
Who
Stakeholders
Geographical boundaries
Outcome level at baseline
Stakeholder characteristics
How much
Contribution
Risk
Scale
Depth
Duration
Depth counterfactual
Duration counterfactual
Risk type
Risk level
Figure 5.2 Impact Management Project’s framework to capture outcomes
Responding to these Challenges
The impact investing and philanthropy communities are aware of the challenges associated
with metrics in social entrepreneurship, and they are taking actions to address them.
An example is the Impact Management Project, which consolidated and promoted best
practices in measuring and managing social outcomes.2 One way forward is to acknowledge and actively look for multiple dimensions of social change –​the number of
people reached, the identity of these people, and how they were impacted. The Impact
Management Project offers a five-​dimension framework to capture outcomes (Figure 5.2).
This framework is now embedded within the IRIS rating system, an online database
of impact metrics launched by the Global Impact Investing Network (GIIN), which for
many years has been impact investors’ go-​to database of reporting standards. As industry
has shifted from one-​dimensional to multidimensional metrics, the GIIN partnered with
Impact Management Project to adapt and expand IRIS ratings accordingly.
Social Return on Investment
One approach by which funders can assess a social investment, or compare across
investments, is social return on investment (SROI). It signifies the amount of social impact
generated per dollar invested.
Return on investment (ROI) is a way of assessing what you are getting out compared
with what you are putting in. In financial metrics, for example, if an investor puts
$1 million into a venture and gets out $1.4 million, then the investor has earned a 40 percent return. ROI is used in many fields to compare various investment opportunities. In
the field of public health, ROI is used to highlight smart investments that produce positive population outcomes, by quantifying the impact per dollar invested. For example, a
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bicycle helmet can result in a return of almost $50 for every dollar invested. Knowing
exactly what you are putting in to and getting out of your social venture is crucial to
growing your success.
ROI is only one way to communicate your results; you can use measures other than
monetary value to demonstrate outcomes. SROI can be the number of students who stay
in school, the number of disease cases prevented, or the number of jobs created per dollar
invested. Even without converting these statistics into their estimated monetary value, the
measure allows you to compare different routes or different ventures. The cost of keeping
a child in school, the cost of preventing one case of disease, or the cost of creating one
job is another way to evaluate options when forming your plans or approaching different
investment opportunities.
This approach is especially useful in government intrapreneurship. Given an existing
government budget to achieve a specified outcome, a government intrapreneur may create
an innovation that either enhances outcomes, reduces the cost of achieving outcomes, or
both. Measuring the SROI can capture this. For example, for every X dollars invested,
Y jobs are created (or lives saved, or cases of recidivism prevented, and so forth). This
approach to measuring social impact is valuable for innovative financing approaches, like
social impact bonds. Venture philanthropy organizations also use this approach. While
venture capital organizations measure the financial return on supporting high-​profit
entrepreneurs, venture philanthropy organizations measure the SROI.
Building Systems for Data Collection and Analysis
The metrics you are collecting don’t only inform the work of you and your stakeholders.
By generating knowledge, information, and awareness, they also inform the work of
others and empower your end users. Creation of knowledge is an output in and of itself
that also has a positive social impact. Beyond achieving the specific target you are aiming
for, let your social venture be a factory for information!
By building processes for data collection and analysis, building capacity in your team
and your community to execute these processes, and then disseminating information
widely, you are adding value above and beyond your product. One way to achieve this
is to automate data collection and analysis in the style of Hippocampus. Investing in
technologies –​whether hardware, like the tablets they use in the field, or software, such
as data management and analysis packages –​may yield a high return in terms of producing and communicating your outcome metrics. This may also require human resources
investments, such as training. As you home in on your success metrics, step back and ask
yourself how you can build a system around data collection and analysis so that it becomes
an integrated part of your venture.
One of the final pieces of the success metrics assembly line is communicating your
results. We will focus more on this in Chapter 9. In the meantime, keep in mind that a
feedback loop ties your assembly line together. While communicating your results to the
outside world is a worthy goal, communicating and reflecting on your results internally
are crucial to evaluating your work and strengthening your systems.
In the social service sectors, these systems are referred to collectively as M&E.
Monitoring refers to collecting and analyzing data. Setting up your monitoring system
involves choosing your targets, how you are going to gather information on these targets,
where you are going to store this information, and how you are going to summarize
and characterize your results to incorporate this information in day-​to-​day management.
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Evaluation, in which you compare results against your initial targets, follows monitoring.
What did you set out to do, what have you accomplished, and how did you accomplish
it? It is important to note that when you evaluate your social venture, you are evaluating outcomes as well as processes. Did you engage the target population in a way that
empowered them? Do you need a new strategy, or if you already have a new strategy,
were you able to follow it and did it work? Have your resources been used efficiently
and effectively? Are there any trends or patterns over time that suggest your operations
and impact may not be sustainable? What are the stakeholder implications of your results?
Indicators that answer these questions should be included in the data you are collecting.
Monitoring and evaluation aren’t always discrete events. If you’re able to automate
your data collection and analysis, then you should be able to continuously monitor process and outcome metrics to evaluate your performance and update your next decisions.
As your organization grows, one or more team members may become specialized in
the role of collecting and assessing impact metrics. Your M&E framework may start out
as a simple spreadsheet in which you manually enter information collected from paper
surveys distributed in your community. That spreadsheet would list the names of your
participants/​customers/​patients/​end users and the characteristics you decided to record
(e.g. gender, age, employment status, occupation, starting income, income over time, or
other social metrics).With time it could evolve into a more automated software or system
requiring more than one team member.
Dos and Don’ts of Success Metrics
If at any point in the process you feel that measuring your social impact is getting
complicated and overwhelming, then you are most likely doing it wrong. Don’t panic –​
this is an experience most social entrepreneurs go through. Finding your metrics is a
process. Take a step back, revisit your goals, focus on what you want to achieve, and think
of the metrics that are most obvious for demonstrating if, when, and to what degree
you have achieved your goals. Before you start, let’s go over a few tips about how you’ll
measure success (Sidebar 5.2).
1. Decide Early On
You want to measure the change you are creating from the moment you start. Deciding
what to measure –​what pieces of data will indicate success –​is one of the very first
steps of your endeavor. Defining these metrics will help you define your work plan and
business plan; it’s not something that can be left for a later stage. You can always revise
them at a later stage if evidence points to a need for adjustment. This may happen if you
find that your original metrics do not truly reflect the change you are achieving or if data
collection is not feasible or takes up too much time and resources.
2. Measure Inherently
Ideally, you’d like measurement of your success indicators to be integrated into your
work, rather than an extra step. Think about what steps your team, suppliers, providers,
end users, and other stakeholders are already taking. Ask them to suggest important pieces
of information that can be gleaned from their roles and processes. What information can
you collect through your core operations? Streamlining processes, human resources, time
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130 Measuring Outcomes
spent, and associated financial costs are all key to measuring your success –​and to success
across the board.
3. Don’t Measure Too Much
Setting too many indicators is a common pitfall. It results in a cumbersome and inefficient
data collection process that takes up more time and resources than is necessary. A general
rule of thumb is that the fewer indicators you deem sufficient to demonstrate success, the
better. What statistics do you want to show to funders, customers, team members, and
other stakeholders in 1 year, 5 years, 10 years, and 20 years? What statistics represent your
core mission and the ultimate reason for your work? Oftentimes, just one statistic captures
an ultimate outcome. A simple example is reduction in a community’s infant mortality
from its baseline rate to your target.
4. Refer to Baseline Data
Because change is relative (we are changing from the current situation to a future situation), ideally we can compare past and current statistics. This can be tricky in settings
that lack baseline data. In Chapter 1 we talked about the importance of characterizing
the problem you are trying to solve or the situation you are trying to build on.Your work
from that early stage may be the most valuable resource for making comparisons. In an
ideal situation, you can access statistics representing the current state of your target population, such as infant mortality rate in the above example. In a less ideal situation, you may
have to refer to average statistics and cite reasons why your target population is above or
below average.
Collecting your own statistics at the outset of your social venture can be powerful. It
is the most valuable use of your time and resources, because it provides a future point
of comparison and, more immediately, it helps you understand your setting and tailor
your intervention. It might represent an extra step, but this one-​time investment is worth
considering. You can only measure the changes you have created if you have adequately
characterized the situation before your venture’s implementation.
Oftentimes, you can collect baseline data while implementing your venture.You can
interview parents who bring in their infants for vaccination, asking them whether they
sought vaccination the previous year or whether they missed their last appointment.
Other times, it might be necessary to collect baseline data before implementation.
This could entail implementing measurement systems –​creating or strengthening the
medical records system to track the number of missed appointments, for example.
Another approach is to select a comparison site where the intervention is not being
implemented. The pilot stage is an excellent time to do this.
5. Control for Other Factors
Early in the chapter we talked about the difference between outcomes and impact.
Outcomes are the changes you’re observing; whether you have made an impact requires
you to ask whether those changes would still have taken place without all your efforts.
While researching your challenge, you may have identified multiple factors that influence
your outcome. Returning to the SMS message intervention described in Chapter 3 as
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Measuring Outcomes 131
an example, parents forgetting to bring children in for appointments was recognized as
one reason for low vaccination rates, and the endeavor focused on this cause. But other
factors likely contributed to low vaccination rates, too, such as transportation challenges.
If transportation had been improved at the same time as the social venture rolled out its
intervention, then an evaluation of social impact would have to take this information into
account. Transportation, rather than the text messages, may have been the leading factor
of improved vaccination rates. This is critical information! In such a case, instead of (or in
addition to) focusing on expanding the text message reminder system, the social entrepreneur would refocus the endeavor on transportation and other factors impacting the
social outcome. Collecting data on other factors that influence your target outcome is
important. But again, this means you can measure your impact only if you have adequately
characterized the situation before implementing your venture.
Sidebar 5.1 Things to Keep in Mind when Selecting Your Metrics
1.
2.
3.
4.
5.
6.
Use different logic models (e.g. theory of change, logframe).
Set targets.
Measure process versus outcomes metrics.
Link to the existing evidence base and linking to quality.
Consider direct versus indirect benefits.
Consider the supply chain.
Sidebar 5.2 Dos and Don’ts of Success Metrics
1.
2.
3.
4.
5.
6.
Decide early on.
Measure inherently.
Don’t measure too much.
Refer to baseline data.
Control for other factors.
Assess results with your stakeholders.
6. Assess Results with Your Stakeholders
Measuring outcomes isn’t just about obtaining metrics. What you do with that information matters. Reflect on results with your internal team, board, and external
stakeholders, and make decisions accordingly. These stakeholders hold you accountable
for both your processes and your outcomes. Reporting your results, learning from the
overall process, and listening to the experiences of your stakeholders before, during, and
after implementation allow you to create a learning plan for moving forward. Also keep
in mind that your contribution is not limited to the outcome you are creating: you are
creating knowledge as well. Exchanging knowledge with other endeavors and change
agents enables you to create a multiplicative rather than an additive effect. Knowledge
exchange allows us to assess the cumulative social and environmental impact of multiple ventures.
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Case Study: Soufra
Soufra is a social enterprise launched by the Women’s Programs Association (WPA), a
community-​based organization in Lebanon led entirely by refugees. The WPA prepares
girls and women for a future with equal rights and opportunities in which they participate
in the development of their communities.3 Largely donor driven, WPA activities historically centered on traditional development agency programs to support refugee families,
such as awareness events, skills training, and charitable activities. But Mariam Shaar, one of
the organization’s directors, had bigger dreams. Frustrated that women participants would
go home to unchanged lives, Mariam envisioned a production unit where women could
create something that had an economic value.
Mariam surveyed the women in her refugee camp, asking them what type of work
they were interested in doing. Many responded that they enjoyed working with food –​it
was something they did every day, they enjoyed it and were good at it, and it had a market.
In a country with high political and economic instability, the food industry was one of its
strongest sectors. People have to eat.
Mariam sought seed funding to launch a catering venture that celebrates heritage recipes, and she recruited about 30 women from her refugee camp to launch the
company –​called Soufra, an Arabic term describing a table laden with food. Through
this process she connected with Alfanar, a venture philanthropy which provides tailored
financing and management support to social enterprises serving marginalized communities.4 In addition to seeding the new venture and helping with business planning, Alfanar
supported a documentary and a crowdfunding campaign for a food truck. To get a better
picture of the context of this endeavor before reading on, please take a moment to watch
the two-​minute campaign video and the two-​minute trailer for the documentary.5
As you’ll see in these short videos, the women of the WPA were living in
harsh conditions. Many of their basic needs –​such as health, education, and job
opportunities –​were not met. They lived in crowded conditions and felt a sense of hopelessness and helplessness. At the time that Soufra was launched in 2013, one out of three
young Arab people was unemployed; for girls and women, it was two out of three. The
Arab countries also accounted for 55 percent of the world’s refugees, and in Lebanon at
the time, one in every four people was a refugee.
Alfanar hoped to help organizations like the WPA reach more people in their education and job creation efforts. Their theory of change is that investing in impactful
civil society organizations and sustainable social enterprises is one of the most effective
levers of change in Arab countries, and that tailored financing and management
support should amplify the impact of organizations already working to tackle social
challenges. The desired outcomes in Alfanar’s logic model included increasing income
for participants and increasing earned revenue for the WPA so that it could serve more
people.
But the transformational effects of social enterprises like Soufra weren’t fully captured
by statistics like the number of women working and the amount of money they made.
Soufra was challenging local assumptions of what it means to be a refugee, what it means
to be a woman, and who gets to participate in the market. It was changing beliefs both
inside and outside the refugee community about what was possible. In a setting where
people felt hopeless and helpless, the women of Soufra felt they could be agents of change,
and they became active participants not only in the economy but also in their families and
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Measuring Outcomes 133
wider community. As Soufra’s participants felt a new sense of agency, so Mariam began
seeing the WPA and her leadership role differently.
Soufra and Alfanar co-​developed a new survey tool to capture more qualitative changes.
They combed through the literature to identify existing psychosocial metrics, such as
agency, self-​efficacy, competence, satisfaction and frustration; and then created a survey
tool that tailored those metrics to their local context. The metrics captured changes in
the women’s self-​perceived ability to: set plans for the future of their families; overcome
obstacles; set personal goals; and cooperate with their friends, relatives, and neighbors on
societal opportunities and challenges. By measuring qualitative changes –​for example,
change in personal sense of agency –​they hoped to capture the different dimensions of
Soufra’s impact. Soufra would never reach millions or even thousands of women –​but it
was transforming individuals and communities.
How would you go about creating a logical framework for an endeavor such as Soufra?
Let’s say the overarching goal is for the residents of the refugee camp to live independently
and with dignity and achieve their personal goals. One theory of change could be that if
they housed a production unit where people create something they loved, and take that
product to market, this would increase their independence and sense of dignity as well
as and their ability to achieve their personal goals. To help operationalize this theory of
change and create a blueprint for action, you’d need to break down this overarching goal
into multiple SMART objectives, thinking about the outputs you’ll need to produce to
reach those objectives and the activities needed to produce those outputs. Then you can
estimate the time and cost needed for each activity, which will help you create your financial forecasts (which is what we’ll do in the next chapter).
As an example, Objective 1 could be to increase the culinary skills, economic productivity, and agency of 30 women in the refugee camp over three years.You’d need to collect
baseline data on each of these outcomes so that you could set specific, measurable targets
for each one. Outputs could include the catering company launched to generate revenue. Activities needed to produce those outputs include feasibility and business planning,
market research and branding, raising seed funds, training participants, creating the menu,
and implementing health and safety measures.
Outcomes associated with Objective 1 include increased income for women and their
families, increased participation of women outside their home, and an increased sense of
agency among the women.These would be the indicators of success. One way to measure
them would be pre/​post surveys asking women about their participation in decision-​
making at home and in the community, and their confidence that they can overcome
obstacles and make plans for the future.
In a world where funders look for “numbers reached,” Soufra would not make a splash.
An impact investor looking to reach millions of people would never even hear about
a small venture like Soufra. But this small venture was changing the status quo. It was
reaching the most marginalized people and operating in one of the most challenging
contexts. These dimensions are rarely captured by “numbers reached.”
In the social entrepreneurship sector, outcome metrics have a long way to go. Changes
that shift the status quo to a new and more just equilibrium are rarely captured easily. If
social enterprises like Soufra and funders like Alfanar can work together to characterize
the impact of the changes they are creating, then the funding landscape will ultimately
recognize and support leaders with lived experience like Mariam and the women she
works with.
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Thought Questions
1. Do you agree with the choice of metrics that Soufra and Alfanar use to measure
success? How would you build on the example logframe description above? What
other objectives would you add, and what would be your process and outcome
measures for those objectives?
2. What are some of the challenges that may arise when funders compare social
enterprises of different sizes, sectors, contexts, and backgrounds? What are some of
the injustices that may be propagated, and how might we address them?
3. Look up a few social purpose organizations that you admire. How do they measure
their impact? To what extent do you think their metrics capture the changes they are
creating?
Next Steps
Outcome metrics reflect the bottom line of a social enterprise, which is to produce change
and positive motion. The metric is a tool for understanding whether you’ve reached your
goal and whether you’re using your resources optimally. It enables you to communicate
with your stakeholders, assess past progress, and plan for future work. At the end of the
day, your outcome metrics should be easy to collect, inherent to the operations required
in your intervention, and aligned to your mission and vision.
Ensuring that processes and outcomes align with your mission and vision means that
your metrics will accurately reflect whether you’re fulfilling that mission and vision.
In the next chapter, we’ll complete your business plan by tying together the different
components of the business model you’ve created up until now: characterizing your
challenge; co-​
creating with the community; designing your solution and theory of
change; understanding your customer; and selecting your social impact metrics. This will
empower you to incorporate your bottom line into the support structures required to get
there. We’ll cover those support structures in the final chapters covering funding, organization, communications, and expansion.
Chapter Assignment
1. Fill out a logic model of your choice, whether the flowchart in Figure 5.1 or the
logframe in Table 5.1. What is the social change you are trying to create? What
outcome metrics will you use to capture that change? What are some key process
measures that can help you track your progress toward creating that outcome? To
keep your logframe time bound, start with just the pilot stage. What would it take to
pilot test your idea?
2. How will you measure and track your process and outcome metrics? Describe the
steps you would take and the resources you would need. How can you design your
M&E to minimize additional time and resources?
3. What baseline data do you need to create the targets you’d like to reach? How will
you go about collecting this data?
4. Which key stakeholders will help set your metrics, collect data, and assess results?
Who do you want to be held accountable to?
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Measuring Outcomes 135
Notes
1
2
3
4
5
Find details of the database at: https://​iris.theg​iin.org
See more at: https://​impa​ctma​nage​ment​proj​ect.com
See the WPA’s website at: https://​wpa-​lb.org/​
Find out about Alfanar at: www.alfa​nar.org
The campaign video can be found, along with full details of the Kickstarter campaign
“SOUFRA: A food truck for refugees in Lebanon,” at: www.kick​star​ter.com/​proje​cts/​sou​fra/​
a-​mov​ing-​feast-​a-​food-​truck-​for-​refug​ees-​in-​leb​ano. The film trailer can be found at: https://​
sou​fraf​i lm.com
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6Ensuring Financial Viability
Chapter Overview
In this chapter, we will address the financial viability of your solution using revenue
and distribution models that are commonly adopted by social enterprises. You’ll
learn about:
•
•
•
•
•
Sources of revenue
Payment models
Distribution models
Operational efficiency across distribution models
Financial forecasting
Over the past few chapters, you’ve taken key steps to build your business model. As we
discussed in the Introduction, the business model includes the impact model, revenue
model, and operational model. In this chapter, we’ll go into more detail about the revenue
and operational model, and how these will help determine your financial viability. We’ll
discuss potential sources of revenue and look at a few business models that are commonly
used for social enterprises. We’ll also talk about distribution models, including key factors
for operational efficiency across distribution models.
Based on your customer research, you’ll have an idea of which, if any, of the revenue
sources and distribution models discussed in this chapter most naturally fit your solution. To refine your answer, you may need to conduct further research on pricing and
costing, following up on the logic model you developed in the last chapter. We’ll then
take a shot at financial forecasting. These initial calculations will give you a sense of
how much seed funding you’ll need to get started and at what stage generated revenue
can cover your costs and fuel your growth, as well as your sources of both funding and
revenue.1
Sources of Revenue
We’ll start with common revenue sources for social enterprises and the kinds of contexts
where they might be useful. The distinguishing factor here is which stakeholder the revenue comes from (Figure 6.1).
DOI: 10.4324/9781003094715-7
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Ensuring Financial Viability 137
Self-sustaining
Customers pay
for offering at
cost plus margin,
generating
surplus revenue.
Includes lowmargin-highvolume and buyone-give-one
models.
Crosssubsidization
Customers
subsidize other
customers’
purchase of
offering. Includes
differential pricing
and other crosssubsidization
models.
Grant-supported
fee-for-service
Customers
purchase offering
below cost.
Grants and
fundraising cover
remaining cost.
Customers
Grant-funded
Non-customers
pay for offering
for users in its
entirety. These
could include
grants and other
fundraising.
Payers
Figure 6.1 Visualizing the payer–​user relationship
High Volume, Low Cost
If you have come across this model elsewhere, it may have been called the “bottom of the
pyramid” model.This is a self-​sustaining business which provides an affordable offering to
a low-​income customer in a market that comprises many potential customers.
The key to financial sustainability here is to lower costs enough that customers’ willingness to pay will cover those costs and generate a small margin that, over a large volume
of customers, makes the company sustainable. An example is Hippocampus, whose revenue model hinged on opening hundreds of early learning centers for achieving financial viability. With parents paying less than $5 per month, Hippocampus’s margins are
miniscule. But they add up over large volumes.
Differential Pricing
A differential pricing model provides the same offering to customers of different income
levels, and it uses sliding-​scale pricing so that some customers cross-​subsidize others.
This is most feasible in situations where low-​and high-​income customers have the same
needs, and where a standardized high-​quality offering can solve that shared problem. At
Aravind Eye Care System, which provides cataract surgery in India, for example, arriving
patients are given a menu of options at different price points. Patients can choose to
pay either market rate or a subsidized rate, or no fee at all if they cannot afford it.Yet all
patients receive the same quality of clinical services at the same place. The key to financial sustainability is having enough paying patients to balance out the nonpaying patients.
Aravind Eye Care System also maintains financial sustainability by serving high volumes
of patients, reducing the cost per patient, and by identifying operational efficiencies. Both
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138 Ensuring Financial Viability
strategies require building demand in the surrounding community as well as systems that
allow for maximum efficiency in dealing with high volumes.
Differential pricing can be used to cross-​
subsidize customers in different places.
Consider the Educate Me Foundation, which is a social enterprise providing Montessori-​
style early childhood education to low-​income residents of Cairo, Egypt (Sidebar 6.1).
Services are priced by neighborhood –​they are based on local parents’ ability to pay as
well as the price of competing offerings in that neighborhood. These prices often do not
cover the costs of the education services, nor of back-​end costs like curriculum oversight
and teacher training. To make sure these costs are covered, the Educate Me Foundation
has opened similar schools in high-​income neighborhoods where parents are able to pay
more; surplus revenue from these locations cross-​subsidizes the same programs in the low-​
income neighborhoods. Again, the key here is that the offering is designed around the
needs of the low-​income population, but because it is of such a high quality, high-​income
populations are willing to pay for it. This is different from the “buy one, give one” model,
where the offering is designed around high-​income customers and a portion of that revenue is used to donate the same offering to low-​income recipients.
Pay-​what-​you-​want models are also examples of differential pricing. Public goods like
radio, podcasts, informational websites, and other offerings are often made available to all
as free resources.They ask for a fee from users who can afford to pay it, as any regular user
of Wikipedia should know!
Sidebar 6.1 Educate Me Foundation (https://​educat​eme-​fou​ndat​
ion.org)
Founded in 2010 in Cairo, Egypt
Goal: To inspire a nationwide movement in Egypt that promotes self-​actualization
through the development of innovative education solutions for children,
teachers, parents, and institutions
What they do: The Educate Me Foundation provides a community school in
Talbeya, Giza, training and development programs for public school teachers
and students, and education consultancy services for various organizations.
How it works: The foundation implements an evidence-​based, skills-​based, and
learner-​centered education model through its Community School. The school
promotes whole-​child development and a culture of self-​actualization and
lifelong learning. The foundation’s training and development programs are
accredited by Pearson Assurance, ensuring consistent standards across multiple
programs, delivery locations, trainers, and facilitators. In 2019, the foundation
signed a memorandum of understanding with the Ministry of Education to
enable the foundation to scale its programs in public schools.
Other Cross-​Subsidization Models
Whereas differential pricing cross-​
subsidizes customers of the same product or service, other revenue models can achieve cross-​subsidization by including different, more
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Ensuring Financial Viability 139
profitable products and services in its offering. As an example, consider a social enterprise
that provides primary healthcare services in low-​and middle-​income countries. Patients
see healthcare workers for different reasons, so it’s not possible to apply a differential pricing model in the absence of a standardized offering, like cataract surgery. In addition,
consultations’ flat fees often cannot cover the costs of care. But revenue from other services can cross-​subsidize those costs, and different healthcare centers offer services such as
diagnostics, eyeglasses, and birthing to cross-​subsidize those consultations.The more profitable services can be made available to the same customers, or they may be targeted to
high-​income audiences. Some centers have also developed their own software to manage
their records and sell this software to other clinics as a source of revenue.2
Advertisement is yet another form of cross-​subsidization.The end user can access content on a platform for free while the costs are covered by those who pay to advertise on
the platform.
Buy One, Give One
When people think of a revenue model for social enterprise, the “buy one, give one”
model often comes to mind. One commonly known example is TOMS’s One for One
model, whereby the company donates a pair of shoes to someone in need for every pair
of shoes purchased by a customer.This could be thought of as a differential pricing model,
since everyone is receiving the same product; some customers cross-​subsidize others.
However, the offering is designed around high-​income customers rather than low-​
income customers, whose needs are not the same; the high-​income customer is essentially
giving charity to others. Traditional charity models do not shift the status quo over time.
Rather, they often propagate it. Furthermore, distributing free shoes in an unfamiliar
setting could have unintended negative consequences for, say, a local shoe manufacturer
and its distributors. For these reasons, TOMS has shifted toward a new model. Instead
of giving away free shoes, it invests one-​third of profits in grassroots efforts, such as
organizations that are driving local change. It continues to leverage profit from paying
customers, redirecting it to create longer-​lasting impact (Sidebar 6.2).
This sort of shift is not uncommon, regardless of your business model. As we saw with
Daily Table, sometimes we start with certain assumptions, but when we test out a model,
roadblocks compel us to pivot and evolve in order to proceed.
Sidebar 6.2 TOMS (www.TOMS.com)
Founded in 2006 in the US
Goal: TOMS was founded with the mission of using business to improve lives. It is
the pioneer of the One for One giving model. Today, one-​third of their profits
support grassroots efforts, including cash grants and partnership with community organizations, and it focuses on promoting mental health, ending gun violence, and increasing access to opportunity.
What they do: Footwear and apparel is sold online and in retail stores.
How it works: TOMS began with a One for One giving model. For every pair
of shoes sold, TOMS donated a pair to people in need. TOMS has evolved
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their model to focus on cash grants to community organizations to create even
deeper impact. TOMS is a certified B Corporation (B Corp) and is committed
to investing one-​third of profits in grassroots efforts and incorporating sustainability practices throughout the business. As of December 2021, TOMS has
impacted almost 105 million lives.
Hybrid/​Mixed Models
In many cases, social enterprises rely on a mix of revenue streams. We refer to this
as a hybrid or mixed model, and it is extremely common in social entrepreneurship.
Oftentimes, revenue from customers (referred to as trading revenue or earned revenue)
does not cover costs and it is supplemented by fundraising or grants. VisionSpring is an
example. According to its financial reports, VisionSpring earns no more than 20 percent
of its revenue from the sale of eyeglasses. The remainder comes from contributions and
grants.3
In a hybrid/​mixed model, multiple revenue streams may flow into the same organization or through sister organizations. For example, a charity can own a business whose
sole purpose is to generate revenue that supports the charity’s mission. This was the case
for Soufra in the last chapter: the WPA registered a for-​profit company to operate a commercial food truck, with the goal of generating revenue to support the WPA’s other activities in the community. We also saw this with Newman’s Own in Chapter 4: all profits
from food items sold by Newman’s Own go to support the charitable activities of the
Newman’s Own Foundation.
Grant Based/​Charity Based
In the hybrid/​mixed model, revenue can come from many different sources, including
different kinds of earned revenue and supplementation from grants and donations.
However, many social innovations are implemented without any earned revenue, relying
completely on grants and donations for financial viability. YLabs, which implements
youth-​driven solutions addressing young people’s health and economic opportunity, is
fully funded by grantmaking institutions focusing on global health and young people
(Sidebar 6.3).
Sidebar 6.3 YLabs (www.ylab​sglo​bal.org)
Founded in 2016 in Boston, Massachusetts, USA; at time of writing, works in 15
countries worldwide
Goal: To ensure all young people have the power to design a healthier, more prosperous future for themselves and their communities
What they do: YLabs designs, tests, and advocates for youth-​driven solutions that
address the biggest challenges to young people’s health and economic opportunity worldwide.
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How it works: YLabs works directly with young people to design solutions that
reduce mortality and morbidity among young people, focusing on HIV/​AIDS,
sexual and reproductive health, mental health, and economic inclusion. YLabs
blends various areas of expertise, such as human-​centered design, adolescent
health, outcome evaluation, and implementation, and establishes partnerships
with peer organizations to create lovable and lasting solutions to these problems.
Responsible Business
At the other end of the spectrum, a business may not be serving low-​income customers,
but it may be shifting the status quo by finding new ways of cultivating ethical and sustainable supply chains or by hiring marginalized workers. Such a business may not need
to rely on any of the revenue models above; it may be able to earn a healthy profit margin,
which it can invest in socially responsible methods. Patagonia and Seventh Generation are
often cited as examples of responsible businesses. Both companies invest in finding ways
to create their products more sustainably over time and in building a responsible business
culture.They are part of a network of companies who see business as a force for good: the
B Lab network. Members are legally required to consider the social, environmental, and
economic impact of their decisions on all of their stakeholders, not just profit for their
shareholders. A business doesn’t have to be part of the B Lab network to be a responsible
business –​this is just one place to find numerous examples of for-​profit companies that
practice responsible business.4
Cost-​Reduction Models
Not all financial viability relies on new sources of revenue. For many endeavors, financial viability may be achieved partly or wholly through cost reduction. Later in the
chapter, we’ll read more about Aravind Eye Care System, an entrepreneurship endeavor
whose financial viability was partly reliant on finding innovative cost-​reduction methods.
Another example could be an intrapreneurship endeavor within an institution that has
an existing budget to achieve certain outcomes, such as a public health agency. An intrapreneur within that institution could design an innovation that allows them to demonstrate improved outcomes for lower costs. Here, they don’t need to find someone to pay
for it. By working within the existing budget, they are implementing an innovation that
demonstrates financial viability wholly through reduced costs.
Payment Models
All of the above revenue models encompass different payment models. There may be
different models for financing payment, different mechanisms for payment transactions,
and different payment structures. Many of these are applicable to a wide variety of
settings.
An example is Water.org, which, in partnership with microfinance institutions, helps
finance access to water and sanitation through a credit program (Sidebar 6.4). People
living without a tap or a toilet in their home can access affordable loans, use local resources
to complete installation, and pay in small amounts to cover the cost over time. A similar
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example is one of the social businesses in the Grameen Group –​Grameen Shakti, which
provides electricity through solar power in remote, off-​the-​grid villages. The cost of a
solar system is paid for entirely by the customer in small installments over a long period.
There are different methods of transaction as well. While customers in high-​income
countries are used to paying by credit or debit cards, customers in many low-​and
middle-​income countries prefer to pay cash on receipt. Additionally, with the increasing
penetration of cell phones, mobile credit is a preferred method of payment in some countries: customers exchange cash for electronic money that they can then distribute via
phone. An early example is M-​PESA, which was pioneered in Kenya and quickly spread
to multiple African countries.
Yet other differences are related to the timing and structuring of payments as they relate
to the delivery of the offering. For example, if your offering is something your customer
will use on a regular basis, then a subscription model could be a viable payment model
for the endeavor. This could apply for physical or virtual offerings. Examples of physical
offerings include home delivery products such as healthy food, sustainable personal care,
household cleaning products, or resale clothing. Examples of virtual offerings include a
website that provides educational content. In the case of websites, a “freemium” payment
strategy, whereby certain content is available to all users and premium content is available
to paying users, may inform your subscription model. Some websites, and other virtual/​
digital offerings like podcasts, also rely on revenue from advertisements. If your offering is
a new software, then payment options may include licensing, one-​time payments, transaction fees, or subscriptions.
The takeaway here is that for many revenue models in which customers pay directly
for your offering, you can consider different payment models to increase accessibility,
acceptability, and affordability, depending on context, preferences, and needs.
Sidebar 6.4 Water.org (https://​water.org)
Founded in 1990 as WaterPartners International; became Water.org in 2009 after
merging with H2O Africa; US registered 501(c)(3) nonprofit organization; operates
in Asia, Africa, and Latin America
Goal: To provide access to affordable financing to the millions of people around
the world who lack the capital necessary to bring safe water and sanitation into
their homes
What they do: Water.org uses financing as a tool to increase access to safe water
and sanitation.
How it works: For millions around the world, access to funds stands between
them and safe water and sanitation in their home.Water.org focuses on market-​
driven solutions that break down the financial barriers between people living
in poverty and access to safe water and sanitation. Water.org works with in-​
country financial institutions to add loans for water and sanitation solutions to
their portfolios. Every repaid loan creates the opportunity for another family to
get the safe water and toilets they need, fast and affordably. It is a pay-​it-​forward
system that makes it possible to help more people in ways that will last.
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Your offering
Consulting, research,
investing, etc.
Your offering supports
others in doing their
socially beneficial
work
Potential
partner
Direct to end user
You work directly with
the end users of
your work
End users
Contracting,
partnerships, etc.
You work alongside
others, in direct
contact with your
end users
Figure 6.2 Visualizing a direct-to-end-user distribution model versus distribution via an intermediary organization
Distribution Models
In preparing for your financial projections and thinking about how many people you can
reach, your distribution model is an important consideration. A key distinction is whether
you’ll access your end users directly or through an intermediary. The intermediary could
be a partner organization or an intermediary individual (Figure 6.2).
Direct to End User versus Intermediary Organization
Within any of the revenue models we’ve discussed, different distribution models may
apply. To illustrate, let’s revisit VisionSpring, which provides affordable eyeglasses to those
with impaired vision. One way VisionSpring reaches end users is through direct-​to-​end
user sales and outreach. It also distributes products wholesale to enterprises serving target
customers. Additionally, it partners with other organizations that may be interested in distributing eyeglasses to their constituents, such as workplaces and schools.
Each distribution model has its advantages and disadvantages.Your choices will depend
on context and the resources you have at your disposal. Delivering your offering directly
to customers allows you to build a relationship with them. Partnering with an intermediary organization allows you to leverage existing networks, relationships, and systems
in communities you have not entered yet. Like VisionSpring, you may decide to use a
combination of distribution methods.
When partnering with an intermediary organization, look for alignment in mission
and incentives as well as an organizational culture that is amenable to replicating and
expanding your impact. Conduct due diligence on partner organizations, assessing them
for characteristics that are critical to your success. For example, if your organization invites
innovation and creativity from its staff but the intermediary organization does not, will
that distinction affect the intermediary’s ability to deliver your model? If your business
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144 Ensuring Financial Viability
model requires you to operate in a lean and efficient manner to reduce costs, while
the intermediary has high administrative costs and operates inefficiently, how will your
operations be impacted?
Social Franchising
One option for working with an intermediary organization is social franchising, which
stems from the commercial practice of franchising. Franchising means partnering with
other organizations to replicate your model once you’ve piloted it. For social entrepreneurs,
it is important to assess how a prospective franchisee has established and sustained itself
over time, demonstrated social impact, and built trust in its community. This organization
will then take on the responsibility of implementing your offering in its community. In
most cases, you will receive a franchising fee from the organization and you will remain
responsible for guidance and training that ensures consistency and quality in your brand,
its output, and the social outcome that is your ultimate goal. Franchising requires less
resources to deliver your solution to a larger audience, because the franchisee is carrying
the burden. On the other hand, franchising still requires you to devote time and capacity
to management guidance and training, and you should have your operations running
smoothly at your pilot site before you replicate it in the first franchise site.
Microfranchising
Microfranchising is another option, where the unit of replication is much smaller. Rather
than franchise the endeavor as a whole, last-​mile distribution is franchised. That is, your
core organization is still responsible for a large portion of the operations and production,
while the franchisee is responsible for interfacing with the end user.The franchisee is usually an individual or, in some cases, a small organization. The microfranchising model has
been used to provide access to basic goods and services at affordable costs and to foster
job creation. This is a model that has been applied in both commercial and social enterprise. Examples from social enterprise include VisionSpring,The Healthstore Foundation,
PlayPumps, KickStart, Drishtee, and Grameenphone.
Non-​Monetized Methods
Another way to expand delivery after the pilot is through non-​monetized methods –​that
is, sharing your content and processes with those organizations without incorporating
financial transactions. One way to do this is to license your offering free of charge through
legal tools, such as those provided by Creative Commons,5 on which you can set conditions
of use. Some social ventures take this one step further by training other organizations on
their model to ensure that the desired social impact is achieved. These kinds of options
may not work for everyone, as they require you to have a robust revenue stream from
other sources. However, some organizations have made non-​monetized distribution work
by diversifying their revenues –​for example, by adopting a hybrid model where revenues
from one market support activity in another market, or by complementing revenue-​
generating activity with fundraising or through financial support from their board. In
some cases, it could also serve as a marketing tool to attract paying customers to compensate for freely shared information, thus balancing out your venture’s financial viability. In
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these cases, social impact growth takes place at a higher rate than financial growth, but the
organization remains financially viable.
Consulting and Contracting
Many social entrepreneurs effect change through consulting and contracting. In this model,
they work with existing institutions to help those institutions implement changes that
affect many people. An example is IDEAS Generation, which focuses on inclusion, diversity, equity, accessibility, and social justice (Sidebar 6.5).The difference between consulting
and contracting is that, in most cases, consulting entails making recommendations to
customers while contracting entails implementing recommendations on behalf of the
customer. The customer could be a business, nonprofit, or government agency.
Sidebar 6.5 IDEAS Generation (www.idea​sgen​erat​ion.org)
Founded in 2018 under the name Inclusion NextWork in Washington, DC, USA
Goal: To support the next generation of leaders and organizations in advancing
social change through IDEAS: inclusion, diversity, equity, accessibility, and social
justice
What they do: IDEAS Generation offers programs and services that support next-​
generation leaders and organizations through the provision of community,
research, tools, professional development opportunities, and consulting services.
How it works: IDEAS Generation connects, supports, and elevates emerging
leaders to advance social change through IDEAS and address the systemic
challenges millennials and Gen Z have inherited. Through leadership development programs and dynamic convenings, IDEAS Generation harnesses
new perspectives, global networks, trauma-​informed practices, and culturally
humble facilitation to co-​create thriving communities with embedded IDEAS-​
centered leaders. The organization’s comprehensive IDEAS consulting practice further scales their impact in nonprofit and social good institutions while
providing compensated professional development to the pipeline of next-​
generation, IDEAS-​informed organizational leaders. All of these projects are
millennial and/​or Gen Z led, while senior IDEAS professionals serve as subject
matter experts and advisors. Nonprofit pricing ensures that the organization’s
services are financially accessible.
Different Options and Combinations
Your economic buyer is determined by the distribution model applied to your revenue
model. For direct sales to your end user, the customer and economic buyer are one and
the same. For wholesale distribution or partnership with other organizations serving your
end user, the economic buyer is that intermediate organization.
The market research you began conducting in Chapter 4 will inform your decision
about revenue models, payment models, and distribution models.You may decide to start
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with one approach and then test others as you go along. This experimentation will help
you determine how to expand your reach over time.
Interview Box: Thulasiraj Ravilla, Executive Director, Aravind Eye
Care System
We have seen a lot of success in the scaling
of social ventures coming out of India.
Do you think that lessons learned from
Aravind Eye Care System are applicable to
India only, or can they be generalized to
other settings?
India is certainly a large market amenable to high-​
volume systems, but our experience shows that the
models developed here can be adapted to other
settings, too. Our team has already helped implement similar models in many countries around
the world. For example, in many African countries, the doctor population is low, and this model
can increase access to basic eye care services.
Image courtesy of Thulasiraj
Ravilla
Do you think your model is applicable
beyond the healthcare sector?
Yes, I do think it can be applied across sectors.
My only warning is that adopting a cross-​subsidization business model may not be
the right fit if your social product or service is not equally needed by paying and
nonpaying customers. Eye care is needed by both, and it is especially sought after by
paying customers; other services may not be.
What other pieces of advice would you like to share with aspiring social
entrepreneurs?
Social entrepreneurs need to recognize that their customers are smart and know
what’s good for them. It’s about the process and the prices, but most importantly
about the people.
Operational Efficiency across Delivery Models
Your revenue, payment, and distribution models will determine how you deliver your
offering, to whom, when, and where.Whatever model you choose to deliver your offering,
understand the control knobs that you can adjust to influence your reach. While these
differ by organization, success stories from around the world point to certain controls you
should consider no matter the field you work in or how you set up your social venture
(Figure 6.3).These can help you reach the operational efficiencies required to deliver your
offering to as many people as possible, especially once you expand beyond your pilot.
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Ways to achieve operational efficiency:
●
●
●
●
●
●
●
●
●
●
Define core package
Standardize
Digitize
Shorten last mile
Foster local leadership
Decentralize
Tailor locally
Leverage existing channels
Apply new technologies
Stay lean!
Figure 6.3 Potential pathways for operational efficiency across distribution models
Define Your Core Package
One task involved with evaluating your offering is identifying the main factors responsible
for your desired outcomes. These make up the core package that you want to get to your
target audience. The contents of your core package are determined by the results of your
pilot testing. Consider your core package as the “non-​negotiables” in creating your desired
outcomes until further evidence suggests that they should be modified. For example, with
Aravind Eye Care System, one of the non-​negotiables is that everyone should get the
same high-​quality care. Other factors related to the endeavor may be adapted to different
contexts, but the non-​negotiables stay the same. These non-​negotiables define your core
package, which can be standardized to reach as many people as possible.
Standardize
In many cases, expanding your reach requires standardizing the processes by which you
produce your offering. Which elements are proven to yield the social impact you are
reaching for? How can you ensure that these elements are effectively delivered to each
and every customer as you grow and expand distribution? Not all elements of your social
venture will be standardized –​many will be tailored and customized –​but before you
design your delivery model, it is essential to determine what needs to be maintained across
your offerings and how to ensure consistency in operations. Standardization can take
place through training, automation, and quality control. Creating protocols, checklists, and
procedures are ways for ensuring that key characteristics of your core package are tied to
your social impact.
Digitize
One efficient way to standardize your offering is to automate manual processes.The key is
to select the right processes.This opens up resources (people, time, funding, physical assets,
and facilities) to take on larger volumes and serve more people. Not all processes can
be digitized and automated, but it is worth your while to figure out which steps can be
automated. As an easy example, data entry and analysis are usually inexpensive to digitize.
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Rather than rely on paper forms for monitoring, you can record field data digitally (using
a phone, tablet, or other computing device), adding the data to your database immediately.
Data analytics software, which is easily accessible, can then help you identify data trends
showing which sites are performing well and whether you are reaching your social impact
targets. Data analysis will also assist in determining what equipment or inventory you
need, as well as other crucial factors for optimizing social outcomes and operations. Many
other back-​end processes are amenable to digitization. Analysis and decision-​making can
then be overseen by a qualified person, without wasting time, talent, and overhead on
steps that can be automated.
Shorten the Last Mile
What if your delivery model could shorten last-​mile distribution? Could you innovate
your supply chain to excel in distribution? How can you turn a distribution obstacle
into an asset? Let’s look at some examples of how successful social ventures have
done it.
Decentralizing the production unit is one means of improving last-​mile distribution.
Rather than having a central headquarters churning out the product (like a factory) or
offering the service (like a hospital), social ventures aiming to reach the most marginalized
populations have brought the actual production unit or service unit to those populations,
creating the social good on site. Determining whether this might be an option for you
requires testing, like anything else.
Consider the host of new social enterprises whose aim is to make sanitary pads for adolescent girls and women more affordable, available, and accessible. The theory of change
behind these new social ventures is that lack of access to affordable sanitary pads forces
adolescent girls to miss school days and that greater access would improve education
outcomes and its ripple effects. These social entrepreneurs realized that manufacturers
do not sell pads in rural areas, because the transportation costs are so high. In turn, they
designed new machines to produce high-​quality, affordable pads, providing them to
women in decentralized locations to bypass the transportation dilemma. These women
then became the manufacturers and distributors. This model is currently being tested by
social entrepreneurs in Rwanda,6 India,7 and other settings.
Foster Local Leadership
These manufacturers are not the only examples of local production and distribution. By
recruiting young women from surrounding villages, training them in its core package, and
giving them the responsibility to manage their respective learning centers, Hippocampus
treated its teachers as local business leaders. This is another form of decentralization!
Kenya’s Nuru is a social enterprise built on training local leaders (Sidebar 6.6). After
recruitment and training, local leaders build Nuru’s program, monitor and evaluate social
impact, and run operations after the departure of Nuru’s core staff. Without such a
model, Nuru would not be able to scale beyond its first site. Thinking back to the waste
pickers in Peru (Chapter 2), they formed alliances and unions, and they spread their
impact by finding local leaders who could serve as catalysts for direct service as well as
policy change. Whatever your social goal or distribution model, previous experience
shows that collaborating with local entrepreneurs and leaders could be your best shot at
reaching end users.
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Sidebar 6.6 Nuru (www.nuruin​tern​atio​nal.org)
Founded in 2007 in the US as a 501(c)(3) nonprofit organization
Goal: To cultivate lasting, meaningful choices in the most vulnerable and
marginalized communities in the world
What they do: Nuru unites communities around shared economic goals, using
sustainable agriculture programs to help farmers adapt to changing climates,
markets, and political landscapes.
How it works: Nuru identifies vulnerable communities, recruits and trains local
leaders to scale interventions, and organizes farmers into cooperatives to provide quality farming inputs and training in agronomic practices and financial literacy. Nuru then ensures that the cooperatives are strengthening farmer
operations and supply chains, crop yields, nutrition, and access to external
markets so that farmers can move from subsistence farming to farming as a
viable business. By investing in local leaders, Nuru builds ecological, economic,
and social resilience in a sustainable way.
Decentralize Operations
The previous examples point to the importance of decentralized operations. There are
yet more ways to maximize decentralization, beyond manufacturing, distribution, and
recruitment. M&E is one additional candidate for decentralization. Hippocampus exemplified this by recruiting and training field coordinators to conduct M&E at learning
centers rather than from the central headquarters. This streamlines the process and lowers
costs, just like local manufacturing lowers costs by eliminating the need for transportation
and warehousing. More important, decentralizing increases the “surface area” of the interaction between the team and the end user.
Do you remember from middle-​school science class how air or water can be absorbed
or transmitted through an object’s surface area? You can think of the surface area of an
organization in the same way. The more interaction points between you and your end
user, the better.You don’t want your ground-​up organization to evolve into a tight round
sphere that is centered on itself.
Even communications and marketing can be optimized through decentralized teams,
because content and channels can be more finely tailored to the local setting. This
includes customer service and feedback. Aravind Eye Care System is a prime example of
the inside-​out approach: after relying on vans to bring community members to central
hospitals (outside in), Aravind’s team realized that a more effective way to reach more
people would be to bring services to them (inside out). Today, they are focusing more
on growing the number of decentralized units (see more in the case study later in the
chapter).
Tailor to the Local Population
Beyond local distribution, management, and communications, there are ways to tailor
your offering to the local population to optimize impact. As your organization grows and
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more distance is created between the central unit and the decentralized unit, you need
to allow a certain degree of freedom and flexibility for tailoring the offering and how it
is offered.
Let’s look more closely at customer service as an example. While it is critical that all
staff members are trained in the core components of your model, they also need the skills
and competencies to personalize your offering. This also applies to non-​staff members
of your supply chain, as some ventures choose to contract out certain elements of their
supply chain. By supply chain, we mean all those involved in delivering your offering; this
could include staff, consultants, volunteers, vendors, suppliers, other stakeholders, and the
products and services involved along the way. An important way to maximize your social
impact is to ensure that each step of your supply chain is integral to your mission. This
gives your endeavor the power to adapt and respond to local customs, preferences, and
needs. Even behaviors, mannerisms, and social protocols for interfacing with customers
can be tailored to locality.
Leveraging Existing Channels
What are the existing distribution channels in the community you’re working with?
What providers do they currently turn to? Regardless of your distribution model, you
can always find ways to piggyback on existing channels rather than starting from scratch.
As always, the key is to test different theories and see which parts of your business
model do and do not deliver impact. A striking example can be found in ColaLife, whose
product for oral rehydration therapy is aimed at combating the diarrhea that is a leading
cause of childhood mortality in many areas (Sidebar 6.7).The initial idea behind ColaLife
was to package the product in pods, which were shaped to fit in the spaces between cola
bottles delivered to small shops in both cities and villages. This was inspired by the fact
that you can buy Coca-​Cola in every village in Africa, but you often have to travel several
kilometers to access health products at rural centers.The packaging idea sounded brilliant,
but when the team tested it, only 4 percent of rural retailers actually used the cola crates
to transport the product. This distribution model was not the key to success, though the
experience proved people’s willingness to pay for the product. The team is using insights
from field tests to devise new ways of tailoring its offering to customers.
Sidebar 6.7 ColaLife (www.colal​ife.org)
Open-​source approach licensed under Creative Commons; registered in 2011 as a
UK charity
Goal: To reduce morbidity and mortality in children by treating diarrhea, which is
the second-​biggest infectious killer of children under 5 in developing countries
What they do: ColaLife provides transformational improvement in access to oral
rehydration salts (ORS) and zinc for the treatment of diarrhea.
How it works: ColaLife studied Coca-​Cola’s techniques and applied them to
the design, marketing and distribution of a life-​saving diarrhea treatment kit.
This was achieved through the twin approaches of redesigning a basic product
to better meet the needs of customers together with a value chain to engage
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existing distribution channels of fast-​moving consumer goods to remote communities. Trial results during the pilot year included: ORS/​
zinc coverage
increased from <1 percent to 45 percent; correct mixing of ORS increased
from 60 percent to 94 percent; and distance to ORS/​
Zinc access points
reduced from 7.4 to 2.3 kilometers. Following a successful scale-​up in Zambia,
ColaLife transferred the product to its local manufacturing partner, which now
serves both the private and public sectors on a self-​sustaining fully commercial
basis; and it applied to the World Health Organization to change the global
treatment recommendation to co-​packaged ORS/​Zinc. Having successfully
influenced global policy, ColaLife established ORSZCA (https://​ors​zco-​pack.
org) to accelerate its uptake worldwide.
The Role of Technology
Many social entrepreneurs have shared that IT increases both impact and financial sustainability because it can reach more people and track processes and outcomes. In the case
of Hippocampus, IT systems helped monitor and track quality and performance across
centers, managing growth while ensuring consistent quality. In the case of social enterprises
providing primary healthcare, IT improves reach through telehealth. Additionally, social
enterprises that develop electronic medical records can see patients at multiple locations
and generally manage higher volumes more efficiently. Some can also sell their software
to others. Thus, the use of technology has the potential not only to help the endeavor
operate more efficiently and serve more people, but also to generate revenue in new ways.
Staying Lean
We’ve already discussed design for affordability, different dimensions of poverty, and the
AAAQ checklist. Remember that you are working in a setting where the market has
failed to provide a solution for your social challenge. As you build your business model,
operations, and other components of your venture, keep leanness in mind.
Being lean simply means that you stretch your resources to the max. You are looking
for the distribution channels, administrative setups, and other characteristics that will
allow you to operate at a low cost. Of course, you are also looking for revenue channels
that will cover your costs and allow you to grow –​it’s a balancing act. The coming
chapters will include tips and techniques to stay lean: where to situate your organization
physically, how to hire lean and outsource where possible, and how to mobilize resources
creatively. Examples include working virtually or renting a co-​working space instead
of an office; outsourcing certain tasks rather than hiring full-​time employees (FTEs);
and finding internal operational efficiencies to reduce the need for costly resources, like
Aravind Eye Care System does in the case study later in the chapter.
Financial Forecasting
Next, we’ll start the process of generating financial forecasts.You can adapt the template
given below to your needs, using it to solicit feedback on your business model so far.
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Market Sizing
Before we start, let’s talk about market sizing. This is a metric that for-​profit investors and
philanthropic funders use to understand the size of the problem you’re trying to solve, as
well as the opportunity for growth. There are two ways to characterize your market size.
The common top-​down approach is based on the overall size of the market. For example,
if the US education technology market is estimated at $200 billion and we can reach
0.01 percent of the market, then our endeavor will be worth $20 million.
Another, perhaps more recommended, approach is bottom-​up, which starts with estimating how many units of your offering you can sell to your economic buyer and then
multiplying that number by your projected price. In this approach, you know your economic buyers, how much they’re going to pay for your offering, and how many of them
you will be able to reach. For the template below, you will be asked to use the bottom-​up
approach.
It’s always a good idea to try both approaches to test if the estimates you’re getting are
in the same ballpark area. If your bottom-​up estimates and your top-​down estimates are
meeting in the middle, that can be a good sign.
Financial Template
For this chapter’s skill-​
building exercise, we’re going to create financial projections.
Depending on whether you’re working on a for-​profit or nonprofit idea, your approach
to financial projections will look a little different. Cost projections will be relatively
similar, while revenue projections will differ slightly because the sources of revenue may
be different; the underlying financial principles remain the same.
We will use a simplified spreadsheet that organizes information for the purpose of
conducting initial conversations with your stakeholders. These can include potential
employees, funders, and economic buyers. This is not a full-​fledged financial statement; it
contains basic information for you to build on (Table 6.1).8
Defining Unit of Offering
At this stage, you’ll need to specify how you’ll “package” your offering. For some offerings,
such as a product or a bundle of services, one “unit” will be easy to define. For others, it
may be difficult to define a unit in advance of implementation. For the purposes of financial projections, you need to define what a unit of your offering looks like, how much it
costs you to produce it, who will pay for it, and how much they will pay for it.
Estimating Revenue
First, we’ll estimate your revenue, building on our discussion of revenue models.Your revenue model is how much you will make as a function of time; it can encompass multiple
sources and payment models. How many units of your offering do you think you can get
an economic buyer to pay for? How much is each economic buyer paying? Multiply these
to get your total revenue. If your economic buyer will pay for service and support after
purchasing the initial offering, you can add that revenue here.
If you do not have a uniform offering or if you have different prices for different economic buyers, then you can input revenue in multiple rows. The important thing is to
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Ensuring Financial Viability 153
Table 6.1 Simple table for preliminary financial projections
Year 1 Year 2
Year 3 Year 4 Year 5 Notes
Revenue
Variable
expenses
Units sold this year (#)
Total units sold (#)
US share of market (%)
Average price per unit ($)
Revenue from new units ($)
X% estimate
Service and support revenue ($)
Total revenue ($)
Variable expenses
Average cost per system ($)
Cost of goods sold ($)
X% estimate
Customer acquisition cost ($)
$X estimate
Sales people (#)
Gross profit ($)
Fixed expenses
FTEs
R&D staff (#)
CEO, COO, 1/​2 CFO (#)
Tech, admin, etc. (#)
Tech support (#)
Total non-​sales FTE (#)
Total employees (#)
$X estimate
Loaded non-​sales FTE costs ($)
Consultants ($)
X% estimate
Royalties ($)
R&D expenses ($)
G&A expenses ($)
Total fixed expenses ($)
Profit and cash
Net profit ($)
Investment to sustain cash flow ($)
Net cash flow ($)
Key statistics
Revenue per employee ($)
Revenue per salesperson ($)
Total units per support person (#)
Average income per salesperson ($)
Notes: In the columns for Year 1 to Year 5, gray cells will be direct inputs and white cells will be calculations
based on those inputs.
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154 Ensuring Financial Viability
calculate your total revenue in the final row of this section by adding up the different
revenue streams.
Because this is a simplified template to help with your initial startup calculations, it
does not include the notion of the “lifetime value” of a customer, which applies when
you have ongoing revenue over a period of time. If you have this data, you can add rows
to track the cumulative acquisition of economic buyers and recurring revenue.
For the purposes of this template, only include income from grants if it is a revenue
stream that a grantmaking agency has paid as your economic buyer. Do not include grants
that you won prior to taking your offering to market, which we’ll refer to as supplemental
income.
Estimating Expenses
There are two types of expenses: variable and fixed. Variable expenses change with the
number of things you produce.Variable expenses usually amount to the cost of goods sold
plus customer acquisition costs.
Cost of goods sold is defined as the cost to produce your offering. In the services
industry, you may have heard it referred to as cost of sales. You may already know this
amount from your previous logframe exercise if you listed all the inputs and costs required
to produce your outputs. What is the average cost per unit of your offering? You multiply
this by the number of units offered to get the cost of goods sold. If your offering is a
physical product, then this figure will be driven by manufacturing costs. Any production
cost that increases per unit of offering goes in this line. In most cases, salaries do not belong
here, though line workers should be calculated because they increase in proportion to
number of units sold.
Customer acquisition costs refer to the costs incurred to secure your economic buyer.
Do you have to attend certain conferences or conventions, organize and host meetings
with stakeholders, pay someone’s salary to meet with potential economic buyers or to
create and manage your social media and marketing? These are examples of customer
acquisition costs. If you don’t have a clear sense of your customer acquisition costs at this
point, for the purposes of this exercise a general rule of thumb you can use is that 30 percent of your revenue goes to customer acquisition costs.
Fixed expenses do not go up for each additional unit of offering. In many organizations,
personnel costs are a major expense. You can list your different types of personnel and
their estimated salaries.Try your best to not underestimate salaries, or expenses in general.
You will be in a much better position if your expenses turn out to be lower than you
think, though this rarely happens.
In some sectors, such as medical devices and life sciences, R&D could be your largest
fixed expense, especially initially, to get your product or service in the form that is affordable and usable by customers. Other fixed expenses common across sectors could include
office space, insurance, and general and administrative (G&A) expenses. Don’t forget to
include startup costs such as fixed asset purchases, deposits, organizational paperwork,
lawyers, branding and website development, rent, and payroll before actual operations
begin producing cash flow. This can be several months’, if not years’, worth of expenses
depending on the type of industry. The amount required to finance operations is called
“working capital,” and this is represented in the “investment to sustain cash flow” line of
the template (in the Profit and Cash section).
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Ensuring Financial Viability 155
If you are not certain of exact expenses at this stage, then start with estimates. Examples
could include estimating benefits as 12 percent of salary, overhead as 8 percent of salary,
and utilities as 20 percent of rent. Labor estimates depend on the type of endeavor you
are building and the market-​rate salaries in that industry, and the part of the world
you are working in. For example, if you are building a medical device company in the US,
estimating an average salary of $200,000 per person is a good start. Some roles within the
company will have much lower salaries, and some will be much higher, but this is a good
average for initial calculations. It is not too difficult to look up average salary figures in
different industries depending on the part of the world you are working in; at this stage,
it is okay to plug average figures into your initial calculations.
Profit and Cash
The next section of the template focuses on profit and cash. Net profit is revenue minus
expenses. It is likely to be negative for the first few years of your endeavor, before you
break even. This is where you can specify investments that sustain cash flow. Afterwards,
you can calculate net cash flow, which will hopefully be positive.
This template organizes information about prospective finances that you have at hand.
The next chapter is dedicated to potential sources of funding. Before launching your
endeavor, you need to have a plan for sustaining yourself and your work. You cannot
implement your offering if you are cash flow–​negative. Cash flow is the amount of cash
available to pay bills and invest in your offering and your partnerships. If your expenses
exceed revenue, then you are operating at a loss and have no profit. Most endeavors
operate in this way to start with. Some will always stay this way, depending on grants and
donations for sustainability. Others will eventually reach the stage where revenues exceed
expenses –​that is, the endeavor becomes self-​sustaining.
In the meantime, it is important to understand that cash flow is never as straightforward
as it seems. Even if you identify enough economic buyers to cover your costs, there is
usually a lag between when you incur your expenses and when you receive your revenue.
For grant-​dependent nonprofits, rule of thumb is to have six months of operating costs
in the bank to sustain operations in case of a lag. Some grant cycles are long; you have to
wait for a decision and then disbursement, and you can’t stop operating in the meantime.
Similar rules of thumb apply to ventures with earned revenue, which experience lags due
to long sales cycles, regulatory cycles, and payment cycles.
Lastly, there are a few key statistics at the bottom of the template that you can keep
your eye on as you proceed in your endeavor. These are the revenue per employee, revenue per salesperson, total units per support person, and average income per salesperson.
The purpose of these statistics is to indicate how lean your operations are. You can discuss them with your team, funders, and other stakeholders. There are no wrong or right
answers here. Larger numbers indicate leaner operations (more units per person, which
indicates potentially more impact for less cost), but every situation is different, depending
on the endeavor and the setting.
Putting It Together
There are many templates for preparing financial forecasts. The template provided in
Table 6.1 is one way to get started. You can use another template if you feel equipped
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156 Ensuring Financial Viability
to include more detail, or if you have a way of preparing financial forecasts that you are
already used to.You can also conduct a sensitivity analysis that tests different assumptions,
to gain understanding of the range of possibilities associated with different estimates of
timing, market size, pricing, and various expenses.9
The objective here is to understand what it would take to build a financially viable
endeavor, whether it is a new organization, an endeavor within an existing organization,
or a standalone initiative such as a campaign. You can use this opportunity to envision a
pilot before thinking about long-​term implementation. If your goal is to test an offering,
then you can use this financial template to understand how much it would cost to implement a small pilot and to look for funding sources to help make it happen (which we’ll
talk about in the next chapter). It’s okay to dream big and start small!
In understanding your startup costs, some questions you may ask yourself are:
•
•
•
What will it take for me to develop and iterate my offering? Some people refer to
this as the proof of concept stage to create a minimum viable product (or, as Guy
Kawasaki calls it in his book The Art of the Start,10 minimum viable valuable product).
How long will this take? What resources and stakeholders are needed, and how much
will this cost? At this stage, there will likely be no earned revenue, only grant or
investment revenue.
How much will it cost to pilot test the offering on a small scale? Define the scale of
the pilot test (e.g. units of your offering, number of customers, location, time frame).
In the pilot stage, you will be testing out your revenue streams, so there will be earned
revenue. Note that the pilot stage is optional. Some people like to go directly to
launch and just start small.
How much will it cost to formally launch? Again, define the scale at which you
will launch (e.g. number of units, customers, location). How long will you need to
operate before you break even?
These three stages (develop, pilot, launch) can be considered your startup phase. For most
startups, this will take three to five years (and for many health startups, even longer). Once
you break even, you’ll need to think about your plans for expansion and ask yourself the
same questions. What resources, stakeholders, and time are required? Will you fund this
through earned revenue, or will you require additional grant or investment revenue to
fuel expansion?
In the next chapter, we will learn about different sources of revenue for the development, piloting, launching, and expansion stages. The focus of this chapter is to try and
estimate your revenue streams and expenses, even if they are just estimates for now to start
a conversation with your stakeholders. This should include checking your assumptions
with someone who has experience with this challenge. As you proceed in your endeavor,
you’ll be able to collect more data and refine your revenue streams and expenses with
more precision.
What to Do with Surplus Revenue
Ideally, your revenue model maximizes social impact while covering all your expenses
and more. To continue maximizing your social impact, you would then reinvest as much
profit into your mission as possible. In some cases, however, profit is not possible: expenses
will exceed revenues.
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Ensuring Financial Viability 157
Your financial projections and pilot testing will start revealing whether your endeavor
can generate revenue that exceeds your expenses. If you do generate surplus revenue,
what you intend to do with the surplus will determine your endeavor’s structure (as a
for-​profit or nonprofit) and what sources of funding you will be eligible for.
For-​profit companies may allocate part of their surplus to building economic value for
the individuals that created it and those who invested in them. The founders can profit
personally, and they can qualify for types of funding such as venture capital, in which the
investors demand higher financial returns. They may receive higher amounts of funding,
allowing them to expand more rapidly.
Most founders allocate at least some part of surplus toward growing a company’s
operations and outcomes, to further its mission. In some cases, they may decide to reinvest
100 percent of the surplus into their mission, in which case they may decide to structure as a nonprofit. Part of this reinvestment may be spent on the people working in the
organization, but the key here is that no profit will be distributed among owners (whether
the founders or investors) in the form of dividends. Depending on the settings, nonprofit
organizations benefit from advantages such as exemption from real estate taxes and sales
taxes, qualification for tax-​deductible donations, and funding from grants.
It is also worth noting that some for-​profit organizations, at certain stages in their
journey, may also decide to reinvest all their surplus into their operations and growth.
This is a little bit different, since eventually they will distribute profit to their owners
and investors. Their decision to invest all their surplus in growth could be strategic at any
given time –​for example, to fund new projects, make acquisitions, or pay down debt.
If your expenses exceed revenues, then your only choice is to operate as a nonprofit
and to use fundraising to bridge the shortfall.The main disadvantage of a nonprofit organization is that you will devote a lot of time to recruiting donors, reporting results, and
applying for grants. On the other hand, a for-​profit company may give you more freedom
and fuel for scale, but it usually requires more capital investment to get started. At the same
time, you need to find the right investors that are aligned with your social mission, since
there are often trade-​offs between profit and impact.
Case Study: Aravind Eye Care System
Aravind Eye Care System is a nonprofit organization that achieves financial viability through a differential pricing model. Aravind started as an 11-​bed hospital
inside a home in the Tamil Nadu state of India. It was founded by Dr Govindappa
Venkataswamy (Dr V), an eye surgeon who had been employed by the government to
launch mobile eye care facilities, or “camps.” These camps focused largely on cataract
surgery for the adult population. By the time he reached the government’s mandatory retirement age of 58, Dr V had performed more than 100,000 eye surgeries,
trained hundreds of doctors, and managed countless community outreach initiatives.
He asked himself whether it was possible to provide cataract surgery at a cost most
people could afford.
Together with his family, DrV formed a trust that allowed him to found the first Aravind
eye hospital.This self-​funding involved Dr V mortgaging the family’s house, selling family
jewelry, and pooling life savings. This risk was compounded by obstacles stemming from
Dr V’s limited knowledge of business planning and budgeting.11 At the time, there was a
great need for cataract surgery, but low demand. While lack of supply, with only one eye
doctor per 60,000 people, certainly drove low demand, poor understanding of eye care
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158 Ensuring Financial Viability
also impacted demand. Many people were not aware that blindness could be prevented or
cured, and many were afraid of surgery or leery of the costs associated with it.
Aravind addressed these challenges by providing communities with information and
support –​including transportation to and from the hospital as well as surgery costs, food,
and medication –​through satellite camps.The camps allowed Aravind’s team to build trust
and generate demand in rural areas.
Aravind’s business model also involved providing a menu of options at different price
points to patients arriving at the hospital. Patients could choose to pay either market
rate or a subsidized rate, or no fee if they could not afford to pay. All patients would
receive the same clinical services regardless of payment. Staff alternated between paying
and nonpaying patients to ensure an equal level of quality for, and understanding of, all
patients’ needs. The key to financial sustainability was twofold: to serve high volumes of
patients, which would decrease the cost per patient; and to have enough paying patients
to balance out the nonpaying patients. Both targets required building demand in the
surrounding community, efficient systems that could handle high volumes, and intensive
monitoring of quality and costs.
The Aravind founders placed three constraints on themselves that required finding
out-​of-​the-​ordinary solutions: to not turn anyone away; to not compromise on quality;
and to be self-​reliant. Achieving the three goals simultaneously required using resources
sparingly. When the first hospital was founded and resources were especially scarce, the
team used to cut packaging material into sponges. Today, resources are more readily available, yet the Aravind team still maximizes the use of every resource.
Transparency was important to building trust in the customer base. Anyone who has
ever been to a hospital or a bank can identify with hidden costs. Aravind’s team did not
charge for each test or service. Rather, it charged one consultation fee (equivalent to less
than a dollar), which was valid for up to three months if the patient needed to return.
Letting patients choose their price also helped build demand across customer segments.
Approximately half of nonpaying outpatients come to Aravind on their own volition and
half come in thanks to Aravind’s outreach efforts.
However, uptake in the communities surrounding eye camps held at under 7 percent.12 It became clear that outreach alone was not enough to create the desired impact.
Exploring potential reasons for the lack of uptake, management initially concluded that
eye health was simply not a priority among the rural population. But referring back to
the AAAQ framework of health and human rights (see Chapter 3), they realized that
addressing affordability did not create awareness and acceptance.
Initial responses focused on education, trust, and reduction of costs like transportation and lost work. Yet over time, it became clear that customers did know what was
best for them and that it was the organization that needed to change its way of thinking
and behaving. Achieving universal coverage required adjusting services and patient
interactions. If not everyone was coming to the eye camps, then perhaps the eye camps
were not the best way to reach everyone.
Aravind’s team was able to crack the case by setting up a permanent network of vision
centers. Using population coverage as their key metric, they calculated that each center
would cover patients within a five-​mile radius. At the time of writing, there were about
50 vision centers in Tamil Nadu, covering a total population of 3.5 million people. These
centers cumulatively registered more than 900,000 patients. Plans are in place to add 100
more centers, scaling to a population of 10 million.
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Ensuring Financial Viability 159
Three factors were key to building the organization and scaling its impact. First, basic
services can be provided by a basic workforce with a basic level of training. In the case of
Aravind, not every patient needed to see an ophthalmologist, as the majority of clinical
needs could be diagnosed and treated by optometrists. Optometrists received technical
support from the central team and via telemedicine. This allowed Aravind to charge less
than bus fare per consult, yet each center was able to break even as a standalone financial unit.
Second, scaling requires that processes be tightly packaged for easy replication. Quality
management, standardization, and a detail-​oriented approach were necessary. Personnel
were disciplined, accountable, and responsive to patients. To deal with large volumes,
it’s necessary to find the right balance between the “factory” approach of standardized
processes and the need to tailor human interaction to local context and to the person.
While Aravind Eye Care System’s approach can be thought of as “mass production” and
the goal of its founder was to serve millions, its services are still tailored to multiple
populations.These include children with congenital problems or infections, workers with
refractive errors, diabetics with retinopathy, and adults with cataracts, glaucoma, and other
clinical needs. Process innovations such as an assembly-​line approach to clinical care also
helped drive down costs across the different services.
Third, tailoring services to customers’ needs is the cornerstone of a social venture.
Aravind’s perspective is that customers are driven by value for money and quality of care,
and that charity is not always associated with quality. Aravind doesn’t advertise that paying
customers are subsidizing those who are not able to pay. Customers come for high-​
quality, high-​value service for themselves, not because they want to help others. Aravind
has quadrupled its growth every decade, making an operational surplus of 50 percent on
revenues of tens of millions of dollars.
Thought Questions
1. What unique attributes make Aravind’s differential pricing model possible? In what
settings and circumstances might a similar model be replicable?
2. How did they create operational efficiencies to lower costs and increase volume? Are
there ways that you might apply a similar approach to your endeavor?
3. Go back and revisit Figure 6.3 (Potential pathways for operational efficiency across
distribution models). Are there any that were not included in your answers to the
above two questions? Describe how Aravind’s model employed these pathways to
reach the “last mile” of distribution. How might you adapt your distribution model
to reach the last mile?
Next Steps
Business planning began the moment you started studying your challenge. Characterizing
the challenge, working in the community, innovating, and designing the solution all laid
the foundation for your value proposition and theory of change. Developing your outcome metrics using a logic model allowed you to work backward from the change you’re
targeting to build the framework needed to get there.This set you up for identifying your
revenue streams, distribution model, and levers for operational efficiency to create a viable
venture.
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160 Ensuring Financial Viability
The financial forecasts you created in this chapter are initial estimates that will help
you start a conversation with potential funders and other stakeholders. In the next chapter,
we’ll talk about different sources, vehicles, and approaches for funding your endeavor.
Chapter Assignment
This chapter’s assignment is divided into two parts. First, describe your revenue and distribution models, and how you will package your delivery in a way that will help you
reach your desired outcomes. Second, prepare your financial projections, and discuss their
implications. Please proceed step by step in answering the questions below.
Part One
1. Describe your revenue and payment model. How will your endeavor be financially
viable? (If you are relying on a cost-​saving model in the case of intrapreneurship,
describe your cost-​saving model.)
2. Describe your distribution model. Will it be a direct-​to-​end-user model or will you
operate via an intermediary partner?
3. What are some of the different ways you will generate operational efficiencies to
strengthen the viability of your endeavor?
Part Two
4. Prepare your initial financial forecasts using the template in Table 6.1 or another template of your choice. Share this with your team and other stakeholders and consider
their feedback.
5. Based on your estimates, will your earned revenue cover your expenses? If yes, after
how long will you break even? If not, what percent cost recovery will you reach at
steady state (what proportion of your expenses will your earned revenue cover?), and
what is your plan for covering the remainder?
6. Describe your startup costs. How much do you need to raise in initial investment or
grants?
7. If you will break even and generate surplus revenue, how will you allocate the surplus?
Notes
1 Author’s note: This is another chapter I spread out over two weeks in my course (double the
usual amount). In the first week, we focus on revenue and distribution models, and discuss the
Aravind Eye Care System case. Students are asked to prepare their revenue streams and expenses
for the following week. In the second week, we walk through the financial template together.
Students plug in their estimates and we discuss the resulting financial forecasts.
2 Lokman, L., & Chahine, T. (2021) Business models for primary health care delivery in low-​and
middle-​income countries: A scoping study of nine social entrepreneurs. BMC Health Services
Research, 21: Article 211. https://​doi.org/​10.1186/​s12​913-​021-​06225-​6
3 See VisionSprings’ website for more details: www.visio​nspr​ing.org
4 See more at: www.bcorp​orat​ion.net
5 See the Creative Commons website at: https://​crea​tive​comm​ons.org
6 See Sustainable Health Enterprises at: http://​shein​nova​tes.com
7 See Jayashree Industries at: www.newinv​enti​ons.in
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Ensuring Financial Viability 161
8 Courtesy of Mike Dempsey, MIT.
9 A student recommended this tutorial: Sensitivity analysis Excel: How to set it up [tutorial
video] (17:58). Breaking Into Wall Street. https://​bre​akin​g int​owal​lstr​eet.com/​kb/​excel/​sens​itiv​
ity-​analy​sis-​excel/​
10 Kawasaki, G. (2004). The art of the start: The time-​tested, battle-​hardened guide for anyone starting
anything. Penguin.
11 Mehta, P., & Shenoy, S. (2011). Infinite vision: How Aravind became the world’s greatest business case
for compassion. Berrett-​Koehler, p 69.
12 Velayudhan, S. K., Sundaram, R. M., & Thulasiraj, R. D. (2011). Aravind Eye Care System: Providing
total eye care to the rural population. Teaching Case. Ivey Publishing.
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7Funding Your Endeavor
Chapter Overview
In this chapter, we’ll review the financing approaches associated with social entrepreneurship, and we’ll discuss which ones could be right for you.You’ll learn about:
•
•
•
•
•
Sources of funding
Financing vehicles
Evolution of social investing approaches
Nonfinancial support
Resource dashboards and tips for getting started
Depending on where your endeavor falls in the social entrepreneurship spectrum from
traditional charity to traditional commerce, there will be a set of social financing vehicles,
funding organizations, and other resources that could be right for you. We’ll discuss this
range of social financing tools and approaches in the sections below. By the end of the
chapter, you will have gained an understanding of how social financing works, what
different funders are looking for, and what kinds of funding sources and approaches might
fit your venture. Keep in mind that as your endeavor matures, you may qualify for and
benefit from different financing approaches that correlate with different stages of progress.
The chapter concludes with a resource dashboard template, which you can use to track
different resources and organize funding information.
Overview of the Social Investing Spectrum
In the Introduction, we discussed how social entrepreneurship occupies a spectrum
between traditional charity and traditional commerce. Social investing has evolved over
time to match that spectrum. At one end are nonprofit approaches, such as philanthropic
giving of grants and donations, and at the other are for-​profit approaches like investing with
equity. Hybrid approaches, such as venture philanthropy and impact investing, occupy the
middle (Figure 7.1). Funding vehicles correspond with these different approaches: grants
and donations on the nonprofit side and equity on the for-​profit side; other funding
vehicles include loans and bonds, which can be used across the spectrum.
Different sources of funding also correspond with various points along the spectrum.
Governments, foundations, and other nonprofits have historically focused on the
nonprofit side, while private-​sector organizations like investment funds and banks have
DOI: 10.4324/9781003094715-8
163
Social value is
primary driver
Traditional
charity
Investment
approach
Financial vehicles
Type of endeavor
Funding Your Endeavor 163
Financial value is
primary driver
Revenuegenerating
social
enterprise
Socially
motivated
business
Grants, donations, and
awards
Traditional
commerce
Equity
Loans and bonds
Traditional and
catalytic philanthropy
Venture
philanthropy
Impact investing
Traditional and
socially
responsible
investing
Figure 7.1 Social investing spectrum
focused on the for-​profit side. However, this is changing with the growth of the hybrid
space. This is the middle of the spectrum, where mission-​driven revenue-​generating
organizations –​venture philanthropy, impact investing, and other approaches –​reside.
Increasingly, hybrid approaches are being included in the portfolios of NGOs and other
historically grantmaking organizations.
Sources of Funding
Funding can come from one or more of myriad organizations and sources. Depending on
where your endeavor falls in the social entrepreneurship spectrum, there will be a set of
social financing vehicles, funding organizations, and other resources that could be right
for you. Here we’ll talk about the role of governments, nonprofits, the private sector, and
individuals in funding social entrepreneurship (Figure 7.2).
Governments
Government agencies provide funds for R&D in specific subject areas and, in some cases,
seed funding for new ventures. Research funds are often earmarked for researchers based
in universities, research institutions, or smaller organizations that specialize in a specific
subject. For example, the US Environmental Protection Agency allocates research funds to
researchers based in universities, nonprofits, and even private consulting firms. If you are
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164 Funding Your Endeavor
Category of source
Governments
NGOs
Private sector
Individuals
Notable subcategories
• Multilateral / intergovernmental organizations
• Foundations
• Investment funds
• Businesses
• Banks
• Angel investors and philanthropists
• Friends and family
• The crowd
Figure 7.2 Sources of funding
a smaller social venture, then partnering with deeply experienced university researchers
is a strategic way to increase your competitive edge when bidding for government grants.
Government agencies may also provide startup resources that encourage new ventures,
whether commercial or social or both. There is an increasing number of government
agencies and programs dedicated to innovation. These can exist within a subject-​specific
agency or within a program that fosters entrepreneurship irrespective of subject. Check
for programs in your country that support social entrepreneurs.
In addition to fostering social entrepreneurship domestically, many governments extend
funding to social entrepreneurs in other countries through international aid agencies. Most
governments have a specialized agency that disburses funds for international development.
A few examples include the United States Agency for International Development (USAID),
the Foreign, Commonwealth & Development Office (in the UK), the Japan International
Cooperation Agency (JICA), Danida (in Denmark), the Italian Agency for Development
Cooperation (AICS), the Development Partnership Association (in India), the Swedish
International Development Cooperation Agency (SIDA), and the Norwegian Agency for
Development Cooperation (Norad). In recent years, making aid monies available to social
entrepreneurs has increasingly become part of international development strategy. Check
whether governments furnish such resources to the country you are working in.
Multilateral Agencies
Beyond the resources provided by individual governments, multilateral agencies bring
together funds from multiple governments to allocate to specific causes. For this reason,
they are also often referred to as intergovernmental agencies. The World Bank and the
UN are two of the largest and best-​known examples. The World Bank focuses on poverty alleviation and provides financing and programmatic support to governments for
sustainable development. Its regional equivalents are the Inter-​American Development
Bank, the African Development Bank, and the Asia-​Pacific Development Bank. Many of
these have funding programs focused on supporting social entrepreneurs in their region.
The European Bank for Reconstruction and Development and the Development Bank
of Latin America are similar examples. While these funding institutions have historically
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Funding Your Endeavor 165
financed large-​scale private-​sector enterprises, increasingly they are supporting social
entrepreneurship in low-​and middle-​income settings all over the world. The United
Nations Development Group includes specialized agencies with specific areas of focus
you may be working on, such as children (UNICEF), development programs (UNDP),
environment programs (UNEP), education, science, and culture (UNESCO), and labor
(International Labour Organization) among others. Multilateral agencies are responsible
for disbursing funds from their member governments according to each agency’s mission
and scope; this often involves partnering with local actors like social entrepreneurs.
International NGOs
Social entrepreneurs may also turn to local and international NGOs for funding. NGOs
encompass any private association organized by individuals having a common purpose.
(This includes many social enterprises, in fact.) NGOs can implement their own programs,
products, and services, or they can provide funding to other organizations to implement
their missions. Some do both!
As an example, Mercy Corps is a US-​based international NGO that tackles poverty and
injustice by building safe and productive communities.1 Mercy Corps operates various
international programs related to drivers of poverty and injustice. While implementing its
own programs, Mercy Corps provides funding to local organizations and entrepreneurs
worldwide that fulfill its mission in a local context. Oxfam is another international NGO
headquartered in the UK which implements a multitude of programs related to poverty
reduction and social justice. It also partners with local organizations and entrepreneurs in
countries all over the world.2
In short, numerous international NGOs focus on various SDGs, and they may offer
funds to local organizations such as social enterprises that can help them deliver mission.
Usually, they advertise such funding opportunities through civil society media, newsletters,
and list servs, so make sure to familiarize yourself with media outlets in the area where
you are operating.
Foundations
There is one type of nonprofit organization that you should be especially familiar with.
Foundations are nonprofits that were formed for the purpose of funding and supporting
other social purpose organizations or individuals working on social purpose initiatives.
Some foundations have been formed for a specific cause –​examples include the Ms.
Foundation for Women, the Sierra Club Foundation, and the Stars Foundation, which
respectively focus on women, nature, and children.
Historically, foundations that have been formed by individuals or families are referred
to as private foundations; well-​known examples are the Ford, Rockefeller, MacArthur,
Hilton, Gordon and Betty Moore, Bill & Melinda Gates,William & Flora Hewlett, Michael
& Susan Dell, Clinton, and Nuffield foundations.3 Other foundations have been formed
by public entities or communities and are commonly referred to as public foundations;
these often support a specific geographical community or, in some cases, a subpopulation
within a specific location.4 Corporate foundations are also becoming major players in the
nonprofit world, as many large corporations dedicate resources to increasing their social
impact. Common examples include the Coca-​Cola, PepsiCo, Starbucks, Nike, Shell, and
Google foundations.
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166 Funding Your Endeavor
Investment Funds
Investment funds can be private or public, profit-​driven or nonprofit. Individuals and
institutions form investment funds by pooling their resources and distributing profits.
Banking institutions also have their own investment funds, into which individuals or
organizations can choose to put their resources. There are many different approaches to
social investment; for now, it’s important for you to be aware that there are private sources
of funding for social entrepreneurs. It’s also important for you to be familiar with the traditional sources of funding for commercial entrepreneurs, to understand the full spectrum
of startup financing and the different ways in which it is practiced.
One of these is venture capital. Venture capital firms focus on financial growth, not
social returns on investment. If a venture capital fund invests in your startup, it will own
a certain percentage of it and have decision-​making power. This is to ensure influence
over the startup’s growth. It usually leverages the expertise of the venture capitalist to
achieve as much scale as quickly as possible. The venture capitalist is taking a high risk
on the entrepreneur because there is a chance of high financial return (this is referred to
as “alpha”). Venture capital has historically been a much-​sought-​after source of funding
for commercial entrepreneurs, more so than for social entrepreneurs. But in recent years,
more and more venture capital firms have demonstrated interest in high-​growth ventures
that are creating positive social change (more on these later in the chapter). This chapter’s
interview box features a venture capitalist focused on ending racism.
Private equity is another form of funding you will hear about in the commercial world, but unlike venture capital funds, private equity funds target larger companies rather than startups. Other forms of funding that are more tailored to social
entrepreneurs, such as impact investing and venture philanthropy, have developed over
the years, stemming from venture capital approaches. (We will learn more about these
later in the chapter, too.) Many of the first venture philanthropists and impact investors
began their careers in venture capital and finance, and they went on to apply those
techniques (analyzing risk, maximizing reward, and systematically collecting data to
inform decisions) to social impact.
Interview Box: Kathryn Finney, Founder, Genius Guild
You started out as an entrepreneur and
are now a venture capitalist. How did that
evolution unfold?
First, I started out as a public health researcher
and practitioner. I worked all around the
world on global health projects and ended
up in Philadelphia, where I led a women’s
health organization. During that time, as a side
hobby, I created a fashion website that became
a successful startup, which was eventually
acquired. It was while leading my startup that
Image courtesy of Kathryn Finney
I experienced how difficult it was to be a Black
woman founder in tech. So after I sold my company, I made it my mission to
change that.
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Funding Your Endeavor 167
What are some of the barriers you faced that you are helping others to
surmount?
People do not expect Black women to be successful entrepreneurs. I launched a
research project called ProjectDiane, which analyzed all venture capital transactions
in the US during 2011–​2016.These data show that the average Black woman received
$43,000 in venture funding compared to $1,100,000 for the average failed startup.
We used the data from ProjectDiane to help inform the work at digitalundivided,
the social enterprise that I founded and led for eight years. digitalundivided provided
training, networking, and mentorship to Black and LatinX women and nonbinary
founders. Our theory of change was that by creating a world where women own
their work, we will create a better world for everyone.
How did you go from providing nonfinancial support at first to financial
support with your new fund?
I’ve been an active angel investor for years, investing in close to 20 companies.
During the height of the pandemic, I authorized small microgrants as emergency
assistance to the companies in our program. The impact of those grants then led
me to start The Doonie Fund, a 501(c)(3) named after my grandmother Kathryn
“Doonie” Hale, which has distributed more than 2,000 microinvestments in Black
women entrepreneurs. The transformative effect was huge, and it got me interested
in mobilizing funds for financial support. I was able to raise a fund of $20 million,
and launched Genius Guild.5
What are you focusing on with Genius Guild, and what do you hope to
achieve?
The main thesis of Genius Guild is that successful Black companies produce alpha
for their investors, their community, and themselves. We believe the best way to
prove this thesis is by building and investing in high-​growth companies led by Black
founders that serve Black communities and beyond. We invest at the pre-​seed level
($50,000 to $250,000). We’re interested in companies that are connecting people,
that are restructuring the flow of capital in Black communities, and improving
the health and well-​being of Black communities, with the ability to scale to other
communities.
Corporate Funding
Another option is to approach a corporation for financial or nonfinancial support.
Corporations sometimes have their own investment funds and incubators that support
entrepreneurs who are innovating on challenges related to their corporate strategy.
Sometimes they may even acquire startups and fold them into the corporation. Another
way that corporations support entrepreneurs is through corporate social responsibility
(CSR).This is practiced by many larger companies and increasingly by small and medium-​
sized enterprises. Both privately and publicly held businesses might sponsor or partner
with a social endeavor, based on the premise that they would contribute to social and
environmental outcomes while meeting their financial bottom line. Thus, they allocate
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168 Funding Your Endeavor
financial, human, or structural resources to growing their social and environmental impact
in a positive direction. CSR sends the message to customers and other stakeholders that
this company is socially responsible; an internal benefit is that it attracts and retains talent
eager to apply their talents to social and environmental topics.
When looking for a corporate partner, think about which business might have a vested
interest in your line of work. Consider mission alignment, common interests, resources,
and practices related to your venture. For example, a company focusing on worldwide
beverage distribution may be open to an endeavor that increases access to clean drinking
water. An insurance company would be your best bet for partnering on a risk-​reduction
scheme for smallholder farmers. Large companies often launch specialized foundations to
fund and focus their CSR work.
Individuals
Social entrepreneurs can also be funded by individuals, who may be philanthropists
seeking social returns or investors seeking both social and financial returns. While you
develop your social enterprise, you may consider approaching the different categories of
individuals described below.
Angel Investors and Philanthropists
An angel investor is a type of private-​sector investor commonly sought by early-​stage
entrepreneurs. The name refers to the idea that an angel investor is an individual with
means who might take a chance on you and your idea. Angel investors have discretion
over whether and how to use their own money, and they are on the lookout for people
to change the world. Angel investors sometimes form networks that bring angels and
entrepreneurs together, but still operate at their individual discretion. Most ask for a financial ROI.
Philanthropists are similar to angel investors, but they do not ask for a financial ROI.
While most philanthropists operate through a foundation, you might find individual
philanthropists to support your social venture directly. We will delve into more detail
about the different kinds of philanthropists later in the chapter.
Friends and Family
Smaller startups may choose to launch with a round of funding from friends and family.
This is usually for proof of concept or a small pilot, after which outside funding can be
secured. The founders literally ask their friends and family to become investors, usually in
return for a share of the financial value of the venture.
Seed funding from friends and family is more accessible than some institutional sources,
and some entrepreneurs find it less stressful to pursue. However, other entrepreneurs point
out that it can be more stressful to ask for money from people you know, due to the emotional burden. The important thing to communicate to friends and family who provide
funding is that they are taking a risk and there is a chance they could lose their investment.
Some entrepreneurs are tempted to self-​fund.They believe in their cause and in their
solution so much that they are willing to shoulder the financial burden themselves and
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Funding Your Endeavor 169
recoup their investment down the road. Not only is this unadvisable financially, but
rallying supporters, stakeholders, and shareholders is an important step in your journey
toward success, too. You need to find enough people who believe in your vision and
your ability to invest in you. This is practice for the many hurdles you will need to
overcome.
The Crowd
The ability to get funding from angel investors, philanthropists, and friends and family
is largely dependent on who you know. But there is another category of individuals
who might be interested in supporting you: total strangers! Crowdfunding is an increasingly popular source of funding for early-​stage endeavors. Individuals may contribute
small amounts, sometimes in return for a gift or “sample” of your offering, and sometimes not. Some crowdfunding websites specialize in nonprofit endeavors (examples
include JustGiving and GoFundMe) while others are open to both nonprofit and for-​
profit endeavors (examples include Kickstarter and Indiegogo).6 Others have a regional
focus (such as Zoomaal in Arab countries).7 Most of these solicit donations from the
crowd even though the endeavor itself aims to make a profit. Yet, increasingly, there
are crowdfunding websites that offer a financial return for the individuals contributing (such as Republic, Wefunder, and Seed Invest).8 Most crowdfunding websites are
for-​profit. They take a fee from the entrepreneur, usually based on the amount you are
trying to raise.
Crowdfunding can present an excellent opportunity to raise awareness about your
endeavor and to access potential customers. It is also very time-​consuming and you should
be prepared to accompany it with a social media campaign.
Funding Vehicles
The funds allocated by the organizations and individuals noted above can come in various
forms, which we refer to as funding vehicles or social investment vehicles (Figure 7.3).
Gifts
The first type of funding vehicle is gifts, a technical category that includes multiple subcategories of relevance to social entrepreneurs. These are funding vehicles that do not
require financial return. They are given for the purpose of creating social outcomes. The
different subcategories differ mostly in the degree to which the giver requires reporting
and monitoring. Gifts and donations can be given by individuals or institutions; grants
and awards are more commonly made by institutions. Next, we will describe the different
funding vehicles in this category. Later in the chapter, we will go into the nuances of
grantmaking and the way it has evolved over the years.
Donations
Donations and gifts are sums of money or nonmonetary support given by individuals
or organizations to support a cause. These do not require a financial return, only a social
170
• Funder owns
part of your
venture
• Funder will
likely expect
an “exit” at
which point
they can
reclaim their
money and
some return
Require only social returns
Hybrid
Loans
SIBs
Donations
Grants
Awards
• Sum of
money that
must be
returned over
time
• Usually
carries
interest but
with minimal
restrictions on
how it’s spent
• Social impact
bonds are
guaranteed by
a government
or other third
party
• Financial
investors are
repaid if a
social
outcome is
achieved
• Funds are
given to an
organization,
program, or
initiative
• Can include
conditions
and
restrictions
but minimal
reporting
• Funds are
given toward
specific goal
• Often begins
with a call for
proposals
• Requires
grantees to
report on
spending and
outcomes
• Awards are
given at the
end of a
structured
process,
usually after
something has
been achieved
• Carry fewer
restrictions
and
commitments
Figure 7.3 Social investment vehicles
newgenrtpdf
Equity
170 Funding Your Endeavor
Require financial returns
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Funding Your Endeavor 171
impact. They can be given in small amounts, as in crowdfunding, or in larger amounts
from individual philanthropists or foundations.
Gifts can be given to both for-​profit and nonprofit organizations. Donations are gifts
given to nonprofit organizations; these are tax-​deductible. Donations can be given on
a one-​time or a repeat basis. Usually, donations are given to nonprofit organizations,
initiatives, or people who are implementing a specific program, service, or awareness
campaign. In return, the social entrepreneur often reports back to donors, but this is not
always required.The word “donation” is often used to describe a hands-​off approach –​the
donor provides the money but does not get involved in implementation. When an institution provides money in a more structured way, and attaches requirements to it, we then
refer to it as a grant.
Grants
A grant is a sum of money given to an individual or organization for the purpose of
achieving a specific aim. Grants are commonly given by foundations and other nonprofits,
multilateral organizations, governments, and aid agencies, and they may be given for
R&D, implementation of proposed programs, or evaluation and dissemination of information. Grants usually involve a competitive application process, which can vary in length
and intensity depending on the funding institution. Usually, this process starts with a call
for proposals, which is circulated and advertised via mailing lists, development websites,
subject-​specific journals, social media, and other networks. Calls for proposals can be
open-​ended (this is sometimes referred to as a rolling application) or have a fixed end
date. Many grantmaking institutions issue a call for proposals once a year and have a fixed
review schedule similar to a university application process. Others have a less regular
schedule, depending on their own funding or organizational strategy.
The grant application process usually requires the applicant to present a budget detailing
what the funds will be used for, with a corresponding time line. Indicators for measuring
the outputs of budgeted activities are commonly required as well. Grants usually target
subject-​specific program areas (e.g. health, environment, education, financial inclusion,
gender equity), but some programs are aimed at fostering innovation and entrepreneurship across topics. The most common duration of a grant is between one and five years,
but shorter grants and multiyear grants are also common.
The pros and cons of a grant depends on the grantmaking organization. Some
organizations, especially government agencies and multilateral agencies, require intensive
reporting. A commonly heard complaint among social entrepreneurs is that reporting can
require more time than the actual work! Combined with the lengthy application process
and staggered time lines of various grantmaking organizations, social entrepreneurs can
find this overwhelming and counterproductive. However, many grantmaking institutions
also provide social entrepreneurs with technical guidance and expertise, and these can be
a huge advantage. In addition, institutions often seek a long-​term relationship with the
grantee.
Awards
An award is another type of gift. This lies somewhere between donations and grants –​
on the one hand they carry fewer restrictions and commitments and, on the other hand,
they are received at the end of a structured assessment process. Awards are usually given
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172 Funding Your Endeavor
at the end of social entrepreneurship competitions or in association with specific events.
They can either be a ceremonial acknowledgment or a financial award and are most often
given as a one-​time gift. Awards can also come in the form of free consulting; this is commonly found in social entrepreneurship contests, which are held by universities and other
organizations.
Awards are similar to donations in that they are less likely to be associated with specific budgets, targets, and time lines. However, they are similar to grants in that they are
awarded as the result of a competitive assessment –​whether of early-​stage ideas or of
later-​stage developments that have shown results.
Loans
A loan is a sum of money that is given to an individual or organization and must be
returned. Loans usually carry interest, which means that in addition to repaying the original amount (also known as the original capital), you need to pay an amount in the form
of a percentage. The percentage can range widely. Sometimes, it is matched to the rate of
inflation so that the lender is neither gaining nor losing money. This is often referred to
as a low-​interest loan.
In most cases, the interest rate is larger than the inflation rate, because the lending institution or individual is relying on this loan to generate an income. However, funders specializing in social ventures usually minimize the interest, because they are wary of putting
you at a financial disadvantage that may lessen your social impact. Lenders specializing in
the nonprofit sector may even issue a zero-​interest loan, which only requires the original
capital to be returned.
Many social entrepreneurs have a fear of loans, and certain cultures are more
debt-averse than others.9 To qualify for a loan, you must demonstrate to the creditor (the
individual or institution issuing the loan) that you can generate enough revenue to pay
back your debt (the amount you owe). Irrespective of your venture’s success, you are
obliged to return the loan. Even so, a loan can give you more freedom than other forms
of social investment, such as grants or equity.You are accountable for paying it back, but
you are also usually free to use it as you see fit to achieve your social mission.
Equity
Equity refers to a financing mechanism whereby the funder owns a part of your
venture –​often proportional to the amount of money they have given you. Equity
investors are referred to as shareholders. A share simply refers to a part of the company,
and a shareholder is someone who holds a part of the company. Types of funders most
commonly associated with equity investment include venture capitalists, private equity
firms, and individual investors, like angel investors or friends and family. Regardless of
funder, working with equity involves similar core processes.
First, the venture is valuated.10 This means an estimate is made of the financial value
of the proposition you are offering.11 How much is your venture financially worth? This
is calculated according to projected future revenues. Let’s say your venture is valuated at
$1 million. If a funder has invested $10,000 in your startup, then they own 1 percent.
Next, a term sheet is drawn up to describe the agreement between the funding and
funded parties.This is similar to a grant agreement and a loan agreement.The terms of the
agreement specify how long the equity is initially held (e.g. three to five years, while the
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Funding Your Endeavor 173
venture is growing). After this initial period, the funder may have the option to hold on
to their share if they desire to maintain ownership. They will then share the profits in the
form of dividends. If the entrepreneur is able to buy back their share, then the funder may
alternately cash out. In this scenario, the entrepreneur pays the same percentage value of
the company’s current worth at the time, which may or may not equal the initially forecasted value. If the company grows more than was projected, the funder will take away a
larger financial sum than they invested, and if the company grows less than projected, the
funder could end up losing money.The funder also has the option of selling to an investor
other than the social entrepreneur.
Capitalization tables are used to lay out all the shareholders in your business and
track the value assigned to the shares they own.12 As you raise more money from equity
investors in future rounds of fundraising and growth, each investor’s equity will decrease,
or dilute, in proportion to the overall amount raised. Yours will, too! A key concern
of entrepreneurs when evaluating potential investors (such as venture capital funds,
incubators, and accelerators, described below) is the amount of equity they need to give
away. The less equity owned by the founders, the less decision-​making power they retain.
It’s a choice that entrepreneurs need to make between control and growth. This is one
of the many reasons why it’s so important to evaluate potential investors according to
alignment of values –​the future of your endeavor could be in their hands.
The most striking difference between loans and equity is that loans must be repaid,
regardless of the outcome. Whether the venture succeeds or not, the entrepreneur is held
liable for the loan and the funder will get the money back. For equity, however, the funder
is not guaranteed to get the money back. The funder simply owns a part of the venture.
If the venture succeeds, the funder has the option of selling this ownership for cash; if it
does not, then there is no financial return. Another characteristic of equity is that ownership often confers decision-​making power (unless this is waived). Of course, in the previous example, 1 percent ownership does not give much power to the individual funder.
But in many cases, the group of individuals investing in a company can take up a large
percentage of ownership, and they can influence outcomes and decisions, even replacing
executive team members in some cases. Also, some equity investors may impose stringent
criteria as a condition of involvement. Therefore, some entrepreneurs would rather risk a
loan than share ownership with funders. Others might prefer the support of equity versus
the liability of loans. It’s also worth mentioning convertible debt, a type of loan (e.g. from
an angel investor) that gets converted into equity after you raise future rounds of funding
(e.g. from a venture capital firm).13
Over the course of your endeavor’s life cycle, certain funding vehicles may feel like a
better fit than others. Some entrepreneurs prefer to seek grants, awards, or loans in the
early stages while developing proof of concept, to avoid diluting their percent ownership. Some entrepreneurs might seek venture capital funding later on in their journeys;
they will have to give up equity to the venture capital firm at this point. Each round
of investing means that a larger percent of your company is owned by others. These
trade-​offs can be tricky to navigate. On the one hand, you can only grow so much
without others. On the other hand, it’s natural for the founding team to feel hesitancy and fear about losing decision-​making power and financial value to others. As
always, these decisions are best made in collaboration with your team, board, and other
stakeholders. Weigh the ownership you will be losing against the benefits you will be
gaining, including the capital itself as well as investors’ nonfinancial contributions that
have the potential to help you grow.
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174 Funding Your Endeavor
Bonds
Social impact bonds (SIBs) can be used to fund large-​scale endeavors by remunerating social entrepreneurs for social outcomes. SIBs are a vehicle for achieving tangible
outcomes –​for example, improved enrollment rates, improved employment rates, and
improved health outcomes. Governments, corporations, foundations, and others can target
social challenges through SIBs. If the social entrepreneur achieves results, then the investor
is reimbursed and receives increasing interest according to success. This has been used by
countries all over the world to tackle higher education dropout rates, chronic diseases, and
many other challenges. SIBs require extensive efforts to measure results.
SIBs are typically applied to social entrepreneurship if the endeavor has been proven to
create long-​term outcomes that are desired by government and which will result in cost
savings for the government. While the government cannot front the money needed to
fund the endeavor, it can partner with a private-​sector institution that provides the funds.
The social entrepreneur uses those funds to implement their offering and create the long-​
term outcomes. After a set amount of time, when the cost savings begin to emerge, the
government can pay back the funder. This simplified scenario first came to life in 2010
in the UK, and it effectively means that social entrepreneurs can create their own balance
sheets by monetizing social improvements.14
Evolution of Social Investment
Historically, the nonprofit and for-​
profit worlds operated separately. Broadly
speaking: foundations, charities, governments, and aid agencies supported nonprofits; venture capitalists, banks, private equity firms, and private investors supported for-​profits.
With the growth of social entrepreneurship and hybrid organizations that create both
impact and revenue, the “missing middle” has begun to take form. This has entailed both
the creation of new forms of investing, such as impact investing, and the evolution of traditional forms of investing like philanthropy and venture capital.
Trends in Philanthropy
Philanthropists are individuals who donate large sums of money to help create something that didn’t exist before, or to sustain or grow an existing venture or initiative.
Philanthropists can support new movements or institutions, like universities, museums,
theaters, and hospitals. Or they can support a person or group of people –​such as artists,
scientists, activists, or social entrepreneurs –​in their work. As mentioned previously, many
philanthropists donate through a foundation and others donate individually to different
causes. While philanthropists are committed to social change and not money, they may
sometimes ask you for a financial return on their investment so that they can invest in
other social entrepreneurs. Over time, philanthropy itself has developed a spectrum that
encompasses traditional program funding, strategic and catalytic philanthropy, and venture
philanthropy that mimics private-​sector approaches.
“Strategic philanthropy” refers to practicing philanthropy for predetermined goals, in
which the philanthropist actively ensures that milestones toward those goals are achieved.
Strategic philanthropists work toward specific social outcomes and invest money to
achieve those outcomes. We use the word “invest” here to demonstrate that strategic
philanthropists evaluate ROI in terms of social outcomes produced. Many foundations
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Funding Your Endeavor 175
practice strategic philanthropy, raising funds from individual or institutional investors and
channeling those funds to social ventures. Foundations also often provide nonfinancial
resources, such as technical support, to help recipients produce a larger impact. Grants are
the primary funding vehicle in strategic philanthropy. Recipients are required to produce
social outcomes, but they are not always required to generate financial revenue, so strategic philanthropy can be a helpful funding source for nonprofits.
Along those same lines, “catalytic philanthropy” refers to an approach whereby the
philanthropic organization takes responsibility for the outcomes. It uses all available tools
to mobilize others and generate actionable knowledge to develop the field.15 Among
the many foundations practicing catalytic philanthropy are the Bill & Melinda Gates
Foundation and the Rockefeller Foundation.16
“Venture philanthropy” refers to the practice of providing hands-​on financial and
nonfinancial support over a long-​term investment, with predefined exit criteria that
the organization must achieve before the investor withdraws support. Venture philanthropy organizations maintain a portfolio of investments –​social ventures receiving their
support –​and evaluate the impact of their portfolio, reporting back to their investors.
Investors can include individual philanthropists or government, multilateral, and private
institutions. Most venture philanthropy organizations require that their investees generate
a financial return; however, the return is intended for the investee to grow, not for the
venture philanthropy organization to generate a financial ROI. Examples of venture philanthropy organizations include New Profit in the US, Social Ventures Australia, Alfanar
venture philanthropy in Arab countries, and Draper Richards Kaplan Foundation worldwide.17 Numerous venture philanthropy organizations based in the UK and Europe can
also be found through the European Venture Philanthropy Association.18 Similar networks
include The Asian Venture Philanthropy Network and the African Venture Philanthropy
Alliance.19 Depending on the organization, funding vehicles used in venture philanthropy
can include grants, loans, and equity.
Beyond the different types of philanthropy, new approaches are emerging with funders
coming together to find ways of supporting systems change, rather than supporting one
venture or one organization at a time. Four of the leading organizations supporting social
entrepreneurs (Ashoka, Echoing Green, Schwab Foundation for Social Entrepreneurship,
and the Skoll foundations) came together to support the formation of Catalyst 2030, a
global movement of social entrepreneurs and social innovators that we’ll read about in
Chapter 10. In Chapter 5, we learned about Co-​Impact, a global philanthropic collaborative for systems change that funds locally rooted coalitions working to achieve impact
at scale in the Global South (see Sidebar 7.1). Over 40 funders from 16 countries came
together to form Co-Impact’s Foundational Fund, which provides initial design grants
followed by systems change grants.
Sidebar 7.1 Co-​Impact (www.co-​imp​act.org)
Founded in 2017 in London, England, as a philanthropic organization
Goal: To improve the lives of millions by advancing education, improving people’s
health, and providing economic opportunity
What they do: Co-​Impact offers larger, longer-​term, and more flexible grants focused
on long-​term goals and specific outcomes leading to systems-​level change.
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How it works: Co-​Impact invests in systems change efforts in low-​and middle-​
income countries in the Global South that are working to address underlying
conditions which perpetuate social inequities. The organization’s approach
focuses on ways to address market failures and better serve the poor through
market development and improving underlying government and market
systems. Co-​Impact collaborates with partners in civil society, government, and
philanthropy to make large, long-​term, and flexible grants that go beyond singular inventions and allow partners to focus on deep systemic change in the
fields of education, health, and economic opportunity.
Trends in Impact Investing
Impact investors require both financial and social returns on their investment. While
venture philanthropists may invest in nonprofit or for-​profit endeavors, impact investors
invest primarily in for-​profit endeavors. This can take the form of debt or equity. Most
impact investors operate in a for-​profit capacity, distributing financial return to their
investors in addition to reporting on their social impact. Private impact investing firms
are sprouting up all over the world: individuals and institutions pool their money for both
financial gain and social impact. Some focus on specific topics, while others focus on specific parts of the world.
Impact investing is an approach that can be practiced by a range of organizations,
including venture capital funds and foundations. For example, DBL Partners (DBL
stands for “double bottom line”) is a venture capital fund that was formed to enable
social and environmental improvement along with economic growth, with a focus on
environmental sustainability, IT, and healthcare (see Sidebar 7.2).VOX Capital is a venture capital fund that was formed to support early-​stage capital to entrepreneurs enhancing the lives of low-​income customers in Brazil, through both funding and managerial
support.20
There are some impact investors who operate as nonprofit organizations. They
leverage private capital for social impact and return financial gains to investors, then
reinvest any remaining profits into social impact rather than dividend distribution. Some
impact investors are nonprofit organizations that reinvest financial returns into other
organizations without distributing any financial gains to their donors. They refer to this
philanthropic capital as “patient capital.” An example here is Acumen.21 A good place to
read about the wide spectrum of impact investors is GIIN’s website.22
Impact investors are willing to place their money in ventures that may generate less
financial return than commercial averages in favor of generating social and environmental returns. They valuate the total output produced: financial, social, and environmental. Each part of the world uses different terminologies and legal frameworks, but
the core concepts are the same. In Europe, an investment fund qualifies as a European
Social Entrepreneurship Fund if at least 70 percent of its capital is invested in social
businesses.23
One ongoing debate in the impact investing world is whether impact investors can
make or exceed market rates of return or whether impact demands lower financial returns
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by definition. Many impact investors believe it is possible to generate market rates of
return or better by supporting impactful ventures, pointing to their own portfolios as
proof. Others hypothesize that the market can’t solve for many social and environmental
problems; if it could, then these problems wouldn’t exist in the first place. The Impact
Finance Database and reports coming out of the Wharton Social Impact Initiative at the
University of Pennsylvania are good resources to keep your eye on.24 Another resource
is the CASE i3 Initiative on Impact Investing at the Duke University Fuqua School of
Business. Its CASE Smart Impact Capital offers an online repository of tools, templates,
and guided trainings that prepare aspiring social entrepreneurs to raise capital. CASE i3
also includes multiple free podcasts, videos, and publications on its website.25 Another
resource is ImpactAlpha, a subscription-​based newsletter that analyzes the impact investment space.26
Occupying the middle of the social financing spectrum, impact investors include firms
that were created for the sole purpose of pioneering impact investing and supporting
impactful entrepreneurs. It also includes players from the two extremes of the spectrum: traditional capital market players interested in including impact in their portfolios;
and traditional philanthropy players interested in financial returns. As a result, the phrase
“impact investing” can be used by different players to mean different things. For example,
traditional financial institutions that have created impact investing portfolios to satisfy
socially responsible customers use the term very loosely.27 As impact metrics and language
around impact investing evolve and solidify, hopefully capital market participants will
become more stringent and impactful in their criteria.
Some traditionally philanthropic organizations have begun to include impact investing
in their work; this is done in two different ways. The first is through their programs: in
addition to supporting nonprofit organizations implementing social change programs,
they have begun to support for-​profit social entrepreneurs. These is called “program-​
related investment.” So far, this has represented a small part of their overall portfolios,
which may be a good thing. As more funds flow into impact investing from traditional
capital markets as well as from emerging impact investing firms and initiatives, philanthropy is key in supporting initiatives and entrepreneurs that cannot generate attractive
financial returns. Philanthropy can also prepare the pipeline for impact investing by providing seed funding for pilots, proof of concept, and R&D, so that social entrepreneurs
can become investment ready.
The second way that philanthropic organizations are starting to participate in impact
investing is through endowment management. Some foundations have an endowment: a
sum of money that was set aside to fund charitable giving. This sum of money is usually invested in traditional commercial investments that generate large financial returns,
and these financial returns are used to fund the foundation’s charitable programs. Over
time, foundations have realized that the outcomes they produce from charitable programs
are only part of their total footprint. They have the opportunity to create positive or
harmful effects through endowment investments themselves. Thus, some foundations
have begun to allocate part of their endowments to impact investing.This is referred to as
“mission-​related investment.” Another way they improve overall footprint is to screen out
harmful effects when investing their endowments. This is known as “socially responsible
investing” (SRI).
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Sidebar 7.2 DBL Partners (www.dbl.vc)
Founded in 2003 in San Francisco, California, USA
Goal: To invest in and help grow companies that can deliver top-​tier venture capital
returns and enable social, environmental, and economic benefits
What they do: DBL Partners offers venture capital investment to companies that
achieve a “double bottom line” of long-​term financial success and positive
social, environmental, and economic impact.
How it works: DBL uses venture capital to accelerate innovation and nurture outstanding entrepreneurs in a way that positively affects the organization’s social
impact as well as its financial success. The firm operates four investment funds,
totaling over $1 billion in assets under management, focused on the fields of
climate tech, IT, sustainable products and services, and healthcare. DBL has over
40 portfolio companies, including industry leaders such as Tesla, the Farmers
Business Network, Apeel Sciences, and SpaceX. Data from the end of 2020
shows that these portfolio companies employ 50,000+​individuals nationwide,
and that over 50 percent of the portfolio companies had company headquarters and/​or facilities located in low-​or moderate-​income areas at the time of
DBL’s investment.
Trends in Socially Responsible Investing
While impact investing screens for businesses that create positive social and environmental
outcomes, SRI screens out businesses that create negative social and environmental
outcomes. SRI emerged from traditional for-​profit investment firms that wanted to practice social responsibility by excluding from their portfolios companies which generated
harm. They are looking for investments that can generate large financial returns; they also
want to make sure that the companies they’re supporting have policies and practices in
place to reduce their carbon footprint, improve their communities, and provide social
benefits to their employees.
A whole ecosystem of players has evolved over time to support SRI. This ecosystem
includes companies that provide reporting standards for environmental, social, and governance indicators used by established firms. These companies include the Global Reporting
Initiative (GRI) and the Sustainability Accounting Standards Board (SASB). In 2020, a
number of these organizations shared a vision for a unified corporate reporting system
that includes both financial accounting and sustainability disclosure. The companies continue to provide different metrics that can meet the unique needs of diverse corporate
settings, but they are now making sure they complement each other while approaching
messaging and advocacy in a unified manner.28
Trends in Venture Capital
While SRI refers to investment in established firms that generate high profits, venture
capital refers to startup investments that aim for high profit generation. Social entrepreneurship and profit are not mutually exclusive. There have been social entrepreneurs
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who leverage venture capital for systems change. The key is to find a venture capital firm
whose values are aligned with yours.
Most venture capital firms are looking for startups that will be acquired for large sums,
to generate a high financial ROI. Some venture capital firms have been known to pressure
entrepreneurs to make decisions that put them on the path to rapid acquisition. Social
entrepreneurs can actively seek funders who are willing to wait longer for financial return
and understand the unique model and mission of their endeavor.
Venture capital could be a good fit for some environmental technology and healthcare
startups.Technology and software in general are more amenable to venture capital funding
because of the potential to scale rapidly.
An example of a social endeavor that leveraged venture capital funding is Iora Health
(Sidebar 7.3). When founder Rushika Fernandopulle began Iora Health, he considered
both nonprofit and for-​profit options. The organizations for which he was working at
the time, Harvard University and Mass General Brigham (formerly Partners Healthcare),
were both technically classified as nonprofits despite generating billions of dollars in revenue per year. His goal was to transform the US healthcare system by demonstrating that
value-​based care (paying for healthy outcomes among patients) rather than fee for service
(paying for procedures, visits, and diagnostics) could simultaneously create a healthier
population and be more cost-​effective for private insurance companies and government
insurers like Medicare and Medicaid. He felt that doing this required large amounts of
capital, and he decided to seek venture capital. Over the course of 10 years, Iora Health
raised several rounds of venture capital worth hundreds of millions of dollars to fuel
growth. It was eventually acquired by a large-​scale membership-​based primary care practice with centers across the country.
Working with venture capital has its pros and cons. A key pro is that venture capital firms provide large-​scale funding to help entrepreneurs scale rapidly. A key con is
that rapid scale can come at the cost of quality. Some entrepreneurs and their teams are
concerned that accepting venture capital funding changes the quality of the work they
can do and shifts organizational culture. However, Iora Health’s leadership felt that the
only way to shift American healthcare was to reach a large scale.
When considering venture capital funding, make sure to learn more about the firm’s
values and track record, and the type of nonfinancial support they can offer (such as
mentoring and networking).You can do this by talking to other entrepreneurs they have
invested in.
Sidebar 7.3 Iora Health (www.ior​ahea​lth.com)
Founded in 2010 in Boston, Massachusetts, with practices across the US
Goal: To restore humanity to healthcare
What they do: Iora Health provides relationship-​based primary healthcare.
How it works: Iora Health is transforming healthcare, starting with primary
care. Iora created a high-​impact relationship-​based care model that particularly benefits older adults on Medicare. Iora’s approach is threefold: team-​based
care that puts the patient first; an outcome-​focused payment system, based on
care; and technology built around people, not process. A team consisting of a
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provider, a nurse, and a health coach works with each person to set goals and
enable them to become active participants in their own well-​being. Iora identifies organizations that share this vision and, together, they open practices. Iora
believes that high-​quality primary care is the solution for happier, healthier, and
more engaged patients, and leads to lower costs in the long run. In September
2021, Iora Health became a part of One Medical.
The Missing Middle
Despite evolution in the middle of the social investment spectrum, social entrepreneurs
still cite a gap between the need for funding and the amount of funding available from
those who understand the unique needs of social entrepreneurs. Consider Acumen,
a philanthropic organization that invests in for-​profit entrepreneurs. Acumen CEO
and founder Jacqueline Novogratz speaks openly about the difficulty of raising funds
for profit-​generating endeavors from philanthropists. On the flipside, Kickstarter is a
crowdfunding organization that supports creative endeavors. Although it has a for-​profit
model, its founders wanted to create space for its users to innovate for impact. They
experienced difficulty in raising funds from venture capitalists who understood this
mission.
Finding the Right Fit at Different Stages of Your Endeavor
The social investment vehicles and approaches described above are not mutually exclusive. You can combine more than one at the same time, and you can leverage different
approaches at different points in the life cycle of your venture. Awards and donations
might be more helpful during the seed stage of your venture, when you’re prototyping,
testing, and establishing proof of concept. Grants, loans, and equity will come into play
when you want to formally launch your venture. If and when you reach a stage where
you need to invest in growth by opening new sites or expanding existing operations, you
may need to conduct additional funding rounds.
As you grow and your revenue becomes more predictable, investors at the tail end of
the social investing spectrum will become more interested. If you can generate enough
financial return for both your social goals and your investors, then impact investing and
venture capital could be a good fit for you. This is often the case in environmental entrepreneurship, which impacts people in both high-​and low-​resource settings: the volume
and distribution of your challenge enable you to generate significant financial revenues
while implementing your solution, and, to reach those volumes, you need large-​scale
investors. On the other hand, if you can generate enough financial return for your organization to function sustainably but cannot generate profit for yourself or anyone else, then
you are more likely to find support from venture philanthropy. Many social entrepreneurs
may not qualify for venture philanthropy if they employ a business model that relies more
on donations and grants than trading activity; in this case, a foundation employing strategic philanthropy might be your best bet. Depending on where you fall on the social
entrepreneurship spectrum, between traditional charity and traditional commerce, you
will find your match on the social investment spectrum.
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Many social entrepreneurs start closer to traditional charity and inch along the spectrum until they are closer to traditional commerce. Different stages of that journey
might benefit from different social investment approaches. In fact, some venture philanthropy organizations make it part of their job to help you increase your cost recovery;
you could rely largely on grants and donations to start, and by the time the venture
philanthropy organization exits, you might have reached, passed, or approached your
break-even threshold.
What you decide to do with your profits will inform which funders to approach. Many
social entrepreneurs want to focus all their energy, creativity, and resources toward social
outcomes and reinvest profits toward those outcomes. Others feel convinced that profit
will drive scale. There is no right answer. The important thing is to find a social investor
whose mission and approach is aligned with yours and who can support you without
trying to drive you in a different direction.
One thing to keep in mind when evaluating different funders is that it’s not only the
funders who examine and assess you; you also need to examine and assess them. Look for
funders who understand your mission, share your values, and offer you the time and space
to make decisions that drive impact. Also look at the nonfinancial support the funder is
offering. Funders across the spectrum can offer mentoring, networking, and technical
support. Talk to social entrepreneurs who have worked with those funders, finding out
how much time and support they provide in addition to funding.
Nonfinancial Support
While it is important for you to find funders that provide mentoring, networking, and
technical support, you can also look for that help elsewhere. Specialized organizations
exist to provide mentoring, networking, and technical support to social entrepreneurs;
they understand how nonfinancial forms of support help social entrepreneurs succeed.
There are so many resources at your disposal, and part of being a strategic social entrepreneur is going out and mobilizing those resources! In this section, we’ll talk about some
ways to surround yourself with the right people and resources to help pave your path to
success.
Finding Your Tribe
Being an entrepreneur can be lonely and overwhelming. While you may be surrounded
by people, recruiting supporters and co-​creating with team members, there are also times
when your mind is racing at the sheer burden of everything you have taken on. Knowing
that others are in the same boat can help. Thinking beyond your main team and vested
stakeholders, you might find comfort in realizing that your “tribe” is much bigger. Your
tribe includes all the social entrepreneurs out there, working just as hard to make a difference. Finding them will empower you.29
This is critical not just for your well-​being. There is also a wealth of tips, knowledge,
expertise, experience, and tools that you can exchange with others. By bouncing ideas off
someone or attending training workshops, you can learn about tried and tested methods,
cases, and where to access certain resources.You might even get discounts on services by
joining certain networks. Below, we will review some of these networks and resources,
which can be as valuable to you as funding itself (Figure 7.4).
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Ways to build your network
and find your tribe:
●
●
●
●
●
●
●
Coworking spaces
Incubators
Accelerators
Events
Boot camps
Fellowships
Mentorship and
coaching
Figure 7.4 Sources of nonfinancial support
Mentors and Coaches
Finding your tribe does not just mean finding your peers. People who have experienced
and transcended your situation can be a huge source of support and guidance. A mentor
is someone you develop a long-​term relationship with, who can offer you advice and
connections and who simply cares to see you succeed. Mentorship is one of the most
valuable resources you can access, even before you seek funding.
Mentorship feels natural in a university or workplace setting. You may also find a
mentor through formal channels. If you are taking a course in social entrepreneurship,
for example, then chances are your university also offers resources to students starting
their own social endeavors. Your mentor can be a professor, an alumnae, or a volunteer in a specialized network. Mentorship networks are often associated with universities, investor groups, events, coworking spaces, incubators and accelerators, and other
training programs. However, you don’t need to restrict yourself to social entrepreneurship
mentorship networks to find the right match for you.
Coaches are similar to mentors, but they are focused on building a specific competency in the short term. Coaches might help you work on tasks specific to a competition,
for example. Coaches may be accessible through the entrepreneurship spaces described
below, or you can hire a coach to work on specific skill sets.
Coworking Spaces
Many entrepreneurs work from home, coffee shops, libraries, or other places where they
can save on office rent and keep operations lean. Others use shared offices or find a corporate sponsor or other organization to donate space. Yet another option is coworking
space. This is different from a shared office because, in many cases, a coworking space is set
up specifically to support entrepreneurs and their startups, providing low-​cost utilities and
facilities as well as other services that members can benefit from. Joining a coworking space
can enhance your visibility and offer you access to a network of entrepreneurs and potential investors. Many coworking spaces are also affiliated with incubators and accelerators,
which we will learn more about below. Most are designed with a vision of fostering creativity, inspiration, connection, and community. Joining a coworking space can sometimes
be a low-​cost, high-​yield way of accessing tools and services that foster innovation while,
at the same time, avoiding the isolation that can come from being an entrepreneur.
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Incubators
Incubators are shared physical or virtual spaces where startup entrepreneurs can grow
their ideas into reality. Most incubators provide some combination of space, supplies,
technical support, mentorship, and funding. Each entrepreneur enters and exits the incubator at their own pace; the environment is full of innovation at its various stages. Most
incubators have an application process, and they include mentorship and sometimes
funding in return for equity.
Well-​known incubators exist all over the world, representing various sectors. A few
examples of social entrepreneurship incubators are the Halcyon Incubator in Washington,
DC, Enviu in the Netherlands, the Social Venture Incubator at the University of
Cambridge in the UK, and the Social Impact Lab in Germany.30 Be sure to read the fine
print to ensure an incubator fits your current and upcoming needs.
Accelerators
Accelerators are more like taking a class, in that they usually have a predefined period in
which everyone enters and exits the program. While incubators may host a wide range
of startups at various stages, accelerators usually have a predefined program that requires
most participants to fit stringent criteria. The goal of an accelerator is to rapidly grow an
existing startup, rather than gradually nurturing it over time like an incubator. Accelerators
often offer investment capital or at least provide the social entrepreneur with access to
investors through networking, pitching, and showcasing opportunities.
Some programs offer a variety of choices, ranging from accelerator programs,“excubator
programs” (nonresident incubation), mentorship programs, and boot camps. Examples are
the Global Development Incubator, the Unreasonable Group, Common Future, the Y
Combinator, and the Acumen Academy Accelerators.31 Many incubators and accelerators
spin out of universities, and chances are you’ll have the opportunity to participate in one
associated with your university. An early-​stage example is the Monash SEED Incubator in
Australia, and a later-​stage example is the Agora Acceleration Program, initially established
in Nicaragua and now operating throughout Latin America.32
Boot Camps
Boot camps are often provided by accelerators, but they aren’t necessarily tied to one.
They are short, intense training programs that help entrepreneurs develop their ideas and
prototypes. Social entrepreneurship boot camps are available at many universities and
through other networks, often open to members of the local or even global community.
One example is Johns Hopkins University’s Impact Bootcamp.33 You can also attend boot
camps that do not specialize in social purpose organizations, and if you are looking for a
creative, rapid-​fire environment, try the MIT boot camps.34
Fellowships
Fellowships combine several of the services described above: they gather a cohort of
social entrepreneurs, offer mentorship and in most cases funding, help accelerate and scale
impact, and incubate new ideas. Fellowships are often suited to slightly more advanced
ideas, which have already demonstrated impact. Some of the organizations in Sidebar I.3A
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have leading social entrepreneurship fellowship programs. Most of the listed institutions
were formed to support social entrepreneurs, and fellowship programs often form the
cornerstone of their work. But don’t stop there –​universities and governments also offer
fellowship programs, so make sure to check for fellowships near you. Fellowships usually
involve a stipend along with visibility, networking opportunities, and other nonfinancial
support.
Events
Entrepreneurship events and conferences are a great place to find mentors, investors, and
potential team members. Events don’t need to specialize in social entrepreneurship; general entrepreneurship events often cover social impact topics, and even if not, you can still
find like-​minded people attending them.
University-​based conferences can be found in most parts of the world and are easy
to identify via online search. Find out whether there is a social entrepreneurship interest
group at your university or workplace. If there isn’t, you might just be the best person
to start one! Also plentiful are non-​university-​based conferences, such as the Social
Enterprise World Forum, the Global Social Business Summit, the Skoll World Forum,
the Clinton Global Initiative, the SOCAP conference, the PopTech conference, the Net
Impact conference, and many others. Many of the institutions listed in Sidebar I.3A also
hold events and conferences.
Events other than conferences can also be found in most major cities and even in unexpected places.You will find business planning seminars in coworking spaces, pitch contests
in coffee shops, real-​time prototyping events in maker spaces, and hackathons hosted by
various businesses, universities, nonprofits, and other conveners. Global Entrepreneurship
Week35 takes place each year in more than 140 countries; you can find many of your geographic region’s innovation and entrepreneurship players there. Even if you are not able
to attend in person, check the website of the event nearest you and read about the various
organizers, speakers, participants, and partner organizations. You may want to reach out
to some of these participants on your own –​no event needed. Conduct an informational
interview, find out about their application process, and create a dashboard for yourself to
determine the best timing to proceed in applying.
Other Networks
Other organizations contribute to the social entrepreneurship ecosystem by building
networks that bring people together. One example is the Start Up Europe Club
(startupeuropeclub.eu), while alumni entrepreneurship networks are common to various
universities. Private-​sector partners have been known to come together to create spaces
that foster social entrepreneurship. One example is PLUS, a collaborative space for social
entrepreneurship in Indonesia.36 Angel networks and other investor networks will also be
an important potential resource for you.
Advisory Board
Now may be a great time to assemble an advisory board. Ever since you started having
conversations with potential customers, competitors, and collaborators in Chapter 4, you
have been building relationships with people who believe in your mission. Are there any
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individuals who stood out as particularly knowledgeable, experienced, and supportive?
You can invite them to your venture by creating an advisory board (sometimes called
an advisory committee). This is a group of individuals who provide support to founders
through regular meetings and follow-​up. It is different from a board of trustees, which has
legal responsibilities that we’ll cover in the next chapter. Serving on an advisory board or
committee is a less heavy lift than serving on a board of trustees. It’s a good way to get
people involved; they might either support you for a short period of time and move on,
or go on to become a member of your board of trustees in the future, if you form one
(more in the next chapter). Members can meet with you one-​on-​one or you can meet as
a group. They can offer advice and networking. Having an advisory board or committee
can also signal to potential funders that you have been vetted and supported by others.
A Word of Caution
As you start to build momentum, you’ll notice how easy it is to get carried away by the
entrepreneurship scene. While the moral and technical support can be extremely helpful,
it’s also easy to lose touch with the reality of your end users and the world they live in.
Stay connected to the community you began this journey with; make sure your mental
bandwidth, energy, and thoughts are with them, not with the hype around you. Success is
not about you. It is tangible progress toward the social impact you set out to achieve, so
stay focused on your mission and your work.
Creating Your Resource Dashboard
Before you dive in, let’s make sure you have a tool for managing all this information.With
the different available resources, ways to raise money, sources of money, funding vehicles,
and investment approaches, it is easy to not know where to start.Take some time up front
to create a resource dashboard. This is a way to organize the resources at your fingertips,
to make sure you are approaching them in a well-​thought-​out and strategic manner.You
can keep populating it as you come across new resources in the future.
Your time line for tapping into specific resources should be based on your venture’s
stage of growth and level of maturity. For example, you may want to focus more on
nonfinancial support before you approach funders. You may want to flag certain people
to contact when you are ready to make use of their expertise.You may also want to circle
back to certain people you have already spoken with, to keep them posted as you proceed.
Timing is everything: don’t bombard people with emails or meeting requests, but make
sure you stay on their radar with timely updates to keep them engaged (even once a year).
Remember, you are in this for the long haul.
It is important to make the most use of your resources, but also to know how and
when to do so. This strategic thinking is important when meeting with potential funders.
While it’s crucial to obtain funding before you’re self-​sufficient, you also don’t want to
approach prospective funders before you’re ready for your next stage of growth –​or at
least have information about what the next stage(s) will entail and when they will happen.
You get to make only one first impression.
Your dashboard may look something like the sample template in Figure 7.5. The
different tabs contain information on resources available to you for your proof of concept
stage, for when you launch your venture, and for your later growth stages. This way,
when you come across resources available to mature social ventures, you can file away
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1. Proof of concept
2. Launch
3. Growth
Expertise needed
People to talk to
Funding needed
Prospective funders
Targets for each stage
Tools and resources for each target
What does your offering look like after each stage?
Figure 7.5 Resource dashboard template
the information for later. Always populate the dashboard in a needs-​based manner. Write
down your venture’s needs first. Then find the resources to meet those needs.37
In the funding world, the three stages represented in Figure 7.5’s tabs are often referred
to as: the seed funding or proof of concept stage (which includes developing, iterating,
and piloting); the series A or launch stage; and the series B or growth stage. Different
investors specialize in different stages of maturity, so using a resource dashboard can help
you track sources of funding you qualify for at each stage.You can either use this template
or create your own, but in either case, it’s crucial to keep track of all resources you discover (whether people, events, deadlines, sources of expertise, or sources of funding) and
to organize your time line to make the best use of resources at the optimal time.
Next Steps
The funding approaches available to you depend on your business plan, your end goals,
and how you intend to get there.Whatever your model, you will find the right funding fit.
Be wary of changing your model to become the right fit for funders –​you’ve invested a
lot of time, resources, and work to find the best business model to reach the desired social
outcome. Navigating the social investing landscape can feel overwhelming, but the surest
way to maintain integrity is to take a needs-​based approach as outlined in your resource
dashboard. Most important, make your decisions with your team, advisory board, and
other stakeholders.
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How you formally set up and register your social venture will also depend on your
business model, which in turn can affect the sources and types of funding you’re eligible
for. In the next chapter, we’ll examine different options for formalizing your endeavor,
whether within an existing organization or by registering a new organization.
Chapter Assignment
1. Create your own resource dashboard, either using the template in Figure 7.5 or
another template. A simple Excel sheet might be the most handy. Start by populating
it with the nonfinancial resources you’ve explored. Next, add the funding sources,
noting the different types of funding each source provides.Which resources are available to you right now? Which will you be eligible for in the years after launching,
before breaking even?
2. Share your results with your team and advisors. Are they familiar with any of these
sources, vehicles, or approaches? Do they know additional ones you can add?
3. According to your financial projections, do you expect enough financial return to
qualify for social investors who require both SROI and financial ROI?
4. Do any of the funding sources, vehicles, or approaches specify certain requirements
or restrictions that might affect your legal registration options?
5. Optional: Conduct informational interviews with potential funders, in person or virtually. This will help you determine whether their approach and requirements are a
good fit for you and how you might strengthen your funding qualifications.
Notes
1 See more at Mercy Corps’s website: www.mer​cyco​r ps.org
2 See more at Oxfam’s website: www.oxfam.org
3 For information on funding by UK foundations, see: Pharoah, C., & Bryant, L. (2012). Global
grant-​making:A review of UK foundations’ funding for international development. Nuffield Foundation.
www.nuf​fi el​dfou​ndat​ion.org/​about/​publi​cati​ons/​glo​bal-​g rant-​mak​ing-​a-​rev​iew-​of-​uk-​foun​
dati​ons-​fund​ing-​for-​intern​atio​nal-​deve​lopm​ent
4 See: www.cof.org/​page/​commun​ity-​fou​ndat​ion-​loca​tor
5 The Doonie Fund –​www.thedoo​nie.fund; Genius Guild –​www.geni​usgu​ild.co
6 JustGiving –​ https://​jus​tgiv​ing.com; GoFundMe –​www.gofun​dme.com; Kickstarter –​www.
kick​star​ter.com; Indiegogo –​www.indieg​ogo.com
7 Zoomaal –​ https://​zoom​aal.com
8 Republic –​ https://​repub​lic.com; Wefunder –​ https://​wefun​der.com; Seed Invest –​www.see​
dinv​est.com
9 Chahine, T., & Farhat, Z. (2015, January 16). Fueling financial innovation in the Middle East.
Stanford Social Innovation Review. https://​ssir.org/​artic​les/​entry/​fueling_​financial_​in​nova​tion​_​
in_​the_​midd​le_​e​ast
10 A recommended resource on valuation is: Ewing Marion Kauffman Foundation. (2007). The
entrepreneur’s guide to high growth. www.ange​lcap​ital​asso​ciat​ion.org/​data/​Docume​nts/​
Resour​ces/​AngelC​apit​alEd​ucat​ion/​ACEF_​-​_​Valu​ing_​Pre-​revenu​e_​Co​mpan​ies.pdf
11 A few methods for valuation of startups are described here: Payne, B., & Angel Capital
Association. (2013, May 29). Methods for valuation of seed stage startup companies. Angel
Capital Association. www.ange​lcap​ital​asso​ciat​ion.org/​blog/​meth​ods-​for-​valuat​ion-​of-​seed-​
stage-​star​tup-​compan​ies/​
12 My students love this blog post, which walks a reader through the use of capitalization
tables: Hyde Park Angels. (2015, September 15). How to read and understand a cap table: The
18
188 Funding Your Endeavor
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
29
30
31
32
33
ultimate shorthand guide. https://​med​ium.com/​hyde-​park-​ang​els/​how-​to-​read-​and-​und​erst​
and-​a-​cap-​table-​f062d​db34​24e
A more detailed and easy-​to-​read explanation can be found at: Shuster, M. (2010, September
30). Is convertible debt prefereable to equity? Both Sides of the Table. https://​both​side​soft​heta​ble.
com/​is-​conv​erti​ble-​debt-​pre​fera​ble-​to-​equ​ity-​1103a​b32d​091
As explained by Sir Ronald Cohen, Chairperson of the Global Steering Group for Impact
Investment. See Ron’s books at: sirronaldcohen.org/​books
Kramer, M. (nd). Catalytic philanthropy. FSG. www.fsg.org/​publi​cati​ons/​cataly​tic-​phila​
nthr​opy
See: Gates, B. (2014, March 27). Catalytic philanthropy: Innovating where markets won’t and
governments can’t. GatesNotes. www.gat​esno​tes.com/​About-​Bill-​Gates/​Cataly​tic-​Phila​nthr​
opy-​Inn​ovat​ing-​Where-​Mark​ets-​Wont
New Profit –​www.newpro​fit.org; Social Ventures Australia –​www.soc​ialv​entu​res.com.au;
Alfanar –​ www.alfa​nar.org; Draper Richards Kaplan Foundation –​www.drkfou​ndat​ion.org
See more on the European Venture Philanthropy Association at: www.evpa.ngo
Asian Venture Philanthropy Network –​https://​avpn.asia; African Venture Philanthropy
Alliance –​ https://​avpa.afr​ica
See VOX Capital’s website: http://​vox​capi​tal.com.br
Find out about Acumen’s approach at: www.acu​men.org/​appro​ach
The website is available at: https://​.theg​iin.org
European Commission. (2011, December 7). European Social Entrepreneurship Funds –​frequently asked questions. https://​ec.eur​opa.eu/​com​miss​ion/​pres​scor​ner/​det​ail/​de/​MEMO​_​
11_​881
The Impact Finance Database is available at: https://​socia​limp​act.whar​ton.upenn.edu/​resea​
rch-​repo​rts/​imp​act-​fina​nce-​datab​ase/​
See the CASE i3 website: https://​sites.duke.edu/​cas​ei3/​
See the ImpactAlpha website: https://​impa​ctal​pha.com
For example, companies listed in their portfolios may include oil and gas companies (selected
for their sustainable practices), leading electronics manufacturers (selected for their ethical employee standards), and leading clothing retailers (selected under the “health” category
because they sell athletic gear).
See: CDP, CDSB, GRI, IIRC, & SASB (2020). Statement of intent to work together toward
comprehensive corporate reporting. Summary of alignment discussions among leading sustainability and integrated reporting organizations CDP, CDSB, GRI, IIRC and SASB. Facilitated
by the Impact Management Project,World Economic Forum and Deloitte. Available for download at: www.inte​grat​edre​port​ing.org and https://​impa​ctma​nage​ment​proj​ect.com
A great reference on this notion is: Robinson, K. (2008). The element: How finding your passion
changes everything.Viking, Chapter 5.
See details at: Halcyon Incubator –​www.halcy​onho​use.org/​progr​ams/​halc​yon-​incuba​tor/​;
Enviu –​ https://​enviu.org/​; Social Venture Incubator –​www.jbs.cam.ac.uk/​facu​lty-​resea​rch/​
cent​res/​soc​ial-​inn​ovat​ion/​cambri​dge-​soc​ial-​ventu​res/​soc​ial-​vent​ure-​incuba​tor; Social Impact
Labs –​ https://​socia​limp​act.eu/​labs
See details at: Global Development Incubator –​https://​glo​bald​evin​cuba​tor.org; Unreasonable
Group –​ https://​unreas​onab​legr​oup.com; Common Future –​www.commo​nfut​ure.co; Y
Combinator –​ www.ycom​bina​tor.com; Acumen Academy Accelerators –​ https://​acumen​acad​
emy.org/​accel​erat​ors
See more at: Monash SEED Incubator –​www.mon​ashs​eed.org/​incuba​tor; Agora Acceleration
Program –​ https://​agora2​030.org/​our-​work/​accel​erat​ion-​prog​ram/​
See more about Johns Hopkins Impact Bootcamp at: https://​ventu​res.jhu.edu/​progr​amsservi​ces/​soc​ial-​inn​ovat​ion-​lab/​imp​act-​bootc​amp/​
189
Funding Your Endeavor 189
34
35
36
37
See MIT Bootcamps at: http://​bootca​mps.mit.edu
Find out about Global Entrepreneurship Week at: www.genglo​bal.org/​gew
See more on Platform Usaha Sosial at: https://​usah​asos​ial.com
CASE’s Smart Impact Capital is a valuable repository for searching for resources, including
links to funding databases as well as templates to track resources, prepare your pitch, and other
steps of your journey. See more at: https://​case​smar​timp​act.com/​capi​tal
190
8Structuring as an Organization
Chapter Overview
In this chapter, you will learn how to organize and structure the resources required
for institutionalizing your endeavor. We will cover:
•
•
•
•
•
People (founding team and other roles, culture)
Processes (operations, policies and procedures, manuals)
Governance (bylaws, board)
Legal structure
Considerations for growth
This chapter will focus on how to build infrastructure around your endeavor, to be able
to grow. Once you’ve piloted your solution and are ready to roll it out and launch, you’ll
need to make sure that your endeavor is well structured and held up by the pillars of people,
processes, governance, and legal structure (Figure 8.1).We’ll go through these one at a time,
and we’ll also contemplate the risks that come with growth to watch out for.
Before we start, the most important thing to keep in mind is that the organization is a
means to an end; it is not an end in and of itself. If you ever find yourself focusing more
on the survival and growth of the organization, to the detriment of impact, remember
that your organization is simply a vehicle to structure and deliver social change. At some
point (or at multiple points), you may need to let go of that structure and adapt it to
expand your impact.
In the coming sections, we’ll talk about different options for structuring your endeavor.
If you decide that launching a new organization is the way to go, these may include legal
registration options. We’ll also talk about support structures, like a board, and the internal
mechanisms needed to institutionalize your endeavor’s processes. We’ll conclude with a
discussion of the considerations you must keep in mind when growing your endeavor.
Now let’s start with your team’s structure.
People
Founding Team
Not everyone on your design team will go on to implementation. Part of institutionalizing your endeavor is figuring out what roles are necessary for implementing your
DOI: 10.4324/9781003094715-9
19
Structuring as an Organization 191
People
Individuals, roles,
culture
Processes
Governance
Delivery,
decision-making,
documentation
Bylaws,
board design,
cultivation, and
management
Legal structure
Whether and how
to incorporate
Figure 8.1 People, processes, governance, legal structure
Who is
invested
and cares
Who you
want on
your team
Who has the
right skill set
and
perspective
Figure 8.2 Thinking about the founding team
offering over the long run. This also involves figuring out what members of your design
team have the appetite, interest, and ability to see this through, and whether each person
is a good fit for the journey (Figure 8.2). Sometimes this dialogue happens naturally, as
certain people move on and others decide to stay. Other times, there might be a more
uncomfortable transition, when it doesn’t make sense to keep certain people who desire
to stay involved.
Important elements to consider are time, skills, experience, drive, and fit.Who is willing
to dedicate the time to moving forward? Members of your design team may feel a sense
of ownership in your offering, but much more time will be needed to make it a reality.
Implementation requires skills that are different from research and design, too. Do people
have those skills, or job or life experiences, to see this through? Fit is another criterion
that is harder to explain, but it can be the most important aspect of a successful implementation team. Are people easy to work with? Do they add value? What is the team culture?
Culture
This is a good place to talk about culture, because it is crucial to building your team and
the organization that will house it. Organizational culture is defined as the predominant
beliefs, values, attitudes, behaviors, and practices that people in an organization share;
these are formed as a learned response when the people share common experiences
in addressing external and internal problems.1 Organizational culture starts with the
core values that you defined in Chapter 4. Make sure that the people on your team, on
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192 Structuring as an Organization
your board, and in your partner organizations share these values and operate by them.
As you grow, the founding team will continue to play a critical role in setting the tone
for the culture of the organization. Making time for people, listening to them, shaping
the workplace according to their needs, creating an atmosphere where everybody can
contribute to ideas and decision-​making, dedicating resources to improve your team’s
well-​being –​these are all examples of actions you can take to cultivate your organization’s
culture. Helping people identify their strengths and leveraging those strengths will not
only create a positive team environment but also contribute directly to the strength of
your endeavor and the outcomes it can produce. Later in the chapter, we talk about transparency, accountability, shared leadership, and considerations for growth –​these aspects
are closely linked with culture.You can mindfully and purposefully build the culture that
will enable the kind of environment and internal health that allows your organization to
thrive.
Roles
In thinking about which members of your design team will become part of the founding
team, it’s important to understand what roles are required of implementing and growing
your offering. Each founder needs to bring something to the table, whether that is
help with fundraising, strategy development, or continual refinement of the vision and
offering.
Let’s talk about the typical composition of a founding team.Then you can think about
whether this composition makes sense for you and your founding team. Some of your
design team’s members may be well suited for these roles; you may need to recruit new
people to fill other roles.
In a typical founding team structure, founders are assigned roles according to their
strengths, weaknesses, experiences, and preferences. For example, some people are outward-​
facing and enjoy vision and strategy. Such a person is suited to a CEO or executive director role. The CEO is the face of the organization and works to garner support from
others; this person is most often held accountable by stakeholders for the organization’s
performance (Figure 8.3).
Other people prefer to focus on the behind-​the-​scenes operations, building and overseeing internal systems. Such a person could be chief operations officer (COO) or an
operations director. This person makes sure that internal operations run smoothly and
that the organization can produce its offering for the target customer. At first, the position
also often involves building management and administrative systems, and it may encompass human resources (i.e. ensuring that the appropriately skilled personnel are recruited,
trained, and managed) until a human resources person or team is hired.
Someone with subject matter expertise would serve as a program director or chief
product officer (CPO); if your offering is computational or medical, then that person may
be referred to as the chief technology officer or chief medical officer. Depending on your
topic area, this role ensures that all programs, products, and services are technically robust
and maximize impact for your target audience.
Other key roles include the finance director or chief finance officer (CFO), who is
responsible for financial management, modeling, and reporting. While the CEO most
often meets with funders and builds relationships to secure funding, the CFO plays a key
role in managing and implementing this process. Some organizations also have a resource
development officer on the executive team to lead fundraising.
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Structuring as an Organization 193
COO
(Chief
Operating
Officer)
CFO
(Chief
Financial
Officer)
CEO
(Chief
Executive
Officer)
CPO
(Chief
Program
Officer)
CTO
(Chief
Technology
Officer)
CMO
(Chief
Marketing
Officer)
Figure 8.3 Example of executive team composition
Often an organization also includes a chief communications officer or chief marketing
officer (CCO or CMO), who is responsible for getting the word out and for bringing
feedback in. This involves setting internal and external communication strategy, overseeing social media, following up with stakeholders who have a vested interest in the
company, and building the base of customers, supporters, and other stakeholders. The
CEO is responsible for breaking new frontiers in terms of outreach, but without a
communications or marketing officer, relationship networks are challenging to manage
and optimize.
Different organizations refer to these roles using different nomenclature. In foundations
and nonprofits, for example, the CEO is known as an executive director; other organizations
refer to this role as the chief executive. Positions like COO, CFO, CMO, and CPO could
be referred to as a general manager, director of finance, director of communications or
director of marketing, and director of programs.
Not all organizations have the same structure. Each builds its own team according to its
needs and functions.You have creative license to draft the job descriptions and titles that
you need. At the end of the day, make sure your team represents all core competencies. In
most cases, you need: someone with strong people skills to champion the organization;
someone with strong administrative skills to build processes and ensure that everyone is
using their time well; someone with subject-​specific skills to make sure you are at the
cutting edge of your field; someone to make sure your organization has strong financial
health; and someone to make sure your internal and external communications are helping
you reach your goals.
Do You Have to Be the CEO?
Do not assume that founding a new venture obliges you to serve as the CEO. You may
hire someone to play this role. The CEO is someone who has long-​term vision and can
carry the team toward that vision, building partnerships and accruing supporters along
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194 Structuring as an Organization
the way. A CEO candidate possesses strategic thinking, an ability to not get lost in details,
and expertise in forging alliances and winning supporters. Sometimes, founders feel more
comfortable playing a technical role, so they recruit someone to be the people person.
Some social entrepreneurs find that as an organization grows, CEO responsibilities limit
their opportunity to interact with the end users, so they recruit someone else to be CEO.
Whatever your preferences, make sure that you have one person for each of the key
roles outlined above. Of course, your set of executive team members may not match this
general outline exactly. In addition, when you start out, one person may be playing more
than one of these roles. In any case, remember to think about the future and envision the
roles needed to get there, and invest time and resources in recruiting the right people for
those roles. It might be tempting to plug along in your work, thinking it is more urgent
than finding someone to take the load off you. But taking this time will allow you to have
a larger impact in the future, and you are most likely harming your own mission if you
don’t prioritize finding the right team to help carry your venture forward.
Ownership Conversations
Later in the chapter we will talk about different options for forming a new organization,
should you decide to go that route. If you form a nonprofit organization, the founders
will not have legal ownership. For charities and other nonprofits, there is no owner. The
board of trustees (more on this below) is legally responsible, but nobody “owns” the
organization. If you decide to form a business, you will need to have some important
conversations with your co-​founders about ownership, depending on how you structure
and register that business.
Some teams decide to divide ownership equally among the founders. In other cases,
one or more founders may feel that they have invested more time (or other resources
such as capital) in launching the company and should own a larger share of it. These
conversations are difficult to have.They are often exacerbated by fears that future investors
will be added to the mix and dilute ownership shares in the future. Other considerations
are the relative weight of each persons’ contributions to future growth, not just to getting
to where you are today.
To help these conversations feel equitable in both how they are conducted and
decided, stick to the same principles you’ve been applying in your journey up until now.
Focus on a process and outcome for these conversations that will allow you to achieve
your mission, to build power for your stakeholders, and to shift the status quo. A huge
part of that is the founders feeling rewarded and committed –​this can be financially and
otherwise. It’s important to maintain transparency in deciding on how these decisions
will be made and in proceeding to make these decisions together. Focus on the longterm growth of the endeavor. This includes each person feeling like their contribution
is valued. Invest as much time and bandwidth as possible in having these conversations.
Launching a new endeavor comes with many pressures, and failing to create the space for
these conversations can result in a dissatisfactory process and a dissatisfactory outcome
for these conversations.2
In some cases, the founders decide to make the business employee owned. This means
that they share ownership with future employees. A business can be up to 100 percent
employee owned. Examples of employee ownership are an employee stock ownership
plan, an employee trust, and a worker cooperative. We’ll learn more about these in the
legal structures section.3
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Structuring as an Organization 195
Process
Beyond the Founders
The purpose of taking the steps recommended in this ­chapter –​building systems, processes,
and people –​is to set up an organizational framework that allows the endeavor to endure
without you. While you may have been the visionary who brought your venture to life,
the venture needs to be tightly managed as it grows.Whether you prefer to interface with
customers or set strategic directions, or both, the day-​to-​day running of the organization
cannot be handled by you alone. Let’s talk about how to set up your endeavor so that it
can grow beyond the founders.
Operations
Management of the different pieces of your value chain is what we mean by the word
“operations”: it’s the functioning of your social venture and the processes required to get
to your desired outcomes.Your “value chain” refers to all inputs –​people, processes, knowledge, and other ingredients –​required to achieve your outcomes. Operations, then, refers
to the day-​to-​day activities and decisions required to produce and deliver those outcomes.
Prototyping and piloting an idea are completely different from rolling it out and
launching. How can you create systematic processes for providing your offering to your
end user? The answer not only helps you ensure results, but also helps you set up your
venture in a way that minimizes resources and maximizes output.
Growing Your Team
At the early stages of a new endeavor, it is only natural for the founding team to make
decisions as they go. It’s all about testing, innovating, experimenting, and implementing.
Each person on the founding team ends up playing multiple roles, irrespective of official
titles, and decisions are often made in an ad hoc manner. Once you begin to grow beyond
your first pilot, you’ll start thinking about professionalizing your organization’s processes.
One of the most important aspects of growth is human resources. Figuring out how
to hire (and sometimes fire) new people is something that a founding team can do in
advance, so that decisions are made according to criteria you’ve discussed and decided
on. Human resources decisions usually are led by the operations director or COO; as
you grow, you may eventually have a role dedicated solely to human resources. Decisions
include where to post new jobs, how to ensure that new team members have the desired
skills and that they fit into your culture, how to nurture and mutually evaluate new team
members, and how to identify and proceed when a new (or old) team member is not
working out.
It becomes challenging to maintain an organization’s original culture as new people
and roles are added. Implementing processes for hiring, retaining, nurturing, and mutually
evaluating new team members can help.
Manuals
The day-​to-​day running of an organization needs to be documented and institutionalized,
and manuals are a good tool for capturing those practices. Examples include operations
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196 Structuring as an Organization
manuals, human resources manuals (e.g. guidelines for hiring and firing as well as ongoing
M&E), and training manuals for new hires.
The goal of manuals is not to build bureaucracy and paperwork, but to provide written
documentation of guidelines and best practices. Just like a car comes with a manual, so
does an organization! You have put a lot of work into figuring out the best way to do
things, and the next step is for you to document them.Then, guidelines and best practices
can be revised and improved on in the future.
Keep in mind that manuals should be clear to follow. The manual also should be
simple enough that employees can remember the main steps as they are gaining their
own experience.
Policies and Procedures
Policies and procedures may be included in the manuals described above or in your
bylaws, depending on the policy or procedure in question. For example, we are all familiar
with retail stores’ return policies.This type of policy would be found within an operations
manual, accompanied by guidelines for the person implementing and enforcing it. Child
protection, volunteer recruitment, antidiscrimination, antiterrorism, and other management policies often fall under the umbrella of operations, too, but they are more likely
to be found within an organization’s bylaws, because they apply to all components of its
work (more on bylaws below). Spend time with your team thinking about how basic
principles and values manifest in various steps of your work. This leaves less room for
unintentional adverse outcomes.
Depending on your line of work and the setting you’re working in, local law may
require certain policies and procedures, such as a workforce antidiscrimination policy.
Also be aware of sector-​specific requirements, such as safety and hygiene checklists. You
may not be aware of all regulatory nuances, so get legal advice while working on your
policies and procedures. As your organization grows, it’s equally critical to maintain a
steady grasp on these requirements and to ensure that all incoming staff members receive
training on them.
Process Mapping
As different processes emerge and solidify in your work, it is helpful to undertake process mapping for each one. Process mapping can be done for many different aspects of
your work: the hiring and firing process, M&E of your social outcomes, communications
and marketing, financial accounting and reporting, and so forth.You may not be ready to
think about all these process cycles now. Let’s start with a process mapping exercise for
one foundational aspect of your offering: distribution.
Process mapping clarifies how the moving parts of your offering flow between the
different components of your value chain to get to the end goal. The result is a step-​by-​
step description of your core operations –​a recipe for your team to follow.
At the start of your journey, you defined the last mile: the gap that is preventing your
end user from overcoming this social challenge. How are you going to get your product
or service across the last mile? The process map illustrates every step from A to Z. How
is your offering produced, how is it delivered to the customer, who is involved at each
step, where does it take place, and when? This is how you map out your operations. It’s
similar to the customer experience you sketched in Chapter 4; here we’re building on
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Structuring as an Organization 197
Customer arrives
at clinic
Customer is
greeted by
receptionist
Customer fills out
form with personal
information
Receptionist takes
form and directs
customer to
waiting room
Receptionist hands
form to nurse
Nurse reviews
information
and places
customer in
patient queue
Receptionist
checks queue
every 20 minutes
and updates
patients on
their status
When ready,
receptionist
directs patient
to consultation
room
Nurse greets
patient in
consultation room
and asks for
reason for visit
Nurse goes
through standard
questionnaire
and takes vitals
Nurse makes
diagnosis for
certain outcomes
and refers to
doctor for others
Patient is
provided with
next steps,
medications,
and follow-up
Nurse calls
patients for
follow-up
If phone
questionnaire
is positive,
problem has
been resolved
If phone
questionnaire is
negative,
patient is asked
to come back in
Figure 8.4 Process map for community health clinic aiming to improve patient experience and
outcomes
those sketches to flesh out back-​end processes that you can then standardize and replicate
as you grow.
Figures 8.4 and 8.5 show two examples, one showing the pathway for a customer at
a clinic, from arrival to exit, and the other detailing different decision-​making points for
back-​end customer support.
You’ll notice that both examples describe a system for providing a social service. A process map for the provision of a product is much the same. Person X purchases ingredient
Y.They hand it over to person A, who takes it through procedure B … and so on through
distribution, transportation, and customer service. Where do the customers go? Who do
they buy from?
These two simple examples were created using basic word processing and presentation
software, but you can use more specialized software and symbols. There are free online
tools for creating sophisticated flowcharts, and many process mapping software products
offer a free trial.
Process maps can help you make sure that nothing falls through the cracks; they also
help you chart resources you’ll need for growth. Process maps need to be revisited as your
organization grows so that steps can be eliminated, enhanced, or improved. Process maps
may also change as you refine your distribution channels.
198
198 Structuring as an Organization
Customer
Technician
Front office
Connect the
customer to
a technician
Diagnose the
problem
Yes
Calls to
request
service
Is the
caller
eligible for
service?
Can the
problem
be fixed
over the
phone?
No
Explain to the
caller why they
are not eligible,
and if
applicable,
explain how
they can
become eligible
Yes
No
Schedule
time for a
visit and, if
necessary,
order
replacement
parts
Yes
Fix the
problem
Figure 8.5 Process map for an agricultural technology social enterprise maintaining rural farmers’
equipment to support their livelihoods
However, keep in mind that things may become too standardized and automated with
growth. As distance widens between the founding team and end users, and as more people
manage organizational processes, sometimes we lose the ability to respond and adapt to
the needs of users and other important stakeholders. Later in this chapter and in coming
chapters, we will discuss feedback loops that allow you to listen and respond to feedback
as you grow.
Governance
Governance structures protect the people and processes described above. Governance
refers to principles, policies, and procedures that ensure a fair, transparent, and ethical
institution. By clearly describing how decisions are made and by whom, people are held
accountable for the consequences of their decisions and actions.
Bylaws
Regardless of your organization’s legal status or your funders’ requirements, it is your
obligation as a social entrepreneur to create internal governance documents to ensure
that all decisions are aligned to mission and benefit the target audience. These documents
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Structuring as an Organization 199
may be referred to as bylaws or articles of association, or they might have another name
depending on the type of organization and country you’re operating in. They outline the
key principles, policies, and procedures to which everyone in your organization is held
accountable.
Chances are you’ve been involved in a volunteer group or student group at one point
in your life. These groups have constitutions that outline the makeup of the organization
(officers), the decision-​making processes (voting), and the rules by which all members
should abide (bylaws). Just like a nation has a constitution that serves as the basis for policymaking and legislation, your organization also needs a constitution.
Your business model already contains much of the information required for internal
governance. It describes what you’ll do with profits, your organization’s mission, and how
your work will reflect the mission.What remains to be added to your internal governance
documents are the rules and processes for executing these guiding principles. How will
decisions be made? Is it just up to the founding members to decide what is best for their
organization? How will new personnel and other resources be added –​do they need to
fit certain criteria?
Board
An important part of an organization’s governance structures is its board. A board ensures
that the management team does not make decisions that affect other people single-​
handedly; rather, those decisions should include others’ input and oversight, and different
viewpoints should be taken into consideration.
Having a board in place helps provide some of the checks and balances that stabilize
healthy organizations and allow them to thrive. This group of people can be referred to as
the board of directors, board of trustees, or board of governors. Irrespective of name, the
board serves a central purpose of ensuring that the organization stays true to its mission, uses
its resources ethically and efficiently, maximizes social impact, and follows sound practices.
A board is a legal requirement for any for-​profit or nonprofit organization that is not
privately owned.4 Most funders and investors also require you to have a board, and many
even require having a seat on the board: this is their way of ensuring involvement in the
venture’s decision-​making processes, directions, and outcomes. For-​profit board members
are sometimes compensated monetarily for their time and input, while nonprofit board
members usually are not. However, depending on the place where you are registered, in
some cases a certain percentage of nonprofit board members can be compensated monetarily. This can help ensure diversity in a board: asking people to donate their time may
result in a board that does not necessarily represent some of the important stakeholders in
your mission. More and more social entrepreneurs are writing board member compensation into their bylaws, within the frameworks allowed by their place of registration, to
ensure equity and diversity in representation on their board.
Note that a board of directors, governors, or trustees is different from the board of
advisors or advisory committee we discussed in the last chapter. While the former is
responsible for overseeing the direction of the organization, its governance, and decision-​
making, the latter serves as a volunteer corps that shares technical expertise, social and
professional networks, and other resources. Asking people to join the advisory group
demands less of their time. They may join the board later on, which is positive as it’s a
good idea to circulate people in and out of the board over the years.
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200 Structuring as an Organization
Appropriate
resources
Technical
knowledge
Network /
connections
Your
board
Complementary
experiences
Relevant skills
Diverse
perspectives
Figure 8.6 Forming a well-​rounded board
Criteria for Board Members
The composition of your board should represent different perspectives (Figure 8.6).
If you are assembling a board to support your venture’s governance, you do not want
to be looking for people who share your attributes. As with any team, more diversity
in lived, learned, and professional experience makes for stronger and more balanced
decision-​making.
As a starting point, you want your board members to have strong track records in
leading and governing organizations. When recruiting board members, ask yourself the
following questions:
•
•
•
•
•
Who do I want to find out about my work and join forces with me?
What resources do I need to gain access to?
What technical know-​how do I need?
What skills or strategies would help me achieve my goals?
What experiences or perspectives would complement my team?
Then ask yourself where you can find those people. Start with your existing network and
build out from there. This includes classmates, colleagues, friends, family members, and
their networks. Thinking outside your own generation, it also includes your professors,
managers, mentors, parents, and their networks. Meet with people you think can help,
have specific questions prepared for them, and ask them to recommend other people to
meet with.
In assessing potential board members, make sure that they are a good fit with the
organization’s culture and that they will hold you accountable to both the outcomes you
want to reach and the values you want to honor while getting there.
Board Cultivation and Management
Cultivating a board relationship takes time and care. Asking too many people to join your
board may make it difficult to manage. Moreover, it is important that board members
play well together. The last thing you want is for internal politics and power dynamics to
develop between your board members, which would interfere with their primary task of
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supporting and ensuring good governance. Before inviting individuals to join your board,
organize meetings between yourself and prospective board members, and between prospective board members themselves. This will ensure that they feel engaged, and it gives
you the opportunity to experience what it’s like to work with them.
As with any role within your organization, write a job description for your board
members.This document clarifies the characteristics you are seeking in a board member.
It also spells out expectations for the prospective member.Typically, a description covers
attendance (e.g. quarterly board meetings), events that promote awareness of your work,
and, in the case of many nonprofits, board members’ financial contribution to the
venture.
Ultimately, the role of the board is to hold the executive team accountable. While all
social entrepreneurs, founders, and other leaders are personally accountable to their social
mission, answering to a senior body mitigates the risk of drifting from mission and ensures
that all views and potential pathways are explored.
Accountability
Accountability means answering to someone other than yourself. When you report to
your board on a regular basis, you will be grilled about what you have and have not
accomplished, why you made certain decisions, and what you intend to do moving forward.They will set a high bar and be realistic, simultaneously; and they will make the next
board meeting feel like an ultimatum. Just like you study the most before a final exam,
having a board pushes you harder.
Diversity
Look for diversity in a board. If you fill it with members who share your characteristics,
then you are not adding as much value to your organization. Look for people who offer
experience, skills, or contacts that you don’t already have. Think of your board as your
army; they are the people who will provide backup to you and your team members.
Shared Leadership
You can choose to design the governance of your organization so that decision-​making
power is not concentrated in a hierarchical way among the chief executive and the board.
This can be done in many different ways –​for example, by inviting external volunteers to
join governance committees, by structuring as a membership association where members
have decision-​making power over governance decisions, or by dividing the executive
roles using a more horizontal design.
To illustrate, we’ll use the case of Havenly, a social enterprise based in New Haven,
Connecticut. At the time of writing, Havenly had just transitioned from having an executive director to having three co-​executive directors: a co-​executive director of development, a co-​executive director of operations, and a co-​executive director of mission.
Havenly also used a member-​based governance model where members have the power
to vote the co-​executive directors and the board members in and out of the organization.
Members are alumni of the program who have selected to take on a leadership role in the
organization. Members serve on committees, such as the finance committee, organizing
committee, program committee, and business operations committee.
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202 Structuring as an Organization
Thus, you can turn to community engagement as a model for governing your organization, just as you have at every step of your journey –​from understanding your challenge
to designing your offering to testing and implementation.
Legal Structure
We’ve been talking about ensuring integrity and quality through people, processes, and
support structures. Internal governance documents detailing policies, procedures, and
decision-​making processes institutionalize your offering so that it can grow and thrive
beyond its founders.
The next consideration is whether to form a new organization. The options available
to you will depend on your business model and the country in which you’re operating
(and the different states, if you operate in the US).
Whether and When to Form an Organization
Before launching your venture, it’s worth stopping and asking yourself whether you really
need to build an entire organization from scratch. Is it possible to launch your venture
from within an existing organization? It could be a new department, program, or project
within a larger organization; a new branch or joint venture; or a variety of other creative
setups. If you’re able to identify someone else who’s working toward the same mission,
then why are you starting your own organization?
Many social change initiatives take place outside of organizational walls, or at least start
out that way. If you are organizing a volunteer-​based campaign or movement, then you
don’t necessarily need to formalize a new organization. Forming, registering, and managing a new organization is a costly and time-​intensive process. One motivation for doing
so is the ability to accept funds. On this front, an alternative to registering a new organization is to partner with an existing organization that can accept funds on your behalf.
This is increasingly common in some parts of the world. For example, in the US many
new endeavors work with a fiscal sponsor: a nonprofit organization that provides financial oversight and management and other administrative services. A few of the endeavors
in this book are fiscally sponsored projects. One is Co-​Impact, the collaborative we met
in Chapters 5 and 7, which supports extrapreneurs working together for systems change.
Co-​Impact is a fiscally sponsored project of the New Venture Fund, which provides
operational expertise.5 While the New Venture Fund requires a minimum amount of
committed funding before they will work with you, others, such as the Open Collective,
don’t. In the interview box below, we’ll meet another endeavor, WeTheChange, a group
of women leaders of B Corps and other purpose-​driven enterprises. WeTheChange is a
fiscally sponsored project of Social Good Fund, a nonprofit that helps community, art,
environment, and other projects by running their backbone and organizational structure.6
To explore your fiscal sponsorship options, look into projects that do similar work to
yours and see what fiscal sponsor they use. If your work is in the US, you can also refer to
the Fiscal Sponsor Directory.7
Setting up an organization requires time, resources, cash, legal expertise, paperwork, and tax and maintenance fees on an ongoing basis, too. These costs are not to be
underestimated. If there is any way to free up valuable headspace, then it is advisable to at
least explore this option.
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Structuring as an Organization 203
Another option is to incubate within an existing organization and then strike out on
your own.This can provide valuable time and resources to test and refine your product or
service –​time that would otherwise be spent in the red. Riders for Health is an example
of an organization that was started out of Mercy Corps and spun off when it became
more financially sustainable to do so (Sidebar 8.1). During this time, Riders for Health
benefited from Mercy Corps’s human resources, administrative, legal, logistical, technical,
and other resources. Even raising money may be more effective if done with a larger
organization.
When you reach a stage where you need to launch a new organization to gain something tangible and crucial, then take that step. But don’t form a new organization just for
the sake of it.
Sidebar 8.1 Riders for Health (www.rid​ers.org)
Founded in 1989 as a social enterprise; registered as charity in England and Wales;
US 501(c)(3) nonprofit organization; country programs registered as local nonprofits
Goal: To strengthen rural health systems and truly achieve equitable healthcare in
sub-​Saharan Africa by providing transportation and logistical assistance
What they do: Riders for Health provides high-​quality transport management
services for government and nonprofit healthcare efforts.
How it works: Riders for Health offers fleet management and logistics to meet all
of a healthcare system operation’s transport needs, including last-​mile transit
to remote communities, transport of biohazardous samples, emergency health
transport, medical supply chain logistics, and training for riders and drivers.
They’ve grown to work across nine countries in Africa and reach 47 million
people in need of health services. By improving transit options for health
workers, Riders for Health has halved the turnaround time for test results in
Lesotho and quadrupled the range over which healthcare workers can travel.
Charging a nonprofit-​level fee ensures their sustainability as an organization so
they can continue to offer these services in the long run.
Legal Options for New Organizations
If you do need to form a new organization, then its legal form will most likely reflect your
business model. If you are a nonprofit endeavor, then the organization will most likely
take the form of a charity or association. If your endeavor is for-​profit, then depending
on your country or state you will need to choose a for-​profit setup or form as a social
enterprise (if that option is available to you).
Many social entrepreneurs aspire to run a for-​profit business that reinvests all its profits
into growing social impact, after distributing any required returns to investors. While you
may argue that this operation is not for profit, your country’s legal requirements may not
be sophisticated enough to accommodate social entrepreneurship. At the end of the day,
many social entrepreneurs feel that legal structure is more of a taxation issue and less of a
reflection of business model and social impact. Whatever your country’s legal landscape,
let’s get a picture of how legal registration works in most places.
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204 Structuring as an Organization
Charity
In many countries, the legal structure of a charity is suitable for nonprofit organizations,
including those that generate revenue. For organizations whose generated revenue is less
than expenditure toward social mission, this is the most commonly chosen legal option.
Even for those organizations with more than 100 percent cost recovery (i.e. surplus
revenue is generated) a charity status may still be possible –​as long as all of the revenue
is reinvested in the social mission. Some of America’s wealthiest institutions, such as large
universities and hospitals, are registered as charities. The main advantages of forming a
charity are related to the ability to seek philanthropic capital in any form –​for example,
from individual donations, major gifts, and foundation grants. Other advantages are tax
related. Donations given to charities are tax-​deductible for the individual or institutional
donor. Charities are also exempt from paying certain taxes, such as property tax.
Each country has its own version of a mainstream legal charity. In the US, the most
common form of registering a charity is the 501(c)(3). In the UK, there are four major
charity structures: unincorporated association, charitable incorporated organization, charitable company, and trust.8 Checking the legal form of leading nonprofit organizations in
your country is one way to find out what setups are common –​usually, this information
is clearly stated on the nonprofit’s website and printed materials. Each country also has
its own nuances, so it is important to understand the pros and cons of each option before
you proceed. For example, in the US, entities are formed and governed at the state level. If
a founder seeks to start a nonprofit organization, there’s a difference between legal entity
formation at the state level and seeking tax exempt charitable status at the federal level.
Business
For endeavors that wish to distribute surplus revenue to individuals and funders, a for-​
profit registration is a better fit. In the US, a social entrepreneurship most commonly
registers as a limited liability company (LLC) or C Corporation (C Corp). The US Small
Business Administration’s website has a helpful table summarizing the differences between
the LLC and C Corp, and other legal forms. Differences include how decision variables
like liability and risk, tax treatment, governance and control, funding, and resource development affect entity formation.9 Keep in mind, however, that for businesses as for charities, entities are formed and governed at the state level.
In an LLC, profits can be passed to the owners as personal income without necessarily paying corporate taxes. Owners can instead choose to pay self-​employment taxes.
A C Corp, on the other hand, is separate from its owners and can sell stock.They are more
expensive to form and require more extensive record keeping and reporting.They are also
taxed separately from their owners. Less commonly, an American social entrepreneurship
endeavor can form itself as a limited liability partnership (LLP), which is a partnership
between individuals. The S Corporation (or S Corp), moreover, is a type of domestic
corporation registered with the Internal Revenue Service in addition to the state; it has a
limited number of owners and types of stock and can pass income directly to its owners
without paying corporate tax.
The most common legal structure for commercial business in the UK is a company
limited by guarantee or shares. This is similar to the LLC and C Corp options in the US.
Across countries, some social ventures choose to stick with a traditional business structure
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Structuring as an Organization 205
because they allow for more flexibility in internal governance and fundraising. In these
cases, to ensure that the company operates as a social enterprise, the founders incorporate
the social mission into a constitution, articles of association, rules, or memorandum. For
example, a social enterprise formed as a for-​profit company will specify in its internal
governance that a certain percentage of profits will be reinvested into the social mission.
In most countries, social entrepreneurs do not have many options tailored to them,
as specific legal structures have not yet caught up to entrepreneurship. Having clear-​cut
internal governance and incorporating these policies and procedures into the legal registration are appropriate actions in these cases.
Hybrid Structures
Many social entrepreneurs also opt for a hybrid model whereby they form separate non-​
and for-​profit entities. The rationale behind forming two separate organizations is that
it: provides more flexibility and allows the founders to benefit from a larger range of
funding options, from venture capital to charity donations; and protects charitable status if
earned revenue exceeds regulatory guidelines. In some cases, a charity can own a business.
An example of this is Soufra, which we visited in Chapter 5. The charity existed long
before the business, and it needed to register the business as a separate entity to operate a
commercial food truck. In other cases, a business can start a charity. This is common for
many high-​profit businesses that want to allocate some profits to a social mission via a
foundation. One of many examples is the Salesforce Foundation, which oversees education, workforce development, child welfare, and community programs.10
Forming for-​profit and nonprofit entities might make sense for many organizations
with a hybrid business model, as discussed in previous chapters. However, many social
entrepreneurs hope that singular forms of legal structures will emerge to provide flexibility and consideration for their needs. In the meantime, some social entrepreneurs have
found innovative ways to manage the different requirements and trade-​offs of non-​and
for-​profit structures in their respective countries. One example is Groupe SOS, a French
association comprising nonprofit organizations that own commercial subsidiaries. The
commercial activities provide livelihoods for marginalized populations, and profits fund
complementary social programs. The organizations formed an executive board with
representatives from each of the founding nonprofits, as well as a management alliance
that optimizes management across the different bodies in areas such as finance, accounting,
human resources, and communications (Sidebar 8.2).
Sidebar 8.2 Groupe SOS (https://​gro​upe-​sos.org)
Founded in 1984; a French social enterprise
Goals: To combat all forms of exclusion; to carry out actions in the field to promote
access to essential needs for all, helping associations safeguard their activities and
their jobs; and to innovate in light of new social, societal and environmental
challenges
What they do: Groupe SOS works primarily for the benefit of the most vulnerable, future generations, and underserved territories.
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206 Structuring as an Organization
How it Works: Groupe SOS has incorporated numerous social ventures over the
years in nine programmatic areas: International action, Youth, Commerce &
Services, Solidarities, Health, Seniors, Culture, Ecological transition, and
Territorial action. Examples include nonprofit health centers, retirement
homes, children’s centers; social business serving those in transition from
addictions, homelessness, and other challenges; production units and various
service businesses run by people with disabilities; development of multiservice
cafes in underserved areas; and incubators for social entrepreneurs. Operating
in 34 countries, the group includes 600 different structures and serves over
2 million people each year, making it Europe’s leading social enterprise. A central innovation is the sharing of resources across these structures to professionalize their activities, pool their expenses, and develop synergies to maximize
social outcomes.
Cooperatives
Another available option is the cooperative structure, whereby the organization is
owned by a membership composed of a group of stakeholders.There are many different
types of cooperatives depending on the stakeholders involved and what their goals
are. For example, people who produce similar types of goods and services may join
forces to form a producer cooperative to more effectively negotiate prices for inputs
and to access larger markets. You may also be familiar with consumer cooperatives,
such as grocery stores, credit unions, and housing cooperatives. Again, the members
pool their demand to provide better selection, pricing, availability, and delivery of the
services or products they need. A similar type of cooperative is the shared services
or purchasing cooperative, where the members are businesses rather than individuals making wholesale purchases. There are also multi-​stakeholder cooperatives, whose
membership includes a mix of the above. A few places where you can read more
about the different types of cooperatives and how to form one are the University of
Wisconsin-​Madison Center for Cooperatives, the Cooperative Development Institute,
and Cultivate.Coop.11
Some cooperatives distribute equity stakes to members, and some confer extensive
voting powers. Cooperatives are common in the agricultural sector and are increasingly
common in the service, credit, consumer, and housing sectors. In the UK, the two main
cooperative legal structures are the industrial and provident society (IPS) cooperative and
the IPS community benefit society (also known as society for the benefit of the community, or bencom). The former is set up for the benefit of its members (in the agricultural
sector, individual farmers are members), and the latter is set up to benefit the community,
even if they are not members.12 In Kenya, cooperatives operate much of the coffee and
cotton markets, and they account for approximately half of gross domestic product. In
Argentina, more than a third of the population enjoys cooperative membership, and in
Columbia, microcredit is provided by cooperatives. In France and Japan, nine out of ten
farmers are members of a cooperative. In Denmark, more than a third of the consumer
retail market is held by consumer cooperatives, and in New Zealand, many industries are
dominated by cooperative enterprises.13
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New Legal Registration Options for Social Enterprises
In recent years, new legal registration options have emerged for social enterprises, yet they
are nascent and limited in many countries. In the US, a small number of options have
emerged from for-​profit structures in some but not all states. A low-​profit limited liability
company, or L3C, is like an LLC, but it is not designed to maximize profit: its primary
mission is social. This type of social enterprise has the flexibility to generate profit while
being driven by social mission. Foundations advocated for this legal form to enable impact
investment.
The public benefit corporation is another new type of corporation, which is
legally required to consider social and environmental outcomes in addition to profit.
This legal option defines three bottom lines for an organization –​financial, social, and
environmental –​with the purpose of promoting accountability and transparency. This
legal form was advocated for by a nonprofit called B Lab (mentioned in Chapter 6),
which we’ll discuss more below.
The flexible purpose corporation is a newer option that is available in California as well
as the State of Washington, where it is called the social purpose corporation. This legal
form requires boards and management to agree to one or more social and environmental
purpose with shareholders, while providing additional protection against liability for directors and management. As you can see, these legal forms are state dependent and still
nascent.The Grunin Center for Law and Social Entrepreneurship at NYU School of Law
supports and hosts a website (Social Enterprise Law Tracker) where you can search for
and track social enterprise laws by state.14
In the UK, a common legal option for social enterprises is the community interest
company (CIC).15 CICs were created specifically for social enterprises and are regulated
by the government to ensure they do not deviate from social objectives.The CIC provides
tax benefits to social enterprises that have prespecified restrictions on profit distribution.
For example, a CIC provides tax benefits to hybrid ventures that limit distributions to
investors: once the CIC is approved by government, its assets are “frozen” and designated
for general community benefit. Investors can receive capped dividends on their investment, but the principal is never retrieved. Another UK option is group structure with
charitable status, in which a revenue-​generating organization has a charitable purpose but
also wants to retain some surplus revenue for strategic activities that sustain and achieve
its long-​term mission.
Global Variations
Many other options and legal forms are emerging worldwide. Sometimes, social
entrepreneurs are not yet familiar with them. Other times, they are set up by a government to encourage social entrepreneurship, but they are not yet fully developed to meet
entrepreneurs’ needs. Civilian-​run non-​enterprise units and social welfare enterprises in
China are examples of options that have not yet been leveraged as much as traditional for-​
profit enterprises. In the Middle East and North Africa, social entrepreneurs are mostly
confined to a traditional for-​profit or nonprofit structure, while in the education and
training sectors, they have the option of registering the equivalent of a social benefit company. In India, nonprofit trusts or societies have been prevalent historically in the social
landscape, but social entrepreneurs are increasingly turning to for-​profit options like a
private limited company.16
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In some cases, social entrepreneurs choose to register their organization in the country
where they will be raising philanthropic or private investment funds, to facilitate financial transactions. Funders sometimes require this to ensure that the investee is abiding by
a country’s reporting requirements. Social enterprises registered in the US or UK but
operating in different parts of the world are common, because they have globally minded
funding organizations and impact investors based in the country.
Regardless of Registration …
There is a growing movement in which businesses that may not necessarily identify and
operate as social enterprises strive to create positive social and environmental outcomes
alongside their financial outcomes. Some social entrepreneurs are actively fostering and
nurturing such networks and communities. A leading example is B Lab, which helped
pioneer and advocate for public benefit corporations’ legal status for for-​profit companies.
In addition to the new legal form, they developed B Corp certification for companies that
can demonstrate social and environmental responsibility and good governance. B Corp
certification helps existing businesses strengthen their social and environmental outcomes
and their governance as a first step, and in many cases they then switch over to benefit
corporation status if conditions allow. Business leaders in the B Corp network begin to
feel they are part of a movement, which helps to create framework change: interacting
with peers who practice the same beliefs can create a snowball effect of investment for
social and environmental impact. Such networks and organizations are rapidly growing
around the world. In Central and South America, Sistema B is a sister organization of
B Labs, while in Lebanon, social entrepreneurs united as the Lebanese Social Enterprise
Association to advocate for new legal registration status and a conducive environment
for social enterprises.17 Another example is Conscious Capitalism, a nonprofit organization bringing together business leaders and CEOs under the theory of change that free
enterprise can create social and environmental impact if businesses operate with higher
purpose, stakeholder orientation, conscious leadership, and conscious culture.18
Asking for Help
It may be difficult to figure out whether and how you want to form a new entity. The
tax implications of different legal structures within a country or state will likely inform
your decision. Once you register, too, staying on top of your tax requirements takes on
a whole new meaning, not to mention that taxes affect your balance sheet and cash
flow. Managing all this is not something you can do alone; nor should you. It is time-​
consuming and requires staying up to date on tax law and other moving parts. Hiring a
lawyer and certified tax specialist to work closely with your accounting person or team is
critical. This will not add a huge expense to your annual budget and will be well worth
the investment.
Investing in a lawyer is crucial at this stage in your endeavor, too. It’s important to find
a lawyer or get legal advice from someone who is knowledgeable about social entrepreneurship. It is possible to recruit a pro bono lawyer who is willing to give their time at
no or reduced cost. It may also be possible to obtain legal counsel, or at least information
on lawyers specializing in social entrepreneurship, through one of the many organizations
that support the formation of social enterprises (see the Introduction and Chapter 7)
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Structuring as an Organization 209
or via the networks described above. Universities also run legal clinics that are open to
students working on registering a new organization and which charge reduced fees.
Most important, find and talk to your peers. Social entrepreneurs before you have
struggled with the nitty-​gritty of organizational health and structure, and they will have
helpful advice on the different options available to you.
Intrapreneurship
If you already work inside an organization that supports the development and implementation of your offering, you have a lot going for you. You can design and launch a new
endeavor within the walls of your existing institution. This can take place within a government agency, nonprofit organization, or business. Intrapreneurs are everywhere to be
found! They are people who see their job as a platform for change, and look for innovative ways to mobilize resources at their disposal for social change. If you think about your
place of work or study, or organizations you have volunteered or been involved with, you
will likely identify one or more intrapreneurs.
Launching a new venture within an existing organization has its pros and cons.You’ll
be pitching internally for resources, and making the case that your innovation is in line
with the organization’s mission and strategy. You may be competing with existing priorities and pressures in a setting where people already have a lot to manage in the short
term, compared to a startup where there is a single focus. Creating a new product or service within an existing company has different scale requirements (you may need to launch
at a larger scale).You’ll also be working within the time lines of the existing organization,
which may cause you to move slower than in a startup. On the other hand, you’ll have
access to an existing pool of talent and resources, robust internal systems, and credibility as
an organization. If a large company is committed to a social goal, it may have the wherewithal to bring other stakeholders along and to create new systems that influence existing
stakeholders, such as suppliers, customers, and investors. In the second of the interview
boxes in this chapter, we’ll hear from Vincent Stanley, Philosophy Director at Patagonia,
about the role of existing businesses in innovating for social change. In the first interview
box in the chapter we’ll meet Kim Coupounas, who shares the different roles she has
played as an entrepreneur, intrapreneur, and extrapreneur working to mobilize existing
businesses for social change.
Extrapreneurship
There are numerous potential structures for working across organizations.We’ve seen three
examples in the course of this book. One is collective impact initiatives, which bring
together multiple organizations working toward a shared agenda and have shared metrics,
mutually reinforcing activities, continuous communication, and a backbone structure.The
backbone is usually an organization that has a team of dedicated staff recruited to the collective impact initiative. This helps maintain overall strategy and manages daily operations
and implementation, including stakeholder engagement, communications, and M&E.19
In addition to the backbone, collective impact initiatives have a steering committee (also
known as an advisory group, advisory council, or leadership table) of cross-​sectoral community partners representing the ecosystem involved, to provide strategic direction for
the collective impact initiative.20
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210 Structuring as an Organization
A second example of the way multiple organizations can work together across institutional boundaries is through PPPs. This does not require forming a new organization but allows existing institutions to achieve something together that they would not
be able to achieve alone. There have been many examples of PPPs across the decades.
One example from global health is Project Last Mile, which had multiple stakeholders
from across sectors come together to improve supply chain management for essential
medicines in several sub-​Saharan African countries.21 Each partner played a different
role based on its unique core competencies. The ministries of health in these countries worked with the Coca-​Cola Company to understand their supply chain logistics and distribution, in partnership with Accenture Development to support capacity
building for health ministry teams, and several funding organizations from across sectors
including USAID, the Global Fund, the US President’s Emergency Plan for AIDS
Relief, the Bill & Melinda Gates Foundation, and the Coca-​Cola Foundation, along
with Yale University’s Global Health Leadership Initiative as an evaluation partner.
They found that critical ingredients to build trust over time among diverse partners
include the individuals involved, the context, alignment of goals, delivering results, and
communication.22
In Chapter 10, we’ll see yet another example of an extrapreneurship initiative, called
Catalyst 2030, which structured as a distributed entity rather than a new organization.
There are many ways to partner across organizations and to bring together individuals
interested in innovating for social change.
Interview Box: Kim Coupounas, Co-​founder, B Corp Climate
Collective, WeTheChange, Regenerative Rising; Co-​Founder
& former CEO, GoLite; former Head of Impact & Global
Ambassador, B Lab
What led you to focusing your career on
using business as a force for good?
I have always seen business as one of most critical platforms for social change. As a student,
I pursued a joint degree in business administration and public administration (MBA/​
MPA)
because I wanted to do both. I wasn’t sure how,
but as I proceeded in my career, the opportunities made themselves known. First, I founded and
led an outdoor apparel company with my spouse,
GoLite, which was one of the earliest certified
Image Courtesy of Kim
B Corps. I became very active in the B Corp
Coupounas
community, founding the B Lab office in the state
of Colorado and later becoming B Lab’s Head of
Impact and Global Ambassador. Part of that work included convening and mobilizing a group of women CEOs of certified B Corps, which led to founding a group
called WeTheChange, which works to promote sustainable business practices and
innovations, advocate for systems changes to uplift marginalized identities, advance
women’s leadership, and increase the flow of capital to women-​led enterprises.
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Structuring as an Organization 211
Tell us more about the B Corp Climate Collective.
The B Corp Climate Collective,23 or BCCC, is a group of certified B Corporations
and other mission-​driven businesses taking action together on the climate emergency. These businesses recognize the unique and powerful role they must play as
purpose-​driven businesses to reverse climate change. They are working to identify
concrete steps to accelerate climate mitigation and to work collectively, as individual
companies and through cross-​sector collaboration and public advocacy. There are
now over 1,800 members of the BCCC that have committed to net-​zero emissions
by 2030, 20 years ahead of the Paris Agreement targets. And all members of the
BCCC are committed to centering justice in their climate work. B Lab and leaders
of the BCCC worked together with the Skoll Centre at Oxford University and several other partners to create the Climate Justice Playbook for Business. The BCCC
and B Lab collaboration is really a case study in global collective action and corporate innovation.
What about existing businesses, not just startups?
While the B Corp movement was in the past made up mostly of privately held
SMEs [small and medium enterprises], large multinational corporations are gaining
momentum in the B Corp movement –​and given their scale, they have a huge role
to play in advancing a better future for humanity and our planet.There are now many
large multinational companies that are certified B Corps, both public companies and
wholly owned subsidiaries of large public companies. Several large public companies,
like Unilever and Danone, are certifying their subsidiaries one by one. The B Corp
community and B Lab are working in a wide range of spheres to advance “business
as a force for good,” including building a toolkit with the UN called the SDG Action
Manager to help companies work toward achieving the SDGs by 2030.24
Interview Box: Vincent Stanley, Director of Philosophy, Patagonia.
What does it mean to be Director of
Philosophy?
I divide my time among teaching company history and values to our employees; advocating
for, encouraging, and advising certified B Corps
(or those who want to be); and teaching and
mentoring graduate students in environmental
studies and business.
Patagonia’s mission statement now reads: “We’re
in business to save our home planet.” Highly aspirational language, I know, so I’m moved by the
consistency with which our employees ask themImage Courtesy of Patagonia/​ selves: What does this mean for my job and my
Tim Davis
team? How do we change the products we make
21
212 Structuring as an Organization
to support that goal? Increasingly, our business model is based on self-​imposed
constraints and the innovations that emerge as a result.
We’ve given 1 percent of sales to grassroots environmental organizations since
1985. We’ve assisted and helped train hundreds of activists to be more effective in
their campaigns. We’ve now established Action Works, a platform to connect citizens with grassroots organizations. It is like a dating website that connects citizens
with grassroots organizations working on the problems they care about.25
What do you see as the role of business?
Of the three big social forces, only business is self-​sufficient and self-​sustaining.
Government runs on taxes it collects; civil society, on fundraising. But a business
can earn its keep by creating necessary products and services that address the social
and environmental crisis (and by assuming responsibility for all actions taken on its
behalf). At Patagonia Provisions, every new product has to solve a problem in the
food system or in agriculture. That’s our new North Star for responsibility.
One ongoing challenge: how to respond to the harm from accelerated consumption of disposable goods. So we’re promoting repair and the sale of used Patagonia
clothing. We are also, in the wake of the lessons of the summer of 2020, working
with more focus on environmental justice and diversifying our US workforce.
What advice do you have for aspiring social entrepreneurs and
intrapreneurs?
Understand your values and why you’re in business. Be true to your purpose and
values and you will find the right path for your enterprise.
Considerations for Growth
Organizational Health
The main idea behind the concepts presented in this chapter is to think of your endeavor
as an organism. It is a living, breathing being, and it’s up to you to ensure that it’s provided
with the support system, environment, and nutrients that will nourish it and allow it to
grow. As you move beyond your pilot phase and start thinking about institutionalizing
your offering within a new or existing organization, don’t underestimate the time and
careful nurturing that is needed to set up your structure. The people, processes, governance, and structure you build are the pillars that will carry your work moving forward. Without those pillars, you won’t have the infrastructure to grow your impact. It’s
important to invest in a solid, thriving setup so that you can start thinking about growth.
And, once you do start growing, continue dedicating time and resources to monitoring
and strengthening the vital signs of your organization (Figure 8.7).
Things to Keep in Mind When Growing Your Organization
Once you have set up a structure and feel confident about its moving parts, you can
start thinking about next steps that push your impact further. Growing impact means
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Structuring as an Organization 213
An organization is a living, breathing organism
with the following vital signs:
●
●
●
●
●
●
●
Good governance
Financial health
Institutional memory
Transparency and accountability
Strong human resources
Legal and tax health
Good information and communication systems
Figure 8.7 Vital signs for a healthy organization
graduating from your initial pilot and launch stages; scaling your operations, volume,
and reach; and reaching beyond the confines of your own operations to build strategic
partnerships with others, to collectively transform the social challenge you set out to
tackle.
Growth can mean different things for different organizations. It can mean reaching
more people by scaling direct service. It can mean adding more offerings to increase
the depth of impact for each person or stakeholder group. It could entail venturing into
different geographies or different target audiences. To change systems and frameworks,
growth also means thinking beyond your own operations and changing the way others
operate.
In thinking about how and when to grow, keep the following considerations
in mind.
Growing Too Soon:Timing Is Everything
Growing too soon can be detrimental to your venture if you haven’t built the tools to carry
it out. Just like developing your offering was based on collecting evidence, so your steps
toward growth should be based on evidence. Trying to do too much too soon, or lacking
a thought-​out strategy, may strain your resources or cause you to grow in the wrong
direction. Revisiting your mission and your theory of change, examining your internal
organizational and operational vital statistics, and consulting with your stakeholders are all
steps that you need to take at this decision point –​and on an ongoing basis.
Making Decisions Alone: Leverage Data and Feedback from Stakeholders
A huge part of this decision hinges on the data about outcomes as well as the intermediary indicators that let you know whether you’re on the right track. Are there certain
parts of your operations that are more impactful than others? Are there aspects of your
offering that people are responding to more than others? Growth is an iterative process,
just like the initial design of your offering (Figure 8.8). Continue to collect feedback and
data points to track your implementation and inform your growth decisions.
Here is where data collection pays you back.You have been gathering two main types
of data: outcome metrics and organizational and operational performance metrics. Both
types of data will tell you whether and to what degree you have been meeting internal
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214 Structuring as an Organization
Listen
Deliver
Test
Figure 8.8 Never stop the iterative cycle of listening, testing, and delivering as you grow
targets and stakeholders’ needs. The second will also tell you whether your organization’s
systems are running smoothly enough to endure growth.
Growth patterns and related outcomes are objective, usually quantitative measures that
can inform your decision to scale operations. Next, look into qualitative measures.Talk to
your team. What has their experience been? Do they feel that infrastructure is in place to
allow them to take on a larger volume? Have they experienced need for more offerings
or observed demand for the same core offering in different places or target audiences?
Because you are not able to interface with each end user, nor experience every element
of operations, you cannot make scaling decisions alone.
Growing Too Big: Stay Responsive, Adaptive, Innovative
There are multiple dimensions of growth, from scaling your offering to expanding your
external efforts around advocacy, knowledge dissemination, and policymaking. This
section refers to scaling your offering, while the next two chapters relate to the other
dimensions of expansion. Besides growing too soon, another threat can be scaling too
big. Smallness allows startups to innovate and experiment. As they grow and standardize
processes and operations, they run the risk of becoming bureaucratic. This not only
runs the risk of stifling innovation, but also can limit responsiveness and adaptation in
different contexts. This is not to say that you shouldn’t grow. Rather, remaining a responsive, adaptive, and innovative organization should be a consistent priority.You can do this
by building communication channels between field workers and management, by giving
those who interface with end users more voice in decision-​making and process making,
and by maintaining a culture of a learning organization.
Creating a Learning Organization
Whatever you choose for your growth strategy, it should include room for information
gathering and innovation. Each new site, market, or offering is a source of information
to help you assess performance, impact, and potential for further growth. Furthermore,
you will experience many unexpected plot twists, and these will allow you to glean
invaluable insight for improving your product or service, processes, value chain, and
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Structuring as an Organization 215
Start here
Challenge
Co-creating the
solution
Engaging local
communities as
you grow
Learning about and
testing new
contexts
Designing,
prototyping,
testing
Choosing which
characteristics to
retain
Retesting in new
markets, trying
new offerings
Measuring
outcomes
Interfacing with
users
Setting new targets
Business model
and funding
Adapting pricing /
marketing
Funding and
earning revenue
from growth
Organizational
aspects
Standardizing and
refining processes
Expanding team
and capacity
Communications
Communicating for
scale
Reaching new
audiences
Evolution
Responding to a
changing context
and challenge
Collaborating with
others, lobbying,
building knowledge
Where do you
want to reach?
Creating new
patterns, trends,
frameworks
Figure 8.9 Growing and evolving at multiple stages of the journey
future plans. A growing organization, after all, creates something new every step of the
way (Figure 8.9). As your experiment matures, your knowledge will catch up to your
unknowns, but each new phase will present new unknowns and new opportunities for
both success and failure.
Listen to your customers –​which may mean delegating more organizational resources
to feedback and signaling –​to compensate for the growing distance between you and
end users. How can this information drive new innovations within your organization?
Are there feedback loops from different sites, teams, or product lines, or from internally
versus externally facing components? Size can be an advantage in terms of economies of
scale and number of people reached, but it can also slow information flow and innovation.
Giving due time and attention to data empowers growth best.
Next Steps
This chapter establishes strong foundations for a healthy organization. By considering
the pillars of people, process, governance, and legal structure, you can ensure that your
216
216 Structuring as an Organization
endeavor grows beyond its pilot stages and beyond the founders. For your organization
to flourish and thrive, you first must ensure that all its vital signs remain stable as you
roll out operations and start growing. Once you’ve demonstrated that the organism can
handle the pressures of growth, you can start thinking about growth. Important considerations include building a culture that is in line with your values and mission, and creating
a learning organization that will allow for the flow of communication between different
parts of your organization. We will focus on communications in the next chapter. Then,
in the final chapter, we’ll talk about further considerations for growth and expanding
your impact.
Chapter Assignment
1. Is it possible for you to carry out your work within an existing organization? Is it
absolutely necessary to start your own organization from scratch to do this work?
What are the pros and cons of each? What are some examples of organizations you
could potentially incubate within?
2. Look up the legal registration options available to you in the country or countries
that you’re working in. What advantages and disadvantages does each confer to you?
Would you benefit from registering in more than one country?
3. If you have decided to form a new organization and have chosen your legal structure,
look up the requirements specific to this type of organization. What are the taxation
and reporting requirements? What are the industry-​specific standards you need to be
aware of?
4. What are some critical ingredients for your endeavor’s health? What are some ways
you can set up the four pillars of people, processes, governance, and legal structure so
that your endeavor can grow beyond the founders? Write a few bullet points for each
of the four pillars, listing your priority actions.
5. Write out a job description for your board members. What would you need from
them? What do you want them to hold you accountable for? Make a list of your
“dream team” board members.Who are the first five people you will invite, and what
is your action plan to recruit them?
Notes
1 Schein, E. (1988). Organizational culture and leadership. Jossey-​Bass Publishers; Warrick, D. D.,
& Mueller, J. (eds). (2015). Lessons in changing cultures: Learning from real world cases. RossiSmith
Academic Publishing, pp 1–​16.
2 Some resources were suggested by a serial entrepreneur colleague to help prepare for and
guide these conversations: How to fix the co-​founder fights you’re sick of having –​lessons
from couples therapist Esther Perel (available at: https://​rev​iew.fir​stro​und.com); Structuring
equity splits to mitigate co-​founder conflict by Ghosh et al (available at: https://​start​upgu​ide.
hbs.edu); Crucial conversations training: Summary of techniques (available at: https://​virtua​
lspe​ech.com); and the learning resources on Slicing Pie (https://​sli​cing​pie.com). Another
popular resource many aspiring entrepreneurs turn to is the book The founder’s dilemmas
by Noam Wasserman, which is summarized in this short piece by the author: Wasserman,
N. (2008). The founder’s dilemma, Harvard Business Review. https://​hbr.org/​2008/​02/​the-​
found​ers-​dile​mma
3 Some resources on employee ownership can be found at the websites of the National Center for
Employee Ownership (www.nceo.org) and Project Equity (https://​proj​ect-​equ​ity.org).
217
Structuring as an Organization 217
4 Rosenthal, L. (2012, April 15). Nonprofit corporate governance: The board’s role. Harvard Law
School Forum on Corporate Governance. http://​corp​gov.law.harv​ard.edu/​2012/​04/​15/​nonpro​fit-​
corpor​ate-​gov​erna​nce-​the-​boa​rds-​role/​
5 More information is available on the New Venture website: https://​new​vent​uref​und.org
6 See more at: www.soc​ialg​oodf​und.org
7 The Fiscal Sponsor Directory is available at: https://​fis​cals​pons​ordi​rect​ory.org
8 See UK government information on charity types at: www.gov.uk/​char​ity-​types-​how-​to-​cho​
ose-​a-​struct​ure
9 Information from the US Small Business Administration on choosing a business structure is
available at: www.sba.gov/​busin​ess-​guide/​lau​nch-​your-​busin​ess/​cho​ose-​busin​ess-​struct​ure
10 See more on the Salesforce Foundation at: www.sal​esfo​rce.com/​comp​any/​phila​nthr​opy/​sal​
esfo​rce-​fou​ndat​ion/​
11 University of Wisconsin-​
Madison Center for Cooperatives –​https://​uwcc.wisc.edu;
Cooperative Development Institute –​https://​cdi.coop; Cultivate.Coop –​https://​cultiv​ate.
coop/​wiki/​Main_​P​age
12 Co-​operatives UK has information on choosing your legal form at: www.uk.coop/​start-​new-​
co-​op/​start/​choos​ing-​your-​legal-​form
13 To look up different countries and industries, you can visit the International Cooperative
Alliance at: https://​coops4​dev.coop. Cooperative Business New Zealand has a helpful website
for that country: https://​nz.coop
14 You can access the Social Enterprise Law Tracker at: https://​socen​tlaw​trac​ker.org.You can also
check for up-​to-​date resources and conferences hosted by the center at: law.nyu.edu/​centers/​
grunin-​social-​entrepreneurship/​resources
15 See the UK government’s information on setting up a social enterprise: www.gov.uk/​set-​up-​
a-​soc​ial-​ent​erpr​ise
16 Publications and resources on these topics are rapidly evolving. A helpful online reference
including several countries is: Huang, C-​C., & Donner, B. (2018). The development of social enterprise: Evidence from Europe, North America, and Asia. https://​soc​ialw​ork.rutg​ers.edu/​sites/​defa​
ult/​files/​report​_​40.pdf. A helpful printed resource is: Means, B., & Yockey, J. W. (eds). (2018).
The Cambridge handbook of social enterprise law. Cambridge University Press. See: www.cambri​
dge.org/​core/​books/​cambri​dge-​handb​ook-​of-​soc​ial-​ent​erpr​ise-​law/​1CD1F​C4AD​9E77​
D295​6687​0839​A19C​0EF. Also keep your eye out for a global report on social enterprise to
be released in 2023 by Dana Brakman Reiser at the International Academy of Comparative
Law: https://​aidc-​iacl.org/​gene​ral-​con​gres​ses/​
17 Sistema B –​www.siste​mab.org; Lebanese Social Enterprise Association –​https://​lse​asso​ciat​
ion.org
18 See more at: www.cons​ciou​scap​ital​ism.org
19 Collective Impact Forum. (2014, January 13). Tools for backbones. www.collec​tive​impa​ctfo​
rum.org/​resour​ces/​tools-​backbo​nes
20 Collective Impact Forum. (2014, January 13). Tools for steering committees. www.collec​tive​
impa​ctfo​rum.org/​resour​ces/​tools-​steer​ing-​com​mitt​ees
21 See Project Last Mile’s website at: www.proj​ectl​astm​ile.com
22 See: Christie, S., Chahine,T., Curry, L. A., Cherlin, E., & Linnander, E. L. (2021).The evolution
of trust within a global health partnership with the private sector: An inductive framework.
International Journal of Health Policy and Management, 11(7): 1140–​1147.
23 See the B Corp Climate Collective’s website at: www.bco​r pcl​imat​ecol​lect​ive.org
24 Learn more at the B Lab website: www.bcorp​orat​ion.net
25 Watch the short video at: www.patago​nia.com/​acti​onwo​rks/​about
218
9Pitching and Communications Strategy
Chapter Overview
This chapter is about effectively communicating with your stakeholders. Business
plans and pitches are essential communication tools, but they’re not the only ones.
A communications plan specifies what to convey to whom and why, when, and
how.You will learn how to:
•
•
•
•
Write a business plan
Create your slide deck and present your business plan
Deliver a compelling pitch
Build a goal-​oriented plan for communications with all stakeholders
In this chapter, we’ll discuss the different components of a communications plan, making
sure that you’re conveying the right information to the right people in the most effective
way and at the most effective time. By the end of the chapter, you’ll be able to outline
the key components of your communications plan: who you want to communicate with;
what actions you want them to take; how frequently each stakeholder group requires
communications; and key messages and potential channels. Like everything else in your
endeavor, you’ll then need to gather evidence about what works best for each stakeholder
group via testing.
We’ll also focus on your pitch. At the end of the chapter, your assignment will be
to prepare a pitch deck that presents your endeavor to a stakeholder group of your
choice: customer; economic buyer; funder; policymaker; community groups; or other
collaborators.
Social entrepreneurs are often intimidated by this aspect of their work. But what they
don’t realize is that they have communicated in so many ways, shapes, and forms already.
Co-​creating your solution is a form of communication that requires exchanging information in multiple directions. Listening can be one of the most important parts of communicating. Brainstorming with your team and developing your first prototypes also involved
communication, to exchange and catalyze ideas. Testing your prototypes then required
getting feedback from your end users. Communicating your impact and deciding on
metrics were also key components of your communications strategy; the metrics you set
in Chapter 5 are communications tools in and of themselves. So, you are already pretty
good at this communications stuff. Don’t forget that!
DOI: 10.4324/9781003094715-10
219
Pitching and Communications Strategy 219
Packaging and Pitching Your Business Plan
In this chapter, we’ll make sure you have the right tools to mobilize resources for your
venture. The first thing you’ll need is a business plan or executive summary that outlines
the key points of your business model –​in other words, how and why it works.
Why Do You Need a Business Plan?
We’ve all heard the famous saying: “People don’t plan to fail; they fail to plan.” At this
stage, you’ve failed on purpose while experimenting with different solutions in the design
stage; now it’s time to start succeeding on purpose! The point of a business plan is not to
lock yourself into a minute-​by-​minute dictation for spending the next several years, as
many social entrepreneurs fear. The first point is to have a road map. It’s that simple –​a
map lets you see where you’re going and the different ways to get there. You can still
decide to go off-​roading; the map just helps you assess and plan for the dangers and
opportunities ahead.
Second, a business plan helps you garner support. If you want people to help you,
you’ll need to show them where you’re going. Most people don’t back an idea, they back
a person –​that person’s vision and ability to turn vision into reality. You need not only
passion and vision to demonstrate that you are a backable social entrepreneur, but also the
know-​how to translate an idea into results.
Your business plan can and will change. As you implement your plan, you have to be
responsive to emerging field data and adapt to new evidence and changing contexts. In
fact, it’s that responsiveness and adaptability that will most likely determine your success.
There are a lot of unknowns, as we explored in the last chapter. And while you’ve done
a lot of work to chart out this new territory, think of your business plan as an adaptable,
living and breathing thing –​you can, will, and must revisit it along your journey.
How to Write a Business Plan
Guess what? You’ve already written the key components of a business plan. The chapters
in this book represent your journey of building an effective and viable solution, and the
business plan simply presents the ingredients of the solution. If you haven’t skipped the
exercises that conclude each chapter, then all you need to do now is put them together.
Start by describing the challenge you’re facing, any key statistics that can help capture
the challenge’s breadth and depth, and some personal stories that capture the urgency and
importance of tackling this challenge.
Then you present your solution, describing how it builds on existing evidence, what
others have and have not tried before, and how it was co-​created with the community
and developed through user-​driven design.
You present your mission, vision, values, and theory of change. Then you go about
describing how it will all work. This includes describing your market research, preliminary results from your testing and piloting, and your customer experience flowchart.
Include summary information on the nuts and bolts of your operations, such as distribution channels and key resources.
This is followed by your revenue model and financial projections, time line and break-​
even point, and plans for growth. Last but not least, you present your SWOT analysis and
20
220 Pitching and Communications Strategy
describe your contingency plans to mitigate risk (how you will respond to and incorporate the external factors in your PESTEL analysis).
A business plan provides high-​level information and summarizes it in an easy-​to-​
understand format. If you’d like to include details that might interfere with flow, then it
might be better to cover them in an appendix.
Highlight your strengths and convince the reader that you and your team are the right
people to make this happen. As with everything you do as a social entrepreneur, this is
not something you type up alone or overnight. This is a living, breathing document that
is co-​created with your stakeholders over time and revisited as your venture grows.
Your business plan can come in many different sizes, shapes, and forms. It can be a
document or a slide deck, long and detailed or concisely stated. Go with what works for
you, and you can tailor it to different audiences as needed.
To start, aim for a summary document totaling 10 to 20 pages; some business plans
might be much longer. For a deck, which is more sparing than a narrative document, 10
is an ideal number of slides.
Most entrepreneurs like to have both a narrative document and a slide deck, because
after pitching your slide deck to a potential supporter, you might be asked to share more
details. Other entrepreneurs skip the written business plan altogether, focusing instead on
a compelling deck that contains all the key information they think investors and other
stakeholders will want to know.
Executive Summary
Irrespective of the length and format of your business plan, you should prepare an executive summary that is preferably less than five pages. It tells your reader just enough about
the main concepts and components of your venture, highlighting key takeaways from
each component of the plan. Many potential stakeholders will ask you for a one-​pager.
Even so, remember that writing the executive summary is the last step in putting
together your business plan. As you write the plan, keep track of key items or takeaways
you want to make sure any reader can remember. Those are the components of your
executive summary.
Business Plan Outline
Before you go through previous chapters and dig up all your homework assignments, let’s
outline a business plan. The sample outline below encompasses the basic components of
a business plan or slide deck as they should be presented. Each numbered point ideally
can be captured in a written page or a slide. The indented points are the details you need
to elaborate on if you’re writing a full business plan document; you can also discuss these
details if you have the opportunity to make a full presentation (more about presentation
options soon). Of course, you can use more than one page or one slide for each point, but
remember that technical details serve you best as appendices.
You don’t need to stick to the exact order in the following outline, but make sure your
business plan tells a story and follows the logic you used in developing your solution.
Have you noticed how most websites have different sections called “about us” or “who
we are,” as well as “what we do” and “how it works”? These are key pieces of information
that people will want to see in your business plan or slide deck.Think about where to put
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Pitching and Communications Strategy 221
each piece and how it combines with other pieces to convey your message. Just be advised
that any social business plan should start with the challenge and the solution.
Sample Outline
1. Cover page: contact info, title, name of venture, logo, date of writing/​presenting
2. Challenge: the social/​environmental challenge you are facing, including key statistics
about who is affected, where, how, and root causes
3. Opportunity: the opportunity for change that you have identified, including insights
from the community you are working in and its lived experience leaders
4. Solution: a succinct description of your offering, customer, and theory of change
5. Vision, mission, value proposition (a description of the components of your compass)
and how it works (customer flowchart)
•​How you have tested it with customers so far, and the preliminary results
6. Revenue model: how this is viable
•​Economic buyer, main costs and revenues, financial projections, break-​even point
•​Scenario analysis, competition and market analysis, threats and opportunities
7. Outcomes: how it affects people, what it changes, long-​term effects (including direct
service, scaled direct service, systems change, and framework change)
•​Short-​versus long-​term goals, milestones, phasing
•​Expansion plan: Where you will reach, how many people you will impact, how big
you will grow
•​Stakeholders and community ownership; potential partners and collaborators
8. Team: why you can make it work (e.g. skills, values, your story), how this came about,
key positions and who fills them, why you are the best people to make this happen
•​How your team will evolve to meet the needs of a growing organization
•​Strengths of your model and of your team, which will allow you to reach your goals
9. How the audience can help: what you want from them, where they can add value
•​Challenges: obstacles, risks, limitations, and how all these are addressed
10. End with a reminder of your vision for the future, and the change you will make,
preferably closing the loop with your plan’s first one or two points
Presenting and Pitching Your Plan
You should be prepared to present your venture in a variety of formats. When presenting
a slide deck to investors, a pitch lasts between 10 and 20 minutes. At conferences, speakers
are usually given this same amount of time, with additional time afterward for questions
and answers. If you are speaking as part of a panel, you may be allotted five minutes or less,
with a longer time set aside for discussion. Many entrepreneurs find it helpful to prepare
a full slide deck, an abridged version of the deck, and an elevator pitch.
The Full Deck
Your full slide deck is something you can adapt to different audiences: funders, peers
attending conferences, prospective clients, and other stakeholders. It is based on your
business plan and follows the same general order and outline. While the basic information will not change from audience to audience, your areas of focus and the ordering will
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222 Pitching and Communications Strategy
change.We’ve all rearranged our resumes to better suit various job descriptions –​the same
goes for different audiences. If you’re presenting to funders, you may need to spend more
time going through financial details. If you’re presenting to community members whose
collaboration you’re seeking, you may need to spend more time describing the feedback
you received from various community members, how it was incorporated into the final
product, and how you’re leveraging community assets at multiple points along your value
chain, working alongside lived experience leaders.
If time allows, it’s helpful to share preliminary results, trends, patterns, and even raw
data with your audience. If you’re tight on time, include these as appendix slides. What
factors have affected the customer experience so far? How are you faring with respect to
your competitors? Your audience may have questions on these points, so it’s better to be
prepared!
Remember that flow matters.You’re telling an engaging story, so slides should not be
too wordy or image heavy. Refer to the 10/​20/​30 rule by Guy Kawasaki,1 who provides
a helpful blog post and downloadable template.2 Please read it now.
The Abridged Version
When you are given only five to ten minutes, use an abridged version of your slide deck.
What challenge are you tackling? What is your solution? How does it work? Who are
your clients and how are you reaching them? What is your business model? Where will
you reach in terms of scale?
Again, you can include more detailed information in an appendix or save it for discussion or a question and answer session. The goal of your presentation is simply for people
to understand what you do, as a starting point for discussion.
Less is More
The fewer pieces of information you show, the more information will be conveyed and
retained by the audience. Don’t include all the statistics you have gathered on your social
challenge. Include one photo, or a very select number of statistics, that demonstrates
urgency and need. Then move on to your solution. There is a growing body of literature
championing the “less is more” approach to presenting information, especially in a setting
where time is limited. The classic blog post “Really Bad Powerpoint” by Seth Godin is
a short must-​read piece containing great advice on what to do and what not to do in a
presentation.3
Your full slide deck should be reserved for settings where people want detail about
your work and are prepared to focus on a long presentation. Outside of those settings,
your goal is to secure the attention of your audience. In these cases, minimize the information on your slides, use a simple message or photo to convey your point, and focus
on making an emotional connection. Your purpose here is not to answer all possible
questions, but answering most questions in a clear and concise manner.
The Elevator Pitch
The elevator pitch does not involve a slide deck. This is how you present your organization verbally to someone at a networking event, conference, reception, or other social
encounter. The term originates from the literal situation of bumping into someone in
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the elevator and having mere seconds to tell them what you’ve been up to. You need to
be prepared to deliver a speedy, info-​packed answer to the question: So, what have you
been up to? And this does not mean talking fast. If you don’t have your elevator pitch
prepared and practiced in advance, then you’ll still be fumbling for words by the time the
doors open.
When preparing your elevator pitch, imagine yourself in an elevator where you have
seconds to explain what you do and why it’s important. Can you answer this question in
one sentence?
You can have a slightly longer elevator pitch reserved for situations where time –​
and the interest of the person listening –​allows for a fuller explanation. Having a one-​
sentence version is a must.
Some social entrepreneurship conferences and contests conduct “lightning” rounds.
This means you have less than a minute (sometimes 30 seconds or less) to pitch your
social venture to an audience or panel of judges. Try watching some lightning rounds
online to grasp what pitching might look like and feel like.4 Try out your pitch on
friends and family and teammates before sharing it with others. And rehearse, rehearse,
rehearse all the while. Your pitch has to feel natural, and you need to show enthusiasm
and energy.
Sidebar 9.1 Pitching Tips
1.
2.
3.
4.
5.
6.
7.
Find your balance.
Make a connection.
Research your audience.
Prompt questions.
Be intentional with your body language.
Be honest.
Have a clear ask.
Pitching Tips
Find Your Balance
Perfecting your pitch ahead of time is crucial for a smooth delivery, but there is a fine
line between delivering a well-​prepared pitch and sounding like a robot. While fumbling
for the right words will risk losing the attention of your listeners, so will a delivery that
sounds automatic. Sounding natural, passionate, and authentic is what will engage your
audience. Say it like you’re saying it for the first time!
Make a Connection
It’s not just the words you say and how you say them, but also how you connect with the
person you’re speaking to. Maintaining eye contact, smiling, and positioning yourself so
that you’re facing them and giving them your full attention will draw them in and help
them give you their full attention in return.
A common mistake is looking around the room at a networking event while you’re
talking to someone, to see who else you should be talking to. It’s hard for your listener
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224 Pitching and Communications Strategy
not to notice this, and it will make them much less interested in hearing what you have
to say. Make them feel like they’re the only person in the room.
Similarly, if you are standing in front of a room full of people presenting your work,
make each person feel as if they are engaged in a personal conversation with you. Look
at them and hold eye contact for a few seconds until moving on to the next face. Wait
to see if something registers in their face, which shows they are actually listening. Find
someone whose eyes appear glazed over and speak to them until they focus back on you.
Pay attention to the signals your audience is giving. Are they smiling, nodding, or looking
concerned about what you are saying? These are all signs that they are really listening and
that what you are doing is working. Are they checking their watches or their phones or
looking around the room at others? This means you have lost them and need to switch
gears fast. Ask a question, take a vote, show a picture, or tell a joke!
Research Your Audience
One of the best ways to make a connection, whether in a small-​group conversation or
while presenting to an audience, is to research your audience ahead of time. What do you
know about your listener(s)? What do they do for a living, what do they care about, and
why are they here today? Presenting your work from different angles –​focusing on geographic region versus a demographic group, for e­ xample –​will draw in diverse audiences
with different perspectives.
Prompt Questions
Another great way to keep your audience engaged is to share just enough information to
spark curiosity, holding back a nugget of information for “round two.” This is especially
the case in informal settings, where you are making conversation and networking with
one individual or a small handful of individuals. Here is an example:
•
Scenario A
Your listener: So, what do you do?
You: I create medical devices to enhance maternal child health in low-​resource
settings.There are X children around the world who die each year and Y mothers
who die in childbirth.This can be solved with a simple device that does A, B, and
C. We work in geographic regions 1, 2, and 3, have served y people so far, and
plan to scale to z in five years.
In this scenario, you have probably bombarded your listener with too much
information.
•
Scenario B
Your listener: So, what do you do?
You: I create medical devices that enhance maternal child health in low-​resource
settings.
Your listener: Oh, interesting …
You: Yes, it’s extremely challenging work. There are X children around the world
who die each year and Y mothers who die in childbirth. This can be solved with
a simple device that does A, B, and C.
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Pitching and Communications Strategy 225
In this scenario, your listener is more likely to ask you a question to keep the conversation
going. By now, they are probably extremely curious to find out more!
Know When to Ask Questions
It may be counterintuitive, but the best way to get someone curious about your work is
to ask them about themselves. People love talking about themselves, and a great way to
create a positive first impression is to show someone you are interested in them. Listening
to their story will prep them for listening to yours. Plus, it helps you know your audience before pitching to them! You can segue to your work by asking about successes or
challenges in their work and finding commonalities you can talk about. Starting your
presentation at a stage where the listeners already know they have something in common
with you automatically makes them more interested in learning about what you do.
Common Mistakes to Avoid
Most of us have spent enough time listening to presentations to know the most common
mistakes to avoid!
•
•
•
•
•
•
Don’t look at the ground. → Do look directly at your audience.
Don’t fiddle with your hands. → Do place them by your side to avoid distraction. Use
them strategically when emphasizing a point.
Don’t shift your weight. → Do stand strong with equal weight on each foot.
Don’t talk too fast. → Do maintain a consistent pace of delivery while livening it up
with intonations, surprises, and catchy pieces of information.
Don’t make it sound like you have all the answers. → Do sell your ideas, while
showing that you’ve thought about mitigating risks and addressing challenges.
Don’t stress out. → Do enjoy yourself, because you’re the one who will set the tone
for the mood in the room, and you want others to enjoy listening to you.
A good way to catch counterproductive public speaking habits is to record yourself and
play it back multiple times. For the first playback, listen to yourself carefully and try to
catch any habits you can improve on, such as speaking too softly or too quickly, or saying
things like “um” and “like.” During the second playback, watch your body language for
distracting movements, looking at the floor, or poor posture. The third time you view the
playback, watch it in fast-​forward: this will make even small gestures painfully obvious,
helping you to correct them. Next, practice your new habits for a second video recording
and see how you’ve improved and how you can do better. Try new postures that convey
confidence and authority –​it turns out your body language doesn’t only influence your
audience –​it influences you!5
What Is an “Ask”?
By the time you finish your pitch, your audience should be asking themselves: How can
I help? How can I get involved? They will be expecting you to provide them with an ask.
This means concluding with information about what they can do. Depending on your
audience, you may want to provide a combination of nonfinancial and financial actions.
For example, asks could include the following:
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226 Pitching and Communications Strategy
•
•
•
Follow us on social media and tell your friends.
Volunteer your skills and expertise.
Sign up for a monthly or annual donation.
Or, you could target an investor or group of investors by saying:
We have an idea that could change the world. To develop our proof of concept, we
need $X. With your help, in the next six months, we aim to A, B, and C.
Or for a more advanced venture:
In the past three years, we have demonstrated proof of concept, showing that our
product or service does A, B, and C. In the next five years, we are looking for
our solution to reach X people.We are raising $Y to fund this expansion (having
already shown them information on your costs, revenues, and business model).
With your help, we can achieve (fill in the blank, inserting your social outcome
or objective).
These are just examples of asks. The important thing is that you have carefully thought
out and planned what you are going to do and what you need to get there. Run your
pitch and your ask by friends, families, advisors, and supporters.Tailor it for each audience,
and then go for it!
Humble Self-​Promotion
Most social entrepreneurs have a strong sense of humility, because the work itself is humbling. When presenting your work, your humility will come through, and that is a good
thing. Your audience will respect you for it. Just make sure that being humble about
yourself doesn’t mean understating your work, your ideas, and the importance of your
mission. Promoting them is not the same as promoting yourself. And remember, you are
the person who developed this mission, this vision, this product or service, and its value
proposition. As much as you believe in your work, believe in yourself. Humility is an
important quality in a social entrepreneur. But that doesn’t prevent you from showing
pride in your work. Don’t be afraid to sell it.
Advice for Introverts
Many of the most creative people are introverts, who prefer to be thinking quietly to
themselves rather than talking to others. If you are an introvert, do not be intimidated by
the concepts in this chapter. It is possible to enjoy yourself while pitching and networking!
Focus on the ideas and on your work and how much you believe in both. It’s not about
you, nor the person you’re talking to. It’s about the mission.
Communication is something you can learn, even if those skills don’t come naturally
to you. If you feel energized after working a room, then great! If you don’t, that’s totally
okay. Knowing yourself, setting aside time for yourself before and after social and professional engagements, and sharing responsibility with your teammates will make communication a more rewarding experience for you. Just don’t shy away from it. Each and
every person can play to their strengths when conveying ideas to others –​whether you
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Pitching and Communications Strategy 227
are gregarious, quiet, talkative, thoughtful, charismatic, reserved, or a combination of these.
Don’t try to be something you’re not and, at the same time, don’t give up until you find
the communication style that feels right to you.
Sidebar 9.1 summarizes some of the pitching tips shared above.
Building a Communications Plan
Your business plan and slide deck are only part of your communications. Let’s take a
moment to step back and think about the various stakeholders with whom you need to
exchange information, as well as the different approaches and skills needed to communicate with each one.
The different stakeholders with whom you want to communicate vary widely, from
customer to funder to team member to policymaker. Each stakeholder group also requires
a different communications plan (Table 9.1). Your communications plan will entail
messaging (what to convey), timing (when to reach out), and channels (how to reach
them), which will all be determined by your objective (why you need to communicate
with them).
A typical communications plan includes the following components:
•
•
•
•
•
Who: different stakeholders you need to communicate with
Why: actions you want each stakeholder group to take
What: messaging and content that will inform stakeholder action
How: communications channels to convey that messaging and content
When: timing and organization of your messaging and delivery
Table 9.1 Example of diverse stakeholders and objectives for communications
Stakeholders
Desired actions
Examples of communication tools
Customer/​end user
Adopting your solution,
providing feedback, engaging
others
Paying for your solution
Direct sales, social media,
community workshops,
one-​on-​one meetings, webinars
Direct sales, social media,
conferences, webinars
Implementing, innovating,
improving your solution
Meetings and convenings, internal
communications (messaging
software), reviews
Reports, meetings, visits
Economic buyer
(if different from
customer/​end user)
Team
Board
Funders
Partners and
collaborators
Policymakers
General public
Assessing progress, ensuring
organizational health,
strategizing for future
Investing in your solution
Implementing and growing your
solution
Drafting, enacting, enforcing laws
and regulations to tackle root
causes
Raising awareness, participating
in advocacy
Pitch deck, business plan
Meetings and convenings, impact
reports
Research papers, policy papers
Reports, articles, blogs,
documentaries and short videos,
podcasts, social media, events
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Below we’ll go through these different components. The objective here is for you to
understand the different components of a communications plan and to start thinking
about how you will go about developing and implementing that plan.
The “Who” and the “Why”
To start developing the different components of your communications plan, explore the
different categories of audiences you need to communicate with as well as the different
purposes for communicating with each one.
List your target audiences, according to why you are trying to reach them. If your goal
is to sell your offering, then you are trying to reach the economic buyer. If your goal is to
spread the word about the social outcome you are working toward, then you are targeting
stakeholders who can influence policy and other determinants of social infrastructures
and outcomes. Other goals include keeping your team engaged so that they feel a sense of
ownership of processes and outcomes and, in turn, provide feedback to improve processes
and outcomes. Reporting back to existing supporters and managing relationships with
prospective supporters –​or, even trickier, relationships with those who stand against you –​
are all separate objectives with separate target audiences.
Communicating with Customers
You’ve been communicating with end users and economic buyers from your endeavor’s
outset to co-​create your offering. Now, how are you going to get others to adopt it? How
do you get the word out? How will you compete with all the other offerings that end
users are spending their attention, time, and money on? Also, once you do attract your
end users and economic buyers, how do you keep them? How do you ensure that your
customer service and feedback systems make your end users feel seen? Future iterations
of your offerings, new offerings, and your team’s responsiveness to end users all depend
on communicating with your end users. This is a two-​way exchange: getting the word
out and listening to others.
Communicating Internally
Internal communications is another essential component of getting your job done and
making progress toward your mission and goals. How can you ensure that information is
exchanged across your workforce? Recruiting, hiring, and training team members involve
communication that conveys your mission and ensures that each person internalizes
your values and vision. As your team grows, other forms of communication become
essential: informing people, getting or giving input, and making decisions. Internal
communications can take place horizontally –​between team members –​and vertically –​
between management and the field, and between staff and the board of directors.
Communication between management and the field ensures that end users’ voices are
heard and that all decisions are made with end users’ best interests in mind.This means that
people delivering the offering to end users need to get information back to the executive
roles responsible for strategy and garnering resources. Conversely, executive team members
need to solicit information and feedback from the field when making decisions.
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Keep in mind that end users and those directly interacting with them may be most
expert in users’ needs and preferences. Management gathers, synthesizes, and analyzes
information about end users’ wants and needs –​they don’t make decisions based on their
own opinions and assumptions. It is crucial to be evidence based beyond design, piloting,
and rollout, and it is everyone’s job to gather this evidence. Everyone. Build feedback
systems so that information flows from end users to your organization’s decision makers,
and not the other way around.
How can this be done? To empower your team members to share end users’ as well as
their own feedback, open channels of communication need to be built into your organization from the start. Regular meetings, events, and surveys make sure that everyone has
a voice. Comment boxes, online forms, asking random samples, and other data collection
vehicles can reap this valuable information within your organization as it grows. Even
the layout of your office can impact the exchange of information. Open spaces, shared
facilities, and other design elements can help people interact more regularly, which can
foster exchange of feedback and new ideas. Throughout, transparency and consistency
are key.
Most organizations conduct an annual review of employees, and there are two opportunities to improve on this process. The first is to increase frequency (e.g. on a quarterly
basis). Reviews don’t have to be elaborate or time-​consuming; they’re an opportunity for
people to share feedback. The second is to conduct 360-​degree reviews, which means
that everyone is given the opportunity to review others; the review doesn’t only happen
from the top down.
Communicating with Funders and Other Partners
In traditional commerce, reporting to shareholders meant conveying information about
financial performance. In a social venture, your stakeholders are not necessarily people
who hold shares in your company or stand to benefit financially from it. Remember, the
word “stakeholder” means anyone who has a stake in your venture, such as community
leaders, existing authorities, potential opponents, and other parties you met when you
started co-​creating your venture.These are the people who prioritize the social outcomes
and end goals you envisioned.
Reporting to funders and other supporters therefore involves tracking social outcomes
using the metrics you identified in Chapter 5. You also must convey the voices of your
end users, which are harder to capture through statistics. Reporting on your outcomes,
progress, successes, and lessons learned is key to making it personal.
Your stakeholders are people with whom you need to continue communicating,
because support is something you need to keep garnering throughout your journey. Let
people know what’s working and let them know what you could still use their help with.
This is the best way to keep them engaged.
Finally, remember that reporting is an opportunity for you to not just show off your
successes but also share valuable information you’ve collected along the way. This will
cause a ripple effect whereby your work will influence the work of others. A ripple effect
has to happen consciously. So, think about how you can broadcast information you want
others to adopt and propagate, and message that information accordingly. This will have a
huge social impact in and of itself!
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Communicating with Policymakers and the Public
Your collaborators, supporters, partners, suppliers, team members, and end users are
already part of your value chain. But what about people who influence your work,
by making or blocking policies that affect your ability to reach your target audience?
Thinking back to Chapter 1, we talked about identifying the root causes and pathways of
social and environmental challenges.These are complex, and you can’t tackle them all. But
there are opportunities you can look for –​and opportunities you can create with others
in your value chain –​to influence the social, environmental, political, and economic
determinants that underlie, propagate, mediate, or block these pathways. Consequently,
there is a much wider audience for your communications strategy than you might initially
think. This includes lobby groups that work for or against your cause, policy institutes
and think tanks, politicians, and advocates. As with all other audiences represented in
your communications plan, information needs to flow in more than one direction: What
information do you need to get to these individuals and groups? What information do
you need to get from them? Pay attention to what they are saying and doing, because
it will influence your work and your ability to reach your goals. And you may have the
opportunity to influence them in return. Beyond communicating your work to those
who interact with it directly, exchanging information with people who influence your
field cannot be overlooked.
Building a Goal-​Oriented Communications Plan
This is why it’s important to build a goal-​oriented communications plan. As an endeavor,
everything you do, say, and share has a goal in mind. Ad hoc or sporadic communication
does not serve this well.Your communications strategy needs to be well studied, thought
through, planned in advance, and crafted with specific objectives in mind.
This is why each target audience is listed according to why you are trying to reach
them. If your goal is to sell the product or service, then you are trying to reach the prospective end user. If your goal is to spread the word about the social outcome you are
working toward, then you are targeting stakeholders who can influence policy and other
determinants of social infrastructures and outcomes. Other goals include keeping your
team well informed so that they feel a sense of ownership in processes and outcomes, and
reporting to existing supporters and managing relationships with prospective supporters.
These are all separate objectives with separate target audiences. Thus, we need to craft
different content for each one: this is where the “what” aspect of your communications
strategy comes into play.
The “What”
Exploring your objectives and your target audiences is the first step in building your
communications plan. The next step is figuring out the message you need to convey
to each one. Just like you’ve tailored your solution and its delivery and pricing around
your end users and economic buyers, you’ll need to craft tailored messages to each stakeholder. The trick is to be clear, concise, compelling, and consistent. A careful balance is
required to tailor your message to different stakeholders while maintaining the integrity
of your core story. Let’s talk about important things to keep in mind while crafting each
message.
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Messaging for Action
The information you present to each audience needs to be packaged in a way that
compels those people to take action.You want end users to buy your product or service.
You want internal team members to inform your venture’s process and take ownership
of the results.You want other stakeholders to understand the importance of what you do
and to support it.
What’s in It for Them?
Your messaging is based on your value proposition to each audience. What will the end
user get out of this? Why should your team get the results you’re looking for? What do
other stakeholders have to gain if you achieve your social mission? Understanding the
motivations, needs, and preferences of each party is a key consideration of messaging. To
achieve it, tap the information and analysis you accumulated during the co-​creation and
subsequent stages of your journey.
Stakeholder Ladder
In the world of marketing, the concept of a stakeholder ladder suggests that each
target audience will follow a sequence of stages after they are exposed to your message
(Figure 9.1). First, they will be suspicious. “What is this new idea? Why should I adopt it?”
they might be asking themselves. If you get the messaging right, then those stakeholders
will become prospects: they will start thinking, “This sounds like it might be interesting
to me or benefit me in some way.” Once you nail down your marketing, they will be sold
on it –​this is when an end user becomes a customer, for example. But this is not where
the ladder ends!
Inspire
Advocate
Engaged
Captivate
Convince
Testing
Prospective
Inform
Attract
Suspicious
Figure 9.1 Stakeholder ladder
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232 Pitching and Communications Strategy
Follow-​Up
You need to communicate with stakeholders in an ongoing way –​and content has to be
tailored to them accordingly. A repeat customer requires different messaging from prospective customers, for example. Once you can get customers to come back repeatedly,
they become engaged. And if you can keep your customers satisfied –​more than satisfied,
delighted –​then they become advocates who get others to join in.
This trajectory applies to stakeholders other than end users. After the suspicious and
prospective stages, they test out your ideas and then become fully engaged.The important
thing to keep in mind is that your communications plan needs to incorporate tailored
messaging and timing for each of the stages.
Multidimensional Messaging
A tool for organizing your messaging is shown in Figure 9.2. Here, you list all your
different audiences, creating multiple columns for each: attract, inform, convince, captivate, inspire. What does it take to grab the person’s attention? Where do they read,
watch, shop, buy, listen, and go? What information do you need to provide to them? What
do they aspire to? How do they want to feel? Your answers will probably not describe
Attract
Inform
Convince
Captivate
Inspire
End users
Economic
buyers
Staff
Board
Policymakers
General
public
Figure 9.2 Multidimensional messaging
Source: Inspired by the Messaging Matrix of the Social Enterprise Marketing Toolkit, with many
thanks! Check out this valuable resource and others at: www.ent​erpr​isin​gnon​prof​i ts.ca
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Pitching and Communications Strategy 233
your offering, but rather how that product or service can change their life for the better.
Again, this is where it is crucial to understand each target audience. One common social
marketing tip is to appeal to people’s emotions. This is how you’ll attract and retain them
as long-​term stakeholders. Show how your venture will make a person’s life easier, happier, better.
The “How”
We’ve talked about who we’re targeting and what the right messaging requires. But how
will we get these messages across? Here, we need to think about different communications
channels.
If the “who” and the “why” determine the “what,” then all three will help you decide
the “how.” You have many options, and in most cases you’ll end up using a variety of
different communications channels –​which we refer to as the media mix. The medium
is the vehicle or channel through which you get your message to your target audience. As you consider the following media, keep in mind that communications is not
something you should do by yourself, at least not long after rollout. You should have a
communications strategist thinking about what needs to get out there, to whom, and why,
and one or more team members charged with implementation.
Social Media
Social media can be tricky, because it can just as easily work against you as it can work
for you. As you grow, recruit a social media specialist as soon as possible. This role’s tasks
should include:
•
•
•
•
•
•
Growing followers and likes
Responding to both positive and negative feedback
Strategically posting content for various target audiences, to get them to move up
the stakeholder ladder
Collecting and synthesizing real-​time information, updates, and photos from the
field, co-​creating the content with end users
Making sure that all your social media are regularly updated and consistent with each
other, yet not repetitive
Engaging with the online community
Multimedia and Interactive Media
Your website is one of your most powerful communication channels, as all other
channels will point to your website. Make sure it is interactive. It can include updates
from the field, blog posts from your team and end users, photos, videos, testimonials,
news updates, thought leadership, research, and publications. Your website should not
read like a brochure.
Short videos are a powerful way to get your message across, and they can often be part
of your social media strategy. Podcasts are another medium you can leverage. Research
podcasts dedicated to your space (whether it is industry or geography) and connect with
the podcasters for potential interviews.
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234 Pitching and Communications Strategy
Publications
As you establish your media mix, you need a publication plan. Depending on the context you’re working in, you may plan for a brochure, because some people need something tangible in their hands.Your brochure should be simple and streamlined, with select
examples of what you offer. It needs to contain contact information and actions that
people can pursue if they want to get involved as an end user, supporter, advocate, supplier, or other form of stakeholder.
Start thinking about what else you can publish. You are on the cutting edge of your
field, generating ideas and finding new ways of doing things. This is called “thought leadership.” While your work most certainly speaks for itself, you have an opportunity to
create a ripple effect by informing and inspiring the work of others. Blog posts, website
contributions, and journal articles are as important as the quarterly or annual reports you
release. Collaborating with academic researchers, journalists, and others may be a great
way to add value to the content you are able to develop and share while also removing
pressure and workload from you and your team.
Mailing Lists
Mailing lists are old-​school, but they work! Newsletters can convey information and
give people a sense of community, depending on the setting you’re operating in. Three
important points to keep in mind here are: it’s important not to overdo it, neither in terms
of content length nor frequency of distribution; timing is everything; an action item is
required.
Annual, biannual, or quarterly mailings are advised. Or email blasts can be coordinated
to special events and calendar dates that are specific to your work.6 If you’re starting a
new phase of growth or reaching a new milestone, then this could also be a strategic
time to send out a newsletter, especially when fundraising needs are anticipated. In terms
of content, keep it simple and catchy. A photo is a must, and boldfacing key messages is
highly recommended. Finally, give people an action item. Whether it’s buying something,
donating, sharing with friends, attending an event, or taking a survey, let people know
what they can do to help. Thanking them for their support (even if they haven’t given it
yet!) is always recommended –​positive reinforcement is an effective route to getting and
keeping people engaged.
Only a small proportion of your stakeholders (far less than half) will open your
newsletter, and an even smaller proportion will actually read through it. That is why it’s
important to be clear and concise about key messages and not make your audience work
for them. Having said that, most people do expect and like to see your name in their
inbox and to feel that they are up to date. For those who don’t, make it easy to unsubscribe and access the same content in other ways, such as your website or social media
handles.
Face Time
No, not FaceTime on your phone. We’re talking about old-​fashioned, in-​person interaction. This includes meeting with collaborators or potential funders one-​on-​one, participating in conferences and other events, and organizing smaller events like panels or
roundtables. Following up on these interactions via other channels is a must. Email people
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Pitching and Communications Strategy 235
after you meet with them, send them newsletters or samples of your work, invite them
out to the field –​these are all ways to engage people, retain their attention, and cultivate their interest until they are committed supporters. The best way to win people over
is for them to experience your offering. And although it takes the most time, it is part
of what makes your endeavor a social endeavor. As your organization grows, make sure
you still spend time with your end users. It is one of the most important parts of any
communications strategy. Inviting someone to join you in the field is a highly effective
way to garner support, too.
Remember that when spending time with people, your primary goal should be getting
to know them and what they hope to achieve.Then, when you tell them about your work
and ways to get involved, you can do so in a way that adds value to them. Cultivating
relationships with various stakeholders is one of the most important factors in your
endeavor’s success.We talked about this early on in the context of working in community.
In the context of other stakeholders such as funders, it’s equally important. For example,
when meeting with philanthropists, it’s rarely advised to ask for a contribution at your first
meeting. Multiple meetings and visits are required to get to know each other’s visions,
backgrounds, and work. Invite them to come see your work, meet your team, get to know
your stakeholders. Their interest and desire to get involved will build over time, and there
will be a right moment to talk about how they can do so.
Surveys and Feedback Forms
Some communications channels are better suited to capturing information than conveying
it. Surveys and feedback forms make sure you keep listening and responding to your
customers and other stakeholders. Nothing beats face time, but since you can’t meet
with everyone, having systems for gathering input must complement personal interaction.
Your M&E team will play a crucial role in developing and implementing this part of your
communications plan.
The “When”
Preparing messaging and communicating it through various channels is a time-​
consuming, often labor-​intensive activity. Entrepreneurs and their teams are often so
focused on the challenge, the customer, and the offering, that they don’t budget time and
resources for communications. Then they find themselves scrambling to communicate
while performing other work.
Create a process map for your communications plan, just like you would for other
elements of your operations. Know when each message needs to be crafted, scheduled, and
delivered, and by whom and to what end. Have this in your calendar and in your teams’
workplans.You may need to hire or outsource specialized team members for this role.
Evaluating Your Communications
Just like every other component of your endeavor, your communications need to be
evaluated. What are your intermediate indicators? How is each one tied to the social
outcome you’re working to change? Are you trying to get more followers and likes on
social media as an indicator of awareness, for example; and what is your target –​how
many followers and likes, and by when? Your targets should be informed by the preferred
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236 Pitching and Communications Strategy
channels and media consumption habits of your audience. Make sure to regularly evaluate
the outcomes of your various communications messages and media according to the
targets you established in your communications plan. If you are putting in a lot of time
and paying someone a lot of money to work on something, but it’s not helping you meet
your objectives, then maybe you need to rethink the plan. Over time, each endeavor will
amass its own evidence about what works best in terms of topic, audiences, and objectives.Throwing an annual event might work for one organization, creating a documentary
might be a good match for another, while sending letters in the mail might work better
for others.
Different Strategies for Different Settings
Reaching urban audiences is completely different from reaching audiences in rural
settings. In the first, most people are bombarded with information, and it’s hard to get
their attention. They’re also more likely to use electronic resources rather than print. In
the second, it might be really hard to get the word out at all.
Strategies also vary by culture and geography. One social enterprise started printing its
ads on calendars when it found out that community members loved calendars. Another
used a traditional troubadour to spread the word.Yet others reach end users through outdoor events, plays, and concerts.
Whatever your setting, don’t make it your default to import ideas from the outside.
Look around you and see where people spend their time, money, and attention. Get to
know what people believe in and what they trust. Then make sure your offering, and the
messaging and branding that goes with it, embody those values.
Sidebar 9.2 Tips for Your Communications
1.
2.
3.
4.
5.
Be positive.
Be thoughtful.
Keep it personal.
Keep it simple.
Invoke emotion.
Universal Tips
Sidebar 9.2 lists some universal tips for your communications. As with all aspects of
your endeavor, the most important thing is to center your communications on your
stakeholders and mission. These tips can help draw others to your mission, and help you
achieve the objectives of your communications plan.
Be Positive
People are more likely to respond to positive inspirational stories that make them feel that
change is possible. Sounding an alarm is less likely to invoke a response than sending out
a thoughtful, positive message that motivates people to take a specific action.Think about
how you would respond to the headline “Climate change is out of control!” compared
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Pitching and Communications Strategy 237
to “Did you know these simple steps can make a huge difference?” Rather than feeling
anxiety, a sense of foreboding, or even irritation and anger at the world, the recipient feels
empowered to do something about it.
Be Thoughtful
Most people you’re trying to reach don’t have the full picture like you do. Any information you share with them is simply a snapshot that they ingest and try to build a picture
around. So, you need to be very careful about how you present information, how you
create context, and how you preempt misunderstanding or miscommunication.
This is another opportunity for collaboration. What do your end users and teammates
have to say about communications? What do other stakeholders have to say, and what
do they think about the content you have drafted? Bounce your ideas off people, take
suggestions, run any messages or materials by multiple audiences, and test them out –​like
everything else you do!
Keep It Personal
Another pointer is to focus on a person and tell their story. While numbers are critical
to formulating your solution, they can overwhelm a call for action. If a person is told
that millions of children are dying before the age of 5, they will more likely than not
feel depressed, hopeless, and frustrated. But if they are told that a child named Maya
lived to celebrate her fifth birthday because of your work, then they are more likely to
become supporters. People don’t like feeling helpless; they might even start avoiding your
communications and ignoring your calls for help. Instead, tell them what they can do
to help, and make them feel that they’re making a difference. This applies to your team
members, your end users, and people whose support you are trying to rally.
Keep It Simple
This is a tip you have heard before: less is more. Don’t bombard people with information.
This applies both to the frequency and content of your communications, although there
are variations across communications channels and audiences. Consider social media,
which can involve multiple posts per day, versus mailings that go out a couple of times
per year.
When in doubt, revisit the key messages from your matrix in Figure 9.2. What are the
top messages you want people to retain? Providing too much information might prevent people from focusing on your most important points. Otherwise, you might just get
screened out.
Invoke Emotion
You may already be familiar with this famous quote by Maya Angelou: “People will never
forget the way you made them feel.” Information is easily forgotten. Data, statistics, facts,
and figures are hard to retain and remember. But emotion is something that stays with us.
Inspiring people, making them feel hope, and making them feel like change agents are
the best ways to get them involved. Whether you are thinking about garnering support
or getting someone to pay for your offering, ask yourself: How do people want to feel?
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238 Pitching and Communications Strategy
Most people just want to feel happy. If they believe your product or service will generate happiness for them and the people they care about, then you are connecting your
offering to the most basic need of the human race. And that is what social entrepreneurship is all about.
Next Steps
Your communications plan determines what, why, when, how, and with whom you
exchange information. Writing your business plan and sharing it with others are parts of
your communications plan. Co-​creating with the community in a constant and evolving
way –​gathering feedback from end users, teammates, and other stakeholders in your
value chain –​is part of your communications plan, too. Presenting your work to potential
supporters, opponents, or the general public is something that you are starting to do now.
Make sure you have the right team to help you communicate in a goal-​oriented, effective
manner. The goal of this chapter is not to make you a messaging expert, but to create
awareness of the different forms of communications and the different skills they require.
Your communications plan is a key part of aligning with others and building partnerships
to expand your impact, both within and beyond your endeavor.We’ll talk more about this
in the next chapter.
Chapter Assignment
1. For what purposes do you need to exchange information within and outside your
venture? List the different objectives of your communications.
2. For each objective, list the audience. With whom do you need to exchange information to reach this objective?
3. For each audience group, what are the key messages you need to get across? List one
or two key messages for each audience group.
4. Now step back and assess whether the same audience group has been listed multiple
times. Extract the key messages you are trying to convey. Are there any missing pieces
in your messaging for each audience group? Review Figures 9.1 and 9.2 to determine whether your communications plan is complete for each audience.
5. How will you get the message across at each stage? What is the media mix for each
message? When and how often will you deploy each message?
6. Optional: Once you have evaluated your messaging needs and channels per audience, go back and reorganize them chronologically. Make a work plan for each
month, by week. Who will be responsible for implementing different parts of the
work plan?
Notes
1 Kawasaki, G. (2004). The art of the start:The time-​tested, battle-​hardened guide for anyone starting anything. Penguin.
2 Kawasaki, G. (nd). The only 10 slides you need in a pitch. https://​guyk​awas​aki.com/​the-​only-​
10-​sli​des-​you-​need-​in-​your-​pitch/​
3 Godin, S. (2007, January 29). Really Bad Powerpoint. Seth’s Blog. https://​seths.blog/​2007/​01/​
real​ly_​b​ad_​p​owe/​
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Pitching and Communications Strategy 239
4 Search for “one-​minute pitches” and “five-​minute pitches” online. You’ll find examples from
the TEDx program, the Columbia Business School social venture pitch competition, the Virgin
Startup one-​minute pitch competition, and many others.
5 Watch this TED talk or read the interactive transcript: Cuddy, A. (2012).Your body language may
shape who you are. TED Conferences. www.ted.com/​talks/​amy_​cuddy_​your_​body_​lan​guag​e_​
ma​y_​sh​ape_​who_​you_​are?langu​age=​en
6 For example, international days may be important times when people are open to receiving
meaningful content on certain topics. See the UN’s list of international days and weeks at: www.
un.org/​en/​secti​ons/​obse​rvan​ces/​intern​atio​nal-​days/​
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10Expanding Your Reach
Chapter Overview
This chapter encourages you to reach beyond your solution. You are contributing
to the improvement of your social challenge, but there’s a limit to what you can
achieve on your own. To broaden the impact of your solution, you need to build
partnerships with other entities that share your goal.You will learn how to:
•
•
•
Think beyond your organization by revisiting your endgame
Identify and leverage the knowledge and expertise needed to grow your
endeavor
Join forces with others through initiatives, networks, alliances, and new
ecosystems
You made it! You’re on the other side of a long and winding journey. Your journey
may have begun with a sense of not knowing where to start in tackling the complex
social and environmental challenges surrounding us. Hopefully this book will have
given you a sense of how to get started by organizing information around a challenge
of your choice, and proceeding in baby steps to: gather more and more information
by working with stakeholders to understand their experiences of the challenge; design
a new offering to shift the power dynamics around that challenge; iterate and test for
different implementation pathways for that offering; and learn about ways to build an
endeavor that is financially viable and structured for sustainability over time.This entails
visualizing what success looks like and how you will measure progress along the way,
and also how to set up your endeavor such that it can grow beyond the founders. In
the last chapter, we talked about communications plans to convey your messages to
different stakeholders and rally support around your endeavor. In this chapter, we’ll talk
about expanding your impact –​the different ways you can reach beyond your endeavor.
There are many ways in which social entrepreneurs, intrapreneurs, and extrapreneurs
can influence the behavior, trends, and norms of others beyond their own endeavors.
Examples include partnering with governments and other sectors, influencing policy,
engaging in thought leadership, joining collective impact initiatives, and building new
ecosystems that foster social change. Your pathway will depend on the nature of your
offering, the strengths of your team and collaborators, and the opportunities available
to you.
DOI: 10.4324/9781003094715-11
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Expanding Your Reach 241
Thinking Beyond Your Endeavor
To achieve your goals, it’s not enough to question whether you’re reaching customers.
What you can accomplish alone is a drop in the ocean compared with what you can
accomplish with others.You may be thinking: “I’ve engaged external stakeholders at every
step of developing and implementing my venture.” And this is true. But now it’s time to
think beyond the activities in the previous chapters. How can you expand the cumulative
impact of your and others’ work? To completely transform the challenges you are tackling,
you need to step outside your venture.
This may sound counterintuitive, but in fact it is something you’ve been thinking
about since you first characterized your challenge, formulated your solution, laid out
your mission and vision, and tested your theory of change. You’ve recognized that there
are multiple pathways to the ultimate social outcome you are envisioning –​and that your
offering is only one part of the solution to a multifaceted challenge. Now you’re being
asked to consider the other pathways.
What Is Your Endgame?
What would it look like if your challenge were eradicated? What would be needed to get
there? Your endeavor is one small contribution. Circling back to the SDGs we discussed
in the Introduction, partnerships are needed between social entrepreneurs, existing
businesses and nonprofits, citizens, and governments to shift the status quo to a new and
more just equilibrium. In many cases policies, laws, and regulations already exist, but are
not reinforced. Large-​scale movements make this happen; social entrepreneurship alone
can only go so far.
Your goal is to be part of something bigger than yourself.You have already worked with
so many others to develop and implement your offering. So don’t stop there. Ultimately,
your work will serve as a platform for influencing other organizations, institutions, and
individuals as they go about shifting the status quo. Many of the social entrepreneurs we
have met in this book used their work as just such a platform. They lobbied for social
change beyond their control, advocated for new policies and legislation in their home
countries, and contributed to large-​scale initiatives with other changemakers. Let’s look
at some of the different ways they did this.
Sharing Knowledge
Just as Aravind Eye Care System provides technical support and consultation to hospitals
in different parts of the world, Hippocampus and other education ventures make their
materials publicly available and rely on other organizations to spread their work. Nuru,
the social enterprise we met in Chapter 6 which focuses on capacity building for and
collaboration with local leaders, made its poverty eradication model open-​source for
organizations to implement in other locations. Without this kind of collaboration, it
would not be possible to treat every patient, educate every child, or eliminate poverty. In
addition to sharing your material, creating partnerships and supporting others to take on
your work will create impact beyond your organization.
Please remember what we talked about in Chapter 3 when you were designing your
solution –​failing is part of succeeding; it moves you toward success. Sharing your failures
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242 Expanding Your Reach
Impact
Time and effort
Prototypes
you tested
Your
model
Yours and others’
future models
Figure 10.1 Testing new solutions for others to build on
is as important as sharing your successes. Throughout this book as you were designing
your solution, deciding on your distribution channels, fleshing out your theory of change,
or building your process map, you were basically trying things out. What looked perfect
on paper might have turned out completely different.You tried to increase your chances
of success by co-​creating with the community, developing user-​driven designs, using
various planning tools and templates, and building the best possible team. Even so, the rest
is trial and error –​so there’s no shame in starting over again.
Just make sure you document your attempts both for your internal records and for
others to build on. This is how we push the boundaries of human knowledge. Knowing
which variables led to success or failure will allow others to figure out whether those
variables might work in different scenarios. Perhaps a factor of your failure, altered in a
different setting, could turn failure into a success for the next social entrepreneur. Imagine
the ripple effect you could have if your model served as a prototype for others to build
on (Figure 10.1).
Research and Thought Leadership
Innovation means continuous learning. This needs to happen both inside your organization and within your community of practice, and it can be disseminated outside your
community of practice. Echoing Green is an American organization that supports social
entrepreneurs through fellowships. In 2020 it launched the Racial Equity Philanthropic
Fund to center social innovation around racial justice in two ways: investing in leaders
of color and other marginalized leaders; overtly embedding racial justice into the field
of social innovation. In some ways, this is a great example of both intrapreneurship
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Expanding Your Reach 243
and extrapreneurship. Echoing Green joined forces with other leading organizations
that support social entrepreneurs to create a new initiative called Catalyst 2030. It
also collaborated with Bridgespan, a consulting company specializing in nonprofit
organizations, to conduct research on racial inequity in philanthropic funding. The article they released became the top read of 2020 in the Stanford Social Innovation Review, a
leading source of information and inspiration for the social innovation community.1
Policymaking
Earlier in this book, we met Albina Ruiz, a social entrepreneur from Peru who helped
draft new legislation incentivizing municipalities to work with waste pickers as service
providers. This took decades of persistence and collaboration with government and other
stakeholders, alongside the work she and her team at Ciudad Saludable were doing to
organize waste pickers in Lima. On top of that, Ciudad Saludable organized beyond Peru
by joining a global network of similar organizations to advocate for waste pickers’ rights.
We also met Health Leads, which works on drivers of health in the US. The founder of
Health Leads went on to found the Health Initiative, a new organization working on
systems change and framework change by shifting the national conversation from one of
healthcare services to one of health.The Health Initiative works directly on policy change
and implementation by partnering with state governments, the federal government, the
private sector, and civil society actors.2
Policymaking and advocacy are not confined to the realm of nonprofits like Ciudad
Saludable and the Health Initiative. In Chapter 7, we learned about DBL Partners, who
practiced impact investing before it became a buzzword. DBL’s founder and team advocate
for policies that increase competition among companies in the US, where monopolistic
companies threaten innovation. They joined a network of like-​minded investors, Impact
Capital Managers, to strengthen their shared mission of growing the impact marketplace
(more on this later in the chapter).
Building your advocacy platform requires you to join forces with other stakeholders
so that you can lobby for policy changes and resources that tackle the challenge you are
addressing on a societal level. Creating resources about what you have uncovered along
that path can facilitate the spread of information, ideas, and know-​how. Engaging your end
users in both tactics will amplify results. Organize a forum that brings together decision
makers and other stakeholders, for example; or create a publication to which your end
users and other stakeholders contribute. For instance, FoodCorps is a nonprofit organization that was formed to create a best-​in-​class model for healthy school food environments
and to serve as a resource to researchers across the school food field and to inspire culture
shifts and policy change while it was in the process of achieving that model. The action
center on their website includes links for citizens to sign up for advocacy alerts and to
petition members of the government to vote for specific laws that would support healthy
school food environments. They also put forth a policy vision articulating the policy
change they are advocating for, referring to specific legislative proposals currently under
consideration by the government.3
Sometimes policy initiatives can be supported by social investors, bringing together
social innovators for policy change. An example is America Forward, a policy initiative created by New Profit, one of the venture philanthropy organizations we met in
Chapter 7. The America Forward Coalition describes itself as “a network of more than
100 innovative, impact-​oriented organizations that advance equity, foster innovation,
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244 Expanding Your Reach
identify more efficient and effective solutions, reward results, and catalyze cross-​sector
partnerships in education, early childhood, workforce development, youth development,
and poverty alleviation.”4 Their theory of change is that coalition members are achieving
measurable outcomes in thousands of communities across the country, and that innovative
policy approaches can transform these local results into national change and propel all of
America forward. Together, they are working to drive federal resources toward programs
that are achieving measurable results for those who need them most.
Joining Forces with Others
Partnering with Government and Other Sectors
In addition to advocating for new policies, social entrepreneurs can work directly with
governments to implement new innovations and programs within government systems,
and to transform those systems. A classic example is the education sector in Bangladesh.
BRAC is one of the largest NGOs in the world. In the 1970s and 1980s, it innovated
a new primary education system that was later adopted by the Ministry of Education.
This required creating primary schools to pilot ideas, gathering data on improved education outcomes, and working with the government over time to adopt viable new ideas
within the public sector. BRAC’s position is that large-​scale change comes only through
partnering with government, collaborating with other organizations, and advocating
for policy at the local, national, and global levels. As such, advocacy and policymaking
can be seen as the final stages of scaling beyond your venture and reaching your goals
(Figure 10.2).
The risk of innovating outside government is that you can end up creating a parallel
system. This is one of the most urgent risks that social entrepreneurs, intrapreneurs, and
extrapreneurs must watch out for: rather than strengthening existing systems, you are
detracting from them. In the BRAC example, achieving higher education outcomes in
new primary schools would not have had the same impact had those schools remained
outside the government system. BRAC’s schools would have had to sustain themselves,
either by requiring families to pay for children’s education or by fundraising. This also
would have weakened public education further, by diverting resources to BRAC’s schools
over the long term. By integrating its innovations into the government system, BRAC
piloted and institutionalized new ways of doing things in a way that permanently altered
Elements of BRAC’s strategy for scaling:
●
●
●
●
●
●
●
Listening to the people
Vision
Piloting
Training
Down-to-earth management
Evaluation and adaptation
Advocacy
Figure 10.2 Venturing beyond scale to achieve your goals
Source: This figure summarizes BRAC’s approach as documented in Ahmed, S., & French,
M. (2006). Scaling up: The BRAC experience. BRAC University Journal, 3(2), 35–​40.
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Expanding Your Reach 245
the status quo. In the interview box below, we’ll hear from Sir Fazle Abed, founder and
chairperson of BRAC, about his advice on partnering with government and other civil
society actors.
Interview Box: Sir Fazle Abed, BRAC Founder and Chairperson
Sir Fazle, your organization is cited as the
largest NGO in the world. What advice do
you have for social entrepreneurs working
on growing their ventures?
We can never reach every person through direct
service. It’s important to change how people think
so it can be a self-​propagating change. Take poverty alleviation, for example. There are millions
of children without access to quality education.
BRAC works both to solve individual needs for
education and also to advocate for universal primary education.
Image Courtesy of Sir Fazle Abed
Tell us more about how you approach these different levels of service.
It is very difficult to provide quality education. In Bangladesh, 95 percent of children enter school and 20 percent drop out before finishing primary school, so only
75 percent are receiving sustainable primary education. Advocacy work is needed to
get all children into schools. But it’s more than that; education is not just going to
school. Are they learning? Is it effective quality or repeating rote learning? We need
to look at how the schools are performing. If students can think for themselves, they
become a catalyst for change.
What has been the most effective way of creating large-​scale change in
your experience?
You need partnerships with others to have impact. Government is a big actor
to scale your own solution. We work with other NGOs for advocacy and policy
change; civil society needs to unite. It cannot be about each one doing his own
work without looking at the big picture. We need to put our energy and resources
to alter the systemic problem on a large scale.
Collective Impact
As introduced in previous chapters, there are many ways to take collective action with
others; among these, the Collective Impact Forum provides a specific framework which
has been tested by various groups of stakeholders working together across settings and
sectors. They use the term “collective impact” to refer to a structured way of working
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246 Expanding Your Reach
Conditions of collective impact
Common
agenda
Shared
measurement
Mutually
reinforcing
activities
Continuous
communication
Backbone
support
Figure 10.3 Conditions of collective impact
Source: Hanleybrown, F., Kania, J., & Kramer, M. (2012, January 26). Channeling change: Making
collective impact work. Stanford Social Innovation Review. https://​ssir.org/​artic​les/​entry/​channeling_​
change_​ma​king​_​col​lect​ive_​impa​ct_​w​ork#
together, with five pillars: common agenda, shared measurement, mutually reinforcing
activities, continuous communication, and backbone support (Figure 10.3).
Collective impact is a form of extrapreneurship in which multiple organizations and
stakeholders working toward the same mission organize their work so that they are
jointly accountable for outcomes. An example is the Tackling Youth Substance Abuse
initiative in Staten Island, New York. This collective impact initiative brought together
different stakeholders that may not have otherwise collaborated: educators, healthcare
providers, parents, police, policymakers, grassroots nonprofits, and youth groups. The
backbone organization was the Staten Island Partnership for Community Wellness, also
known as the Partnership. Some of the stakeholders, such as those in the justice system,
may not have previously thought of themselves as key players in public health, but their
role was critical in the desired outcome. Others, such as the youth groups and grassroots
nonprofits, were already working toward the desired outcome of reducing youth substance misuse. In the past, they may have coordinated their activities, communicated
in various ways, and collaborated on some projects. By joining together in a collective
impact initiative, they were able to be more systematic, organized, and aligned over the
long term in planning their programs together and allocating resources synergistically.
Together, the collective impact is bigger than the sum of its parts. The Partnership later
went on to tackle other local public health challenges in addition to youth substance
misuse. There are many other examples of collective impact initiatives working on
diverse outcomes, including education, environmental justice, homelessness, and many
others at the Collective Impact Forum’s website.5 In the case study later in the chapter,
we will learn more about a collective impact initiative with a global distributed backbone entity.
Other Partnerships and Collectives for Policy Change
There are many other ways that institutions and entrepreneurs come together to form
partnerships and collectives. For example, we saw in Chapters 5 and 7 an example of
a global funders collaborative, Co-​Impact. Another example of a funder collaborative
is the Convergence Partnership, which expanded its work beyond philanthropy into
policymaking. Their grantmaking and capacity building efforts supported a network of
advocates and funders working on health equity in the US, with the intentional focus of
building and connecting multiple fields and actors along with their own voice as funders.
They call this building a “field of fields.” Similar to the Staten Island Partnership for
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Expanding Your Reach 247
Community Wellness, they were able to cultivate ties and relationships across sectors and
issues to work toward shared, cross-​cutting goals.
By creating new, unexpected connections and alliances, the Convergence Partnership
launched the Food and Agriculture Policy Collaborative and the Transportation Equity
Caucus. The Food and Agriculture Policy Collaborative is a partnership of partners in a
way, bringing together existing groups of stakeholders including the Fair Food Network,
the Food Research & Action Center, the National Sustainable Agriculture Coalition,
PolicyLink, the Reinvestment Fund and The Food Trust.6 Working together, they are
addressing food insecurity through systems change protecting and improving SNAP
benefit levels; supporting farmers and rural economies to help SNAP customers buy
locally grown fruits and vegetables; helping grocers expand supermarkets in low-​income
communities; and opening new markets and building the local supply chain infrastructure
that connects local food producers to regional markets.7 The Transportation Equity Caucus
is a diverse coalition of organizations promoting policies that ensure access, mobility, and
opportunity for all; it brings together leading civil rights, community development, disability, racial justice, economic justice, faith-​based, health, housing, labor, environmental
justice, tribal, public interest, women’s and transportation organizations.
These are some of the ways that the Convergence Partnership is working to build
fields of fields. This approach circles back to our first interview box with Bill Drayton
in the Introduction, where he shared his thoughts on changing frameworks through
ever-​shifting “teams of teams.” Through these partnerships of partners, the Convergence
Partnership shaped and informed the design of government policies and programs, especially those related to funding prevention and public health. For example, they played a
key role in urging and amplifying support for prevention and equity through the inclusion of a Prevention and Public Health Fund under the Affordable Care Act, guiding the
program to include an explicit focus on equity, policy, and environmental change, and to
require community engagement and promote connection and coordination with other
place-​based initiatives.8
The program director and fiscal sponsor for Convergence Partnership is PolicyLink.
PolicyLink was funded by African American lawyer Angela Glover Blackwell to advance
racial and economic equity for all.9 Another collective which emerged from PolicyLink’s
work is the Alliance for Boys and Men of Color, a national network of hundreds of
community and advocacy organizations who come together to advance race and gender
justice by transforming policies that are failing boys and men of color and their families,
and building communities full of opportunity.10 The alliance has secured more than 80
state and local policy victories to improve the health, education, and economic prospects
of its constituents.
Building New Communities of Knowledge and Practice
One of the important things that these alliances and networks do is build new communities.We saw in Chapter 5 how GIIN built a community of impact investors and later joined
forces with the Impact Management Project to expand on their collective understanding
of best practices to measure social and environmental outcomes.The Impact Management
Project began as a time-​bound forum for building global consensus on how to measure
outcomes. They created a new network of 15 members, who coordinated their efforts
to provide comprehensive standards and guidance on measuring, assessing, and reporting
outcomes. These include many of the networks you’ve already met, such as GIIN and
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B Labs. Thus, again, it was a network of networks. They also brought together strategic
partners to connect with their networks globally –​again you’ve already met some of
these, such as the European Venture Philanthropy Association and the Asian Venture
Philanthropy Network. Lastly, they convened a practitioner community, representing a
wide range of organizations including funders and social enterprises, to agree on and
share norms related to impact management. After five years in operation, as planned, the
Impact Management Project’s facilitation role concluded, with new initiatives in place to
mainstream the resources created by this community.11
A similar network is Impact Capital Managers, which connects and convenes
impact investors to identify and share best practices, advocate for policy initiatives, conduct research and education related to impact investing, and cultivate a skilled, diverse
impact investor workforce through talent and professional development programs and
partnerships.12 These networks have the opportunity to remove some of the obstacles
we discussed in Chapters 5 and 7 that propagate the status quo in the philanthropy and
impact investing world, such as lack of diversity among funders and lack of metrics that
capture the full impact of social innovations working with hard-​to-​reach populations.
The Centre for Knowledge Equity (which we met in Chapter 2) is also building
new communities of knowledge and practice by bringing their vast network of lived
experience leaders together with funders and practitioners. Their goal is to facilitate the
emergence of diverse and intersectional networks, coalitions, and movements as they
develop radical collaborations for positive change. They are working to develop dynamic
partnerships across sectors, industries, communities, and institutions that bring together
lived, learned, and practice experience.13
Thus, the different kinds of stakeholders we’ve been reading about in this book, ranging
from lived experience leaders to funders to nonprofit and business leaders, are coming
together in new and evolving ways to build new communities of knowledge and practice.
In Chapter 8, we learned about the B Corp Climate Collective from Kim Coupounas in
the interview box.This is a constellation of businesses to drive change in both the business
community and the policy area. They see themselves as a community and a movement.
From Communities to Movements
When communities come together, they can build movements that drive framework
change. An example of a framework change is shifting from the current status quo of
shareholder primacy to a new and more just equilibrium that takes into consideration
all stakeholders. This is what the B Lab movement is trying to do. As we learned in
Chapter 9, B Lab is a nonprofit network aiming to transform the global economy to
benefit all people, communities, and the planet (out of which has come the B Corp certification, B Corp Climate Collective, and other initiatives).Their theory of change is that
a different kind of economy is not only possible, but necessary; and that business could
lead the way toward a new, stakeholder-​driven model.
Along with the Shareholder Commons, an independent nonprofit organization
addressing systemic issues and structures that hinder a just and sustainable economy, B
Lab put forth a policy agenda proposing changes to state and national laws.Their proposal
consists of requiring investors to consider a broad array of beneficiary interests that extend
beyond the financial return provided by individual companies; requiring corporations
to consider the interests of stakeholders as well as shareholders; recommending that tax
laws and financial regulations be designed to discourage compensation based on equity
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or portfolio value that does not account for systemic effects of assets under management;
and recommending steps for the government to support and protect coordinated shareholder action in pursuit of sustainability guardrails or similar restrictions on corporate
behavior with a goal of preserving economic justice, environmental systems, and social
institutions, and otherwise protecting the common interests of corporate shareholders
and stakeholders.14 With a coalition of 50 impact-​oriented organizations, they called for
the creation of a White House Initiative on Inclusive Economic Growth to address the
COVID-​19 economic fallout, the widening racial wealth gap, and climate change.15
A related initiative, Imperative21, was launched in parallel, bringing together over
70,000 businesses with over 20 million employees in a business-​led network working
to drive economic systems change. The goal of this network is for multiple coalitions to
emerge that advance racial equity and support leaders transforming their organizations
in line with the 21st-​century Imperatives of Accounting Principles for stakeholders;
investing for justice to remove structural inequalities; and designing for interdependence
to ensure that everyone has access to free and fair markets.16
Creating New Social Innovation Ecosystems around the World
Alliances, networks, and other coalitions are only a few ways that people come together
to cultivate new environments for social innovators to work within. When you build the
relationships required to research, develop, and implement your offering, you are also
building social capital. This social capital strengthens your endeavor, and it can also be
mobilized as a resource in and of itself. Social capital can be channeled into advocacy
and policymaking, building movements, and creating ecosystems that catalyze and amplify new offerings. In many different settings, social entrepreneurs and those who support
them are working to grow the social innovation ecosystem.This is happening at the local,
regional, national, and global levels.
In the Andalusian region of Spain, poverty levels are the highest in the country. A partnership of stakeholders that includes a local university, a consulting company, and an international university applied to the European Union for a grant to foster innovation. They
chose to focus on green tech by providing technical support and pro bono consulting
to green entrepreneurs, creating a conference dedicated to green entrepreneurship and
bringing together a cohort of green entrepreneurs in an accelerator format.
During Lebanon’s civil war many decades ago, citizens began relying heavily on
nonprofits to deliver and supplement basic services such as education, job training, and
job creation. As in many other war-​torn countries, nonprofits in Lebanon became heavily
dependent on international aid; their programs and agendas came to be donor driven. As
the country rebuilt itself after the war, international aid began decreasing and nonprofits
needed to become more financially independent. This was an opportunity for nonprofits
to seek financial sustainability and drive their own agendas. Many tried shifting to a social
enterprise model by identifying one or more revenue streams they could realize to support
their charitable programs. At the same time, young people graduating from university had
ambitions to create their own jobs and contribute to rebuilding. They dreamed of replicating private-​sector successes in ways that created social impact. The social entrepreneurship movement that was happening around the world found its way to Lebanon, and
various stakeholders contributed to a new social enterprise sector. Social entrepreneurs
came together to form the Lebanese Social Enterprises Association to support each other,
encourage citizens to become customers of social enterprises, and advocate for a new
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legal structure for social enterprises. Similar movements are happening around the world.
Anywhere you look, you can find a similar ecosystem or the seeds of one.There are many
different roles you can play in fostering a social innovation ecosystem.
Interview Box: Cheryl Dorsey, President, Echoing Green
At a recent convening of women in social
entrepreneurship, you spoke about “scaling
deep.” What does this mean to you?
Scaling deep means increasing the depth of your
impact, not just the breadth. Every social entrepreneur aims to reach more people, but we also
want to amplify the magnitude of the change.
This can be achieved through the programs
they are implementing to a certain extent, but
they can’t stop there. We call this “moving from
program to platform.”
Echoing Green supports social
entrepreneurs through its fellowship
program, which provides seed funding,
community support, and leadership
Image Courtesy of Cheryl Dorsey development. But you are also moving
from program to platform with your new
initiative on racial equity in philanthropy. Can you say how you are
approaching this?
Innovation and social justice is in our founding DNA, and the new fund helps
us move from program to platform in two ways. We already had 75 percent
entrepreneurs of color and at least 50 percent women. The racial equity fund
helps Echoing Green to further invest in social entrepreneurs of color and other
underrepresented innovators. Second, our goal is to expressly embed racial justice
within the field of social innovation and to center on it in the years forward. We do
this through a learning orientation, working with other foundations and partners to
tackle today’s racial inequities in philanthropic funding.
What are some of the ways that you work with other organizations with
similar missions, to support social entrepreneurs advancing equity and
justice?
There’s a spectrum of ways that people work together, ranging from coordination
to cooperation to collaboration to collective impact. Some of the peer organizations
doing work similar to Echoing Green are the Skoll Foundation, Schwab Foundation,
and Ashoka. Over the years, we’ve worked together in many ways, most recently by
coming together to form the incubation board for Catalyst 2030, a new backbone
organization for systems coordination and co-​creation.
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There is an increasing number of initiatives for social innovation,
including at the government level. How can they be centered on racial
equity?
In the social entrepreneurship ecosystem, we talk about being evidence based,
which is important. It’s also important to remember that when looking for an evidence base to justify supporting a social innovator, you are more likely to select
later-​stage organizations that have already garnered support. If this is the only thing
you’re looking for, then you will continue to invest in the same people. You may
be less likely to select organizations run by proximate leaders [those close to the
problem] that are building power. We need to actively seek those out. It is only by
finding and supporting the unusual suspects that we can finally begin to shift the
status quo.
Case Study: Catalyst 2030
Catalyst 2030 is an extrapreneurship initiative that accelerates progress toward the SDGs.
According to the Social Progress Index,17 all SDG targets will more likely be achieved
by 2082 than by 2030. One of the reasons for insufficient progress is funding: there is not
enough of it; it is extremely fragmented, often provided in yearlong increments; and it is
not focused on collective action and systems change.
Social entrepreneurs from around the world, and the organizations that support them,
came together to change this. Their theory of change was that working together can
influence others and change the funding environment. They started out by building a
membership to create a collective voice. The first pillar of members’ work was to shift
power dynamics by educating donors and influencing behaviors.They did so, for example,
by launching an awards program for funders who are finding new ways to invest in equilibrium change and equity. Another activity was the creation of the People’s Report,18 a
report from the people addressed to global leaders. The first global report was composed
of 17,000 grassroots voices in 43 languages. Their goal was to share this at the United
Nations General Assembly in an attempt to get the SDGs back on track.
By working with different stakeholders across sectors, Catalyst 2030 aims to change
funding flows. Over time, it would like to link more academics to social entrepreneurs, to
achieve policy shift. Ultimately, it aims to work with governments to create environments
conducive to social entrepreneurs –​especially those with lived experience who have
never had access to funding.
Not all governments are responsive to creating change, but according to Jeroo Billimoria,
chief facilitator of Catalyst 2030, it is possible to engage with governments in different
settings, depending on the individuals in power. She points to her previous work, where
30 percent of entrepreneurs were able to effect policy change.19 Her belief resonates
with reports from other organizations, such as Ashoka, which states that 83 percent of
fellows have changed a system at a national level within 10 years of joining the Ashoka
fellowship.20 One of the first resources Catalyst 2030 published was an outline of five ways
governments can create supportive ecosystems that unlock the systems potential of social
entrepreneurs, along with real-​life examples from diverse governments around the world
that build upon discussions with government representatives and social entrepreneurs.
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These five paths are to leverage the power of information by sharing and co-​creating
data; build capabilities among civil servants and systems-changing social entrepreneurs to
enable mutual understanding and collaboration; develop funding models that recognize
the characteristics of systems social entrepreneurs; promote collaboration between public
organizations and between the public, private, and social sectors; and foster institutionalization by co-​creating or adopting successful innovations.21
Several ideological decisions informed the strategy and trajectory of Catalyst 2030.
They refuse membership fees, asking instead for volunteer hours, because many of their
last-​mile partners cannot afford membership fees and would have difficulty transferring
money internationally.They were careful to set up internal governance processes to prevent special preferences: everyone goes through the same process to become a member,
to attend meetings, and to contribute to the collective work. They hold monthly general assemblies, which serve as a marketplace to exchange ideas and activities. And they
did not register a new organization: they had observed that most global organizations
are registered in the Global North because of funding flows, which creates a power
dynamic.
Instead, Catalyst 2030 operates as a virtual network, which started with an incubation committee instead of a board. They have multiple fiscal and operational sponsors –​
existing organizations that support the administration of the network. Any funding is
allocated to intermediary or regional organizations. Their organizational structure is that
of a constellation (Figure 10.4), with team members living in South Africa, Panama,
the US, and multiple other locations around the world. They refer to a strategy journey
rather than plan, indicating ongoing evaluation and change, and their goal is to exist
until 2030.
Billimoria characterizes Catalyst 2030 as a mix between a sector body, movement, and
social enterprise. It’s not easy to operationalize, but the operations committee takes it
forward. Members are making rapid progress, and the most difficult aspect in her view is
keeping pace with the network.
Thought Questions
1. Catalyst 2030’s distributed entity model is unique and innovative. What are the
advantages and disadvantages of not registering an organization in this case?
2. What are some key assumptions in the theory of change? How will these assumptions
affect Catalyst 2030’s ability to accelerate progress toward the SDGs? How
would you shape the endeavor’s strategy depending on whether and where these
assumptions hold?
3. What challenges in engaging grassroots voices do you foresee? How would you overcome these challenges?
4. Spend some time reading through the Catalyst 2030 website. Where could you see
yourself potentially getting involved if you were a member? What areas would you
want to focus on and contribute to?
Handing Off
At the end of the day, we are each iterating on a personal, organizational, and
interorganizational level. Sometimes this creates incremental change, pushing the
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Figure 10.4 Constellation of members forming Catalyst 2030’s nonhierarchical structure
Source: Catalyst 2030: https://​Catal​yst2​030.net/​organ​isat​ion
boundaries of knowledge and practice one step at a time. Sometimes, due to forces
beyond our control, we find ourselves going backward. But through knowledge sharing
and documentation we can help others build on our steps. Only by handing off our work
to others can we ensure that it has an impact that lasts longer than ourselves.
Some initiatives will be time-bound, as we saw with the Impact Management Project
and Catalyst 2030. Others will grow and evolve over time. Individually, too, our roles will
change. We may start our careers as field workers and later take on administrative or leadership roles, supporting others in their work.This work is bigger than any one person and
any one organization. Always have your eye on where you can instill your knowledge for
others to take forward. The more people we can recruit and train, the better chance there
is of creating lasting positive change.
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Avoiding a Bubble
How can we avoid unintentionally creating a bubble around ourselves? We have watched
bubbles burst when too much hype was created about opportunities for growth in
different sectors. Don’t get swept up in the hype. Stay focused on what is true and tangible, stay connected to the people you are co-​creating with, and stay in touch with your
community’s reality.
The best way to avoid a social entrepreneurship bubble is to recognize its limitations.
Social entrepreneurship is not a panacea for the world’s problems; there are many problems
that need to be solved by governments and private-​sector entities that embrace social
responsibility.We are not practicing social entrepreneurship for the sake of it. It is a means
to reach an end: equitable social outcomes.The goal is not to create parallel systems, but to
provide a tangible, effective, scalable solution. If governments and other sectors can work
together to offer your solution more widely and deeply, then that is the gold standard.
Better yet, if your solution effectively zaps root causes and the challenge ceases to exist –​
or has been transformed into something positive –​then we have reached our ultimate
goal. We have become obsolete.
Remember, market penetration requires that solutions be adapted to multiple situations. There are no one-​size-​fits-​all problems, nor one-​size-​fits-​all solutions. The solution we offer will most likely need to be tailored to each local context, supplemented
and complemented, and monitored and evaluated, all in a timely manner. We need to be
prepared for this by mobilizing local and global resources and capacity. At the end of the
day, it’s about the people you are creating this solution with.Whatever doesn’t make sense
for them doesn’t make sense to pursue.
Revisiting Social Entrepreneurship
So, now it’s your turn to tell us what social entrepreneurship means to you. At the beginning of this book, you were challenged to find new ways of doing things, to think like a
child, to question all assumptions. That includes questioning and building on the framework presented to you in this book. Can you find a better way of doing it? Chances are,
you already have or are well on your way.
This framework has been built on the collective experience of social entrepreneurs
before you, and it is presented to you to get you started in your social entrepreneurship
journey. There’s no reason to start from scratch; it’s good to stand on the shoulders of
those before you. But when you get up there, don’t forget to look around and ask yourself how things could be done better. Then brace yourself to support others in climbing
even higher!
Taking Next Steps Together
Social entrepreneurship can’t solve everything. Social entrepreneurship is just one way
we can make a difference. And while it has the potential to make a huge difference, it’s
important to know your limitations alongside your potential. So, stay humble. Look for
every opportunity to learn from your mistakes, to fill the gaps in your knowledge, and to
mobilize people with whom you can bridge systems and sectors together.
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Expanding Your Reach 255
Keep questioning, too. Don’t get complacent. Questioning all assumptions means
questioning yourself as well as the status quo. Look for any evidence that might indicate
you are mistaken. Incorporate it into your work. Keep collecting as much evidence as
you can.The only thing we can know for sure is that we’ll never have all the answers. But
eventually, hopefully, we’ll find as many answers as possible collectively.
Chapter Summary
•
•
•
•
•
•
Growing your endeavor is about more than growing operations. It’s finding new ways
to reach your target audience and to create ripple effects in the community. It’s also
about venturing outside your own work to join forces with others.
Most social entrepreneurs will not be satisfied by simply scaling.They envision multidimensional growth that disrupts everything in its way!
Growing outside your endeavor means partnering with other organizations, leaders,
and stakeholders to change the frameworks in which you and others operate.
Mechanisms for expanding beyond your venture might include government adoption,
collaboration with other organizations, advocacy and policymaking, and planning for
and measuring collective impact.
It’s important to celebrate your successes –​and to share your failures –​so that others
can build on your experience.
Most important, keep questioning. Don’t get complacent, and don’t get comfortable.
Focus on the social challenge you set out to tackle, and remember that you need
others’ help to truly eradicate the challenge.
Chapter Assignment
After building a healthy and viable endeavor, it’s time to focus on expanding beyond
your endeavor. Let’s explore the dimensions and directions in which you can grow
your impact and reach your ultimate goals (250-​word limit per answer unless otherwise
specified):
1. What is your solution’s ripple effects in society? How can you actively and consciously grow them?
2. What might it look like for you to move “from program to platform” as Cheryl
Dorsey mentioned in the interview box? Beyond your offering, how can your
endeavor serve as a platform for change?
3. What does your communications strategy (Chapter 9) require in terms of advocacy?
What exact policies are you advocating for, and who are the key players you need to
mobilize to change these policies?
4. How might you join forces with others through collective impact or other ways of
working together, such that the whole is greater than the sum of the parts? What
might be your common agendas, shared indicators, mutually reinforcing activities,
and shared communication needs?
5. What would you change about the framework used to present social entrepreneurship in this book? What doesn’t feel right or complete about the methods and mindset
presented? What resonated the most?
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Notes
1 Dorsey, C., Kim, P., Daniels, C., Sakaue, L., & Savage, B. (2020, May 4). Overcoming the racial
bias in philanthropic funding. Stanford Social Innovation Review. https://​ssir.org/​artic​les/​entry/​
overcoming_​the_​racial_​bi​as_​i​n_​ph​ilan​thro​pic_​fund​ing
2 Visit https://​heal​thin​itia​tive​usa.org to watch some videos of the founders sharing their work
to date, and learn more about their recent advancements in the news section.
3 See the FoodCorps website at: https://​foodco​r ps.org/​pol​icy-​act​ion-​cen​ter/​
4 See: www.ame​r ica​forw​ard.org/​about/​
5 See: https:collec​tive​impa​ctfo​rum.org
6 Read more at: www.pol​icyl​ink.org/​resour​ces-​tools/​libr​ary/​food-​ag-​pol​icy-​collab​orat​ive-​
broch​ure
7 We first came across SNAP in Chapter 4’s case study on Daily Table (see Note 4.11).
8 Find out about the origins of the Convergence Partnership at: convergencepartnership.org/​
about-​us/​our-​story
9 See information on PolicyLink’s impact at: policylink.org/​about-​us/​our-​impact
10 See the alliance’s wesite at: https://​abmoc.org
11 Learn more at the websites for the Impact Management Project (https://​impa​ctma​nage​ment​
proj​ect.com) and the Impact Management Platform (https://​impac​tman​agem​entp​latf​orm.org).
12 See more at the Impact Capital Managers website: www.impact​capi​talm​anag​ers.com
13 Find out more at the Centre for Knowledge Equity website: https://​know​ledg​eequ​ity.org
14 Alexander, F., Ensign-​Barstow, H., Palladino, L., & Kassoy, A. (2020) From shareholder primacy
to stakeholder capitalism: A policy agenda for systems change. Available at www.bcorp​orat​ion.
net and https://​thesha​reho​lder​comm​ons.com
15 The proposal is available at: https://​bth​echa​nge.com/​an-​urg​ent-​call-​to-​the-​biden-​har​r is-​adm​
inis​trat​ion-​d5f30​1816​3ab
16 Read the full Imperatives and more at: www.imper​ativ​e21.co
17 This statistic was from the 2020 Social Progress Index. Social Progress Index data are available
at: www.soc​ialp​rogr​ess.org
18 See more on the People’s Report at: https://​catal​yst2​030.net/​peop​les-​rep​ort/​
19 Find information on Jeroo Billimoria at: www.ash​oka.org/​en/​story/​jeroo-​bil​limo​r ia
20 See: www.ash​oka.org/​en/​story/​4-​lev​els-​imp​act
21 See: Calalyst 2030. (2021). New allies: How government can unlock the potential of social entrepreneurs
for the common good. https:catal​yst2​030.net/​resour​ces/​new-​all​ies-​rep​ort/​
257
Index
Note: Page numbers in italics and bold denote figures and tables, respectively. Page numbers with an “n”
denote Notes.
10/​20/​30 rule 222
AAAQ framework 77, 80, 89, 151, 158
Abdul Latif Jameel Poverty Action Lab 39
Abed, Sir Fazle 245
accelerators 183, 249
access to resources 14, 28, 29
Acumen 18, 180
advertisements, and cross-​subsidization
139
advisory board 184–​185
advisory committee 185, 199
advocacy 17, 178, 243, 244
aggregate data 36
Alfanar 16–​17, 18, 132–​133
Alliance for Boys and Men of Color 247
America Forward 243–​244
angel investors 168
Angelou, Maya 237
Aravind Eye Care System 101, 137, 141, 146, 147,
149, 157–​159, 241
Ashoka 15, 18, 125–​126, 250, 251; collaborative
jujitsu 19–​21, 20; four levels of impact 15
Asian Venture Philanthropy Network 248
Aspen Institute 18
asset mapping 60, 60–​61, 65
assumptions 27–​28
attribution 125–​126
automation of data collection and analysis
128–​129
awards 171–​172
Banerjee, Abhijit V. 85
baseline data 120, 130
B Corp 208, 211
B Corp Climate Collective 211, 248
benchmarking 121
Billimoria, Jeroo 251, 252
B Labs 141, 207, 208, 248
Blackwell, Angela Glover 247
boards 199, 200; accountability 201; criteria for
members 200; cultivation and management
200–​201; diversity 201
bonds 174
boot camps 183
BRAC 244, 244–​245
brainstorming 72, 73
branding 100–​102, 113
business, role of 13–​14
business canvas 113, 114n7
business model 10, 10
business plan 219; elevator pitch 222–​223;
executive summary 220; necessity 219;
outline 220–​221; slide deck, abridged version
of 222; slide deck, full 221–​222; writing a
219–​220
“buy one, give one” model 139
bylaws 198–​199
capitalization tables 173
CASE 18
CASE i3 Initiative on Impact Investing 177
cash flow 155
Catalyst 2030 175, 210, 243, 250, 251–​252, 253,
253
catalytic philanthropy 175
catalyzing change 61
causality 36
C Corporation (C Corp) 204
Center for Health Market Innovations 39
Centre for Knowledge Equity 50–​51, 248
changemakers 15–​17, 19
charities 140, 204
chief communications officer (CCO) 193
chief executive officers (CEOs) 192, 193
chief finance officer (CFO) 192
chief marketing officer (CMO) 193
chief operations officer (COO) 192
chief product officer (CPO) 192
child-​like thinking 27
258
258 Index
Ciudad Saludable 57–​58, 63–​64, 68, 243
coaches 182
co-​challenges 26
co-​creation 9, 72, 231
Co-​Impact 126, 175–​176, 202, 246
ColaLife 150–​151
collaborative approach 54
collaborative jujitsu 17, 19–​21, 20
collective action 126
collective impact 209, 245–​246, 246
communication 218, 226, 227–​228, 238; audience
categories 228–​230; being positive 236–​237;
being thoughtful 237; with customers 228;
and emotions 237–​238; evaluation 235–​236;
with funders and other partners 229; goal-​
oriented communications plan 230; internal
228–​229; message 230–​233; methods 233–​235;
objectives, and stakeholders 227; personal 237;
with policymakers and the public 230; reasons
for 228; simple 237; strategies for different
settings 236; timing 235
community 65; definition of 48–​49; inclusions 49,
50; and movements 248–​249; working in 49
community capitals 60
community-​driven research 52, 53, 65, 120–​121;
case study 63–​64; collaborative approach 54;
different voices 56; group dynamics 55–​56;
keeping it simple 54–​55; listening 55; reflective
practice 56–​57; relationship building 56;
research tools 53–​54, 54; and respect 55;
stakeholders identification 53
community interest company (CIC) 207
Community Tool Box 39, 47n10
competition 97–​98
conferences 184
connector, social entrepreneur as 61–​62
Conscious Capitalism 208
conscious capitalism 13
consulting and contracting, difference between
145
contribution versus attribution 125–​126
Convergence Partnership 246, 247
cooperatives 206
corporate foundations 165
corporate funding 167
corporate social responsibility (CSR) 167
cost of goods sold 154
cost-​reduction models 141
counterfactual 117
Coupounas, Kim 209, 210–​211, 248
coworking spaces 182
Creative Commons 144
cross-​subsidization 137–​139
crowdfunding 168–​169
customers 94–​96; acquisition costs 154;
description of 74–​75; and ideas 94–​96, 95;
personas 96
Daily Table 102–​103, 110–​112, 115n12
data 25–​26, 69; collection, automation of 128;
dimensions of 35–​36; as power 26, 34
data analysis 40; automation of 128–​129; software
147–​148
DBL Partners 176, 178, 243
decentralization, and distribution 148, 149
deep reflections 68
Dees, Greg 3–​4
definitions of social entrepreneurship 3–​5
depth of impact 35
designing a solution: beyond 84; case study
86–​89; deep reflection versus group dynamics
68; design for affordability 84–​85; different
ideas, experimenting with 69; and failing 69;
full immersion 68; incremental innovation
and disruptive innovation 86; innovation and
design thinking 67–​70; innovation levels 69,
70; mini-​challenges 76; options, analysis and
organization of 76; pilot projects 83; in practice
see design workshop; premortem 76; product
and service systems 82; reframing the challenge
75; reposition 76; testing 77–​84; time allocation
76–​77; user-​driven design 68–​69, 70
design thinking 9, 67–​70
design workshop 71; brainstorm 73;
brainstorming 72; end user, description of 74–​
75; parameters 72; problem statement 71–​72;
prototyping 75; team formation 71; top ideas,
selection of 74
desirability 74, 74, 75, 76, 77
diagrams 40–​41
differential pricing 137–​138
digitization 147–​148
direct benefits, measurement of 123
disruptive innovation 86
distribution models 70, 103, 143; consulting and
contracting, difference between 145; different
options and combinations 145–​146; direct to
end user versus intermediary organization 143,
143–​144; microfranchising 144; non-​monetized
methods 144–​145; social franchising 144
distribution models, operational efficiency across
147; decentralization of operations 149; defining
core package 147; digitization 147–​148; fostering
local leadership 148; last-​mile distribution
148; leanness 151; leveraging existing channels
150; standardization 147; tailoring to the local
population 149–​150; technological role 151
DIY Toolkit 18
donations 169–​171, 204
Dorsey, Cheryl 250–​251
Double Up Food Bucks (DUFB) program
115n12
Drayton, Bill 15, 16–​17, 19, 247
Drucker, Peter 4
Duflo, Esther 85
259
Index 259
Echoing Green 18, 242–​243, 250–​251
economic sustainability 11
economic trends 107
Educate Me Foundation 31–​32, 138
elevator pitch 222–​223
empathy 93
endowment management 177
end users, description of 74–​75, 94–​96
environmental challenges 24
environmental factors 108–​109
environmental sustainability 11
Equalize Health 81, 82
equity 93, 172–​173
European Venture Philanthropy Association 248
events, nonfinancial support 184
executive director 192
executive team composition 192–​193, 193
expenses estimation 154–​155
extrapreneurship 6, 8, 13, 209–​210
failures 69
feasibility 42, 74, 75, 76, 77, 106, 133
feedback systems 229
fellowships 183–​184
Fernandopulle, Rushika 179
finance director 192
financial forecasting 151; market sizing 152, 153;
surplus revenue 156–​157; template see financial
template
financial template 152; expenses estimation
154–​155; profit and cash 155; putting it
together 155–​156; revenue estimation
152–​154; unit of offering, defining 152
financial viability 5, 6, 9–​10, 74, 74, 75, 77, 136,
159–​160; case study 157–​159; distribution
models 143, 143–​146; forecasting see financial
forecasting; operational efficiency across
delivery models 146–​151; payment models
141–​142; revenue sources 136–​141; tracking of
116–​117
Finney, Kathryn 166–​167
five-​question framework 32–​34
fixed expenses 154
Food and Agriculture Policy Collaborative 247
FoodCorps 243
for-​profit companies 157
foundations, and funding 165
founding team 192
framework change 125
friends and family, funding by 168
funding 162, 186–​187; gap between need and
available 180; resource dashboard 185–​186,
186; social investing spectrum 162–​163, 163;
see also social investment
funding sources 163, 164, 169; angel investors
168; corporate funding 167; crowdfunding
168–​169; foundations 165; friends and family
168; governments 163–​164; individuals
168–​169; international NGOs 164–​165;
investment funds 165–​166; multilateral
agencies 164; philanthropists 168
funding vehicles 169, 170; awards 171–​172;
bonds 174; combination of 180–​181; donations
169–​171; equity 172–​173; gifts 169–​172;
grants 171; loans 172
generalizability 36
Genius Guild 166–​167
genuine relationships 93
geographic and sociodemographic setting 28, 29
geographic distribution 34
gifts 169–​172
Global Entrepreneurship Week 184
global foundations, as information sources 39
Global Impact Investing Network (GIIN) 127,
176, 247
Godin, Seth 222
governance structures 198; boards 199–​201;
bylaws 198–​199; shared leadership 201–​202
government funding 163–​164
Grameen Bank 27, 28
Grameen Group 82, 142
grants 140, 171
group dynamics 68
Groupe SOS 205–​206
growth, considerations for: data collection
213–​214; decision-​making 213–​214;
expansions 214; growing impact 212–​213;
iterative process 213, 214; learning
organization 214–​215, 215; organizational
health 212; timing 213
Grunin Center for Law and Social
Entrepreneurship 207
handing off 252–​253; bubble, avoiding 254;
revisiting social entrepreneurship 254–​255
hard-​to-​reach populations 125
Havenly 201
Health Initiative, The 243
Health Leads 44–​45, 68, 93, 243
help, asking for 208–​209
Hippocampus Learning Centers 72, 73, 83–​84,
86–​89, 101, 118, 128, 137, 149, 241
humility 55, 226
hybrid model 205
iceberg model 43–​44
idea 113; and branding 100–​102; case study
110–​112; and competition 97–​98; and
customers 94–​96, 95; discussing with people
91–​92; and distribution 103; evaluation of
104–​109; impact social business model
canvas 104, 105, 114n1; and partnerships/​
collaborations 103–​104; PESTEL framework
260
260 Index
106–​109; and positioning 98–​99; and pricing
96–​97; and promotion 99–​100; resources
needed 104; SWOT analysis 104–​105, 106;
and value proposition 96; vision, mission, and
values articulation 93–​94
IDEAS Generation 145
ImpactAlpha 177
Impact Capital Managers 243, 248
Impact Finance Database 177
Impact Gaps Canvas 37, 37–​38
impact investing 166, 176–​177
Impact Management Project 127, 127, 247, 248,
253
impact model 10
impact social business model canvas 104, 105,
114n1
Imperative21 249
inclusion 93
incremental innovation 86
incubators 183
indirect benefits, measurement of 123
individuals, funding by 168–​169
industrial and provident society (IPS) community
benefit society 206
industrial and provident society (IPS) cooperative
206
information: collection of 38–​40, 41; sharing of
65
informational interviews 58–​59
initiatives, poverty-​related 85
innovation: and design thinking 67–​70; disruptive
86; incremental 86; levels of 69, 70; new
social innovation ecosystems 249–​250; social
innovation 7
interactive media 233
interdisciplinary collaboration 8, 8
international development agencies, as
information sources 38–​39
international NGOs, funding by 164–​165
intrapreneurship 6, 13–​14, 141, 209
introverts 226–​227
investment funds 165–​166
Iora Health 179–​180
Ishikawa, Inverted 41, 42, 43
Ishikawa diagram 41–​43
joining forces with others: collective impact
245–​246, 246; from communities to
movements 248–​249; knowledge communities
and practice 247–​248; new social innovation
ecosystems creation 249–​250; partnering
with government and other sectors 244–​245;
policy change, partnerships and collectives for
246–​247
Kaiser Permanente 45
Kawasaki, Guy 222
Kickstarter 180
Kiva 100–​101
knowledge communities and practice 247–​248
knowledge equity 49–​51
knowledge exchange 131
knowledge sharing 241–​242
last-​mile distribution 148
leanness 151
learning, constant and courageous 93
Lebanese Social Enterprises Association 208,
249–​250
LEEP for Collaborative Impact 32
legal structure 202; new organizations, legal
options for 203–​208; unregistered social
enterprises 208–​210; whether and when to
form an organization 202–​203
legislation 109, 125; advocacy for 4, 241, 243
limited liability company (LLC) 204
limited liability partnership (LLP) 204
lived experience 9, 28–​29, 48; asset mapping 60,
60–​61; case study 63–​64; catalyzing change 61;
community 48–​49; community-​driven research
52–​58, 53; knowledge equity 49–​51; local
entrepreneurs, identification of 62; moving
forward 62; piecing together the puzzle
61–​62; reaching out to people 58–​59; social
entrepreneur as connector 61–​62; stakeholder
analysis 51–​52, 52
Lived Experience Leaders (LEx) movement
49–​50
loans 172, 173
local entrepreneurs, identification of 62
local leadership 148
local nonprofits 39
logbooks 38
logframe temple 119–​120
logical framework see logframe temple
logic models 118, 118–​119
low-​profit limited liability company 207
mailing lists 234
Malhotra, Umesh 83–​84
manuals 195–​196
market sizing 152
Martin, Roger 4
Meadows, Donella 7
measurable outcomes 80
measuring outcomes 116–​117, 124, 134; case
study 132–​133; contribution versus attribution
125–​126; data collection and analysis, systems
for 128–​129; hard-​to-​reach populations
125; number of people reached 124–​125;
social outcomes versus social impact 117;
success metrics 117–​124; systems change and
framework change 125
mentors 182
261
Index 261
Mercy Corps 165, 203
messaging 230; for action 231; follow-​up 232;
motivations 231; multidimensional 232,
232–​233; stakeholder ladder 231, 231
M&E systems 128, 129, 149
microfranchising 144
Millennium Development Goals (MDGs) 11–​12
mini-​challenges 76
minimum viable product 156
minimum viable valuable product 156
mission 93, 94, 103
mission-​related investment 177
monitoring systems 128
Mowafi, Mona 30–​32
multilateral agencies, funding by 164
multimedia 233
natural environment 108
needs-​based approach 28, 29
Nesta 18
networks 184
Newman’s Own, Inc 101, 102, 140
new organizations, legal options for 203; business
204–​205; charity 204; cooperatives 206; global
variations 207–​208; hybrid structures 205;
social enterprises registration 207
New Profit 18, 243
New Venture Fund 202
nonfinancial support 181, 182; accelerators 183;
advisory board 184–​185; boot camps 183;
caution 185; coworking spaces 182; events 184;
fellowships 183–​184; incubators 183; mentors
and coaches 182; networks 184
non-​monetized methods 144–​145
non-​negotiables 147
Novogratz, Jacqueline 180
Nuru 148, 149, 241
observational data 35
Open Collective 202
operational efficiency across delivery models 146
operational model 10
operations 70
organizational culture 191–​192
organizational structure 190, 215–​216;
governance 198–​202; growth, considerations
for 212–​215; legal structure 202–​212; people
190–​194; process 195–​198
Osberg, Sally 4
outcome metrics see measuring outcomes;
success metrics
ownership conversations 194
partnerships and collaborations 103–​104
passion and motivation 28, 29–​30
Patagonia 141, 211–​212
patient capital 176
payer–​user relationship 137
payment models 141–​142
pay-​what-​you-​want models 138
peer-​reviewed journal articles 39–​40
people: CEO position 193–​194; and culture
191–​192; founding team 190–​191; ownership
conversations 194; reaching out to 58–​59; roles
of 192–​193; see also customers; stakeholders
People’s Report 251
Personas tool 96
personnel costs 154
PESTEL framework 106; economic trends 107;
environment 108–​109; legal requirements
109; political environment 106–​107; social
dynamics 107–​108; technological trends 108
philanthropists 168, 174, 175
pilot projects 83
pitching strategy: asks 225–​226; business plan see
business plan; common mistakes 225; humble
self-​promotion 226; introverts, advice for
226–​227
pitching tips: audience, research on 224; balanced
approach 223; connections and networks
223–​224; knowing when to ask questions 225;
prompt questions 224–​225
PLUS 184
Polak, Paul 84–​85
PolicyLink 247
policy 50, 125, 126, 241; and bylaws 199; Food
and Agriculture Policy Collaborative 247; and
governance 198, 205; and procedures 196
policy change: advocacy for 49, 243–​245,
248–​249; and entrepreneurs 251; partnerships
and collectives for 246–​247
policymaking/​policymakers 20, 49, 51, 214,
218, 243–​244, 246; communicating with
policymakers 230; and constitution 199; and
social capital 249
political environment 106–​107
positioning 98–​99
power, building 9
PRECEDE model 47n10
pricing 96–​97
primary data 36, 40
primary research 36–​37, 37–​38
private equity 166
private foundations 165
private-​sector partners 184
problem statement 71–​72
process: and founders 195; manuals 195–​196;
mapping 196–​198, 197, 198; metrics 121–​122;
operations 195; policies and procedures 196;
team development 195
products 70; designing a system around 82; and
evidence base 122–​123; and quality control 123
professional communities, as information sources
39
26
262 Index
profit 155
program director 192
program-​related investment 177
Project HEALTH see Health Leads
Project Last Mile 210
promotion 99–​100
prototyping 75, 80–​81, 81
publications 234
public foundations 165
public–​private partnerships (PPPs) 6, 210
qualitative data 36
quality control 123
quantitative data 35–​36
randomized control trial (RCT) 35
Rauch, Doug 102–​103, 110–​112
Ravilla, Thulasiraj 146
raw data 36
“Really Bad Powerpoint” (Godin) 222
REDF 18
reflective practice 56–​57
relationship building 56
research: methods and results, keeping track of 40;
and thought leadership 242–​243
research, expanding: case study 251–​252;
endgame 241–​244; handing off 252–​255;
joining forces with others 244–​250
research approach 26–​27; child-​like thinking 27;
questioning all assumptions 27
resource dashboard 185–​186, 186
resources 104
respect, communal 55
responsible businesses 141
results, interpretation of 40–​43
return on investment (ROI) 127–​128, 168
revenue models 10, 70; and cross-​subsidization
138–​139; see also financial viability
revenue sources 136, 137; “buy one, give one”
model 139; cost-​reduction methods 141; cross-​
subsidization models 138–​139; differential
pricing 137–​138; grant based/​charity based
140; high volume, low cost 137; hybrid/​mixed
models 140; responsible business 141
Riders for Health 203
RISE Egypt 30–​32
root causes 34
Ruiz, Albina 57–​58, 243
Salesforce Foundation 205
Sankalp Forum 18
Say, Jean-​Baptiste 4
Schumpeter, Joseph 4
Schwab Foundation for Social Entrepreneurship
18, 250
S Corporation (S Corp) 204
secondary data 36
second opinion 40
seed funding 168
self-​fund 168
self-​promotion 226
self-​sustaining business 137
services 70; designing a system around 82; and
evidence base 122–​123; and quality control 123
Seventh Generation 141
Shaar, Mariam 132–​133
Shakti, Grameen 142
shared leadership 93, 201–​202
Shareholder Commons, The 248
shareholders 172–​173
short-​termism 103
silent probe method 55
Sistema B 208
Skoll Foundation 18, 250
SOCAP Global 18
social challenges: different faces of 26; as problem
versus as opportunity 25; reframing 75–​76
social challenges, characterization of 25, 27;
dimensions of challenge 34–​35; dimensions of
data 35–​36; five-​question framework 32–​34;
framework for 33; how 32, 34; primary
research 36–​37, 37–​38; what 32, 33; where 32,
34; who 32, 33–​34; why 32, 34
social challenges, evidence and data 25–​26;
information collection 38–​40, 41; results,
interpretation of 40–​43; systems mapping 43–​44
social challenges, identification of 24–​25, 28;
access to resources 28, 29; geographic and
sociodemographic setting 28, 29; lived
experience 28–​29; needs-​based approach 28,
29; passion and motivation 28, 29–​30; strengths
and weaknesses 28, 30
social change pathways 4, 5
social dynamics 107–​108
Social Enterprise UK 18
social entrepreneurship bubble 254
Social Entrepreneurship Hub 39
social entrepreneurship spectrum 14
social franchising 144
Social Good Fund 202
social impact 130
social impact bonds (SIBs) 174
social innovation 7; see also innovation
social innovation ecosystems, new 249–​250
Social Innovation Forum 18
social investment 170, 174; impact investing
176–​177; and philanthropists 174–​175; socially
responsible investing (SRI) 178; venture capital
178–​179
socially responsible investing (SRI) 177
social media 233
social outcomes: versus social impact 117; see also
measuring outcomes
social return on investment (SROI) 127–​128
social sustainability 10–​11; see also sustainable
development
263
Index 263
Soufra 125–​126, 132–​133, 140, 205
stages of social entrepreneurship 2; see also specific
stages
stakeholders 65, 229; analysis of 51–​52, 52;
assessing results with 131; mapping 65;
understanding of 53; value, compared with
shareholder value 13–​14
standardization practice 147
Stanford Social Entrepreneurship Hub 19
Stanford Social Innovation Review 19
Stanley,Vincent 209, 211–​212
startup costs 156
Start Up Europe Club 184
Staten Island Partnership for Community
Wellness 246–​247
strategic philanthropy 174, 175
Strategyzer 19
strengths 28, 30
success metrics 117; assessing results with
stakeholders 131; baseline data, referring to
130; being ambitious versus starting small 121;
challenges in measuring 124–​126; control for
other factors 130–​131; decision making 129;
direct versus indirect benefits 123; dos and
don’ts of 129–​131; funders’ perspectives 126;
inherent measurement 129–​130; linking to
quality control 123; linking to the existing
evidence base 122–​123; logframe temple
119–​120; number of indicators 130; process
versus outcome metrics 121–​122; responding
to challenges 127, 127; selection of metrics
118, 118–​119; SMART approach 118, 119;
social return on investment (SROI) 127–​128;
supply chain consideration 123–​124; targets
setting 120–​121; see also measuring outcomes
supply chain 123–​124
surplus revenue 156–​157
sustainable development 10–​11, 11; changemakers
15–​17; stakeholder versus shareholder value
13–​14; Sustainable Development Goals (SDGs)
11–​13, 12, 39, 251
Sustainable Development Knowledge Platform 39
SWaCH cooperative 63
SWOT analysis 104–​105, 106
systems change 125
systems mapping 43–​44
systems thinking 7
tables 40
Tackling Youth Substance Abuse 246
team formation 71
technological trends 108
testing ideas 77, 80–​81; AAAQ checklist 77; and
iterating prototypes 81; theory of change
78–​80, 79
theory of change 78–​80, 79, 118, 132–​133
think tanks, as information sources 39
thought leadership 242–​243
TOMS 139–​140
transparency 158
Transportation Equity Caucus 247
trends over time 35
type two social businesses 10
uniformity versus variability 35
United Nations 164
universities, as information sources 39
UnLtd 18
user-​driven design 68–​69, 70
value chain 195
value proposition 96, 102
values 93, 94
variable expenses 154
Venkataswamy, Govindappa 157
venture capital 165–​166; trends in 178–​179
venture philanthropy 166, 175
viability see financial viability
vision 93–​94
VisionSpring 140, 143
visual tools 40, 43–​44
VOX Capital 176
Water.org 141, 142
weaknesses 28, 30
WeTheChange 202, 210
Wharton Social Impact Initiative 177
White House Initiative on Inclusive Economic
Growth 249
Women’s Programs Association (WPA)
132–​133
World Bank 39, 164
YLabs 140–​141
Yunus, Muhammad 23n5, 27