With the advent of new century, the world has witnessed a boom in the number of social enterprises across the globe. In US alone, more than half of social enterprises were institutionalized in 2006 or later and the trend is same elsewhere too. In India, around 89% social enterprises are just ten years old or younger. This signifies towards the novelty of social sector sphere, providing a colossal magnitude to budding entrepreneurs for innovation, ideation to experiment, refining or pivoting towards new ones, job creation while giving out million of dollars for maximizing social values through organizations, work and lives. The present time of uncertainty and unrest is worsening the social problems and thus further augments the need for social enterprises. These enterprises are not contented with just giving a fish or teaching how to fish rather they aim to revolutionize the fishing industry and revolutionizing is not an over-night phenomenon.
This social sector upheaval is invigorating and transformative for many social enterprises, yet, there are many more who have been struggling to stay afloat. Irrespective of making productive strides in terms of innovation for impact, the sword of survival is hovering over the head of many non-profits due to budget constraints; the very thought of making money to meet the monthly payrolls and administrative expenses. In 2014, annual budget of two-third non-profits in US was less than $50,000 indicating the sword is not an illusion. All the efforts go down the drain with this mongering fear of money, so it is pertinent for any social startup to reach and sustain multi-million dollar revenue in order to launch, scale-up and make a meaningful difference in the social sector facade. This leaves us with a question on how these enterprises can get rid of this daunting fear and attain organizational sustainability? Organizational sustainability, as defined by many social scientists, is reliably raising around $2 million in annual revenues. However there is no set rule to create a direct correlation between scaling revenue and scaling impact. Many organizations sustained and impacted lives with small budgets and then, there are even more who struggled to create an impact even after generating million of dollars in revenue. Relatively, many social enterprises have the stride to do a great deal of good by scalability, but are stymied because of budget constraints. They hit against a stagnation wall – the Funding Wall and struggle to find more growth capital irrespective of making meaningful and impacting contributions. This non-profit scalability challenge calls for urgent attention from social scientists; unfortunately very little data exists on how early stage organizations grow despite heaps of advice offered.
I have recently attended a Philanthropy Summit and met Stanford Professor, Kathleen Janus, who has devoted herself to advancing social cause. She had the same concern of startup success on her mind, being a social entrepreneur herself, so she traveled across the length and breadth of the United States, to get answers to the grave concern by meeting founders, leadership teams and funders of social startups. She posed questions about how they launched the organizations, measured impact, managed teams, sought funding and raised awareness. The findings were presented at the summit which provided a trove treasure of insight and inventive methods for every start-up leader to benefit from, be of a fledgling startup or an established organization. She presented five key strategies that sets the foundation for growth of the most successful social startups and they are:
Research and development to get proof of concept before seeking major funding or media coverage. The organizations that have successfully scaled up have prioritized developing a standard for success, and then placed a strong emphasis on measuring the results against the standard without the fear of failure. They openly admit failure and believes that the reasons of failure are the lessons of success and are critical for the innovation process. They are transparent in their findings to cultivate understanding and support among stakeholders including communities.
Not everything that can be counted counts, and not everything that counts can be counted. (Albert Einstein)
75% of nonprofit organizations measure their impact yet only 6% leaders believe that they are making good use of the data they gather. Impact measurement is still fraught with difficulty despite being demanded by the funders. It is pertinent to measure impact right from the start, with inventive metrics tailored to the specific programs of the organization. The true impact measurement is to track outcomes instead of just limiting to outputs. Honesty is the key, be honest with the data, pressure test it and report with transparency to tell a clear and impressive picture.
The topmost barrier to scalability, as stated by many entrepreneurs, is access to capital. The culture of purposefully experimenting with revenue through a combination of selling products and services that were in strong alignment with the mission of organization and employing bold strategies to raise philanthropic capital is one of the factor in assuring success of social enterprises;
Leadership fosters a culture of high level engagement and commitment by hiring right people for the right job at the right time and provide a room for optimum utilization of talent. The leadership creates truly active boards having expertise that are needed to address the challenges and taking the mission forward for organizational success and scalability. They believe in delegation and spent most of their time in raising funds and strategic planning while ensuring proximity with communities they serve and efficacious engagement of boards.
Telling compelling stories
Story telling is not just about raising money or courting supporters; rather it is about building a movement for change. Telling compelling stories in ways that utilized the most recent innovations and tapped into others to advocate on their behalf is a factor of successful organizations. We all have the power within us to be a great storytellers for the cause we care about; we just have to bring that talent out for the world to know, react and support.
The most powerful person in the world is the storyteller. The storyteller sets the vision, values and agenda of an entire generation that is to come. (Steve Jobs)
She shared another interesting observation, which is worth mentioning here; while interviewing the participants, she was expecting that people will say that success was driven by a grit or remarkable idea or a charismatic personality of the founder, but no one did. They may contribute but the foundation of success is the afore-mentioned set of best practices.
So, in a nutshell, the present uncertain time calls for drastic measures as social problems are not only persistent but are worsening, there is a need for innovation, determination and perseverance to prevail for chalking out fruitful sustainable solutions. With the application of these strategies, social entrepreneurs will optimistically be able to spend less time in being worrisome about keeping their organizations alive and will be spending more to actualize the mission of making a positive impact in the lives of people and communities in general.
@ This article is an abstract of Kathleen Janus research. The images have been obtained from various websites.