Presentation on Social Entrepreneurship-BrownSchool-18November2010

Social Entrepreneurship: Lessons from the Field

Jeffrey A. Robinson, Ph.D.Assistant Professor and Assistant Director

The Center for Urban Entrepreneurship & Economic Development

November 2010

The Center for Urban Entrepreneurship &

Economic Development

World-Class Research

Innovative Education

Economic Development Impact

The Center for Urban Entrepreneurship

& Economic Development

Research AreasUrban Entrepreneurship & Economic Development

– Urban Entrepreneurship (wealth creation, business development, community entrepreneurship, job creation)

– Technology Entrepreneurship (technology transfer, technology commercialization, incubators, technology clusters, leveraging university patents, green business)

– Social Entrepreneurship (social problems solving, social purpose businesses, social investments, green business)

– International Entrepreneurship (institutions and entrepreneurial activity, SME’s and developing nations, entrepreneurship towards economic development)

– Economic Development (urban institutions and development, economic development and emerging economies)

Social Entrepreneurship Books

2006 2009 2010



• Part of NJUEDI Federal Appropriation FY 2010 and FY 2011

• Three (3) Social Innovation and Entrepreneurship Summits

• Establishment of a resource website and network

• Workshops

• Social Innovation Institute – 6 month training

– Non-profit Enterprise Track

– Social Venture Track

NJSEN Establish a NJ Social Innovation Fund

NJ Social Entrepreneurship Network



SOCIAL ENTREPRENEURSHIP

• “Social entrepreneurship is recognized as encompassing a wide range of activities:

– enterprising individuals devoted to making a difference;

– social purpose business ventures dedicated to adding for-profit motivations to the nonprofit sector;

– new types of philanthropists supporting venture capital-like „investment‟ portfolios; and

– nonprofit organizations that are reinventing themselves by drawing on lessons learned from the business world.”

Mair, Robinson, Hockerts in Social Entrepreneurship



• Social Enterprise – NPOs creating for profit or for profit like

organizations with double- or triple-bottom lines

• Social Purpose Business – For profit organization that is created

with a specific social purpose

• Social Venture - A company or organization that a social

entrepreneur starts to achieve their social and economic goals

• Social Venture Capital – Venture capital or venture capital-like

investment targeted for social ventures; often seeks a social and

financial return on investment

Related terms

Social ImpactS

ocia

l Inn

ovatio

n

Su

sta

inab

ility

Meas

ure

men

t

Social

Entrepreneurship



• Different theories of change and intervention strategies (social

impact and social innovation)

• Different types of social venture opportunities

• Different approaches to innovation, structure, and measurement

There is variation in SE



Notable Examples

• Goodwill Industries

• Harlem Children’s Zone

• One Economy

• Sweet Beginnings

• Kaboom!

• Ice Stone

• City Fresh Foods

• Greyston Bakery

• Café Reconcile

• The Doe Fund

• Wilkin Solar

City Fresh Foods was founded in 1994 with the mission of utilizing local culinary talent to prepare traditional and home-style meals. Behind our delicious food is a successful business model that incorporates community and economic development to provide organizations with a cost-effective method of meeting their food service needs.

City Fresh Foods is located in the Four Corners neighborhood in Dorchester, MA, a community that has been historically bypassed by business investment. Four Corners is evolving into a vibrant, bustling neighborhood. We believe that business is a powerful vehicle for empowering our youth, developing the community, and nurturing the environment.

As part of our dedication to our mission, City Fresh Foods:1. Has relationships with local schools, providing exposure to young adults who might consider the culinary arts profession.2. Purchases from local organic farmers in season to use the freshest natural ingredients.3. Recycles and minimizes waste-flow to reduce our impact on the environment.4. Employs from the community, providing residents with an opportunity to manage, and eventually own the operation.

Listed on the Inc. Magazine Inner City 100

• Greyston Bakery is a force for personal transformation and community economic renewal. We operate a profitable business, baking high quality gourmet products with a commitment to customer satisfaction.

Greyston Bakery provides a supportive workplace offering employment and opportunity for advancement. Our profits contribute to the community development work of the Greyston Foundation.

Vision Statements

• Greyston Bakery is the nat ionally leading "Brownie Company".We produce Do-Goodie, the best tasting - highest quality brownies at a great value to the consumer.

• Greyston Bakery is a leading model for social enterprise building a coalition with employees, community and shareholders.We properly compensate our employees: fair/living wage, health benefits, and direct participation in the profitability of the company. We train, promote from within, and mentor our employees, who we source from the local community

Greyston Bakery, through its profit generation, is a substantial source of revenue for the Greyston Mandala, supporting affordable childcare for community, affordable housing for homeless and low income families, and affordable health care for persons with HIV.

http://www.greyston.org/





SOCIAL IMPACT



Social ImpactDoes the venture make a significant social impact?

Social impact is a key element of a social venture. What issue or problem is the venture being set up to address? How a social venture makes the impact and where it wants to make the impacts are important strategic decision. What is the theory of change?

A social venture can make impact at different levels (e.g. community, local, regional national) or with varying degrees of depth (e.g. intermediary, service provider, employer, or instructor). Social ventures are often challenged by the tradeoff between breadth and depth of their social impact. How the founders reconcile this tension is an important indicator of strategic direction.

Leve

l of

Soci

al Im

pac

t

Broad

Targeted

Landscape of Intervention

CSR Program

Public Policy

Corporate Philanthropy

Pure Market

Private Philanthropy

Government Agency

High (Bureaucratic)

Low (Entrepreneurial)Level of Institutional Control

Leve

l of

Soci

al Im

pac

t

Broad

Targeted

Landscape of Intervention

CSR Program

Public Policy

Corporate Philanthropy

Pure Market

Private Philanthropy

Government Agency

High (Bureaucratic)

Low (Entrepreneurial)Level of Institutional Control

Social Venture(with philanthropic support)

Social Venture(with market-based strategy)

Social Venture(working closely with government)

Civic or CommunityVenture



SOCIAL INNOVATION



Social InnovationIs the venture using a new approach to addressing the

social/environmental issue?

Social ventures break new ground, pioneer new approaches, or develop new models. These ventures need to creatively navigate the economic, social, and institutional entry barriers to social sector markets.

Social entrepreneurs develop new approaches to addressing social problems or utilize technology to facilitate problem solving. It is important that a social venture uses effective innovations for the problem they are addressing.



Three types of social innovation

• Service Delivery Innovation

– Closes gaps in the system through partnerships

• Boundary-Spanning (Bridging) Innovations

– Makes unusual and creative connections across

sectors

• Technology or Product Innovation

– Uses technological innovation to address

social/environmental issue

Harlem Children's Zone

Founded in 1970, Harlem Children's Zone, Inc. is a

pioneering, non-p rofit , community-bas ed

organization that works to enhance the quality of

life for children and families in some of New York

City's most devastated neighborhoods. Formerly

known as Rheedlen Centers for Children and

Families, HCZ, Inc.'s 15 centers serve more than

12,500 children and adults, including over 8,600

at-risk children. The emphasis of The Children's

Zone work is not just on education, social service

and recreation, but on rebuilding the very fabric of

c o m m u n i t y l i f e . .

A Triple Bottom Line Company

NLEN and Sweet Beginnings, LLC

Brenda Palms-Barber, CEO

Sweet Beginnings is a producer of natural honey-based personal care

products and premium honey. Sweet Beginnings is a Chicagobased

corporation owned by the North Lawndale Employment Network

(NLEN). The company was originally started in 2004 as a

transitional jobs program for former offenders. The success of the

program spawned the formation of the Beeline brand. The program

boasts a 3% recidivism rates versus an average rate of 80+% in most

rehabilitation programs.



WILKIN SOLAR



Wilkin Solar opportunity - challenge

Opportunity

• 56% of Ghana households with no access to electricity (use kerosene and

candles)

– 23% in urban communities, the rest in rural communities

Challenge

• Uncertainty in market acceptance of products

• Lack of existing credit facilities in rural areas to facilitate upfront consumer

payments for purchases



What are the implications of different types of social innovation?

• What is the relationship between boundary spanning social

innovation and social impacts?

• Is the level of social innovation is related to the level of the

social impact?

• Possible answers:

– More innovative social ventures have more targeted social impact.

– Less innovative have broader social impact.

– Is there a hidden cost of social innovation?



SUSTAINABILITY

FINANCIAL SUSTAINABILITY

NLEN and Sweet Beginnings, LLCBrenda Palms-Barber, CEO

Sweet Beginnings is a producer of natural honey-based personal

care products and premium honey. Sweet Beginnings is a

Chicagobased corporation owned by the North Lawndale

Employment Network (NLEN). The company was originally started

in 2004 as a transitional jobs program for former offenders. The

success of the program spawned the formation of the Beeline brand.

The program boasts a 3% recidivism rates versus an average rate of

80+% in most rehabilitation programs.





(Financial) SustainabilityIs this venture financially viable? Is this venture positioned to

fulfill its mission over the long-term?

A sustainable social venture is financially viable and positioned to fulfill its mission. Many social ventures are not sustainable because they rely upon unstable grant-making or government institutions for their funding. Alternatively, earned-income or fee-for-service business model are generally more effective strategies for social ventures.

How a social venture marshals its resources to sustainable is an important strategic decision that often separates traditional non-profit organizations from social entrepreneurship.

Types of Earned Income Strategies

• Generate revenue from the products/services provided to the

clients/communities/etc. you serve

(For-profit or nonprofit)

• Generate revenues from products/services provided to the public or

to other companies and organizations

(For-profit or nonprofit)

• Create a for profit organization that is owned by the non-profit

organization (Hybrid)

3



Types of Social Venture Opportunity

Value-based opportunities are those that demonstrate a clear potential for profit and growth to the entrepreneur. Although the idea has a social focus, the primary goal of the entrepreneur is to use this opportunity to create financial value.

Issue-based opportunities are, on the other hand, those discovered when the entrepreneurs are not fiscally driven but are motivated to respond directlyto the social needs of the community.

Simms and Robinson 2009



MEASURING IMPACT



What do social entrepreneurs change?

• They change behavior of people in society

• They change existing condition

• They facilitate changes in future opportunities

• How can these things be tracked? Measured?



MeasurementHow does this venture measure its social impact and evaluate success? Are the measurement tools appropriate for this type of venture?

Measurement and evaluation are essential to social entrepreneurship. In addition to the financial metrics used by traditional ventures, social ventures must measure their impact and evaluate its effectiveness. There are many ways to measure and evaluate the social impact of a venture.

The key is that the social venture is using an appropriate type of measurement tool that is in line with their theory of change.



Why Measure?

• Accountability

• Evaluation

• Outcomes and Impacts

• Effectiveness

General Principles

– Outputs vs. Outcomes

– Evaluation vs. measurement



REDF VIDEO



Key Questions for Your Venture

From REDF

• How can we measure the success of our efforts?

• How do we know whether we’re accomplishing what we set out to

do?

• How can we make informed decision about the ongoing use of our

resources?

• How can we test and convince others of what we believe to be true:

that for each dollar invested in our portfolio agencies’ efforts, there

are impressive, quantifiable resulting benefits to individuals and to

society?

In 1997, the agency began a network of programs for a 24-block area: the Harlem Children's Zone Project. In 2007, the Zone Project grew to almost 100 blocks and served 7,400 children and over 4,100 adults.

Recent results:

100% of students in the Harlem Gems pre-K program were found to be school-ready for the sixth year in a row.

81% of Baby College parents improved the frequency of reading to their children$4.8 million returned to 2,935 Harlem residents as a result of HCZ's free tax-preparation service

10,883 number of youth served by HCZ in 2008

This year, President Obama announced that HCZ would be used as the model for a national program to address youth issues in urban areas.

http://www.hcz.org/programs/the-hcz-project

Wilkin Solar:Triple Bottom Line Returns

30 jobs

created

3,100 households with access to clean energy

105,000 liters of kerosene offset 2007-2008



Measurement and Evaluation

• Trade-offs and Opportunities

– Short-term vs. Long-term

– Pre/Post Treatment vs. Longitudinal

– Survey vs. Interview

– Self-reported vs. Observed

– Formative vs. Summative

– Evaluation vs. Social Return on Investment

• Question : Do social ventures with multiple point measurement protocols

and evaluation procedures receive better funding than those without these

protocols and procedures?



Five Observations about Performance Management (Acumen)

1. Culture matters far more than systems

2. If you build systems, start with a pencil and paper

3. Think on the margin

4. Count outputs and then worry about outcomes

5. Don’t confuse information with judgment

– “Simple Measures for Social Enterprise” - Telestad



DISCUSSION

What will your next steps be?

Social Entrepreneurship

Jeffrey A. Robinson, Ph.D.

[email protected]

Twitter: @jrobinsonphd

Search for Jeffrey Robinson

Social Entrepreneurship

Jeffrey A. Robinson, Ph.D.Assistant Professor and Assistant Director

The Center for Urban Entrepreneurship & Economic Development

November 2010