1. MGTS7308 - Social Enterprise and Not for Profits
Session 9 – Customer & Beneficiary Perspective
How many of you have found the
Dr Anna Krzeminska & Prof Andreas Heinecke

2. Prof. Andreas Heinecke
1988 Foundation of Dialogue in the Dark, Germany
1998, Stevie Wonder Vision Award, New York
2005, First Ashoka Fellow in Western Europe
2006, German Entrepreneur Award (Category Sustainable Entrepreneurship)
2007, Outstanding Global Social Entrepreneur by the Schwab Foundation, Geneva
2008, Member of the World Economic Forum’s Global Agenda Council on Social Entrepreneurship
2009, Dragon Award for the category “Business with Conscience”, Dalian China
2011, Professor of Social Business at the European Business School, Germany

3. Weekly Schedule – Part 2
Stages 1 & 2: Establishing Scope & Mapping outcomes
Stages 3 & 4: Valuing impact, understanding investment
Stages 1–3: Focus on Customers/ Beneficiaries (Andreas Heinecke)
Stages 1–4: Specifying Inputs and key activities
Contextualising Social Impact & Stage 5 (?)
Groups present their results
Groups submit their reports, students submit their reflection piece and peer evaluation

4. Mindfulness Gratitude
Start by relaxing and focus on your breath for 10 breaths
Then follow my instructions

5. Agenda Andreas on Customer & Beneficiaries in Social Enterprises
Social Return of Investment (SROI) Stages 1-3: focus on stakeholders and customers & beneficiaries in particular
Group Work

6. Beneficiary/Customer Perspective
Who will buy the product, beneficiaries?
Why is this solution better or meet an unfulfilled need?

7. 6 stages in the SROI process – today Stages 1-3 with focus on customers & beneficiaries
Establishing scope and identifying key stakeholders. It is important to have clear boundaries about what your SROI analysis will cover, who will be involved in the process and how.
Mapping outcomes. Through engaging with your stakeholders you will develop an impact map, or theory of change, which shows the relationship between inputs, outputs and outcomes.
Evidencing outcomes and giving them a value. This stage involves finding data to show whether outcomes have happened and then valuing them.
Establishing impact. Having collected evidence on outcomes and monetised them, those aspects of change that would have happened anyway or are a result of other factors are eliminated from consideration.
Calculating the SROI. This stage involves adding up all the benefits, subtracting any negatives and comparing the result to the investment. This is also where the sensitivity of the results can be tested.
Reporting, using and embedding. Easily forgotten, this vital last step involves sharing findings with stakeholders and responding to them, embedding good outcomes processes and verification of the report.

8. Stakeholders in Stage 1 of the SROI
Identifying key stakeholders:
defined as people or organisations that experience change or affect the activity, whether positive or negative, as a result of the activity being analysed
Consider principles of materiality and transparency
Make sure to connect stakeholder outcomes to activities

9. Stage 1: Identifying key stakeholders - Example

10. List Activities to Accomplish
Stakeholders in Stage 2 of the SROI
Resources
Start with Resources
Activities
List Activities to Accomplish
Outputs
Results Expected
Social Value
Outcomes Achieved
Social Impact
Long Term Outcome
Physical
Human Capital
Technological
Financial
Informational
Processes
Tools
Events
Technology
Product of Program Activities
Changes to:
Behavior
Knowledge
Skills
Intended Impact
It’s about connecting the outcomes you identified to your stakeholders and to customers & beneficiaries in particular!
Have you considered all important customers and beneficiaries?
The Theory of Change model was inspired by Carol Weiss (1972) when she researched small steps lead to long term goal attainment. For more information on the theory of change, go to

11. Profit generator model
Three Models Framework (Venturesome)
Profit generator model
Has no direct social impact
Make a profit and then transfer all or some of that profit to another activity that does have a social impact
CSR
Trading subsidiaries of charities
Thank you Water
Trade-off model
Does have direct social impact, but manages a trade-off between producing financial return and social impact
Fair Trade
Microfinance
Lock-step model
Not only has a direct social impact but also creates financail return in direct correlation to the social impact
The Big Issue
Aravind
Wind farms
Organic veggie boxes
Models Two and Three fundamentally differ from Model One because the social impact of these firms is integral to the business model itself. In other words, even if a Model Two or Model Three type firm fails to achieve any financial return, it will still have some social impact by virtue of its trading activity (eg disabled people are employed, farmers in Africa do make more margin for their crops, the financially excluded do get access to capital etc).
At Venturesome, we are regularly contacted by entrepreneurs and organisations seeking investment in Model One businesses, where
the profits (if any) are to be used to fund work with a social purpose.
We are investors primarily seeking social impact (albeit through using instruments that provide a financial return), and so find Model One
propositions more demanding to assess.
In Models Two and Three, the risk of not achieving social returns is mitigated by the possibility of getting some money back.
In Model One, no social return at all can be achieved until a profit has been made.
Yes No
What is the relationship between customers & beneficiaries in your cases’ models?
Can you increase the social impact by decreasing the financial returns?
Source: (Based on Venturesome, 2008)

12. Profit generator model
Summary of Models
Profit generator model
Service Subsidization
Organizational Support
Entrepreneur Support
Trade-off model
Fee for service
Low income
Per per use
No frills
Employment
Demand-led training
Paraskilling
Market Intermediary
Contract Production
Deep Procurement
Marekt Linkage
Cooperative Model
Lock-step model

13. Stakeholders in Stage 3 of the SROI
Developing outcome indicators
Collecting outcomes data
Establishing how long outcomes last
Putting a value on the outcome

14. Connecting Outcomes to Stakeholders

15. Establishing Duration Examples

16. Valuation Examples

17. Adapt your work in the SROI Impact Map excel sheet!
Group Work
Revisit your work for Stages 1- 3 of the SROI Analysis with a particular focus on customers and beneficiaries
Stage 1: Identifying relevant Stakeholders:
Have you considered all relevant customer and beneficiary groups?
Which operational model are your cases?
Ideally both subjective and objective indicators
Stage 2: Mapping outcomes (Theory of Change)
How do the outcomes within your scope relate to your stakeholders and to customers and beneficiaries in particular?
What is the relationship between customers and beneficiaries in the operational models of your cases?
Stage 3: Valuing outcomes
Have you connected all outcomes and their valuation to stakeholders and customers and beneficiaries in particular?
Revisit your duration estimations and valuations
Adapt your work in the SROI Impact Map excel sheet!