2 presentation yolanda sarason
TRANSCRIPT
Professor Yolanda Sarason
Colorado State University/Foreign Trade University
Fulbright Scholar 2015-2016
Professor Kristi Yuthas
Portland State University
Social Impact Measurement Workshop
Vietnam National University
March 2016
The Relationship between Social Mission and Financial Profitability:
Illustration with Social Enterprises
@Sarason 2016
@Sarason 2016
Outline
1. Definitional Differences of Social Enterprise (US and Vietnam)
2. Value Chain Analysis: The Case of Fargreen
3. Managing Social Enterprises for Excellence
4. Social Return on Investment and Financial Performance
5. Immodest proposals
@Sarason 2016
Understanding of Social Enterprises
Non-
profit
For
Profit
Commercial
EnterpriseEnterprise
CSR
Social
EnterpriseIncome Generating
NGO
NGO
Vietnam
(Europe)
United States
CIEM CSIP
2012
@Sarason 2016
Social Enterprise
Non-profitSocial
EnterpriseFor Profit
@Sarason 2016
What is a Social Enterprise
(Includes Financial and Social Goals)
1. Intent
Address a social need
Be financially profitable in the long term
2. Action – Alignment with social mission
Mission
Processes
Shared Values
Business Model
3. Consequences
Social issue addressed
Financially sustainable
@Sarason 2016Good to Great and The Social Sectors
(Collins, 2005)
Passion:
What does your
organization stand for
and why does it exist?
Best at:
What can do to the
people it touches better
than any other
organization?
Resource Engine:
What Drives your
resource engine
broken into three
parts: time, money
brand
Managing Social Ventures for Excellence
(Action)
@Sarason 2016
Greenhouse
Rice Hay
Substrate
Farmers grow mushrooms Retail and
Restaurants
Mushroom
Consumed
Farmers
learn
new skill
Improved
Social and
Economic
Welfare in
Vietnam
Value Chain Analysis(The case of Fargreen)
Fargreen
packages
mushrooms
Less
PollutionFarmers
earn
money
Bio-
fertilizer
created
Fargreen
Profit
Healthier
Food
Consumed
@Sarason 2016
Fargreen’s Impact Measurement
• Less Pollution. Tons of straw not burned
• Farmers learn new farming technique. Percent farmers not needing
further assistance
• Biofertilizer Created. Pounds created
• Farmers earn extra income. The amount earned
• Farmers stay on land. Reduction in migration
• Fargreen’s profit. Normal financial calculation
• Healthier food consumption. Amount mushrooms sold
• Improved Social and Economic Welfare. Sum of the previous with
financial estimates for each.
@Sarason 2016
@Sarason 2016
Financial Return on Investment
Sacrifice Financial Return for Social Return on Investment
SROI
Social Return on Investment
ROI
Financial Return on Investment
@Sarason 2016
Immodest Proposal:
Managed for excellence, social enterprises can return more social return
than non-profits and more financial return than commercial enterprises.
SROI
ROI
Social Enterprise
Commercial
Enterprise
Non-Profit
@Sarason 2016
Managed for excellence,
social enterprises can outperform commercial enterprises financially
1. All stakeholders share values around social mission a financial imperative
(more passionate, work harder, more diverse, committed for long term)
2. Better manage a matrix organization
3. Thorough understanding of all aspects of the value chain
4. Will easier build social capital –source of competitive advantage
5. Can better manage other tensions
(quality/cost, process/product innovation, local/ global)
6. Managed for the long term
@Sarason 2016
Managed for excellence,
social enterprises can outperform non-profits in social impact
1. More efficient use of resources
2. Focus on balancing financial and social mission
3. Stakeholders understand financial imperative
4. More likely to develop core competencies around delivery of service
5. Less likely to experience mission drift because of funding opportunities
6. Managed for the long term
@Sarason 2016
Even more immodest proposal
Asian
Enterprises
Western
Enterprises
@Sarason 2016
Thank you
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