ROI- ‘I’ for Investment or Impact?

The readings from last week left me curious to find an answer to “What is truly a measure of success for any social enterprise?”- profits, size(growth) or impact?

In the article “It’s not all about growth for Social Enterprises”, Kimberly Tripp emphasizes on how scaling organizational metrics such as funds raised, customers acquired, people hired etc. is a moot point if the product or the service offered by the enterprise does not have a significant impact on the problem that it tries to solve [1]. Furthermore, the article “Profits at the Bottom of the Pyramid” , Eric Simanics and Dunken Duke highlight the importance of profits in social enterprises targeting people at the bottom of the economic pyramid.

In my opinion, multiplying impact is definitely the primary goal around which I would build my enterprise. Maximising impact would be a value that my team and company would operate with. However, my two year Fellowship experience with Teach For India push me to wonder if size and profit are after all as (if not more) important as impact.

Teach For India welcomed its first cohort of 87 Fellows in the year 2009 to collectively impact it’s vision that “One day all children will attain an excellent education”. Today, Teach For India is one of the largest and most successful not-for profits in the country employing over 1250 Fellows, 1500+ staff and alumni to impact the lives of thousands of children across classrooms in India.

During my tenure at this organization, I often evaluated the quality of work that we did through the two-part Theory of Change on which the organization operates. In the short term, TFI aims offers an opportunity to India’s brightest and promising individuals from diverse career and educational backgrounds to serve as full-time teachers for two years in under resourced schools in the low-income communities of India. In the long term, TFI leverages its extensive network of alumni to advocate change and impact by building a movement of leaders across the country. TFI is not a utopian model for a not-for-profit educational enterprise. Despite a significant percentage of Fellows who quit every year on account of pressure, lack of support etc. and TFI’s failure to comply with the teaching standards and requirements of government and private schools that they work with, Teach For India is still one among the top ranked NGO’s in the country. Despite a multitude of issues that I faced as a Fellow, today as an alumni I continue to impact the children in my country through the diverse set of connections and networks that I established through the brand name Teach For India. Their visible exponential growth in 6 years outweighs the many loop-holes and flaws in the organization’s model. Despite being a non-profit venture, TFI pays a monthly stipend of $260 and covers additional costs such as housing, transport, stationery etc. TFI’s investment in its extensive networks of partners and sponsors are an added asset to the organization’s success.

This week’s readings and a more critical analysis of Teach For India’s model bring me to the conclusion that  money (in the form of profits or funds raised), scale in terms of growth and impact are three equally important factors that determine the long term success of any social enterprise.

References:

1. http://www.teachforindia.org/

2. Profits at the Bottom of the Pyramid (Simanis and Duke, Harvard Business Review, October 2014)

3. https://hbr.org/2013/01/its-not-all-about-growth-for-s

4. https://hbr.org/2012/06/how-to-take-a-social-venture-t