Fall 2011 Newsletter
The 2011 Social Enterprise Conference convened more than 700 professionals, students, alumni, and faculty members on October 7. The conference’s theme centered around Social Innovation in a Networked World, which focused on how technological advances are redefining connectedness and transforming business.
Highlights of the day included Leymah Gbowee, the afternoon keynote speaker who was announced as a 2011 recipient of the Nobel Peace Prize that morning. The conference served as her first public speaking appearance as a Nobel Laureate, and she discussed her personal experience in leading the grassroots women’s movement that ended the 14-year civil war in Liberia.
The Social Venture Pitch session, the most well attended session of the day, featured emerging for-profit social entrepreneurs who pitched their enterprise to a panel of impact investors and advisors — all in eight minutes. The entrepreneurs were considered for a potential investment of $250,000 – 500,000 by Jalia Ventures / Serious Change, LP. The session highlighted the common interaction between investor and entrepreneur, the questions and thoughts that come up when impact investors encounter an entrepreneur who wants to generate both financial and social returns, and what key elements entrepreneurs should convey in their elevator pitch. Following the pitch session, Jalia Ventures is conducting further due diligence on MicroHeath, Dental Kidz, and Wash Cycle Laundry for a potential investment.
The breakout sessions focused on four core areas — supporting innovation, promoting sustainability, advancing technology, and building communities — and covered topics across sectors and areas of expertise, including education, climate change investing, impact investing, philanthropy, healthcare, emerging markets, community development, and more.
By Luke Justice ’12
Photo by The Huffington Post
One of the most significant legacies of the No Child Left Behind Act (NCLB), passed under George W. Bush in 2001, is its impact on the way we use data to measure the performance of our educational system. While NCLB’s accountability measures focus on school-level performance, 10 years later we are starting to develop teacher performance evaluations that, for the first time, incorporate student testing.
In 2009, The New Teacher Project published a now widely read survey of teacher evaluation systems across the country, titled The Widget Effect, and found that most systems used an extremely limiting and binary ranking of “satisfactory/unsatisfactory,” and that almost all (98 percent) teachers were annually ranked “satisfactory.” Even if there were a more accurate scoring in that old system, it would still tell us little of substance about an individual teacher’s performance. Ten years after the passage of NCLB, some large urban districts are now developing systems that include the use of hard data in an attempt to paint a rich portrait of a teacher’s performance.
New York City is piloting a teacher evaluation system that uses a mix of student test scores and more qualitative measures, such as peer observations. Most of the focus on using student test scores to evaluate teacher performance has been on so-called “value-add” measurements that attempt to demonstrate the level of improvement students make under a particular teacher.
So far, the data seem to have been rather unreliable for the majority of teachers and more consistent at the extremes. That is, year-to-year, the value-add scores of exceptional — and exceptionally bad — teachers tend to persist, while those in the middle 80 percent jump around. Opponents of using student scores to rate teachers have latched onto this unreliability, while supporters note that the value-add measurements make up only one piece of the larger evaluation and are important data to have, especially if you are trying to identify the best teachers for recognition and the worst for improvement, if not removal.
Another significant drawback to value-add measurements is their limited application to a few grades and subjects. More complex material, such as essay-writing, can’t currently be captured by standardized tests. But the use of hard data to pin down an objective measure of student progress and thereby teacher performance may be just the first step in a larger cultural shift toward a more rigorous and integrated evaluation of both student and teacher. As The Widget Effect highlights, even districts with evaluation systems that have wider spectrums for ranking teachers suffer from a compliance mindset. That is, the most well crafted performance evaluations are useless if they are not applied with rigor and a genuine desire to understand one’s effectiveness.
As the culture around evaluations shifts, however, we are more apt to find methods for evaluating teacher performance that act as reliable predictors of student achievement in lieu of hard, standardized data on student outcomes. As but one example, Cincinnati has begun using rigorous teacher observations as part of its overall Teacher Evaluation System (TES). Researchers have found that the scores of these observations predict student achievement gains for subjects than can be accurately tested (e.g. reading and math), thus concluding that such observations can capture a significant portion of measurable differences in teacher effectiveness in harder to test subjects and grades.
It seems then that while data are directly relevant for understanding student achievement and teacher performance, the larger value of a focus on the numbers lay in the impetus it provided for a deeper cultural shift that seeks to develop an understanding of teacher effectiveness at all levels.
The 2011 Social Enterprise Conference session, Replicating Models of Success: Scaling Innovation in the Education Sector covered these topics. Read the SEP’s research report on Measuring and Creating Excellence in Schools.
By Marin Kaleya ’12
This text originally appeared on Next Billion.
The last decade has given rise to tremendous growth in the impact investing sector. With such growth comes increasing recognition of the sector, but it also brings to light questions of impact investing’s ability to effect substantive change. Stories about upwardly mobile farmers in remote villages are no longer enough to attract savvy socially minded investors. Instead, firms are being held to ever more robust standards to demonstrate the positive implications of their investments. More importantly, with the proliferation of organizations seeking to finance these projects, firms must demonstrate that their social returns are better than the next guy’s. But how can we report standard measurements? There is no EBITDA (earnings before interest taxes depreciation and amortization) equivalent for social impact.
As many NextBillion readers are no doubt familiar, the Global Impact Investing Network’s (GIIN) Impact Reporting and Investment Standards (IRIS) is a proposed response to these new developments in the space. First introduced in 2008 as a joint venture between Acumen Fund, B Lab and the Rockefeller Foundation, IRIS is a proposed methodology for standardizing measurement across the impact investing sector. IRIS offers a standard framework for reporting social, environmental and financial performance of impact investments.
What that means is that instead of different projects reporting different measures for the same thing, each organization will report their metrics using the same descriptive metrics within a standard taxonomy. For example, let’s take two investments that finance mango-growing operations. IRIS provides a guideline for reporting — both investments will report number, not pounds, of mangos produced in accordance with specific IRIS performance indicators, which makes the two investments more easily comparable.
Of course, mangos are easy to measure. What becomes more difficult is measuring the actual social impact of an investment. How do you determine the number of lives impacted by a given investment? Do you count the people who have been employed by the investment? How about their families? What about the consumers and their families? IRIS provides a methodology for dealing with some of these questions. For our mango growing operation, we can measure full and part-time employees, broken down into various descriptive demographics. We can also measure new customers during a given reporting period. Thus, reporting is aligned for all companies and firms can no longer overstate their impact. At the same time, new impact investors have guidelines for where to start when measuring and evaluating their investments and IRIS intends to compile submitted data to provide industry benchmarks.
Despite all the hubbub about IRIS, there are still many questions regarding its efficacy and whether social impact measurement can truly be standardized. In an effort to provide some transparency into the model, the KL Felicitas Foundation (KLF), and the GIIN jointly published a case study in April 2011 that discusses KLF’s motivation for adopting the IRIS framework and details its application of IRIS across its active investment portfolio.
KLF is a family foundation founded by Charly and Lisa Kleissner in 2000 to “address poverty through its support of global early-stage social entrepreneurs and social enterprises, with a focus on rural communities.” The Kleissners decided to implement the IRIS framework because they wanted to “illustrate the social, environmental, and financial success of the foundation; nurture their investments; evaluate future investments; and provide needed performance data to share with a growing community of impact investors.” With increased transparency and standardization into impact investments, the Kleissners hope to drive more resources toward and awareness for the sector.
The case is extremely useful as it explains in great detail how KLF fit its investments into the IRIS framework, chooses key performance indicators and transitions its portfolio into this reporting structure. While a more longitudinal study will be necessary to examine the efficacy of using the standards, the implications of this report could be huge. The case is more or less a “user manual” for IRIS: it handholds the reader through the implementation process, illustrating its benefits and challenges. Hopefully it will encourage more firms to use the methodology, because more users can help refine the system further – and create a standard that increasingly hits the mark for the impact investing sector.
The Kleissners discussed the case study in detail, including their experiences and the implications of adopting of IRIS throughout their portfolio, at the 2011 Social Enterprise Conference.
By Kimberly Parker
Image by The Economist
In a recent article published in The Economist, Matthew Bishop, the author of Philanthrocapitalism, poses the interesting question of whether IBM or the Carnegie Corporation has contributed more to society over the past 100 years. While Bishop recognizes the differences between the organizations, he leans slightly to the side of IBM, which he feels has its best years ahead of it, while he says the Carnegie Corporation is winding down.
The article also raises the larger question of the role of business in society, a debate that takes many forms — from those who feel business contributes to society simply by doing what it does best, to corporate social responsibility, to those who apply business principles to philanthropy.
A few years ago, Economist Robert Barro argued that Bill Gates contributed far more to society through his work at Microsoft than he ever will through his foundation. In the same vein as Bishop, he argues that businesses makes the world a better place simply by producing something consumers value. He adds that the countries that have alleviated massive amounts of poverty, such as China and India, have done so by improving their economies, and not through aid. As of April of this year, however, 69 billionaires have pledged to give away most of their fortune to social initiatives across the world. Pierre Omidyar, founder of eBay and the Omidyar Network, believes in applying business skills to philanthropy, and invests in businesses that pursue a double or triple bottom line.
Daniel Altman and Jonathan Berman, both of Dalberg Global Development Advisors, recently published The Single Bottom Line, which argues that businesses deliver the greatest benefit to society when their efforts are focused on making profits. The New York Times reported on their paper with a somewhat misleading headline — Altman and Berman are not proponents of Milton Freidman’s philosophy that the only role of business is to increase profits. Instead, they feel social initiatives should be pursued when they can increase profits, and by viewing them in this way, businesses will take on more social responsibility. This idea is evidenced in research on eBay’s Giving Works program, which indicates that corporate social responsibility can in fact help a company earn higher profits.
The role of business in society is changing, and no matter how you try to sell it, businesses are being asked to be more socially responsible, and the spectrum is shifting.
By Kimberly Parker
Photo by Mercury News
Echoing Green’s blog recently asked, “Where are all the women social entrepreneurs?” The same question has been asked about female Tech CEOs and women entrepreneurs in general. In fact, women are underrepresented in leadership roles across the board. The gender imbalance in the field of social enterprise can be understood through the lens of other fields, especially fields that are considered new or risky, such as tech or entrepreneurship.
The common thread throughout these fields is the lack of mentors and support for women. Echoing Green is right when they say that focusing on and targeting women is the only way to get them into the sector — much in the way, however subconsciously, male leaders target other men for leadership roles.
There are certainly cases where women do receive direct support from men. Sheryl Sandberg, Facebook’s COO, was sponsored throughout her career by Larry Summers. Sandberg, in turn, now sponsors and assists women in developing their careers. Carmin Black founded Half United, a social venture that follows the same One for One business model as TOMS. Black was mentored and supported throughout an internship at TOMS and was able to launch her own business due to this support.
Yet, the lack of mentorship for women hasn’t gone unnoticed either: networks like Women: Inspiration & Enterprise, Women 2.0, and Y.E.C. Women are designed to support and encourage women. In the field of social enterprise in particular, networks like Young Women Social Entrepreneurs (YWSE) have existed for 10 years, and encouraging articles from organizations like Ashoka promote the role of women in the field. But what we need is more — more support, more women taking advantage of this support, and more encouragement from family and friends to take on risks.
In relatively new fields especially, it is exciting that women have a chance to define — rather than redefine — a sector of the workforce. And, if you can’t find the support or direction you need, there is nothing saying you can’t make it up as you go along.