Social Venture Planning Tips for Assessing Your Venture's Social Impact

1. Social Venture PlanningTips for Assessing Your Venture'sSocial Impact Jill Kickul, Ph.D., Director Stewart Satter Program in Social Entrepreneurship NYU Stern’s 6th Annual Social Venture Competition Entrepreneurs Bootcamp

2. Social Entrepreneurship • Provides business solutions - social & economic benefit • “Multiplies” impact and investment • Delivers sustainable, system wide impact • What is a Social Entrepreneur? • Relentless in mobilizing Local, Regional and Global Linkages • Measures success based on total value returns…OR, put simply: + +

3. Merging Two Perspectives Development societal perspective Business perspective Business activity Direct impacts Indirect impacts Broader development contribution E.g. Economic Growth/GDP Poverty Alleviation Education Social Stability Public Health Human Rights Governance Capacity Building Enterprise Development Environmental Sustainability Infrastructure Innovation Itself Products and Services Jobs Skills and Training Procurement Taxes Corporate Governance Environmental Management Resources 3

4. Relief Stabilization • Respond immediately to a crisis; alleviate suffering • Examples • Post-disaster • Post-conflict • Homeless shelters • Food pantries • Crisis hotlines • Address basic needs; achieve acceptable living standards; reach sustainability • Examples • Public goods • Public services • Community development • Literacy Transformation Enrichment • Advance the human condition; achieve a balance of power • Examples • Bridging leadership • Community empowerment • Human rights • Civil liberties • Improve quality of life; mitigate long-term risks; build capacity • Examples • Higher education • Access to modern lighting • Access to credit • Arts and culture A Social Entrepreneurship Initiative Making a Impact! SOURCE: McKinsey analysis; interviews

5. Common Challenge #1 Problem and solution are misaligned • What? Clearly state the social problem you wish to solve. • Why? Articulate how your venture will actually help to solve that problem. • Example: Charter schools – Offering parents & students choice in public schools creates competition, which will spur innovation and lead to higher performing schools and better educational outcomes.

6. Common Challenge #2Impact is not significant So what? Who cares? • How will people be impacted by your venture? • Do not just describe a process or activity or provide us with the number of people participating in something. • Identify significant quantifiable changes in the following: • Economic value • Environmental quality • Social well-being • Health or quality of life

7. Common Challenge #3 Venture is not scalable • The venture need not be initiated as a large venture unless that is appropriate. However, we do not view favorably the small venture that lacks a vision for growth. • We want to support ventures that create significant, systemic change over time. • Once you have proof of concept how will you move beyond serving a small group?

8. Your Social Impact Where to Start?

9. Our working definition of social impact • A meaningful change in economic, social, cultural, environmental, and /or political conditions… • …due to specific actions and behavioral changes… • …by individuals, communities, and / or society as a whole Defining Social Impact

10. Society & Systems Communities Organizations Individuals Families • Social impact assessment should reflect the values and priorities of the constituents involved

11. What is a “Theory of Change” • Based on your understanding of the problem, what is your theory about which actions will lead to the results you want to achieve? • A Theory of Change offers a clear roadmap to achieving results by identifying the preconditions, pathways, and interventions necessary for an initiative’s success. • It’s a statement about causality.

12. Inputs Outputs Outcomes Impacts Theory of Change and Social Value Creation 4 elements need to measure social value creation: Inputs - resources invested in your activity Outputs - the direct and tangible products from the activity. i.e. people trained, trees planted, products sold Outcomes - changes to people resulting from the activity. i.e. a new job, increased income, improved stability in life Impact = Outcomes less an estimate of what would have happened anyway

13. Examples • Habitat for Humanity – Providing families with simple, decent, affordable housing will break the cycle of generational poverty. • Low Cost Eyeglasses – Delivering affordable corrective eyewear to the 1 billion people in the developing world who need it and can’t get it will raise the standard of living in those countries through enhanced educational and employment opportunities for the wearers.

14. Inputs Activities Outputs Outcomes Impact* Developing Your Own Value Chain - Impact Resources invested to enable activities What the initiative does with the inputs to fulfill its objectives and produce outputs and outcomes Direct products and immediate results of the activities Medium term results of the initiative which affect constituents Long-term results of achieving specific outcomes for constituents • Assessing outcomes allows real-time learning that can guide improvements while an initiative is underway • Outcomes provide action-oriented proxies for impact • Outcomes are easier and more affordable to track than impact measures

15. Success Equation Components Mission What are we ultimately trying to accomplish? Priority Outcomes What changes in behavior or condition are required? A + B + C = D A + B + C = D Performance Measures How do we measure progress against our outcomes? Key Strategies Which programs or activities will drive results? © 2008 Mission Measurement LLC – as adapted from Benchmarking for Nonprofits, by Jason Saul, Fieldstone Press, 2004,

16. Melinda T. Tuan for the Bill and Melinda Gates Foundation – Analysis of 8 integrated cost approaches to measuring and/or estimating social value creative • Foundations • NGOs • Other donors • Program clusters • Grantees • Social Enterprises • Summarize 8 methodologies and analyze each methodology’s strengths, limitations, and utilization, and the cross-cutting issues and learnings for the sector; continue the dialogue in the sector regarding the possibilities for improving the overall practice of integrating a cost perspective into strategy measurement and decision making • Social Venture Technologies for the Rockefeller Foundation – Catalogue of approaches to impact measurement for impact investors • Social investors • Social enterprises • Review methods to measure impact in private equity and debt contexts • Grantmakers for Effective Organizations – multiple publications including Learning for Results • Foundations • Grantees • Foundations • Report on learning organizations and strategies to embed learning in day to day grantmaking work • New Philanthropy Capital – Association of Non Profit Analysts • Foundations • Other Donors • NGOs • Create a cadre of professional non-profit analysts with standard approaches to assessing social impact • Center for What Works – Foundation Effectiveness Toolkit • Foundations • Program clusters • Grantees • Develop a toolkit of online products and services to assist smaller foundations with limited staff capabilities to conduct and implement performance measurement for themselves and their grantees • GiveWell.net • Individual donors • NGOs • Identify top charities for individual donors and create a global, public open conversation about how best to help people Target user Initiative Objective of effort

19. Social Entrepreneurship –Entrepreneurship That Has An Impact ! Jill Kickul, Ph.D., Director Stewart Satter Program in Social Entrepreneurship Berkley Center for Entrepreneurial Studies NYU Stern School of Business