How does social enterprise measure up?

Presented by:

The Collaborative for Innovative Social Enterprise Development (CISED)

• Introduce the concept of social costs & social outcomes

• Start to identify ways to measure social impact • Start to identify the social costs for your SE

• Develop an understanding of the challenge of balancing social and economic objectives

• Krackers Katering Case

• Social Objectives – Why are you doing this?

• Social Impact Measurement

• Asset Building/Accommodation Strategies

• Balancing your bottom lines

• Social Costs

Attached is an excerpt of the CS marketing plan which I feel is ready for implementation.  The attached includes the objectives, strategies, and related workplans – which are based on the audit that was done in late summer.  If you would like to see the full plan or audit findings, pls let me know.Any feedback is welcome – thx. 

Case Study

• “To create meaningful paid employment and training for individuals with mental illness and other barriers to employment, while offering a high quality catering service that sustains the environment and supports the local community.”

• Began in 1999 as AESB employing mental health consumers & survivors

• +$200K funding from various sources

• Objective to provide vocational training to enable “clients” to meet their goal of seeking meaningful employment outside of Krackers

• Revenues of $7369 in year 1• 2oo4:

o 88% of revenues from nfp organizations & health sector

o 10% from private sectoro Average order was $174

2004 2009Model One year training

program; new employees each year

25% of employees move on to employment, education, or other

Staffing 1 manager 1 manager & 2 kitchen supervisors

Revenues $81,841 $158,000

Client-employees 25 41

Employment hours 5588 4800

Employees moving on to outside employment or education

2 7

Measure of Success Social outcomes Balancing both social & business objectives

Why are you doing this?

• Parallel strategies offer fulfilling long-term work opportunities for people who are able to work, but requires a supported work environment

• Linking strategies work with people who face barriers to employment, and can with training & support, fit into mainstream work environments

Linking Strategy: Krackers has a goal of 25% to mainstream employment

How will you know you’ve made an impact?

• Demonstrate the value created by the organization

• Show the impact of grants, social investors

• Assess the organization’s ability to align with its mission

• Make the case for further investment in the organization

• Check the effectiveness of management

• What is the mission of our organization ?

• What barriers that our clients face are we looking to improve ?

• What are our goals for measuring performance ?

• How many resources can we reasonably invest for performance measurement ?

• How it will improve the effectiveness of our organization ?

• What do our funders expect?

Krackers Katering & other Causeway SE’s• Identify the impact of working in a social

enterprise on clients• Survey given to clients based on the Sustainable

Livelihoods Asset Areas• Preliminary analysis show a higher personal asset

increase than expected and lower financial assets increase than expected

• Guiding further management decisions -> i.e. financial literacy training

Section of Causeway Social Impact Measurement Survey given to client-employees

How are you going to achieve your social objectives?

• Accommodation Strategy:o Strategies & practices that SE’s use to support their

target population to participate in the business, and engage in the broader community

• Two processes:o Change work environment to remove barriers to

participationo Promote behavior change that supports people to be

more employable

• Clarity about the rules & expectations of the workplace

• Supportive culture• Timing of work• Supervisors & Assistants who support task

completion• Organization of tasks• Tool design & ergonomics

• More structured work environment that demonstrates clear expectations of behavior

• Put positive routines in place• Formal training & and informal personal

support• On-going assessment and counseling

support to help people adapt & retain employment

• Job related training (ie serving & event planning, food prep, safe food handling, H&S, customer service, inventory mgmt)

• Generic work skills training (ie time mgmt, personal hygiene, problem solving, conflict resolution, team work)

• Personal development (ie employment planning, crisis intervention, performance U employment evaluations)

• Job coaching & support:o Extensive & onsite

• Flexibility: o leave, sickness, mental health issueso scheduling & hours

• Regulatory accommodations:o ODSP & OW

• Accommodating policies:o Progressive discipline policyo Open door policy & support to discuss personal

issues (ie mental health, housing, addictions, housing, etc.)

• Progressive movement:o into further employment or education

How will you balance your triple bottom line?

• Financial health vs client healtho “big orders” vs “small orders”

• Training and retaining employees

• Accommodation – planning for the unplanned

• The cost of moving to a triple bottom line

• Focus:o Understanding niche

market, use of referral network

• Partnerships & Capacity:o Effective & collaborativeo Back-up support

system

• Human resources:o Right blend of staff &

autonomy

• Tracking :o Both social & business

costs

• Long term vision:o Constant small steps

• Priorities:o Business model has to

be right for social outcomes to happen

How much do your social goals cost?

• It’s a social cost if it’s incurred to accomplish a social mission;

• It’s a business cost if it’s incurred by a similar for-profit business in the same industry;

• If all social costs are taken out, the remaining cost structure should be comparable to a for-profit business in the same industry

Employment based:Krackers Katering - ongoing training means extra training, supervision, job development & coaching costs

Mission based:Mothercraft Doula Service: wider market means higher marketing costsEnvironmental Biz: higher product costs (local & green suppliers)

Revenue based:Habitat for Humanity re-Store: high volunteer involvement – increased time to recruit, train, manage volunteers

• Business Costso Cost of goods soldo Labour o Repairs &

maintenanceo Utilitieso Rento Prof & biz feeso Advertising & promoo Insurance

• Social Costso Cost of goods sold

Food wastage Labour (training &

production) Supervision

o Operating expenses Equipment purchases &

repairs Insurance costs

• Planning – what will it take to run the business (financial, expertise, time)? Logical partners?

• Decision making – does it make sense to expand or contract? How efficient is the business?

• Goal setting – what is realistically achievable? Willl the outcomes justify the costs?

• Budgeting – how much cash, fundraising, funding is needed?

• No exact method:o Part observation, part use of industry informationo Track over time to validateo Balance between level of accuracy/detail & time

neededo Consider the value & use of information

• Can start with industry information: o What does a comparable for-profit business look like?o What are the social costs up and above? (business &

organization)

Whole industry

(% of revenues)Bottom Quartile

Lower Middle

Upper Middle

Top Quartile

% of bizs reporting

Total revenue 100 100 100 100 100

Cost of sales

- wages 1.1 2.8 5.5 12.4 28.7

- purchases 31.8 41.5 42.1 41.0 89.3

Operating expenses

- Labour 6.4 6.9 13.1 16.8 55.1

• Rent 7.3 6.1 7.0 6.6 56.3

- Adv & promo 1.3 1.1 1.1 1.7 64.5

Total expenses 85.8 89.2 94.8 100.4 99.9

Net profit/loss 14.2 10.8 5.2 -0.4 99.9

Profitable vs Non-profitable businesses (thousands of dollars)

Bottom Quartile

Lower Middle

Upper Middle

Top Quartile

Profitable69.6% of all bizs

Total revenue 43.2 88.6 187.4 906.8

Total expenses 30.6 69.7 158.3 853.7

Net Profit 12.6 18.9 29.1 53.0

Non-profitable31.4% of all bizs

Total revenue 44.5 87.1 198.4 1028.6

Total expenses 54.8 108.5 225.9 1131

Net Profit -10.4 -21.4 -27.5 -102.4

• Tracking Time in the CSM• Total of ~$47,000 in annual social costs in

staff time• Challenges implementing tracking system

in other businesses• Have yet to track other social costs such

as food waste

• Return to the Business Model Canvas & Napkin Financials

• Add (or start a new canvas) Accommodation Strategies, Conflicts, Balancing Strategies, & Social Cost items

• Put $ amount on the social costs on the Napkin Financials

Where can I find out more?

http://www.cised.ca/workshops/training-materials

• MaRS White Paper on Social Metrics• Business of Inclusion• Add your own resources through the comments!

• 4Good Consultingo Market Research, Logo & Print Design, Video or Photo Essay –

more next week

• Prosperity Centre

• Carleton University & Causewayo Looking for three SE’s to analyze social impact

• Coaching

Phew!

1. Business Model Canvas

2. Market Research Worksheet

3. Who should write your business plan & how it should be approached

4. Social Objective & Social Impact Measurement

5. Asset Building & Accommodation Strategies

6. Balancing Strategies

7. Social Costs

• Questions

• Evaluation

• Workshop next week –o Feb.25th, 9:30-4:30pm,

same location