Measuring Social Enterprise Success

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Measuring Social Enterprise Success
SCP Experience to date with Social Return on
Investment (SROI) Analysis Workshop Presentation
Carleton Centre for Community Innovation Carleton
University, Ottawa June 19 2006
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• Thinking About Success
• There are two primary areas where SCP will be
  evaluating success. These include the setting and
  reaching of clear goals around
• Providing supportive employment and skill
  development opportunities to disadvantaged
  populations
• Social enterprise profitability, ability to scale
  operations and eventually cover all social and
  financial costs
• A social enterprise is achieving success if both
  enterprise target employees and the enterprise
  itself are able to develop paths towards
  self-sufficiency

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• Analyzing Success through Asset Building
• Significant departure from traditional welfare
  economics
• Increasingly, lack of access to assets (
  financial, social, physical and natural) is a key
  indicator for why certain groups slip into and/or
  cannot move out of poverty
• SCP is taking an asset-based approach through
  utilizing the Sustainable Livelihoods framework
  a framework that address where people are now,
  where they want to go and how they want to get
  there

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• Measurement Framework
• Need a flexible measurement framework driven by
  the needs of target employees and social
  enterprise stage of development
• SCP is not prescribing predetermined notions of
  success
• SCP does call for clear definitions around who a
  social enterprise is employing and how this
  population(s) is being helped
• SCP does require that costs associated with the
  social mission be accounted for separately to
  better understand the cost structure of the
  enterprise and plan for future growth
• SCP is interested in supporting and working with
  social enterprise organizations that see the
  value in setting up a success measurement
  framework

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• Three Main Hypotheses to Test
• H1 The social enterprise model is the most
  effective strategy to enable disadvantaged
  populations to develop sustainable livelihoods
  for themselves
• H2 Social enterprises with feasible and
  scaleable business ideas have the ability to
  become self-sufficient over a certain period of
  time
• H3 Access to employment and paid training will
  contribute to the decreased need of individual
  target employees to rely on specific social
  services over time
• SCP deploys a Social Return on Investment (SROI)
  framework to test the above hypotheses

 
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• What is SROI?
• An attempt to quantify the social value being
  generated by an organization as a result of an
  investment made in that organization
• An evaluation strategy to determine what
  organizations and programs are delivering the
  best social returns
• Defined as a return because it is a result of
  resources (financial and human) invested
• Units being measured encompass social and/or
  environmental impact
• This approach is gaining popularity as
  competition for charitable dollars continues to
  increase and social organizations recognize the
  need to report on the social value of their work

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• SROI in the Context of Social Enterprise
• Roberts Enterprise Development Fund (REDF)
  leader in developing and disseminating learnings
  regarding social, economic and socio-economic
  value of social enterprise
• SROI evaluation approach lends itself well to
  social enterprise model in that it encompasses
  both financial and social outcome areas
• A key contribution of this approach is the focus
  on distinguishing between the different costs in
  a social enterprise to enable managers to better
  understand where specific costs are coming from
• Need for social cost accounting in order to
  reasonably project costs of social support
  infrastructure now and in the future

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• Challenges with SROI Approach
• Overarching challenge is to develop a SROI
  framework and ultimately a system to function as
  an integral tool for social enterprise strategic
  development
• Want to avoid pitfalls of setting up an
  evaluation process seen only as an accounting
  exercise with limited value for decision-making
  within individual social enterprises
• SROI as a concept and evaluation strategy is new
  and evolving and a lot more testing and refining
  is needed before touting success of this approach
• Deciding on what social outcomes of target
  employees to track
• Creating and establishing an assessment and
  tracking process that has value for target
  employees (ie Asset Development Planning) - the
  nature and needs of different target groups
  should shape tool development

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• Process and Methodology
• First step is to jointly agree on specific
  strategic issues for both social and business
  missions - to address.
• For the social mission we begin by seeking the
  answers to the following questions
• 1) Who are - or will be - the target employees?
• 2) How is the social mission currently being
  managed?
• 3) How should social mission success be defined?
• 4) What social support infrastructure is in
  place?
• 5) How much should be spent on social costs ?

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• Learning to Date
• We want to have a good sense of how viable this
  model is and understand if employment in a social
  enterprise assists people to develop sustainable
  livelihoods
• Questions Guiding Our Work
• What are the best ways to achieve positive social
  outcomes through the social enterprise model?
• How should social support infrastructure be
  packaged and delivered?
• What are some benchmarks around planning,
  projecting and managing social costs?
• Is the social enterprise model more appropriate
  and/or more successful with particular target
  groups?
• What are the differences between those
  enterprises that offer short term transition
  employment versus those offering longer term
  employment with opportunities for advancement?

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• Thank you
• Please contact us if you have further inquires
  at
• 416 646 1871 x110 Joanne Norris
• For more information, please visit our website
• www.socialcapitalpartners.ca
• We are utilizing our website to disseminate our
  investment portfolio SROI Reports and to keep
  people updated on what we are up to