2008 marks the 5th year of the Fast Company / Monitor Group Social Capitalist Awards. From its inception, the Awards were created both to specifically assess and recognize the leading social entrepreneurial organizations that participate in the project and, more broadly, to further performance measurement and accountability in the social sector with a highly rigorous, data driven, comparative approach.
With each passing year we have enhanced our understanding of the challenges of measuring social impact and organizational performance. We continue to refine our methodology and assessment criteria as a result. We hope that, by sharing the essentials of our methodology, we can encourage non-profit organizations and their funders to measure, report, and, ultimately, maximize the social impact created with the resources they command.
The Social Capitalist Awards defines strong performance as a combination of both social impact and organizational effectiveness. This performance is represented by five critical components: Social Impact, Aspiration & Growth, Entrepreneurship, Innovation and Sustainability. The underlying theme through all of our components is the organization’s ability to analyze tough social and organizational challenges and to craft solutions that create significant improvements over the status quo. Here is a more detailed perspective on each of these components.
1. Social Impact: We consider several different aspects of social impact. First, we examine the rigor and sophistication of the organization’s approach to social change: the organization’s understanding of the problem it is trying to address and the solution it is providing, and whether the organization’s performance metrics are tightly aligned with the problem it is addressing. Organizations that look for the highest-leverage, root cause solutions and are committed to assessing their progress in “moving the needle” are positioned to have the most significant social impact.
Secondly, we assess the actual social impact that an organization generates. This includes both its direct impact in providing necessary products or services (taking into account the degree of difficulty of their challenge, the depth of impact, and the breadth of the impact), as well as its ability to drive system-wide change in addressing the targeted social need. We look for organizations that can demonstrate that they are having disproportionately large impact on the problems that they address, relative to other organizations in their area or at their organizational age.
2, Aspiration and Growth: In addition to proving that an organization is having significant impact today, we also look for organizations that dream big, aiming to push their direct and systemic impact out into the world as far and as fast as they can. We then judge whether those high aspirations are backed by a logical, achievable growth plan that recognizes relevant organizational challenges and milestones. An enormous vision that is not believable or achievable is very unlikely to create tremendous impact, and the organization may waste scarce resources in the attempt to scale.
3. Entrepreneurship: We define entrepreneurship as “the ability to do a lot with a little.” For each applicant, we look for specific evidence that the organization is able to gather and command disproportionately large resources (e.g. financial, human, partnership or intellectual assets), and thinks strategically about which resources it deploys in solving its social problem. We also seek proof that these resources are being used to their maximum potential and efficiency. Finally, we look for indications that the organization is truly entrepreneurial in nature: passionate, ambitious, creative, flexible, focused on constant improvement, willing to take calculated risks and willing to hold individuals accountable for meaningful results.
4. Innovation: We define innovation as the organization’s ability to generate a game-changing or pattern breaking idea–either a new solution to an existing social problem or a new business or operational model. We also look for evidence that a culture of innovation exists within the organization–that there are processes for continuously developing significant new ideas, evaluating whether or not the organization should invest in a new idea, and plans in place to carry them out. At the highest level, a Social Capitalist winner is not a one-hit-wonder of innovation, nor does it endlessly pursue new ideas without significant results; it systematically and strategically uses innovation to maximize its social impact against its targeted problem.
5. Sustainability: Sustainability has two primary dimensions in our assessment. The first establishes that the organization has a strong resource strategy to support the organization and its future growth plans. This means reliable, renewable funding sources that are strategically aligned with the mission and business model of the organization. We are purposefully agnostic on the subject of earned revenue. If an organization earns revenue in a way that is fully integrated with its model for creating social impact, that organization gets high marks; if the earned income seems to be an unrelated add-on business, a distraction from the social mission, we’re not impressed. In addition to sustainability from a financial perspective, we also look for indications of the general strength of the management team and board and their combined ability to anticipate challenges within the organization and or its operating environment.
Customized Approach: One of the most challenging aspects of our assessment methodology is the need to understand and take into account the unique context and choices of each individual organization and their social mission. There are not standardized, universally applicable metrics for any of our criteria that would allow an apples-to-apples comparison across all applicants. Instead, we invest significant effort to develop a sound understanding of each organization and the environment in which it operates. The unique challenges and influences of the problem it is tackling, its chosen business model and organizational form, and its relative age or life stage all influence how we define strong performance for that organization.
Executing A Thorough and Fair Process: Our process balances the need to collect a robust, detailed set of data from each organization with a desire to make the process as open and straightforward for applicants as possible. Any non-profit organization can register for the Social Capitalist Awards online at the Fast Company website. We also accepted outside nominations. The application itself is a one-step written application that consists of a focused, personal essay from the CEO or Executive Director, a 30-question survey about strategic and organizational specifics, copies of the organization’s mission statement and board of directors list, key leadership bios, organizational charts, and copies of the last two years’ audited financial statements and 990 tax forms. Monitor Group consultants then spent months analyzing and evaluating the applications. The assessments on the organizations were then presented to our Selection Advisory Board for decisions,
Monitor Group has a long-standing strategic partnership with New Profit Inc., a venture philanthropy organization that supports several Social Capitalist applicants and winners. Monitor also has client relationships with some of the applicants and winners. A strict conflict of interest policy has been put in place in order to ensure that these relationships do not influence the outcome of the process.
As a final check on our transparency, Monitor offers private feedback conversations to any applicant who requests one. This helps us to refine our understanding and approach, as well as helping the organization maximize its learning from the time invested in its application.
Tammy Hobbs Miracky, Amy Lieb, and Mia Kulla lead the Social Capitalist Awards assessment process. They are consultants with Monitor Institute, a member of Monitor Group dedicated to customizing and innovating strategies for solving complex social challenges.