At The Tool Factory, the social enterprise that I run, there is a lot of discussion about this topic of Social Impact Measurement.

When we talk to organisations about Social Impact Measurement the most common response is that it just feels like there is now this extra thing they need to do in relation to their monitoring but without having access to the necessary resources to implement it.

The purpose of this free e-book is help you make sense of what social impact measurement is, how it could work in your organisation and how you implement it without having to spend 10K or more on a consultant.

We take the view that every social enterprise and voluntary organisation from the smallest
to the largest can be measuring their social impact. Long gone are the days when just saying that we were doing a ‘good thing’ would secure any funding. Today, quite rightly, funders and investors want to know that the investment they make is going to be making a real difference.

There has been a lot of discussion over the last few years about measuring the social
impact that social enterprises and other Third Sector organisations are making.

Funders, government, investors and corporate bodies are interested in making sure their investments have the greatest impact possible and are looking for ways measure this.

But this is not the only reason why it is good to measure our social impact. The real benefits from this process are those that are created for the organisation itself – not the funders that support it.

If we, in the sector, found a way to tell the whole story of the impact we are having – not just a series of  numbers about how many people walked through our doors – we would have an incredibly powerful tool that would:

-enable us to improve our credibility and encourage people to believe what we say
-inspire and motivate our staff and volunteers
-encourage us to continuously improve our services
-communicate to other stakeholders how great we are
-form the basis of effective and powerful publicity materials, funding applications and press releases.

This is the real power of measuring our social impact – enabling us to market our organisations, inspire our staff and volunteers and attract more funding and investment.

At The Tool Factory we work with organisations of all sizes from the smallest community groups, to the largest of national organisations, from pre-start ups to well-established charities who have a decades of stories to tell.

We believe that each one of these organisations can be measuring their social impact – however small or new they are.

Different sizes and types of organisations will require different tools. However, if we take the approach that as an organisation grows and develops it can build additional complexity into the social impact measurement system that it is using to meet its new needs as a larger, more developed organisation.

For example, a small local social enterprise may find the SROI (Social Return on Investment) tool is not appropriate at the current time. But if they introduce a Social Accounting model now, then when they grow and become more sophisticated as an organisation they can build on the model they are already using and introduce the additional concepts of the SROI approach.

For small organisations we often suggest that they start by measuring just one indicator – maybe related to one activity they are running; just to get them started. Once the organisation is used to this they can then add more indicators and grow their social impact measurement model.

In fact, if we can encourage all new organisations to build social impact measurement into their organisations right from the very start we will, over time, have a sector in which social impact measurement and reporting is the norm.

Let’s just get every organisation started on doing some level of social impact measurement – we can build on it from there.

We’ve just launched a free e-book An Introduction to Social Impact Measurement: A Practical Approach to help answer some of these questions and to encourage more organisations to start measuring their own social impact. As part of the download process we are giving people the opportunity to help us measure our social impact.

Free copies are available from here.

Photo by Bev Meldrum – Sunset Beach, Cape Town

I’m just back from a 2 week trip to South Africa. We weren’t planning to go out and meet social entrepreneurs but they kept appearing out of nowhere!

On the Saturday after we arrived in Cape Town we went with some friends into a couple of the townships. We first went to visit a centre called Beth Uriel. It is home for 34 teenage boys – guys that lived in the townships and who had either got into trouble, or were mixing with the wrong people or who didn’t get much support from their families.

The guys move into the house where they become part of the Beth Uriel family. They are all put through school – with lots of help from volunteer tutors and then encouraged to go onto college or into work.

As part of their fundraising efforts they have set up a social enterprise to generate income. The guys have designed a clothing label called Me’Kasi. A term that means ‘my home’ or ‘my place’.

The Tool Factory has gone into partnerships with the guys at Beth Uriel and will be selling the t-shirts through our website.

To have a sneak preview of what we are going to be able to offer visit the Me’Kasi website.

We also had the change to meet Phil, a social entrepreneur, working on a project that makes high quality shoes and employs local women. But maybe more about him another time.

Have a look at more of my photos from South Africa

It’s been a while hasn’t it?

Today I’m re-launching this For More Than Profit blog – we thought we’d have a makeover at the same time. What do you think of the new theme?

The focus of the blog is changing slightly too. I’ll still be focused on the world of social entrepreneurship – I am more passionate about that than ever before. But I’m currently in the middle of my PhD on social enterprise and reading some really interesting pieces of research and thinking. It will be those that we will be discussing – pieces of research that might be of use to us practitioners as well as the academics who wrote it.

There may not be as many posts but hopefully there will be some interesting ones that will generate some discussion.

I’m looking forward to the coming year … it should be an interesting journey.

Listening to the Social Entrepreneur

Following on from the success of the Listening to the Social Entrepreneur event on the 9th October, I have written a brief overview of the day.

You can read the article on the Social Enterprise Magazine website.

We are currently working on a post-conference report and website – we’ll let you know when it’s ready.

Procurement Versus Marketplace

Who are we listening to? This is a question asked in many marketing departments, entrepreneurship lectures and board rooms? Are we here to listen to our customers or to sell them something? The tension between having something sell, or a social justice issues we are passionate about and providing something our customers actually want is a fundamental tension in social business, and it runs to the core of whether we are procurement or market focussed. This is because we have to understand the nature of the two types of clients- the public sector and the wider (broadly private) marketplace. Who are they and what challenges do they present to our business model?

What does the public procurement market represent? The market watchers BIP say that total public spending in the period 2007-08 to 2010-11 will rise from £589 billion to £678 billion. So it represents a huge market, but it is not a single market. This is made up of, in the main, salaries and pension contributions. The rest is massive construction projects, private finance initiative expenditure and defence spending. The Mayor of London’s £3bn budget boils down to £450m of spending on small companies.

Public procurement is an intrinsically rules bound process. If anyone has read the EU Procurement rules, and they are to be reserved for significant sleepless nights, and the guidance on State Aid, they will rapidly realise that public procurement is primarily concerned with the governance of the procurement process- that the procurement should not distort or upset the smooth running of pure competition. Although attempts have been, and continue to be, made to include social clauses in contracting processes, effectively the public procurement market is designed to ensure that no one organisation gains a competitive edge from the procurement process itself. For a social enterprise, which is pursuing a social outcome as a primary objective of business, the procurer or commissioner can’t choose to select a social enterprise as a supplier.

The procurer can’t choose one supplier over another purely because of their status as a social enterprise. Large amounts of public procurement has shifted over the last few decades from ‘lowest cost’ decision making towards purchasing certain public policy outcomes. But, despite this progress away from the ‘cheap as possible’ approach, any organisation can deliver, or appear to deliver, a social outcome. This has been seen in the environmental field, when procurers starting thinking it would be a good idea to include a requirement for environmental management in their prequalification documents. I lost count of the number of ‘Environmental Policies’ I was required to write for companies that wanted to get on the pre-qual list, with no intention of doing any more to protect the environment than printing off a stock-phrase environmental policy. The same is potentially true in other social justice areas- day care services can be provided by any organisation, as long as they appear (in audits) to have achieved a narrow set of social outcomes, but they might well achieve these outcomes and yet exploit their staff with low wages and no pension, or skimp on another cost centre, or exploit food growers in the third world by not buying fairly traded products. In order to be efficient- i.e. provide the service whilst reducing the apparent cost to the public sec tor as well as providing a modest return on investment for shareholders still requires certain costs to be shed.

Shedding costs, however, is a false economy, because the costs (like the carbon emissions we fail to capture and use) don’t disappear- someone else has to pay for them- the costs are borne somewhere else.

Enough of the macro economics. What of the ‘marketplace’? How is this different? The marketplace is less rules bound and its measure of value is based on affordability. Anyone can buy anything, even somebody else’s life. And if I want something I work out how I can generate the cash to buy it- this is fundamentally different from public sector spending which is driven by fixed or reducing budgets. If a company or an individual wants to buy something that is very desirable, there is an opportunity to go and do something (sell more products, get a pay rise etc) in order to afford the product. The marketplace is intrinsically more relationship based- dare I say it- the private marketplace is a more ‘social’ place than the public space. We make more decisions about purchasing based on who we know and what we know about the vendor than we do about ensuring fair competition. The public procurement rules and processes narrow the scope for relationship building, because of the obsession with competition and not distorting the market.

The private market, on the other hand, accepts that the market already is distorted, and that competition is uneven, if not unfair. At the most basic level, differences in the information about a product because of language differences means that a local language product has a competitive edge over a ‘foreign’ product. In addition, purchasers are not unrelentingly rational. We make irrational decisions all the time, particularly over our taste in music or food.

So, to summarise- what is the difference between the public and private marketplaces?

PUBLIC                           PRIVATE

Rules-based                    Relationship Focused

Budget Controlled           Will earn money to afford a product

Efficiency oriented           Influenced by the desirability of a product

Predictable                      Unpredictable

So what does this means for social enterprises? Which market should we be listening to? Which market place is listening to us? Perhaps the question should be- what marketplace is best able to listen to us and why? Although one expects the public sector marketplace to be the one that is the most ethically informed and aligned with our own interests, in fact we must remember that the fact that there is a market at all is the result of the imposition of quasi-free market politics in the 1980’s. This means that the marketplace exists to implement government policy without distorting competition. It does not, therefore, exist to support social objectives that are not covered by (national or local) government policy objectives, nor is it able to listen more closely to one service provider over another.

The private market on the other hand can listen to whomever it wishes, it can contract (more or less) with whomever it wishes in what ever form it wishes. If a company wishes to be hugely inefficient and buy the most expensive product on the market, then it is free to do so. If that product happens to be intrinsically ethical and internalises lots of social costs, then that is a huge bonus. A private market can and does seek to distort the market. Traditionally this distortion is made in the interests of the company, but in some cases the distortion is made for a social justice purpose. The private sector is increasingly engaging with relationship contracting- where the costs of a product is less important than getting the product right and getting the relationship between vendor and purchaser correct.

Because the public sector market is rules-bound it is a predictable market. If you social enterprise relies on a predictable market, then the public sector is for you. If your social enterprise does not rely on predictability, then the private marketplace is for you, but you will need to prepare to weather the changing whims of the marketplace, and be prepared to keep innovating and out-competing the competition- including big corporates.

As the other part in the ‘Doug and Mike show’ due to appear at the event next week I am in awe of Mike’s thinking on variant typologies of social enterprise, all of which I believe to have bearing on the debate here – and I think we come to similar sorts of questions, or sometimes complimentary questions at least, via different routes…

I’ve had an academic interest in social enterprise and social entrepreneurship for a number of years now, with my PhD attained in 2001 in part looking at how Church of England vicars functioned (or not) as social entrepreneurs.  Yet a decade or so before then I worked as a community care development worker when the Conservative government arguably tried belatedly to bring enterprise into the public sector, including the area of health and social care with which I was particularly concerned…

So what contribution do I propose to make in assisting with the ‘listening to the social entrepreneur’ agenda?  I guess my primary question in relation to this debate is ‘what’s in a word or the words?’  I’m not sure whether I’m clever enough or sufficiently versed in particular philosophical ways to make such claims, but it occurs to me that ‘deconstruction’ might describe part of what I’m trying to suggest here, by which I mean breaking down and interrogating the words we use.  Yet what I also see as a supporting element to this analysis is looking at words that may in one instance be used interchangeably, and yet in another be used in such a way only very awkwardly. On the other hand, some words are not used yet conceivably could be.  Why do we talk of ‘social enterprises’ rather than ‘social businesses’, and yet of ‘business goals’ rather than ‘enterprise goals’?  Why do we talk of ‘social enterprises’ and ‘social goals’, rather than ‘public enterprises’ and ‘public goals’?  Could we talk about ‘moral’ or ‘ethical’ enterprises and goals instead of social ones?  Why not talk of ‘green’ or ‘environmental’ enterprises and goals instead of ‘social’ ones, particularly if the aims are about recycling or cutting the carbon count?  Why is ‘business’ seen as particularly conflicting with ‘social’ goals and not ‘power’ and ‘status’?  In the end, however, this workshop is about listening to you, and these questions posed will only work if they can help expose insights relevant to that end, including whether this very debate we are having, that ‘we’ after all have framed, is the right one…

So…what do you think?

We have just released 20 more tickets for Social Entrepreneurs for the Listening to the Social Entrepreneur event after they all sold out earlier this week.

These will be the last tickets we can make available for the event on the 9th October 2008, taking place at the Britannia Village Hall in West Silvertown so make sure you don’t miss out by booking today.

Book your place here.

The Social verses Business Debate: A different debate for different organisations

Doug Foster and I (Mike Bull) will be presenting at the workshop on the social verses business debate. The session might go in any number of ways and I’m sure that each conversation with the groups will be completely different. In a nutshell this sums up to debate – difference. At a time when the social enterprise movement is gathering speed across many sectors, in many parts of the world and in many different ways we somehow still strive to understand the phenomena from a single mindset – a single type, one definition, one way on ‘talking social enterprise’.
To bring difference back around to the debate, there are those social enterprises that this debate has no substance, and there are those that wrestle with the debate daily.

The differences in social enterprise are worth exploring:

Typology 1 – I imagine these to be the SEs that have a financial relationship with their end user – i.e. they sell the users buy – from my experience (on the surface of these types) there is little or no wrestle with the social verses business debate, yet looking deeper reveals that mission drift is an easy trap to fall into.

Typology 2 – I imagine these to be the SEs that are contracted to services for end users, so no direct payment from the user but a process by where the organisation is enabled to work with the end user via the financial contract with a third party – from my experience there appears to be tensions here around the goal differences between the enterprises and funders.

Typology X – I imagine these to be SEs that are using the social enterprise model as a framework to enable their core focus, the social, to function. They resist analogies to businesses per se – here I have seen the greatest disparity to blended value and people are very uncomfortable with the business concept.

Typology Y – I imagine these to be SEs who embrace the business model to be financially successful, rational and pragmatic that they ARE just like any other business, but do something different with their profits than the private sector – from my experience the tensions are explained away as manageable parts of the whole. A pragmatic response to a pragmatic, separated approach.

Typology A – New start SE businesses.

Typology B – transition SEs from charity and community organisations.

A and B types can vary dramatically in their ideological and philosophical constitution,

Typology i – the lone social entrepreneur as social enterprise.

Typology ii – co-op-preneurs as social enterprise.

Typology iii – social enterprise that wouldn’t really call themselves entrepreneurial at all.

i, ii and iii types also vary dramatically in their ideological and philosophical constitution.

Accepting these broadly different types, in theory, there a multitude of different types of social enterprise – of course practice is another thing – and I imagine there to be many shades of grey in-between, so many, many, more different types.

So what does this tell us? Maybe it tells us there are different types of social verses business debates? Maybe it tells us difference matters? Maybe it tells us goals matter? Maybe it tells us nothing? Maybe it is a starting point for debate and one which can be discussed as we lead up to the seminar? Let’s hope so! Look forward to London 9th October.

Announcing a change of venue …

Britannia Village Hall, 65 Evelyn Road, West Silvertown, London E16 1TU

Due to the University of East London not being able to provide enough space for us all we have decided to move the conference to a venue a few stops away on the DLR.

Britiannia Village Hall will be our hosts – a social enterprise in West Silvertown. It is 2 minutes walk from West Silvertown DLR station and there is plenty of parking for those that need to drive.

We’re really pleased with this new venue and it’s great to be able to hold this conference in a local social enterprise.

Look at a map here.

Recently I listened to a hard question from two health care workers attending a gathering of people dedicated to operating soup kitchens for those experiencing homelessness and hunger: “Don’t you know that you are killing the poor?”

What these passionate fellow-travelers were pointing to was the clear evidence that over-eating and eating the wrong food was creating unhealthy bodies that were responsible for early deaths as well as compromised lives. Obesity, diabetes, high blood pressure – all caused in great measure by poor nutrition – are also crippling the health care delivery system by using up so many resources.

Forty years ago when we first began Haley House, the men who lined up for hours waiting to come in out of the elements (into an unheated storefront), gratefully received a cup of coffee, slice of day-old bread – and maybe, some government surplus butter. Today such fare would be rejected out-of-hand. Where are the donuts, pasta, sugar coated cereal – or eggs and ham and toast and jam? Who wants to be the one to say, “Here’s some yogurt and granola, or made-from-scratch oatmeal?

This is where one is reminded of the Buddhist slogan – in order to fly the bird needs two wings: compassion and wisdom. With compassion alone, loving care can miss the mark; with wisdom alone, loving care can take the form of cold rationality.

The mission of our non-profit is to transform peoples’ lives. A business enterprise by definition has the goal to make a profit. Its leader(s) may feel responsible enough to operate their business conscientiously with regard to the planet, their employees, and perhaps those who produce the raw goods. But that is ‘value added.’ It may even be a way of conducting business (socially responsible business) that attracts more customers and therefore generates more revenue.

The purpose of creating our social venture, the Haley House Bakery Café, was to transform lives. The vehicle we use is a business that also must produce a profit if it is to survive. This is the heart of capitalism. For all its downsides (and they are many) inherent in capitalism is an energy that can be either seductive or liberating. It all depends on your goal: to simply make more and more profit, or to give access to this energy to people without capital. A subtle and elusive challenge.