1. Professor Yolanda Sarason Colorado State University/Foreign Trade University Fulbright Scholar 2015-2016 Professor Kristi Yuthas Portland State University Social Impact Measurement Workshop Vietnam National University March 2016 The Relationship between Social Mission and Financial Profitability: Illustration with Social Enterprises @Sarason 2016

2. Outline 1.Definitional Differences of Social Enterprise (US and Vietnam) 2.Value Chain Analysis: The Case of Fargreen 3.Managing Social Enterprises for Excellence 4.Social Return on Investment and Financial Performance 5.Immodest proposals

3. @Sarason 2016 Understanding of Social Enterprises Non- profit For Profit Commercial Enterprise CSR Social Enterprise Income Generating NGO Vietnam (Europe) United States CIEM CSIP 2012

4. @Sarason 2016 Social Enterprise Non-profit Social Enterprise For Profit

5. @Sarason 2016 What is a Social Enterprise (Includes Financial and Social Goals) 1.Intent Address a social need Be financially profitable in the long term 2. Action – Alignment with social mission Mission Processes Shared Values Business Model 3. Consequences Social issue addressed Financially sustainable

6. @Sarason 2016 Good to Great and The Social Sectors (Collins, 2005) Passion: What does your organization stand for and why does it exist? Best at: What can do to the people it touches better than any other organization? Resource Engine: What Drives your resource engine broken into three parts: time, money brand Managing Social Ventures for Excellence (Action)

7. @Sarason 2016 Fargreen http://www.fargreenvn.com/

8. @Sarason 2016 Greenhouse Rice Hay Substrate Farmers grow mushrooms Retail and Restaurants Mushroom Consumed Farmers learn new skill Improved Social and Economic Welfare in Vietnam Value Chain Analysis (The case of Fargreen) Fargreen packages mushrooms Less Pollution Farmers earn money Bio- fertilizer created Fargreen Profit Healthier Food Consumed

9. @Sarason 2016 Fargreen’s Impact Measurement Less Pollution. Tons of straw not burned Farmers learn new farming technique. Percent farmers not needing further assistance Biofertilizer Created. Pounds created Farmers earn extra income. The amount earned Farmers stay on land. Reduction in migration Fargreen’s profit. Normal financial calculation Healthier food consumption. Amount mushrooms sold Improved Social and Economic Welfare. Sum of the previous with financial estimates for each. @Sarason 2016

10. Financial Return on Investment Sacrifice Financial Return for Social Return on Investment SROI Social Return on Investment ROI Financial Return on Investment

11. @Sarason 2016 Immodest Proposal: Managed for excellence, social enterprises can return more social return than non-profits and more financial return than commercial enterprises. SROI ROI Social Enterprise Commercial Enterprise Non-Profit

12. @Sarason 2016 Managed for excellence, social enterprises can outperform commercial enterprises financially 1.All stakeholders share values around social mission a financial imperative (more passionate, work harder, more diverse, committed for long term) 2.Better manage a matrix organization 3.Thorough understanding of all aspects of the value chain 4.Will easier build social capital –source of competitive advantage 5.Can better manage other tensions (quality/cost, process/product innovation, local/ global) 6. Managed for the long term

13. @Sarason 2016 Managed for excellence, social enterprises can outperform non-profits in social impact 1.More efficient use of resources 2.Focus on balancing financial and social mission 3.Stakeholders understand financial imperative 4.More likely to develop core competencies around delivery of service 5.Less likely to experience mission drift because of funding opportunities 6.Managed for the long term

14. @Sarason 2016 Even more immodest proposal Asian Enterprises Western Enterprises

15. @Sarason 2016 Thank you Cảm ơn