Tracking Social Impact with Ashoka Changemakers: How Dreams for Kids is Getting it Right

April 18, 2012 at 6:31 am

Wonderful news! Investing In Communities is excited to announce a new partnership with Ashoka Changemakers. As a Funding Partner on Changeshops Beta, IIC will require all funding recipients to set up a free Changeshop so they (and we) can track the social impact of IIC’s funds.

What is social impact, anyway? When we talk about measuring social impact, we generally mean measuring social or environmental outcome – the result of implementing a program, producing a good, or consuming a product or service.  Outcomes are distinct from outputs – the amount of goods produced or products delivered [1].

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Grow and track your impact – and we mean your outcome!

And why is this distinction important? Suffice it to say that the past ten years have seen an incredible upsurge in both the intensity and extent of outcome-oriented philanthropy [2]. Put another way, let’s face it: tracking the impact of social ventures has become an integral factor in determining which organizations receive funding. Foundations, corporate donors, and the government are all starting to evaluate impact. Funding is scarce, and you don’t want your organization to miss the boat. But it’s not just about funding. The real goal of impact assessment is to understand how to better serve your beneficiaries. (To read more about the broader implications of this industry shift to outcome-oriented philanthropy, we encourage you to check out a recent article by IIC’s Colleen Poynton: “The Challenges of Measuring Impact Assessment”).

With these two objectives in mind – funding and social good – let’s look at just how Investing In Communities’ partnership with Ashoka Changemakers will help nonprofits, consumers, and real estate professionals make a difference in their communities. 

The Challenges of Measuring Social Impact

April 13, 2012 at 1:48 pm

Read the full article at Sustainable Brands.

Social ventures are launching rapidly across the globe and striving to build sustainable business models that drive social or environmental progress. Yet to achieve progress through enterprise, social entrepreneurs must confront a challenge that has long plagued the nonprofit sector – quantifying and tracking social impact.

Substantive impact measurement can be costly and complex, but it’s critical for social ventures pursuing greater scale and efficacy. Recently, sector heavyweight Ashoka launched an open resource that will encourage and facilitate impact tracking across the social change sector – to the benefit of social entrepreneurs, ventures, funders, and investors globally.

Colleen Poynton

Post by Colleen Poynton, Manager of Business Strategy and Development at Investing In Communities

When we talk about measuring social impact, we generally mean measuring social or environmental outcomes – i.e. the result of implementing a program, producing a good, or consuming a product or service.  Outcomes are distinct from outputs – the amount of goods produced or products delivered.[1] While traditional business is concerned with profitably generating outputs, a social enterprise must produce outputs profitably (or at least sustainably), while also advancing a desired social or environmental outcome.

Unfortunately outcomes are not as easily quantified as outputs. They are messy results of numerous variables, only a few of which a social enterprise can hope to influence effectively.[2] The measurement challenge that social businesses face is to demonstrate a connection between output (say, # jars of honey made by formerly incarcerated workers) and outcome (i.e. increased employment and reduced local recidivism rates), and to describe that connection quantitatively (i.e. “Our operations lowered recidivism by 15% relative to control populations over 5 years.”). Quantifying and tracking this relationship is costly. It requires greater data collection and analysis upfront (before launch) as well as over time….

Read the rest of Colleen’s article at SustainableBrands.Com

Public Benefit Corporations: providing a legal framework for investing in our communities

February 6, 2012 at 9:31 pm

Guest post by Layton Olson. Layton specializes in representing tax exempt community, trade, and professional organizations at Howe & Hutton LTD.

Layton Olson, Attorney with Howe & Hutton LTD.

Last month, a dozen companies committed to advancing social good filed to be classified as ‘Benefit Corporations’ in California. Their decisions represent a commitment to business strategies that systematically contribute financial, time, human, and other resources to charitable, educational and community improvement initiatives and institutions.  California has joined the six states – Vermont, Maryland, New York, New Jersey, Virginia and Hawaii- that have enacted so-called public benefit or “B Corp” legislation since 2010.  Colorado, North Carolina, Pennsylvania and Michigan and some cities have similar laws under consideration.

While traditional C Corporations are chartered to maximize benefit (i.e. profits) for shareholders, the B Corporation is legally chartered to consider and benefit stakeholders – a group that also includes employees, the environment, vendors, and the broader community…

The Future of Corporate Responsibility: Innovative, Personal, and Focused

July 27, 2011 at 5:37 pm

Goodbye checkbook philanthropy.

Click to Download Full Report from CECP

A large component of corporate responsibility has always been giving back. And companies show no sign of stopping the habit of giving. The Committee Encouraging Corporate Philanthropy (CECP) placed aggregate corporate giving in 2010 around 13 billion dollars. But companies are rethinking how, where, and why they give. The old approach – writing a check and checking out- is being shaken up by a new take on corporate social responsibility (CSR).

I recently had the opportunity to sit down with several knowledgeable CSR professionals in Chicago and New York to chat about their experiences and expectations for the CSR field. The take-away? Corporate social responsibility in the 21st century will be more innovative, personal, and focused than what’s come before.

More and more, companies are giving back through initiatives that leverage their expertise, talent, and intellectual property; that compliment and reinforce their brand; and that view nonprofits as implementation partners – not merely recipients.

I’ve examined notable CSR initiatives in past posts, and here I will once again return to the concept of shared value, as many innovative CSR initiatives reflect this approach. In future posts, I’ll examine how CSR and corporate giving in particular are becoming more personal and focused.

Defining CSR (and why we need to) – How Language Builds New Sectors

July 1, 2011 at 4:30 pm

Definitions. Not the sexiest topic, I know. But they can be pretty darn important, especially when you’re building something new. The role that definitions and terminology play in building new sectors and new business models has been on my mind a lot recently- for several reasons.

For starters, I work for a social enterprise. Ergo, I find myself in an emerging sector that’s awash with competing terminology, jargon, business models, and practices. Furthermore, the social enterprise I work for – Investing In Communities - is introducing something entirely new to the worlds of real estate and philanthropy. As a result, IIC has been challenged to articulate an unfamiliar model to very different stakeholders: nonprofits, real estate professionals, individuals, and businesses. These are not groups that tend to, as they say, speak the same language.” The language we choose to communicate our model impacts crucial first impressions.  Just like any start-up, we can’t afford to have first impressions be wrong impressions. So we continue to think critically about our terminology, and the essential role it plays in defining and growing IIC.

Second, I recently had the opportunity to attend the Impact Investing Summit here in Chicago. There, I found that Impact Investing, like social enterprise, also lacks clarity with regards to the diverse investment models, standards, and practices that exist (if you’re curious to learn about SII, check out this great video of Antony Bugg-Levine, Managing Director of The Rockefeller Foundation). Unified language has yet to emerge that categorizes these activities and communicates them effectively to stakeholders, such as investors or social ventures seeking funding. I expected the conference to resolve some of my own confusion about the multitude of activities currently lumped into the “SII” sector, but instead I learned that the experts all agreed on one thing: the sector is too broad, too diverse to be talked about as a monolithic entity. Doing so is unproductive, and ignores the distinct needs, challenges, and opportunities faced by different branches of the SII sector.

Distinct SII categories and investment vehicles must be clearly defined. Those definitions must in turn be tied to specific standards and measurement practices if social impact investing is to go mainstream. Investors need to know what they’re backing (what’s the blend of expected social and financial return? What’s the payback period?), investors need to know what they actually get (what was the social impact and financial return?), and social ventures – nonprofit or for-profit – need to know what financing options are out there. None of this will happen without uniform Definitions across the sector. As legal and policy infrastructure is built to support SII, some convergence of language will naturally occur. But in the meantime, broadly understood, consistent, and clear terminology is needed to communicate effectively with stakeholders. Imagine if all SII participants – VC firms, foundations, banks, financial advisors, etc – created unique terminology to describe their own particular activity. Well, you can probably see how that might inhibit broad understanding and widespread adoption.

Finally, the third reason I’m writing this ode to Websters -and the true catalyst for this piece – is this blog post by Ethical Corporation founder Toby Webb. The post struck me because, while I agreed strongly with the spirit of the argument, I find its logical implications troubling. The author argues that CSR terminology is irrelevant. Therefore,  consistent and shared definitions are unnecessary. Creating shared definitions within CSR is unnecessary, he reasons, because what matters is implementation not description – what matters is doing it, not naming it.

Well yes, but also….no. If we don’t know what “it” constitutes then determining whether companies’ CSR activities are actually as sustainable, humane, and socially just as claimed becomes time consuming and costly. Here lies the value of definitions – they demand clear standards.  Standards can be translated into to official certifications or designations, which in turn are tied to measured outcomes. So for example, when someone tries to sell me a “green” building I don’t need to ask where the materials comes from, what the embodied energy is or what the projected efficiency is – I can simply ask, “LEED Gold or Silver?”

In all likelihood, CSR is here to stay. The way companies are talking about CSR, it’s the new business as usual. But – and here I am in complete agreement with the author – talk is cheap. At the end of the day, achieving outcomes and raising the CSR bar is what matters. But without unified terminology across the sector, broad-based measurement, verification and comparison of outcomes across companies is inhibited. Stakeholders will struggle to assess the substance of CSR programs and the validity of corporate claims – and that only undermines the value of legitimate CSR programs. Furthermore, with the fast growth of SII, companies will increasingly face shrewd social investors who want to dig beyond glossy PR “fluff” in search of quantifiable impact. If we are to take CSR seriously as consumers, shareholders, and practitioners, then – as with social enterprise and impact investing – we need to consider the value of definitions and the role they play in building a sector.

But what do you think?

Corporate America, Meet Social Enterprise.

June 10, 2011 at 6:58 pm

Read the article from the Stanford Social Innovation Review

As I described yesterday, much attention is now focused on using social enterprise as a development tool in emerging economies. Yet entrepreneurial solutions to social problems shouldn’t be overlooked at home. The United States may be further along the development curve, but social enterprise models can be equally effective at driving progress here in the US.

For example, Investing In Communities (IIC) aligns the interests of nonprofits, realtors, and real estate clients to create a philanthropic resource and an effective business development tool.  Creating shared value (social and financial return) is what we do. Now, large corporations are dipping their toes in the water and exploring ways to unite corporate citizenship with bottom-line goals. So naturally, we’re interested.

Recently, Panera Bread has distinguished itself from its peers by going a step further and using its brand, supply chain, and expertise to launch a line of philanthropic cafés. The effort  could practically be described as a social enterprise franchise within Panera.

Known as Panera Cares Cafés, these locations are largely indistinguishable from standard Panera Bread cafés, except for one detail – in place of cash registers, patrons at a Panera Care’s Café will find a donation box. Customers pay on an honor system. Those who can afford to pay the full price or a little extra do, those who are strapped give what they can, and those who have nothing to give are, “free to enjoy their meal with dignity” says Panera co-founder Ron Schaich.

Cause Marketing…and why we’re not that

May 16, 2011 at 10:26 am

Recently, IIC received an email from a prospective nonprofit (NGO) Partner. Before it would apply for Partnership, said nonprofit requested that IIC fill out its cause marketing form.

This left us a bit flummoxed because, well, IIC is not cause marketing. On one hand, we wanted to be cooperative and respect this organization’s prudence (tip of the hat to them, by the way, for applying a critical eye to cause marketing proposals). On the other hand, we didn’t want to send an incorrect message – that IIC was actually cause marketing.

At the end of the day, we filled out the form. But all of this got me thinking about cause marketing, its benefits and drawbacks, and why I had such a negative reaction to the suggestion that IIC was an example of it.

First let me clarify, this is not a condemnation of cause marketing. Companies are going to market to consumers until pigs sprout wings, so if reputable nonprofits can gain some value –financial or otherwise – then I imagine cause marketing represents a small win in the on-going battle for social awareness and responsibility. Now, whether the value that nonprofits reap is in anyway proportional to the value which accrues to the companies engaging in these campaigns is another matter entirely, and tends to be where skeptics of cause marketing take issue.

click here for related article on cause marketing

I’m not going to delve into that here, or ask whether compulsively buying packs of pink M&Ms really does make you write a smaller check to breast cancer charities at the end of the year. That’s a topic for another time.

Instead, I’ll consider what sets IIC apart from cause marketing.

1. IIC is not selling anything in the traditional sense. We are a nonprofit platform that enables socially conscious clients to connect with socially responsible real estate professionals, and support their preferred nonprofit/s as a result. We provide the space for real estate clients to make a socially conscious choice.

2. “The cause” is not predetermined by IIC. Philanthropy generated through IIC transactions is entirely client directed.*

And MOST importantly:

3. Philanthropy generated through IIC is not secondary to our business model, it is the driving element behind it. IIC Real Estate Members do not donate a portion of their commission to the client’s preferred NGO solely out of the goodness of their hearts – or to promote their brand generally – they donate because doing so enables them to earn 90% of a commission they would not otherwise have. Through IIC, philanthropy drives business – which in turn drives philanthropy.

Let’s use a more basic commercial transaction to illustrate the difference between cause marketing and the IIC model.

Take  Gap. Gap makes clothes. Occasionally Gap makes a (RED) t-shirt, and a portion of proceeds from the sale of this shirt goes to the Global Aids Foundation. Does Gap really want to support global AIDS relief? Of course, who doesn’t? But what’s the real goal here? – To improve consumer perception of Gap, so that customers buy more Gap clothing generally, beyond just (RED) t-shirts, and ergo boost Gap’s profits.

In comparison, consider a hypothetical company: C’s Social Tees. C’s Social Tees is a non-profit social enterprise t-shirt store. It sells the works of aspiring designers who don’t have the resources to establish their own retail presence. But, in exchange for carrying the designers, C’s Social Tees insists that 10% of the profit designers make from their sales in C’s goes to whatever charity the buyer chooses. The designers are happy to agree, because they retain 90% of profit, which they wouldn’t make in the first place without C’s. C’s goal is to break even, and promote the work of the designers it carries, because more shirt sales = more money going to important causes. C’s doesn’t have a second line of typical tee’s it’s trying to push on the side, so there’s no ulterior motive of brand boosting.

Basically, IIC is like C’s Social Tees – not the Gap. So there you have it. It’s understandable to draw a parallel between IIC and cause marketing, but I think at the end of the day IIC is building something fundamentally different. IIC is not a promotional gimmick, or one-time fundraising effort. It is striving for something far bigger.

It’s a self-sustaining engine of philanthropy that aligns the interests of real estate professionals, corporate and individual clients, and nonprofits in order to drive business growth and social benefit. IIC is pushing for a paradigm shift. Cause marketing guys are just doing  what they’ve always done – product marketing.

* In the event that the client has no preference regarding the NGO Partner recipient, or feels uncomfortable making a selection, the IIC Member may decide which NGO Partner/s will be the recipient/s of IIC funds from his/her transaction. Members may also elect to support only specific NGOs or focus areas through their transactions, and must make that information available to the client before commencing an IIC transaction. 

Social Enterprise and the Cocktail Party Problem

April 7, 2011 at 5:35 pm

Confronting Old Conventions and Misconceptions

I’ve noticed a certain trend, and it speaks volumes about a major soft challenge confronting social entrepreneurs. Call it the cocktail party problem.

You see, cocktail parties are an excellent litmus test for gauging the assumptions and conventions of others, as social pressures, noise, and various distractions tend to push us back on familiar narratives and frameworks. And I find that whenever the topic of my work comes up, responses follow a predictable pattern: either “Tell me why” or, “What’s in this for you??”

My private sector friends often pounce as soon as the words donation or NGO leave my lips: “Tell me why,” they interject,” – why should I participate in this? Remember, I’m a cold hearted corporation, talk to me about the bottom line!!” Those with a public sector or nonprofit background are more apt to let me finish before leaning back, pursing their lips, and offering up a long “hmm okay…but what’s in this for you?”

Imagining A New Philanthropy for the 21st Century

January 26, 2011 at 7:31 pm

This past weekend, the Telegraph ran a piece by Sir Victor Blank entitled, “We Need a New Philanthropy for the 21st Century.” The article highlights the fundamental importance of  corporate engagement around today’s greatest social and environmental challenges – from both a business and moral perspective. It also articulates why a more innovative approach to philanthropy is needed moving forward – one that integrates social benefit and private value creation more directly, one that aligns public and private interests for true sustainability. It’s an approach embodied by IIC.

As Blank points out, fallout from the global financial crisis ensures that governments will be financially constrained  for years to come, and ill-equipped to fight global poverty, disease, and climate change while still tending to domestic challenges at home. Corporations, he argues, not only have a responsibility to come to the table and address these issues – they also have a vested financial interest in doing so.

Customers increasingly demand substantive  social leadership from the corporate sector. In addition, companies’ long-term strategic interests often align with those of their customers. Sir Blank writes, “The idea that there is a sharp divide between charity and commerce is false – the interests of a company and its customers are often synonymous.” Harvard Business Review recently sat down with Michael Porter to  further explore this concept that Sir Blank alludes to – that of “shared value.”

The conclusions drawn by Blake and Porter read as a glowing endorsement for the model and mission of IIC. Blake argues that corporations must expand their corporate giving beyond the current average rate of less than 1% of one fifth of annual profits ( that’s less than 1/5ooth of profits for those of you counting), in order to strategically support causes relevant to the firms’ commercial self-interest.  Porter concludes that in addition to strategic philanthropy, firms must find ways to integrate social responsibility directly into their business operations and thereby create shared value (see my discussion of IIC and hybrid value chains).

Investing In Communities allows firms to achieve both goals simultaneously. IIC enables firms to increase their corporate giving as a direct result of satisfying a standard operating need – real estate. Even better, firms don’t have to pay an additional penny out of pocket to generate that philanthropy. They simply make a savvy, socially responsible operating decision  and in return get to direct all the philanthropy generated by their IIC transactions, and receive recognition for it. For firms needing thousands of sq. ft. of office or commercial space, that figure could easily be tens of thousands of dollars per transaction. Not a bad deal, eh?

IIC proves that market power and public interest truly can align to generate incredible shared value. So we couldn’t agree with Sir Blake more. We do need a new philanthropy for the 21st Century, and here at IIC we’re not just imagining it. We’re creating it.

Changing the Giving Game: IIC Pioneers “Market-Driven Philanthropy”

January 12, 2011 at 11:04 pm

Americans give generously. Even amidst economic hardship, this year Americans gave $303.75 billion away in charitable donations.  That figure amounts to nearly 2.1% of American GDP, according to a 2010 report by Giving USA.  As Ewe Reindhardt noted recently in the NYT Economix blog, that amount is much higher, as a percentage of GDP, than is spent by nations which prefer to finance charitable and public interest activity through tax revenue redistribution.

According to a report put out by Network for Good, about 1/3 of those donations are recorded in the month of December – let’s chalk that up as 1 part holiday generosity mixed with 2 parts tactical prep for the close of tax year.  If – like most Americans – you are philanthropically inclined, and if – like many Americans – you are a final-hour donor, then the odds are strong that you’ve recently given to a cause. If that is the case, then you may have noticed that there has been a dramatic evolution in the ways we give.