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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
The Center for Urban Entrepreneurship
& Economic Development
• 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
The Center for Urban Entrepreneurship
& Economic Development
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
The Center for Urban Entrepreneurship
& Economic Development
• 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
The Center for Urban Entrepreneurship
& Economic Development
• 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
The Center for Urban Entrepreneurship
& Economic Development
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.
The Center for Urban Entrepreneurship
& Economic Development
SOCIAL IMPACT
The Center for Urban Entrepreneurship
& Economic Development
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
The Center for Urban Entrepreneurship
& Economic Development
SOCIAL INNOVATION
The Center for Urban Entrepreneurship
& Economic Development
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.
The Center for Urban Entrepreneurship
& Economic Development
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.
The Center for Urban Entrepreneurship
& Economic Development
WILKIN SOLAR
The Center for Urban Entrepreneurship
& Economic Development
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
The Center for Urban Entrepreneurship
& Economic Development
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?
The Center for Urban Entrepreneurship
& Economic Development
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.
The Center for Urban Entrepreneurship
& Economic Development
The Center for Urban Entrepreneurship
& Economic Development
(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
The Center for Urban Entrepreneurship
& Economic Development
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
The Center for Urban Entrepreneurship
& Economic Development
MEASURING IMPACT
The Center for Urban Entrepreneurship
& Economic Development
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?
The Center for Urban Entrepreneurship
& Economic Development
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.
The Center for Urban Entrepreneurship
& Economic Development
Why Measure?
• Accountability
• Evaluation
• Outcomes and Impacts
• Effectiveness
General Principles
– Outputs vs. Outcomes
– Evaluation vs. measurement
The Center for Urban Entrepreneurship
& Economic Development
REDF VIDEO
The Center for Urban Entrepreneurship
& Economic Development
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.
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
The Center for Urban Entrepreneurship
& Economic Development
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?
The Center for Urban Entrepreneurship
& Economic Development
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
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& Economic Development
DISCUSSION
What will your next steps be?
Social Entrepreneurship
Jeffrey A. Robinson, Ph.D.
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