Experimenting to Prove Program Efficacy First

     Social ventures need to prove that their programs ‘work’ before they are taken to scale. The scientific process models how to obtain this proof – only, funders need to better support this groundwork before they make larger investments in unproven programs.


     This week’s readings present two main measures of social ventures’ abilities to ‘work’ effectively. First, Kimberly Dasher Tripp argues in “It’s Not All About Growth for Social Enterprises” (1) that the most important measure is the ability to prove impact. By asking “so what?” about traditional business growth metrics, a venture following Tripp’s model will ‘work’ best because it knows it’s moving the needle on its target issue.
  A second measure, from Simanis and Duke’s “Profits at the Bottom of the Pyramid” (2), is a venture’s ability to secure small-scale profitability early on. “A steady flow of profits, however modest, will then allow companies to tackle riskier growth opportunities with greater social impact.” By taking things slow, a venture following Simanis and Duke’s model will ‘work’ best because it will be financially sustainable.
  Despite both articles talking about similar poverty and public health issues, these criteria are very different. Taken together, we conclude that the impact must be sufficient to justify the spending of profits, while the profits must be sufficient to sustain the impact. Additionally, the achievement of both measures must be proven before scaling the program.
  That’s where MIT economist Esther Duflo comes in — specifically, her TED Talk titled “Social Experiments to Fight Poverty” (3). In it, she talks about applying the scientific process to social issues. Referencing modern drug trials, she describes using “the same randomized, controlled trial for social policy… you can take the guesswork out of policy-making by knowing what works, what doesn’t work and why” (3).
  One example that Duflo gives is similar to the health issues from the class articles; she studies methods of increasing vaccine clinic use in rural India. By conducting a randomized, controlled trial of an incentive treatment at 134 clinics, she proved that the treatment was impactful and cost-effective. Her experiment satisfies both Tripp’s and Simanis and Duke’s measures, and acts as a green light for scaling.
  Duflo’s experiments relate to a separate problem raised in Tripp’s article, too. While the vaccine clinic experiment was pre-scaling groundwork, it still cost money. According to Tripp, “funders have traditionally been interested in how their money is attributable to a specific impact (e.g., my money built X number of schools)” (1). In order to support impactful, financially sustainable social ventures, funders must do their part to “cultivate the ecosystem…[through] business and product development, marketing, evaluation, advocacy, and training” (1).
  This type of “shared contribution” (1) may not sound as good to funders as ‘X number of schools’ but, if the schools aren’t impactful or sustainable due to a lack of groundwork, the question that needs to be asked is “so what?”


References:

(1) Tripp, Kimberly Dasher. “It's Not All About Growth for Social Enterprises.” Harvard Business Review, 7 Aug. 2014, hbr.org/2013/01/its-not-all-about-growth-for-s. Accessed 18 Sept. 2017.
(2) Simanis, Erik, Duke, Duncan. “Profits at the Bottom of the Pyramid.” Harvard Business Review, 28 Oct. 2014, hbr.org/2014/10/profits-at-the-bottom-of-the-pyramid. Accessed 18 Sept. 2017.
(3) Duflo, Esther. Social Experiments to Fight Poverty, TED, Feb. 2010, www.ted.com/talks/esther_duflo_social_experiments_to_fight_poverty. Accessed 18 Sept. 2017.