Measuring Innovation: Evaluation in the Field of Social Entrepreneurship

Written for funders, this 43-page piece is about social entrepreneurship, its relatively new place in the field of philanthropy, and implications for evaluation. Developed from research with grantees and two dozen interviews with funders, it talks about flexibility, leadership, and risk in funding innovation, and why these are key. The clearly-written executive summary explains how the field of social entrepreneurship has invented its own approaches to evaluation that suit its fundamentally different perspective and how these approaches do not always mesh well with those used in other philanthropic realms. The paper explores evaluation in social entrepreneurship both to help newcomers to the field and to show its strengths and weaknesses as compared to traditional philanthropic evaluation techniques. The paper is divided into two sections. The first discusses what social entrepreneurship is and speaks briefly about general approaches used for evaluation in the philanthropy field at large. The second section is specifically about social entrepreneurship evaluation and has six parts: 1) A New Field with a Different Vision; 2) Conducting Evaluation before the Grant; 3) Measuring Progress Against Self-Determined Goals; 4) Tracking Stages of Organizational Development and Growth; 5) Estimating Economic Benefits and Financial Leveraging; and 6) Shared Learning. A two-page conclusion ties that material together based on the notion that: "Our biggest problem is to get people off the subject of measurement and onto the subject of management. It's not just a nuance." The author also includes four appendices with some strong sample instruments that may be of use to funders. Items in Appendix A are the tools used by the Schwab Foundation to select social entrepreneurship grantees and include the questions the Foundation asked in the interviews. Appendix B shows Echoing Green Foundation's mid-year and year-end reports for its three-year fellowship program. (Fellows must report progress to the Foundation every six months and answer a set of questions around organizational development.) Appendix C is another tool for monitoring the progress of social entrepreneurs: the Balanced Scorecard from New Profit, Inc. (NPI). It has five categories: social impact; client and key stakeholder satisfaction; internal business processes; learning and growth; and financial results. Appendix D, Ashoka’s ten-year survey of its Fellows, is relevant to organizations awarding multi-year, long-term fellowships.