Evaluating Social Impact

(As posted on YourStory.in)

For people engaged in the social entrepreneurship space, one of the most difficult questions is how to measure the positive social impact you make. How do you know you’re doing net social good?

What we typically do is assume that our product has intrinsic positive social value and so simply measure how many people have used our product or service. Then we make grand statements like ‘We have positively touched a million lives’. For some products this might be all it takes. Take d.light, for instance, a solar alternative to kerosene lamps that is cheaper, brighter and healthier. A simple count of product sales would be a pretty good indicator. For many other products and services though it is far more ambiguous. Microfinance, pharmaceuticals, health services, education. All of these have great potential for good but also for abuse, misuse or mistakes. Each instance of use is not always a net positive; a borrower who drinks away a loan, a person who commits suicide with an overdose of painkiler, a person who gets wrong medical advice resulting in a worsening of their condition. In some cases, the net positive impact is highly debated. Are people really better off if they took a loan? If they underwent a particular treatment? Took a particular course?

Social Entrepreneurship? Really?

(As on YourStory.in)

Social Entrepreneurship is the new buzz word in India and marks a shift in thinking away from non-profit models to market based solutions that can operate at large scale and therefore create social value more systemically.

But what puts the ‘social’ in social entrepreneurship? We all have a notion that it means starting a business that does good for less fortunate folk. So we commonly think of a social entrepreneur as someone who is addressing a low income market with a product that can raise standard of living, either by providing greater opportunity or convenience. However, as I have discovered over the past five years, simply product and market are not sufficient.

Creating Social Value

We just sponsored Sociopreneurship 2010, an event that brought together social investors, industry experts and the media for panel discussions and also recognised and showcased social innovations and entrepreneurs. This event is timely in a country like India and is a mark of the shift in thinking away from non-profit models to market based solutions that can operate at large scale and therefore create social value more systemically.

When we begin to talk specifically about ‘social’ entrepreneurship though, it really begs the question: What does it mean to create social value? I think we all have a notion of what it means but when you try to define it and measure it, it gets quite murky and difficult. One fundamental implicit assumption of social value is social equity or equality of opportunity and access. In this sense we commonly think of social enterprise as an organization that addresses a low income market with a product that can raise standard of living, either by providing greater opportunity or convenience. However, as I have discovered in the past five years, simply product and market are not sufficient.