Power of Impact Measurement for Sustainable Social Enterprise

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.

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. 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. 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. 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 than other types. At the end assessment, 93% had moved to a green score, 5% to yellow, and 2% had maintained a red score. Kidogo used this data to find that home-based centers need improvement due to their scoring variability. Also, to help ensure results are at par with the church and school centers.

The next step for Kidogo is to decide where and what to focus on in the future and develop indicators for them, developing specific data collection tools to measure impact, e.g., Parent engagement.

FarGreen - Farming Social Enterprise

Fargreen is a social enterprise that grows climate-resilient farming communities in Vietnam and beyond. 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.

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 Challenges

Fargreen seeks to address three challenges:

• Air pollution
• Lack of knowledge of green farming techniques - lack of training and expertise resulting in dependence on and overuse of chemicals.
• Income instability of farmers - lack of income stream and market access among farmers.

Fargreen enables the farming community by introducing sustainable, community-based green agriculture techniques and allows the urban community to green consumption.

Fargreen provides resources primarily to women farmers to become knowledgeable and responsible about green techniques and share that knowledge with other farmers. Their reach will increase the possibility of sustainable and regenerative farming. Additionally, they introduce green methods for urban communities, such as using rice straw as a base to make mushrooms, thus reducing waste and improving air quality and soil health, resulting in more resilient and engaged communities. Innovating high-quality products like mushrooms helps farmers increase their income and be more stable since they don't need additional work, stimulating inclusive and equitable growth.

It uses the environmentally friendly closed-loop production method, benefiting local farmers and eliminating waste. Fargreen's inclusive business model involves buying rice straws from local farmers (to stop them from being burned) and engaging the farmers in growing high-quality edible mushrooms using rice straw as the only substrate. After the mushrooms are harvested, they are shipped to Fargreen's processing and packaging center and delivered to customers under the Fargreen brand. Besides mushroom cultivation, they support farmers in setting up a sustainable garden to grow veggies and rear honey bees.

The inclusive and sustainable closed-loop production process prevents greenhouse gas release and generates no waste. Once rice farmers harvest the mushrooms, the straw used in the process decomposes into mulch. Farmers return this mulch to their fields to enrich the soil as a nutrient-rich biofertilizer for rice and vegetable crops with no danger of fertilizer on the farm, promoting the rearing of honey bees and closing the production loop. Their products have been served in high-end hotels and restaurants.

So far, 570 tons of rice straw have been saved from burning, equivalent to 588 garbage trucks of waste recycled instead of landfilled. The exact amount prevents methane emission, equivalent to 1094 trees grown in 10 years. Generating 136k USD from the different activities developed in new crops was possible. Fargreen works with 150 farmers; five were trained as local leaders, each representing 50 community farmers. The generated income from other produce has reduced migration to the cities by those community farmers.

This IMM process has helped increase efficiency and effectiveness for Fargreen but moving forward; they need to refine their reporting framework and improve the system workflow of the data generated.

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 is a nonprofit social enterprise introducing agricultural training and solar-powered technologies to improve agricultural productivity and household income. In addition, their goal is to cultivate independence and improve the overall livelihood environment.

They provide access to solar-powered irrigation systems and solar power refrigerators to cultivate and store crops and vegetables. On top of the technology, they provide innovative training to make them climate-resilient. 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. In addition, each cohort is provided agricultural training, loan options, and technologies introduced over three years for easy adoption and repayment.

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. Everyone in the community benefits by supporting these women's efforts to produce higher yields. Before working with THF, women suffered; they could not send their children to school or grow crops. And the vast majority of farmers interviewed would like to have support to buy cattle.

Regarding IMM, the key outcomes defined by THF are the number of farmers reached (particularly women because 78% of THF farmers are women), the percent increase in annual crop yield (per area of land how much is grown), and the percent increase in each farmer's annual income.

The Harvest Fund is targeting specific Sustainable Development Goals like:

• SDG 1 - no poverty
• SDG 2 - Zero hunger
• SDG 4 - quality education
• SDG 5 - gender equality
• SDG 7 - affordable and clean energy
• SDG 8 - decent work and economic growth
• SDG 10 - reduced inequalities
• SDG 13 - climate action
• SDG 17 - partnerships for the goals

So far, THF has reached 375 female farmers from different cohorts, and the average income increased for each woman by around 30% per year. Access to technology prolongs the life of the crops, enabling each cohort to cultivate and sell more. There has been a % yield per hectare changed over the year to around 30% between 2021 and 2022, with more than 2,65 tons of vegetables sold.

One of the learnings is how to efficiently use MS Excel data to create a live, shareable dashboard.

The next step is to collect data from 200+ farmers.

THF will collect more details about the yields of the different crops used by the farmers, water consumption, and how fuel consumption has been reduced due to the use of solar power. Therefore, the focus on more outcome-level data is on the to-do list for the management team.

Image from Canva