Motivations to Grow Your Social Venture

The week’s readings focused on the mechanisms and metrics involved in the growth and development of a social venture. One of the articles elucidated the organizational capabilities that can be developed in order to scale a social enterprise [1] whereas another article emphasized the need to scale the impact of a social enterprise [2]. Then there was an article which outlined the tricks of the trade towards achieving financial sustainability [3]. These readings made me reflect on the drivers for growth and development of a social venture. What is the primary motivation to scale-up a social enterprise?

I perceive the primary motivation to be two-fold; escalating social impact while achieving financial sustainability.

Escalating social impact is an obvious but often ignored motivation to scale a social venture. It is important for a venture to define metrics to measure the social impact/ROI and embed these metrics into the scaling strategy. While I was a volunteer at Teach For India (TFI), I distinctly remember the brochures flaunting the number of volunteers, fellows and partner NGOs then associated with Teach For India. But they are merely metrics of the scale of the social venture as an organization. The focus should instead be on the number of students taught and the number of schools supported. These metrics define the scale of impact and hence such metrics must be used to define the scale-up strategy.

Another important motivating factor to scale a social venture is financial sustainability over an extended interval of time. The economies of scale can be leveraged to ensure a constant stream of revenue to break-even the operating the costs and in some cases, lead to marginal profits.  However, achieving financial sustainability at scale is a function of the actors involved and the technologies applied to the socioeconomic issue being addressed by the venture [3]. TFI is a good example of shifting the role of the government as an actor in the system by associating TFI fellows as full-time tutors with government schools. Now, more children belonging to low-income groups get access to good quality education while TFI fellows receive a stipend from the government schools [4]. Thus, the model tries to achieve financial sustainability at a higher scale of impact.

In conclusion, the growth and development of a social enterprise should be facilitated by the need to scale impact and achieve financial sustainability. However, social entrepreneurs should be mindful of the chicken and egg problem; should I scale-up to achieve financial sustainability or should I first become financially sustainable and then scale-up through replication?

References:

[1] How To Take A Social Venture To Scale (Harvard Business Review Blog Network, June 18, 2012)

[2] It’s Not All About Growth For Social Enterprises (Harvard Business Review Blog Network, January 21, 2013)

[3] Two Keys to Sustainable Social Enterprise (Martin and Osberg, Harvard Business Review, May 2015)

[4] Teachforindia.org. (2017). Our Model | TeachforIndia. [online] Available at: http://www.teachforindia.org/our-model