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A Special Series for Opportunity Collaboration 2013

In the lead up to Opportunity Collaboration, a four-day problem-solving, strategic retreat for nonprofit leaders, for-profit social entrepreneurs, grant-makers and impact investors engaged in economic justice enterprises, the Skoll World Forum is spotlighting a wide range of delegates and speakers working on innovative solutions to tough societal challenges around the world. Opportunity Collaboration will take place in Ixtapa, Mexico from October 13-18.

 
 

Botswana: Poor People, Rich Government

Monametsi Sokwe

Executive Director, Ngamiland Council of NGOs

 

In Afghanistan, A Window Of Opportunity For Girls In A Closed Society

Zala Ahmad

Executive Director, Humanitarian Organization for Local Development (HOLD)

 

Empowering Single Mothers In Colombia

Viviana Cadavid Orrego

Managing Director, Cada Vida Foundation

 

Should We Not Be Outraged?

Ezra Limiri Mbogori

Executive Director, Akiba Uhaki Foundation

 

Half-Baked: Why We Need To Rethink Social Enterprise Accelerator Programs

Half-Baked: Why We Need To Rethink Social Enterprise Accelerator Programs

Kristin Gilliss

Associate Portfolio Director, Mulago Foundation

October 10, 2013

 
  • Problem: We need scalable, high-impact solutions to meet the basic needs of the poor, yet the recent proliferation of social accelerators favors emphasis on business model over impact model.
  • Barrier to Progress: Accelerators risk accelerating an impact story versus impact due to lack of rigorous thinking about impact—what it is, how to measure it, how to scale it.
  • Solution: Social accelerators need to increase emphasis on design for impact. Philanthropy and development dollars should fund great organizations with rigorous focus on both impact model and business model.

When I was a kid there was a product called the Easy Bake Oven that was a working toy oven. To me, it didn’t seem like a toy at all. It was a magical machine that produced perfect cakes. Today, “incubator” and “accelerator” programs purport to work the same magic for aspiring social enterprises: start with the right ingredients (a big idea!), give it the right time and space to set (short-term immersion with mentors, networks and resources), and the result, without fail, will be a finished product. If you’re seven years old using a magic oven, it might be a cake ready for the tea party; if you’re a social entrepreneur graduating from a social accelerator, it’s a fully-baked idea ready to tackle a pressing problem in the world.

The Mulago Foundation is committed to accelerating solutions to the poor’s biggest problems. So we must see the recent proliferation of social accelerator programs as a good thing, right?

Well, maybe.

It depends what’s being accelerated. We want to accelerate impact. To do that, we find and fund organizations that design their impact model with as much diligence as their business model. We see the combo as their organizational model. But the social sector borrowed the accelerator concept from private sector groups like Y Combinator, RockHealth and TechStars that help organizations refine their business model alone– — so it’s no surprise that social accelerators emphasize the business model, not the impact model.

Social accelerators provide social entrepreneurs business tools and approaches to accelerate an idea assumed to create impact. That’s not impact, it’s an impact story. The danger of a sector gone gaga for accelerators is that we may be accelerating impact stories – ideas neither tested nor iterated – instead of impact models. The reality is that organizations with a social purpose need to seamlessly integrate two models: business model and impact model. And both must be treated with the same iterative rigor. Anything less is only half-baked.

We have more to learn than to teach, but at Mulago we’re trying to figure out the best way to do exactly that. Through our Rainer Arnhold Fellows Program, we partner with early stage organizations to think about how they are defining and delivering impact: what it is, how to measure it, how to scale it. We don’t take the current model at face value. We look for fellows who want to design for impact, test their assumptions about that impact through measuring the best indicators, and then iterate on their design. Our fellows program is not a one-off convening; it’s a way of thinking and it takes time.

At Mulago we see “half-baked” often: A good idea, but no implementation plan. A great set of projects, but no core innovation that cuts across them. A detailed plan, but no organizational capacity to deliver. We also often see organizations that think they are scaling their impact when instead we would characterize their impact model as in the R&D phase. A great business plan won’t save a flawed impact model, so it’s okay to have a staged approach. Half-baked isn’t bad; it’s just unfinished. The end goal in the social sector is impact at scale, but be wary of velocity as a proxy for accelerated impact. Think throttle: the accelerator in your car gives you speed, but without brakes, you’re not in control of it. The R&D stage is not the time to accelerate; it’s a time for rapid testing and iteration. If activities don’t lead to real behavior change in the first place, doing more of them at a faster pace does not equate to accelerating impact.

With a focus on business model + impact model, you could say we want to have our cake and eat it too. But the question is, why doesn’t everyone else? It’s an important question as investment in social accelerators grows. The Social Entrepreneurship Accelerator at Duke launched with a $10 million award from USAID to focus on global health challenges, and NASA, Nike, USAID and the US State Department partnered on Launch.org, an accelerator to revolutionize sustainable materials. Even Y Combinator will now accept applications from nonprofits. This growth in the social accelerator space is exciting if it means more organizations have support to develop organizational models anchored in impact, but there isn’t evidence, even from the private sector, that an accelerator is the best path to success and scale. A recent paper by Emory University and Aspen Network of Development Entrepreneurs examined the impact of social accelerator programs (and how that impact leads to impact on the ground). What do we know so far about what happens after Demo Day? Not much, but we’re learning as a sector. I respect The Unreasonable Institute’s open focus on its own failures— from “mentor whiplash” to ventures that failed—and hope this space shares more.

For our part, in our Rainer Arnhold Fellows Program we’ll continue to explore the best way to incorporate design for impact, both ourselves and in partnership with our friends at PopTech, The Unreasonable Institute and Global Social Benefit Incubator. What accelerator will be best known for rigorous focus on the impact model as much as the business model? Agora Partnerships’ Impact Accelerator? Villgro’s SEED Initiative? VillageCapital? Fellows programs like Echoing Green or Draper Richards Kaplan? We hope all. It will entail maintaining all that’s good about accelerators, while also helping organizations ground truth assumptions about impact with as much rigor as one would test business model assumptions about market opportunity or cost of sales.

Social accelerators must transform ideas into impact, not just action, through equal focus on impact model and business model. To do that, social accelerators need to focus on their own impact model, or risk a half-baked approach to social change. So on with the incub-acceler-ellowships! — as long as there is more rigorous thinking about impact. Piece of cake? No. But it will be pretty sweet when it happens.

 
  • RK

    Very thought provoking. How does one define “impact model”? What is the time-frame to consider?

  • Aparajita Agrawal

    Kristin, this is a great piece, and in my role where I lead Sankalp Forum (www.sankalpforum.com), one of developing world’s largest initiative in the social enterprise+impact investing space, I can completely relate to what you are saying. I often feel that as a sector we are falling into this trap of creating more and faster-versions of a model that (like you said) hasnt yet proved its adequacy or success. The need to under-promise and over-deliver cannot be emphasized more at this point.

    On one critical point, I maintain a difference of opinion from you and that is that I do not think it is right for either a social enterprise accelerator to claim or for us to expect that the accelerator can create or accelerate impact. For that to really happen, it is important that the social enterprise’s founders and teams come on to the same page and agree to what they want to achieve in terms of impact and how. Off course there will be need for handholding, and training, but I am inclined to say that a lot of that help accelerator programs are not poised to provide.

    The role for accelerator program I believe critically lies in taking a young organization from point A to point B, faster and safely. If I can quote from an article that was featured in Inc Magazine last year, “The emphasis of the business accelerator is on rapid growth, and to sort out all organizational, operational, and strategic difficulties that might be facing the business. It can be understood as a holistic business advisory service, often bearing strong resemblance to traditional management consulting practices, but adjusted to fit small and medium sized organizations.”

    Again just to emphasize, I believe that there is a definite role that social enterprise accelerator programs can play in making social enterprises stay true to their “impact” course. But it is perhaps too much to ask from business accelerator programs to do this and I feel we need to keep that expectation in check.

    Your blog and especially the information about how you tackle this gap through Mulago Foundation’s work is a welcome perspective and I hope that there are several more support organizations like your that focus on the “impact model”.

 
 

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