Reflections on social impact assessment in India & the shape of social impact measurement 2.0

Having just returned from 3 breathless weeks in India, and having spent much of it interviewing or working with social purpose ventures from a range of sectors, my head is full of social impact-type thoughts. I had the great privilege of working with early stage social entrepreneurs in Mumbai working on solutions to problems as diverse as farmer suicides, violence against women, emotional intelligence, and waste management. Each of them had incredible social impact even if they were not always aware of just how diverse and far-reaching that impact was.

One of the most predictable conclusions of our interviews (conducted for the purpose of developing a simplified, user-friendly social impact framework for early stage social entrepreneurs) was that organisations whose primary impact was environmental had embedded fairly robust quantifiable measures of their impact, and this data was collected on a regular operational basis. Where they were weaker was how their organisational activities impacted on beneficiary groups, where such outcomes were largely qualitative and more difficult to capture. The maxim that what is easiest to measure gets measured clearly holds true in many of the cases we encountered.

Related to this was the desire but the difficulty of capturing what we might call “soft” or second-order outcomes such as dignity or self-esteem. This was crystallised in the case of the organisation Sampurn(e)arth, which specialises in end-to-end waste management solutions. Sampurn(e)arth employs female waste pickers from a federation they have set up in partnership with the Stree Mukti Sanganatha (Women’s Liberation Group). While there are several waste management ventures in Mumbai, no other organisation works with waste pickers in the way that Sampurn(e)arth do. The impact of offering waste pickers dignified, regular, skills-based and fairly remunerated work is more difficult to capture than reductions in carbon emissions (and attribution is a killer here) but it is such a significant outcome that it simply has to be expressed.

More generally, organisations – regardless of whether they collected impact data regularly or not – did not use that data very well. Neither did they store it particularly well, all of which begs the question of why do in the first place? My intuitive belief is that being seen to collect data is a powerful driver of such behaviour, but the advantages of using such data to meet strategic objectives (performance measurement, mission alignment, stakeholder reporting) was neither well understood by any players in the field, whether social enterprises or incubators.

We also found that many organisations failed to recognise the diversity of their impact without prompting to reflect on what they actually do, and perhaps most importantly, who they work with. This is expressed through my twin concepts of social impact “partners” and social impact “ecologies’. One organisation, which seeks to provide emotional support to children in schools who have suffered trauma, regularly refers the children they work with to other organisations who serve other needs (physical health, group activities etc). Though such referrals do not translate into increased revenue or extend the scope of their impact, it does extend impact along the “depth” axis. Without such partnerships beneficiary groups would receive incomplete services, and these joined-up ecosystems release value through referrals. While conventional social impact measurement frameworks emphasise the need to isolate impact -what have you changed that you can prove you did alone? – social impact assessment 2.0 needs to think more carefully about the ways in which organisations create impact through partnerships, and about the distinction between scope and depth impact.

We also encountered practical obstacles to social impact assessment. Firstly, and most obviously, early stage social entrepreneurs lack the resources to carry it out on any more than an annual basis. They also lack the knowledge to do it properly. Some of this is a supply problem; I’m not sure the sector has yet cracked the best way to make Theory of Change models relevant to social purpose ventures regardless of their sector or intervention-type.  The demand side is also real too. Many social ventures assume they know what they seek to change without needing a lesson in it, and that’s understandable. But there’s a problem when social impact is assumed and poorly understood – many organisations simply fail to think through their impact in a holistic way, and so they project a partial image of their impact when the reality is often much richer.

Secondly, social enterprises, like mainstream enterprises, give priority to other reporting formats: financial and operational. For social impact reports to be recognised as a sector standard, they will have to be correspond to operational reports in some way, otherwise they will be relegated to a distant third since they are not (currently) regarded as a necessary form of accountability.  I personally don’t think this is impossible: output data forms the backbone of operational reports and can be transferred to social impact reports.

Beyond these issues is an underlying aversion to comparison.  Many organisations have a quantified base figure in mind when they think about social impact assessment (and it is measurement rather than assessment they have in mind) which they feel leaves them open to comparison with other organisations even if they are not ordinarily comparable.  This is a legacy of social impact assessment 1.0, which was geared towards the holy grail of a definitive numerical expression of impact. Social impact assessment 2.0 has the potential to allay some of these concerns, but it is fairly deeply entrenched, and the influence of earlier quantifying, individualising frameworks remains strong.

What needs to change is a realisation that keeping one eye on social impact is integral to the operational success of social enterprises -large or small.

Two rising stars of the Indian social enterprise scene

This was originally published as “Social enterprise in India makes steady progress” in The Guardian, January 9th 2013.

Over the past decade the social enterprise ecosystem in India has grown steadily, almost in parallel to ours in Britain. Like ours, the evolution of the ecosystem has been uneven, with a surfeit of subsidised capital for early stage start-ups, a splattering of incubation hubs and a small but expanding number of universities that have sought to embed social enterprise in teaching, research, and enterprise activities (or all three).

If London is the UK’s social enterprise capital, then Mumbai is India’s. The city’s Tata Institute of Social Sciences (TISS) launched India’s first masters programme in social entrepreneurship in 2007. Last year, it reached an agreement with the Development Bank of Singapore to fund an incubator and provide continuing financial support to its graduates. In a region where incubation for social purpose ventures has expanded over the past 10 years, but where social entrepreneurship has struggled to find legitimate recognition as a field of academic study, this unique combination of the two has served to make social enterprise a viable career choice for young graduates.

Unltd India – which celebrated its fifth birthday in 2012 – has been providing seed funding and business support in much the same ways as its UK counterpart has done. Until last year, it also provided a vital physical hub in the city for social entrepreneurs. Much more than a co-working space, the hub (now called Bombay Connect) is an oasis of calm, conviviality and creativity in a city that pulses to a manically financialised beat.

Two of the fourth batch of graduates from the TISS masters have gone on to found successful start-ups. Ketan Parmar has launched Krishi Naturals, an organic farming business that works with farming co-operatives in the western state of Gujarat. Despite being heralded as India’s most technologically advanced state (its prime minister Narendra Modi appeared as a hologram in remote villages during recent state elections), rural Gujarat is agriculturally dependent, and the state is India’s largest dairy producer.

In the context of an epidemic of farmer suicide – claiming one life every 12 hours – Krishi Naturals’ mission goes beyond environmental do-gooding. Krishi Naturals has two related objectives: to provide a sustainable livelihood for farmers and to popularise organic farming. To meet its objectives, Parmar and his team have been engaged in advancing the development of farming co-operatives, on the one hand, and consumer groups, on the other.

Krishi Naturals’ support for farmers involves disseminating advice on best practice for organic farming methods and providing technical support. Organic farming is widely perceived as far less productive than chemical methods, so persuading farmers that organic methods can maintain crop yield and offer access to new markets is a major challenge for Krishi Naturals.

On the demand side, the company is working with housing societies (co-operatives) in the city of Baroda to provide weekly baskets of fresh organic produce. This distribution model, based on seasonal subscriptions, provides farmers with a stable, predictable income and ensures that only crops that can be guaranteed to be sold will be grown, reducing food wastage. These advanced subscriptions also provide much-needed working capital. Krishi Naturals has recently partnered with Jatan, an organisation that raises awareness about organic farming and produce among farmers and consumers.

Parmar believes that the organic food market in India is still in its infancy but that, “domestic markets must be developed by spreading awareness about organic food. As most of the organic food produced in India is being exported, our carbon foot print in transporting this stuff is very high which ultimately affects the environment”.

Sampurn(e)arth, another TISS start-up and Unltd India investee, is in the business of end-to-waste management. Like Krishi Naturals, it seeks to create multiple forms of value and impact. Mumbai is home to Asia’s second largest dumping ground, producing a staggering 10,000 tonnes of waste every day. Waste pickers scavenge these dumping grounds from morning to night, separating the useful from the useless.

Sampurn(e)arth operates on the principle that the mass transportation of waste to these mega dumping grounds is not only hugely inefficient and expensive but also environmentally costly and responsible for perpetuating undignifying scavenging work. Its solution is to promote the segregation of waste at source and the overall decentralisation of waste management. It does this by separating dry from wet waste at sites that handle sizeable quantities – universities, corporate offices or hospitals. Where the wet waste crosses a quantity threshold, Sampurn(e)arth installs and maintains a biogas plant that transforms the waste into cooking gas and organic fertiliser. The dry waste is segregated at source and sent for recycling.

This elegant decentralisation of waste management is valuable in and of itself. But Sampurn(e)arth’s innovative twist lies in its partnership withStree Mukti Sanganatha (Women’s Liberation Organisation), which has given rise to a federation of female waste pickers. Sampurn(e)arth and Stree Mukti Sanganatha train members of the federation to separate dry waste properly and to manage biogas plants and composting units. Besides providing members with much-needed transferable technical skills, firms also offer a living wage, social insurance, decent working conditions and perhaps above all, a dignified livelihood. Members of the waste pickers’ federation glow as they speak of an ability to take pride in their work, to hold their heads high and to impress on their children the realisation of long cherished dreams of social mobility. Co-founder Debartha Banerjee describes these female waste pickers as “invisible environmentalists”.

These high-impact, innovative solutions to market and government failures are symbols of a mounting impatience at the persistence of poverty in spite of steady, consistent growth over the past 30 years. In unequal countries such as India, where the windfall of economic gains has accrued to relatively few, social enterprise promises to empower those groups who have found themselves bypassed by globalisation’s gold rush. In social enterprise circles we pay a lot of lip service to the triple bottom line, but very few organisations walk the walk like these two. The challenges lies in providing the right mix of financial, legal, moral and intellectual support for this all-important generation of change makers. Organisations such as TISS and Unltd India are at the forefront of meeting this challenge.

How Satyamev Jayate can catalyse a social enterprise movement

This piece was published on redhotcurry.com,  18th August 2012 and as an editorial in the Hindustan Times in September 25, 2012: 

http://www.hindustantimes.com/News-Feed/Editorials/Just-maintain-the-momentum/Article1-935621.aspx

By all measures, Aamir Khan’s and Star Plus’  Satyamev Jayate has been a phenomenal success. Viewing figures surpass anything shown on Indian Sunday mornings since the Mahabharata and Ramayana serials in the 1990s. It has generated an astounding level of commentary in the print and social media. By the end of its first episode, the show’s website had crashed; even though the last episode of the show aired almost 2 weeks ago, it continues to be the subject of several hundred tweets a day.

Many critics have lampooned Satyamev Jayate as the venal ego-trip of a Bollywood star looking to bask in the reflected glory of hard grafting, dedicated others. Others have attacked the show’s televisual format. But this is too easy – and arguing that television limits SMJ is actually a little bizarre. Television obviously has its constraints - ad breaks, episode limits and so on – but it achieves a level of penetration that other media formats simply can’t hope to emulate. Satyamev Jayate has brought acute social problems into more Indian homes than any other show in Indian television history. Those who doubt this should take a look at the lengths the show’s producers went to ensure that the show reaches the villages as well as the metros (reportedly at considerable cost). Others have taken objection to the paradoxical elevation of Aamir Khan as India’s social conscience at the same time that the show seeks to champion India’s quiet heroes. This has been the basis for a range of accusations in the Twitterverse, ranging from which Khan’s alleged crocodile tears to his exorbitant paypacket. Even if some of these allegations are true, it doesn’t really matter. And those who say the show has made no material impact miss the point of television entirely.

What SMJ has achieved, without question, is awareness on an epic scale. The show has brought the reality of what are “wicked problems” (water shortages, environmental degradation) into an unprecedented public sphere. By doing so, it has not only afforded profile to deserving individuals, groups and projects, but hopefully catalysed a new wave of activity as viewers, either moved by the plight of those suffering from such problems, or inspired by those attempting to address them,  seek to become change-makers themselves. As Shoma Chaudhury has forcefully argued, it also has handled complex issues with a rare dignity and attention to complexity.

For these reasons, neither Khan nor the show’s producers need to unduly worry about an unfinished project with an undefined legacy. The primary concern should be to maintain the momentum the show has created (especially in the absence of a second series in the foreseeable future).

How should it do this? By capitalising on the show’s enormous web following, and to use this to promote more entrepreneurial approaches to social problem-solving. On the official SMJ site, it self-consciously measures its impact in the number of “connections” it has enabled, the Twitter and Facebook “impressions” it has generated, and the number of text messages received. The show clearly recognises that its strength lies in its capacity to bring people into communities of interest, and by doing so, to generate a critical mass of change-makers.

Where it could extend this impact would be to encourage this community to move beyond the philanthropic-charitable model it has understandably championed. There are, for example, numerous match funding schemes for the organisations featured in the show’s various episodes. But there are other opportunities it can seize to engage its following in more creative ways. By doing so, it could enhance the scope and scale of change in India. This involves engaging its self-generated community to move beyond the cult of individual heroes and philanthropic patches to promote entrepreneurial and ultimately sustainable solutions to social problems.

This need not involve everyone abandoning their jobs to start their own social enterprises. Not everyone is or should be a social entrepreneur.  What everyone should be is aware of their ability to contribute to entrepreneurial approaches to social issues. There are already many credible socially entrepreneurial responses to some of the critical issues raised in SMJ – including organic farming, waste management and clean energy solutions. Many of these could benefit from business support, human resources, and technological input. There also many which are good ideas but need expert knowledge to make the leap from good ideas to working models with long-term, consistent impact.

Community time-bank models have been immensely successful in many places around the world. Why not link SMJ’s sizeable following to volunteering organisations in major cities (the “metros”) to enable the kind of skill and knowledge transfer to improve, diffuse and scale social innovations?  If time is an issue, organisations such as Milaap allow individuals to make loans to the working poor in India. These loans go towards providing primary social goods like clean drinking water, sanitation, renewable energy and enterprise development. Such enterprises often go under the radar. Bigger, brasher charity operations hog the media limelight but they don’t necessarily have the greatest impact.

There are many facile criticisms of Satmayev Jayate that need to be dismissed outright. If it is to have a lasting impact on India’s social economy, however, it cannot afford to stand outside sustainable circuits of change-making. This involves the encouragement of a shift away from a reliance on philanthropic and heroic charity to more entrepreneurial approaches. No-one denies that the former two do not have a role to play in India. Social entrepreneurship should not be seen in competition to traditional modes of change-making, but as a viable, sustainable alternative which can complement the truly inspirational work being done in the charity sector.

On its own terms, Satmayev Jayate has been an unqualified success. It is a welcome tonic to the claustrophobic, thought-choking smog of the sass bahu soap opera, bringing uncomfortable realities into the Indian home with clarity and purpose. It has also cultivated a huge online following with the potential to unleash an incredible wave of social action. It is its success in galvanising this wider movement, which will define its contribution to solving the chronic problems facing India today.

Applying & Sharing: Free Press Journal, 20th August 2012

This piece was on our partnerships with Mumbai universities:

Research will set you free: Hindustan Times 15/8/2012

This piece appeared in the Education section of the Hindustan Times on the 15th of August, 2012. 

social enterprise, social capital & the university

Last week I attended the Skoll Centre for Social Entrepreneurship’s Research Colloquium for the first time. A big thanks goes out to Alex Nicholls for inviting me. As a social innovation thinker empirically rooted in the UK and India, it was fascinating to learn from other scholars from around the world (some of whom were also practitioners).

I could draw out any number of thematic strands but I’m going to go with one that fell through the cracks a little, simply because it is not as developed as others (such as impact measurement, the innovation cycle, or the ‘neophilia’ of social enterprise research). Social capital theory has a chequered history, but it continues to be a “go-to” theory for many trying to make sense of relational inequalities in society, or those trying to understand how financial, physical and human capital can only partially explain how things get done.

When we try to explain why we get discounts from people we know, or why some homeowners don’t lock their doors, there is an instinctive turn to social capital theory. There are many definitions of social capital (of ranging complexities), but I’ll proffer a simple one: the productive benefits of social relations. One of the key benefits of social capital is trust – though it is also one of its core dimensions (hence accusations of circularity).

Where does social capital fit in the social enterprise eco-system? We know that social enterprise depends on the following conditions: patient capital, a knowledge base for the innovation cycle, incubation infrastructure, an established supply chain, a customer base. What we sometimes forget is that these are not abstract concepts, but resources whose access is governed by individuals, organisations, or both. It follows that access to these resources is governed not only by the availability of such resources within eco-systems, but by the opportunity to access those who are the gatekeepers of such resources. It follows that accessing and influencing resource gatekeepers is subject to inequality of opportunity, since social capital stocks vary from individual to individual. And while we like to think we are sufficiently bureaucratised to render such relationships impersonal, we also know that is not the case.

If we are imagining a more egalitarian enterprise culture then public institutions able to join the dots between key stakeholders - beneficiaries, providers, government, investors should be expected to utilise their organisational/collective social capital to “level the playing field” by redressing social (and human/physical) capital disadvantages. The recent trend for universities to adopt the role of strategic anchors in social enterprise eco-systems is relevant here. In some cases (in the UK , US, Australia and Europe) they often themselves possess sufficient resources for small and medium scale social enterprises and can thus be providers rather than just intermediaries. We have already seen how Northampton, supported by the Young Foundation, has set itself up as a social enterprise university. The role of social capital in enabling the performance of such a role should not be underestimated. At Southampton we hope to do similar things through the relational resources we enjoy with our alumni, local government, and social entrepreneurs as we take strides to emulate Northampton’s example.

I recognise that universities are not equal, and that some are endowed with greater resources and capital stocks than others. Some are also possessed of a greater sense of growing social value than others, which explains why universities without significant financial muscle (I’m thinking here not only of Northampton, but Plymouth and Southampton Solent) have been the pioneers in the evolution of the social enterprise university. I’ll also concede that my argument is unashamedly Eurocentric, even if there are universities in the South which have led here (Tata Institute of Social Sciences, for one).No doubt I’m also idealising universities and their commitment to the local. These caveats notwithstanding, I continue to believe that universities have failed to recognise their potential contribution to enterprise eco-systems in general, social or otherwise. Universities are public actors and will remain so despite the global privatisation of higher education.  As such, they remain vital to the process of enabling equality of opportunity, and this is especially the case when we consider the various capital asymmetries that hinder the social enterprise sector.

.

the social investment state: part II

Deutsch: Social Impact Logo (Photo credit: Wikipedia)

This blog post follows on from last week’s. While the first post discussed the role of the state as a co-investor and legislator, this post addresses issues of investor readiness and research.

Building investor readiness 

As grant funding is slashed, the viability of the social economy will rest on the ability of social ventures to attract funding. To do so, they need to become “investor-ready”. This means demonstrating, through evaluations of different kinds, that they are both income generating and can deliver a verifiable social return.

There are those who would argue that under New Labour the third sector became bloated with social projects which either duplicated existing interventions or effectively ran as grant dependent charities with little chance of achieving financial sustainability. To this logic the social investment economy will be a process of rationalisation: culling the inefficient and ineffective by directing resources to the efficient and effective. The problem is that demonstrating social impact, in particular, is much easier for a) larger social ventures and b) those which deliver social returns over a shorter time horizon. Niche social ventures which are highly specialised but deliver high impact returns over a longer term (or as a vital cog in a supply chain of social action) will struggle to advertise their returns in a competitive social marketplace where investment decisions might not be based on a nuanced appreciation of social impact but on quantified measures of return (SROI, for example).

Nonetheless, the government has taken measures to help social projects expand their business capacity and become investor ready. NESTA’s Social Venture Intermediary Fund is one such scheme, and the launch of the Every Business Commits scheme over a year ago is another. General incentives for pro bono corporate sector advice and guidance have also been introduced, but there are cultural barriers here. Third sector organisations are nothing if not mission-driven, and corporate sector approaches to lean processes and rationalisation can jar against ingrained working cultures which are often fundamental to the identity of social ventures. This is controversial ground and sensitivity is needed.

Business capacity/capability building is vital to the growth of the social economy but institutional investors are unlikely to be keen to subsidise this process. It will therefore fall on government – and specifically Big Society Capital – to do so. Unless it commits to this process, the abundance of worthy social ventures will not translate into investment opportunities, and the market will stall. The Acumen Fund has commented recently that a structural issue with social enterprise at a global level lies with a surfeit of keen investors but a shortage of investable businesses. In the UK the issue might not simply be a shortage of investable business, but a shortage of social enterprise able to express their social returns.

Enhancing research capacity 

If the number of investable social enterprises has not kept pace with the availability of social investment, this is partially because of a paucity of research. NPC and NEF aside, there are very few think tanks or academic outfits dedicated to providing research to support the market.  This is being redressed but the pace is glacial. In particular, research needs to be focussed on two key areas: market intelligence (to guide Social Finance Investment Intermediaries) and broader explorations of impact analysis options.

If we take a global view of the social investment market it is apparent that institutional investors in the developing world (I’m thinking about Vox Capital in Brazil as an example) have begun to invest in market intelligence because without it social enterprise will fail to meet the most pressing gaps in service provision and thereby innovate appropriately. In the UK I would argue that there is a welter of research on social needs, but a failure to adapt this information for the social investment market.

Exploring broader options for social impact analysis, particularly for smaller social projects (but also on a sector-specific basis, like those for arts organisations) is vital to helping to grow the social economy by allowing such projects to credibly demonstrate their social impact at an affordable and meaningful level.  Without these options to showcase social impact, the likelihood is that investment will either flow to larger social enterprises with the financial resources to pay for SROI, or to those which can evidence solid financial returns. If the social enterprise sector is to be driven by the expression and realisation of “blended value” alternative methods have to be developed and brought to market soon. At the same time, as I have written before, means have to be found to drive down the cost of established methodologies such as SROI, ironing out inconsistencies in the calculative process, and facilitating equity in stakeholder involvement.

If you’d like more information or more detailed analysis on all or any of these individual themes, please contact me at P.Pathak@soton.ac.uk.  I am currently available for expert consultancy and media work. Fuller explanations and examples of alternatives to SROI will be made in my next book, titled Social Investment Made Simple and due for publication in 2013. You can follow me on Twitter @pathik10. I am appearing on the expert panel for The Guardian’s social enterprise & higher education Q&A this Friday, 22 June at 11am.