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Evidence of Impact
What social entrepreneurs need to know when it comes to demonstrating impact

Well, does your inclusive business have customers?

Is the idea of a “hero entrepreneur” doing damage?

These individuals are finding new and novel ways of impacting lives, and in doing so, they are changing the world. Funding them—which USAID has done 1,000 times over—and telling their stories is important.

But, the hero entrepreneur does not reflect the whole story. 

I wonder, does the notion of “hero” perpetuate the idea that impact is achieved by serving a beneficiary, rather than by serving an empowered customer? A hero implies “coming to the rescue” where a customer requires that you deliver value.

As we collectively aim to understand the “evidence of impact,” I would argue that there is no clearer indication that you are having an impact then when a customer chooses your inclusive business product or service.

When Administrator Green, head of USAID, challenged us as staff to define our success by people no longer needing aid, it made me realize that at some point on their journey to self-reliance, people in poverty must start calling their own shots and defining value for themselves. These practices embody demand-driven development.

Recently, a USAID Sr leader visiting a USAID program, spoke with a woman and asked her what she wanted for her son, who was growing up in abject poverty. She scowled, “I don’t want my son to be a beggar.” Then her eyes lit up and she declared, “I want him to be a customer.” This would allow her child to be in the driver’s seat, deciding what he needed, how he wanted it, and what was of value in his life.

It might be a bit of an anathema, for those of us who have dedicated our careers to development, to hear this woman’s vision. What she wants is for her son to be a customer. It sounds cold…commercial. But what it represents is so much more. Being a customer is the point at which a person exercises their own prerogative.

Being a customer marks a powerful transition in an individual’s life—and I would argue that for social entrepreneurs that serve the poor, attracting customers is an indication of having had an equally powerful impact.

I am constantly being told by impact investors that “there are no good deals out there.” Meanwhile, there are 15 different organizations in USAID’s innovation portfolio alone that already have a million or more customers each.

A million customers! That is real business. And what is even more important, is that they are indeed customers—not beneficiaries—with their own voice and power to choose what they need and want.

In the U.S., I am becoming the most highly trained and demanding customer on earth. I want what I want, when I want it and exactly how it is promised to me. For me, exercising my deep respect for the people USAID supports is to expect nothing less for them.

This means that the international development community and social entrepreneurs need to see customers living in poverty as an asset—not a drain—and seek to understand their demands and their preferences. With this knowledge, they need to develop high quality, value-driven interventions that look to serve those customers living at the base of the economic pyramid.

My fellow colleagues in the donor community and I are aiming to make this easier.

As you will read more about in this issue of CLUED-iN, several donor organizations launched the Million Lives Club to identify the organizations that provide value to a million customers or more, living on less than $5 per day, and those that are on their way to a million customers in the next 18 months.

We intend to end up with an “S&P 500” of innovative, customer-driven solutions that can serve as the barometer of impact we are achieving as a global community. For us, instead of the S&P 500 or “Standards and Poor’s 500 list of companies” we are looking for an “S4P” or “Standards for the Poor” meaning a list of organizations that are improving the living standards and potential for the poor at massive scale, and delivering value while they do it.

No one asks for evidence if a Coke is drinkable or a Tesla is drivable. Why? Because people provide that evidence of their value by purchasing them. Let’s structure our impact measurement frameworks to include this same, most critical evidence—do people actually want the products and services that inclusive businesses are selling?

How well an innovation works doesn’t matter if people don’t use it. So, our evidence, monitoring, evaluation and impact assessments should look at impact as reflected by the customer’s decisions. Leaving out this factor in the evidence journey is to waste precious resources for nobody’s gain.

I remember being impressed by a cook stove that reduced smoke and other unhealthy carcinogens. I thought, finally, women would breathe better and no longer would their lungs be harmed by the daily task of meal preparation. Framed this way, the cook stove was a cleaner alternative, which pointed to a win. But months later, during program evaluation, those cleaner stoves were often found repurposed as foot stools. As it turned out, they made the food taste different, and for women who took pride in the meals they prepared, this made the stoves useless. In fact, the women who owned them openly discouraged friends and family from using them.

Can you imagine how much more effective we could have been if the original question we asked was, “What matters most to a woman when cooking? Is this a solution the woman would prefer to cook with?”

In fact, once the issue of flavor was raised, small tweaks were able to be made that made the cook stoves a success.

I hope that the coming year can seed a revolution of customer-centricity that will make our industry enthusiastic about finding and deploying as many creative ways as possible to solicit customer feedback, insight, and preference—and prioritize that information as key factors in the evidence of impact we seek.

Most of all, I hope to see a shift away from “heroes.” Instead, let’s celebrate the customer-centric, social, local, small and medium emerging businesses that are putting their customers first. Indeed, it is these businesses which are driving business models based on customer-defined value, and staying laser-focused on empowering a customer who is progressing on their journey to the ultimate impact we collectively seek—self-reliance.

Alexis Bonnell
Alexis Bonnell is the Division Chief of Applied Innovation and Acceleration in the U.S. Global Development Lab of USAID. Alexis has delivered humanitarian and development programming in over 25 countries, in almost every sector from education to stabilisation. Her more than 20 years of experience in management and communications has provided her incredible opportunities to work on/with: Wall Street, “Dot.coms”, Middle East Peace Plan, Afghan and Iraq Elections, global emergency response coordination and major logistics operations. Her focus is how to leverage science, technology, innovation, and partnership for greater impact. Alexis founded the Global Innovation Exchange, and has been lucky enough to see USAID invest in more than 1,000 social innovators and entrepreneurs, changing millions of lives around the world.

featured story

Nine 'impact insights' for social entrepreneurs like you

For businesses who are serving the poor, there is no shortage of discussions on impact. As a social entrepreneur, the sheer abundance of “impact lingo” that is floating around these days might leave you daunted, unsure of the right tools, techniques and frameworks for your business.
The truth is, there is no one-size-fits-all technique to measuring impact. An important question for you to ask yourself is: who is this information for, and why?

Dana Gulley

Table of contents

graphic summary

GRAPHIC SUMMARY

A visual summary of the key challenges entrepreneurs need to consider when it comes to and impact measurement in inclusive business and social entrepreneurship. Learn more about these aspects by reading this eighth edition of the newly developed…

editorial

Well, does your inclusive business have customers?

Bonnell identifies an opportunity to move away from the concept of a hero entrepreneur, who serves beneficiaries, and instead strive to serve customers, who are free to choose the products and services they want. To do this is to have the ultimate impact.

Alexis Bonnell

featured story

Nine 'impact insights' for social entrepreneurs like you

For businesses who are serving the poor, there is no shortage of discussions on impact. As a social entrepreneur, the sheer abundance of “impact lingo” that is floating around these days might leave you daunted, unsure of the right tools, techniques and frameworks for your business. The truth is, there is no one-size-fits-all technique to measuring impact. An important question for you to ask yourself is: who is this information for, and why?

Dana Gulley

Demystifying Impact Measurement and Management for Inclusive Businesses

The message was clear at the recent UNGA: the world is not moving quickly enough towards achieving the Sustainable Development Goals. Mirza offers specific and practical steps that inclusive businesses can take to measure and grow their impact today.

To change the world, we must change ourselves

Emerson warns against adopting one form of impact measurement—and argues that while important, the SDGs aren’t necessarily the best measure of success either. He, instead, challenges us to understand a different kind of impact this work can have—the transformation within ourselves.

Achieving impact through the everyone a changemaker revolution

Founder of Ashoka—and the individual credited with the advent of the term social entrepreneur—explains that for the income distribution gap to close, not widen, we must be building cultures of everyone a changemaker in schools, corporations, universities and organizations.

Getting into the Million Lives Club

Elson introduces us to the Million Lives Club, a new partnership among leading development organizations to recognise—and learn from—those businesses who are successfully scaling to improve the lives of those living on less than $5 a day.

A new twist on an old story: renewed hope for impact from large companies

According to Harrison, there are not enough examples of large companies implementing success business models that serve the poor. Thankfully, there are efforts underway to identify how MNCs can more effectively scale successful pilots and have a greater impact in serving the poor.

Flipping the script on impact measurement

We are living in the time of a technology revolution, with businesses utilising data to better know and serve their customers. Social businesses have largely been untouched by the power of data to make a bigger impact—until now.

An Impact Story: Results in Plain Sight

Rodriguez shares several success stories from the Securing Water for Food programme, the combination of which speaks to the programme’s impact. From increased crop yields to improved standards of living, the innovators in this programme asked the “what if” questions.

Business fundamentals drive impact for social businesses

Colloff has seen businesses measure their impact well, while others drown in the data. To have a social impact, a business needs to be viable, not to mention thriving in order to scale that impact. So, what’s in the secret sauce of impact measurement?

In Your Words

Illustrations of Gamze Cizreli, Ricardo Oteros, Justine Humbert, and Fahad Awadh

Next Steps for Entrepreneurs on Evidence of Impact

Are you unsure about the right tool for measuring your impact? We have put together a collection of different impact measurement tools to help you find the one that fits your business best.