Sustainable social enterprises have emerged as a powerful force in solving social problems by offering goods and services that generate positive impact. These enterprises operate with a dual focus on social change and financial sustainability. In this article, we will explore the realm of sustainable social enterprises and showcase four remarkable examples that have successfully harnessed the power of impact measurement as a business intelligence tool. These enterprises have scaled their innovative solutions by leveraging impact data while aligning their efforts with multiple sustainable development goals. Furthermore, we will delve into impact investing accelerators, the social impact of social enterprises, types of social enterprises, and the transformative potential of sustainable, affordable housing. Get ready to discover exciting investment opportunities backed by impact evidence and poised to make a meaningful difference in our world.
Impact Measurement in Social Enterprises: A Key to Success
As social enterprises continue to gain momentum and play a crucial role in addressing social and environmental challenges, the need for impact measurement becomes more apparent. Impact measurement, or impact assessment or evaluation, quantifies and analyzes the social, environmental, and economic outcomes of a social enterprise's activities. It helps social enterprises understand and communicate their impact, make informed decisions, and improve their effectiveness.
Impact measurement is a key component of a successful social enterprise because it provides valuable insights into the outcomes and effectiveness of its initiatives. By measuring and tracking impact, social enterprises can demonstrate the value they create and attract investors, donors, and other stakeholders. It also allows them to identify areas for improvement, refine their strategies, and make evidence-based decisions.
In the case of Oorja, a farming social enterprise, impact measurement has played a crucial role in showcasing the positive changes it brings to smallholder farmers in India. Through its affordable solar-based energy infrastructure, Oorja has increased agricultural productivity, reduced fuel consumption and costs, and created job opportunities in rural communities. Impact measurement has provided Oorja with evidence of its impact, enabling it to attract funding and scale its operations.
Similarly, Kidogo, a nonprofit social enterprise focused on early childhood care and education in East Africa, has recognized the importance of impact measurement in its growth and expansion. By tracking and evaluating its programs' outcomes, Kidogo has improved its processes, adapted to scaling challenges, and ensured that children from low-income communities have access to quality childcare. Impact measurement has allowed Kidogo to demonstrate the positive long-term effects of its interventions, such as improved health and cognitive outcomes for children, and break the cycle of generational poverty.
In conclusion, impact measurement is a key factor in the success of social enterprises. It enables them to understand, communicate, and improve their social and environmental impact. By measuring and tracking outcomes, social enterprises can attract support, make informed decisions, and drive positive change. As the impact measurement field continues to evolve, it is essential for social enterprises to embrace this practice and harness its power to create a better future for all.
Sustainable Social Enterprise Examples
Oorja - Farming Social Enterprise Oorja is a purpose-driven social enterprise in farming as a service (FaaS). The company is registered in the UK and India and was incorporated in 2016. It works at the intersection of renewable energy and sustainable agriculture. Oorja focuses on replacing polluting diesel engines used along the agricultural value chain. Oorja's mission is to deliver affordable and reliable clean energy services to power income-generating appliances to reduce energy costs, boost farm productivity and farmer income, and combat climate change.
Around 30 million farmers in India rely on expensive and polluting diesel pumps for irrigation. Farmers face high running costs for diesel fuel, engine rental, and maintenance. This generates an immense carbon footprint and stifles agricultural productivity and income from farming. 4 in 5 people living in poverty are marginal farmers reliant on landholdings that are often too small to be viable. Farmers lack access to cold storage, and 15-20% of fresh produce is wasted.
Oorja has developed a customer-centric business model to provide affordable solar-based energy infrastructure to smallholder farmers on a pay-per-use basis. It provides integrated clean energy services currently split into three verticals:
- Irrigation as a service - pay per cubic meter of water used on the farm
- Milling as a service - pay per weight of produce available on the farm
- Cooling as a service - pay per crate per day available at the farm gate
These services are provided to smallholder farmers on a pay-per-use basis with no upfront cost and represent 20-25% savings vs. fuel, with operation and maintenance costs included in the price. Oorja works with smallholder farmers in the northern region of India. They are involved in agriculture on 2 acres (0,8 ha) of farmland and grow 2-3 cereal crops. Their average monthly income is around $53-$80, and they cannot invest in clean technology due to the lack of affordable financing. The average household size is 8.3 people, and they depend on diesel fuel as a source of irrigation.
Before working with a farmer, Oorja develops a demand assessment, forms farmer groups, and acquires customers before deploying solar assets. After the decision to finance the deployment and maintenance of decentralized solar infrastructure, hiring operators from the local community and servicing and payment collection. Ultimately Oorja trains and supports farmers through offline and digital platforms.
In terms of outcomes, there is an increase in agricultural productivity and income and profit from farming as well as crop diversification, fuel consumption and costs reduction, and job creation, particularly in operation and maintenance.
Oorja has generated enough impact evidence that their business model is causing improvements for stakeholders, like a change in crop yield from 6% to 15% (rice and maize) and new crops cultivated like potato, peppermint, and sugarcane and a 30% increase in income per farmer. Furthermore, from the data collected, ca. 10,000 liters of diesel were saved, reducing 39 tons of CO2 in the atmosphere - $62-$68/acre/year protected by farmers on diesel fuel for irrigation. In addition, twelve jobs have been created in last-mile BOP communities with operators, solar technicians, and field assistants, among others.
Oorja has learned that IMM is an iterative process and how crucial it is to run short experimental surveys from time to time to understand the changes and discover the needs of stakeholders. The next steps include tracking the key impact drivers to know the impact of services and amend changes if required.
For further insights into Oorja's work and the broader context of social enterprise impact measurement, explore the following resources: Carsey School of Public Policy at UNH, 3BL Media's feature on Oorja, WE4F's description of Oorja's approach, The/Nudge Prize overview of Oorja, and for a comprehensive understanding of social enterprise impact measurement, refer to Sopact and Sopact's Impact Measurement University.
Kidogo - NonProfit Social Enterprise
Kidogo is a nonprofit social enterprise that improves access to quality, affordable early childhood care and education in East Africa's low-income communities. Learn more about Kidogo's mission and approach. Kidogo aims to achieve a world where all children, regardless of where they are born, have the opportunity to reach their full potential. Kidogo is the largest childcare network in Kenya, and it operates a small number of 'centers of excellence' across Nairobi. The Kidogo Way is a proprietary approach to promoting young children's healthy growth and development. This framework guides their training, curriculum, and quality assurance for caregivers and centers in the network.
In Kenya's informal settlements, where over 60% of the urban population lives, mothers have to make a difficult daily decision about where to leave their children (0-5 years) when they go to work. Most of the time, older siblings (usually teenage girls) will take younger siblings out of school to care for them or leave the younger child in a daycare facility where an untrained caregiver provides basic supervision. Unlicensed and unsanitary centers do more harm than good. Poor nutrition, hygiene, neglect, and abuse affect children's development during their critical early years. If these children do not receive proper supportive care during their early years, they will suffer physical and learning disabilities in school. In addition, the lack of reliable childcare services makes it impossible for most single mothers to hold consistent employment. Three hundred fifty million children worldwide do not have access to quality childcare.
How do they do it? By joining the Kidogo Network, Mamapreneurs receive intensive training and mentoring on early childhood care and education, entrepreneurship, and health and nutrition to improve the quality of services offered to young children. Read more about the impact of Mamapreneurs in Kenya. Mamapreneurs are also provided with a starter kit, including key resources for their centers and ongoing quality assurance to maintain Kidogo's minimum standards. Kidogo started in 2014/2015 with two childcare operators (mamapreneurs) and 150 kids. In 2018, the program with 24 mamapreneurs across four communities in 2 counties with more than 630 kids. Fast forward to 2021, where Kidogo is rapidly scaling and expanding to 30 communities in 7 counties working with 538 mamapreneurs and 10,889 kids. Kidogo is at a stage of growth stage, 10x in 2021.
The management team envisions the support necessary to maintain the growth. Questions arise at this stage: How do we adapt the process they used to have with 45 mamapreneurs to 400+? How does the team support this scale while keeping the cost per child down without impacting the scale? IMM and impact experiments have helped Kidogo improve its processes by being more data-driven and adapting to the new environment. Kidogo has developed a Theory of Change focusing on immediate, long-term, and community impact. Initially, they want to ensure children from low-income communities can access quality childcare. Still, in the long run, they want to improve caregiving skills and the environment in which children grow up. As a result, children will have improved health and cognitive outcomes; malnutrition will decrease; children will meet their developmental milestones; and at the community level, children will do better in school, breaking generational poverty.
Kidogo focuses on making impact measurement a central element of its decision-making process. Explore the fundamentals of impact measurement at Sopact and deepen your understanding through Sopact's Impact Measurement University. The goals to provide a service that works at the intersection of supporting female entrepreneurs and child development have been to:
- Make early childhood care and education affordable
- Support a variety of workplaces to implement childcare solutions
- Promote young children's health and development
- Encourage women's labor-force participation
Focus now is on analyzing data from their core business model to see how they can improve. A baseline assessment covers multiple factors contributing to a mompreneur's growth and a child's development. These factors include safety, health, nutrition, learning, management and administration, parent engagement, and wash. The following results were obtained: most daycare centers are under Yellow Score (73.77%) - a quality level that scores 8-16 points out of 20, no matter the center type. The Red Score (18.03%) - 0-7 points out of 20 - is mainly found among Home- and School-based employers. Fewer centers are achieving Green Score (8.20%), and center-based is doing better
FarGreen - Farming Social Enterprise
Fargreen is a social enterprise that grows climate-resilient farming communities in Vietnam and beyond. Discover more about Fargreen's mission. Fargreen was founded in 2015 to provide environmentally sustainable livelihood opportunities to rice farmers. Through these services, farmers can increase their annual incomes by 50%. Additionally, Fargreen strives to ensure that no farmer is left behind in the fight against poverty - especially those who stay with their land. To accomplish this, the company has formed a network of Vietnamese farmers to produce high-quality, environmentally friendly, and socially responsible edible mushrooms and other agricultural products. Learn about Fargreen's story and its impact.
With more than US$ 3 billion (20% of total agricultural exports), Vietnam is the second-largest rice exporter in the world, and rice is grown in the Mekong and Red River deltas. In Vietnam, small-scale farmers produce 65% of the rice. There are approximately 67 M tons of dry rice straw available every year. Farmers burn this byproduct in the fields. Twenty million tons of greenhouse gasses are released from the open burning of rice straw after harvest, contributing to air pollution in the country.
Sustainable Social Enterprise ChallengesFargreen seeks to address three challenges: air pollution, lack of knowledge of green farming techniques, and income instability of farmers. Fargreen's commitment to sustainable farming and community development is detailed in their pledge to provide 1,000 smallholder rice farmers with environmentally sustainable livelihood opportunities and training – helping them to increase their annual incomes by 50 percent.
The Harvest Fund - Nonprofit Social Enterprise
The Harvest Fund's (THF) mission is to better the lives of Zambian women through improved income and food and nutrition security. The Harvest Fund's impact-driven approach focuses on alleviating extreme poverty in Zambia by bettering the lives of marginalized female farmers throughout the country. By helping them acquire equipment, technology, and financial resources today, they are put on the path for a more prosperous tomorrow.
THF provides access to solar-powered irrigation systems and solar power refrigerators to cultivate and store crops and vegetables. Along with technology, they provide innovative training to make them climate-resilient. Explore more about The Harvest Fund's mission and projects in Zambia. Apart from that, they provide market access so that farmers are taken seriously. Together, the technologies, training, and market access will enable farmers to grow, earn, and stay resilient. With more yields and income, the farmers can access a greater variety of proteins and meals, ultimately improving their nutrition intake.
Why do they do it? Female farmers produce more than 60% of the food in Africa. In addition, studies show that women tend to reinvest their income back into their families at a much grander scale than men do. The Harvest Fund's locally led team in Zambia empowers communities and tackles the challenges of African subsistence farming.
Learn More: Impact Evaluation