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March 20, 2009 / compassioninpolitics

Lessons in Scaling Up Social Impact and Enterprise

Scaling Up Micro lending and Social Business Ventures as Solutions to Poverty

I have only indirect and small scale experience with scaling social impact, besides my experience coaching debate for 5 years and volunteering with the Washington DC Urban Debate League for 2 years (as well as my experience with scaling impact online). However, its an area that I’m passionate about and interests me and my debate skill certainly help out in the research department. Gregory Dees, professor of the practice of social entrepreneurship and non-profit management at Duke University, in his article “Scaling Social Impact” attempts to answer that question by asking:

How can social entrepreneurs find a scaling path that is best for them? They should look at:

READINESS Is the innovation ready to be spread?
RECEPTIVITY Will the innovation be well-received in target communities?
RESOURCES What resources, financial or otherwise, are required to get the job done right?
RISK What’s the chance the innovation will be implemented incorrectly, or will fail to have impact?
RETURNS What is the bottom line? Impact should not just be about serving more people – it should be about serving them well.

Recently, I’ve become fascinated with how micro franchising or “business in a box” type business models can help scale micro finance and social entrepreneurship. For instance, Kickstart’s, Vision Spring (Scojo Foundation), and Grameen mobile ladies program success in this area has been proven.

One organization that does a great job of scaling social impact is the ACCION Network. Just Means reports:

That point is underscored when one looks at the ACCION Network numbers in toto. It took ACCION and its partners 20 years to reach the first million clients with microfinance. But as the commercial model was adopted and deployed, that number grew exponentially; it took only three years for the Network to reach two million clients; and only an additional 18 months to reach three million.

As the private sector becomes more involved, greater innovation will result, driven by the knowledge and experience of nonprofit practitioners and resulting in a better array of products and services for the poor. ACCION itself is already pursuing four paths of innovation to bring more and better products to customers, and to reduce the cash, paper and manual processing that make microfinance so expensive for both providers and clients:

* Product diversification – A full range of financial services, including savings, credit, money transfers, insurance, and more;
* New delivery channels – such as ATMs, smart cards, retail points-of-service, cell-phone banking, mobile banks and kiosks, reducing the cost of bricks and mortar while vastly expanding client outreach;
* New technological platforms – from standardizing banking platforms and interfaces, to centralizing back-office and call-center operations;
* Credit automation – rationalizing and automating the underwriting, collection and renewal steps of the credit process, to reduce the cost of making loans.

Around the world, with private-sector involvement, exciting innovations are under way on multiple fronts:

* In India, ICICI Bank has equipped its MFI banking correspondents with point-of-service devices that use biometric thumbprint readers for customer identification, compensating for the lack of national identification cards and low literacy;
* In Kenya, Vodaphone is piloting the M-Pesa mobile phone banking system with MFI Faulu Kenya, exploring new avenues of distribution;
* In Uganda, ACCION is piloting ‘Energy Links,’ a low-cost LED light project that will not only eliminates the cost, pollution, and danger of conventional kerosene lanterns but also provides micro-entrepreneurs with a “business in a box” that’s affordable and profitable;
* In Mexico, Banco Azteca has built a 20-million-client financial-services empire in five years, utilizing the sales channels of big-box retailer and parent, Elektra.

Scaling Social Impact and Social Business Ventures

• “Scaling Social Impact” by Gregory Dees
Scaling Social Impact Articles, Papers, and Presentations
Scaling Social Impact Case Studies
• Bradach, J. “Going to Scale: The Challenge of Replicating Social Programs,” Stanford Social Innovation Review 1, no. 1 (2003).
• “The Replication of Social Venture Partners,” University of Washington, Daniel J. Evans School of Public Affairs management case study and teaching note.

Thanks to Greg Dees for the last two recommendations above.

What is the best way to scale up social impact for social business ventures? What organization, tool, model or technology helps this process? What resource, article, or case study for scaling business do you recommend?

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5 Comments

Leave a Comment
  1. Nathan Ketsdever / May 8 2013 8:57 pm
  2. Nathan Ketsdever / May 8 2013 10:16 pm

    I seem to remember a more recent post on here about scaling……but it may be I posted it for publication sometime in the future. Alas.

  3. Nathan Ketsdever / May 9 2013 5:48 pm

Trackbacks

  1. Best Social Business Venture Posts of 2009 « Compassion in Politics: Christian Social Entrepreneurship, Non-Profits, and Base of the Pyramid/BOP Design Solutions
  2. Possible Pitfalls of Mixing Charity and Business in Microfinance « Microfinance Hub

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