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Social Entrepreneurs in Latin America Stephan Schmidheiny Innovation for Sustainability Award Applicant Profile 2013 CiConocimientos.org

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Social Entrepreneurs in Latin America. Stephan Schmidheiny Innovation for Sustainability Award Applicant Profil 2013 A publication of the Centro de Intercambio de Conocimientos de VIVA TRUST, Costa Rica Authors: Urs Jäger (Academic Director CiC; Associate Professor INCAE Business School, Costa Rica; urs.jager@incae.edu) Keith Whittingham (Associate Professor Rollins College, Florida USA; Visiting Research Professor INCAE Business School, Costa Rica; kwhittingham@rollins.edu) Brita Bamert (Student University of St.Gallen, Switzerland; brita_b@ hispeed.ch) Arturo Rodriguez (Project manager CiC; Consultant INCAE Business School; arturo.rodriguez@consultor.incae.edu) Design: Marcela Martínez, Urs Jäger Cover: Marcela Martínez This paper is available on www.ciconocimientos.org Copyright CiC VIVA TRUST.

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Content Concept of Social Entrepreneurship, Method and Data Summary of Results and Challenges Ahead

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Characteristics of Social Entrepreneurs and their Initiatives A) Social Entrepreneurs B) Social Entrepreneurs’ Initiatives C) Embeddedness of Social Initiatives in their Social Context

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Strategies of Social Entrepreneurs A) Social Entrepreneurs’ Perception of their Impact on Society B) Strategic Goals

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Social Entrepreneurs’ Management Professionality A) Human Resources: Volunteers and Professionals B) Financial Sources and use of Funding C) Communication and Marketing D) Social/Environmental Impact Assessment

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Appendix I: Questionnaire Appendix II: Perception of the Questionnaire by the Applicants Appendix III: Literature

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Concept of Social Entrepreneurship, Method and Data We understand Social Entrepreneurship to involve leaders who create and realize business innovations that integrate social/environmental and economic issues. Such leaders integrate the following practices in their work: Create context-specific innovation: The establishment from development to implementation of innovative, value-adding ideas that combine previous ideas or/ and technologies in a unique way and produce positive effects within a specific context (Drucker, 1993). Generate positive impact for social progress: The promotion of entrepreneurships that produce social, environmental, institutional and productive improvements, helping to improve the way society functions (Porter, Stern, & Artavia, 2013). Use business tools: The utilization of corporate concepts, instruments and techniques to achieve established goals (J. G. Dees, 2007). Maintain collective impact: The integration and mobilization of individuals or institutions, the coordination of the activities and contributions of others in order to generate collective impact, and the exploitation of synergies between for-profit and non-profit organizations (Kania & Kramer, 2011). Work with various types of organizations: Those organizations are weakly or strongly linked to markets as well as to social/environmental issues and include start-ups, companies with Corporate Social Responsibility activities, Nonprofits / Public Organizations, Social Enterprises (Jäger & SchrÜer, 2013).

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Nonprofit & Public Organization

Social & Inclusive Business

Start-Up

Company with Corporate Social Responsability

Social & Environmental Value +

+

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Economic Value

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The questions we asked applicants for the Stephan Schmidheiny Award to answer were based on the previously introduced definition of Social Entrepreneurship and a review of the scientific literature (Dacin, Dacin, & Tracey, 2011; Mair & Marti, 2006). We intended to include essential areas of social business models that are discussed in literature (J채ger, 2010). We developed two questionnaires (see Appendix I). The first included topics of general information; information about the social entrepreneur; services, products, clients and beneficiaries; organizational structure; and finance and funding. The second built on these topics and included new ones in the following areas: monitoring and evaluation; duplication of the organizational model; benefits of the organization within society; information about volunteers; the role of the women in the organization; and organizational values. Both questionnaires included multiple-choice, open-ended and dichotomous questions.

Students who visited the CiC Taller in Costa Rica, 2013

We executed this questionnaire as an application form for the Stephan Schmidheiny Innovation for Sustainability Award between the 1st of June 2013 and the 4th of October 2013. The award was presented in the print media and radio mainly in Costa Rica as well as via Facebook, mailing and other online advertising sources throughout Latin America. We proceeded in two phases. In the first phase, we invited all those who intended to participate to answer a questionnaire involving 28 questions. We received 465 applications. We analyzed these applications in order to eliminate those who, according to our criteria, we did not consider to be Social Entrepreneurs and those that were incomplete. We excluded 105 applications, resulting in a total of 360 completed questionnaires in the first round. We then invited 193 of those who had completed the questionnaire to participate in answering a second questionnaire with 28 further questions that built on the first one. In the second round we received 161 completed questionnaires.

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Form applicants as country

Suiza

Estados Unidos Guatemala Cuba

México El Salvador

España

Honduras Nicaragua Venezuela Bolivia

Costa Rica Colombia Ecuador Perú

Brazil Paraguay

Chile

Argentina

Costa Rica

Chile

Bolivia

Guatemala

21%

8%

3%

1%

Colombia

Paraguay

Ecuador

El Salvador

19%

6%

2%

1%

Argentina

Perú

Guatemala

Cuba

11%

5%

2%

1%

México

Honduras

España

Nicaragua

10%

3%

2%

1%

Brasil

Venezuela

Holanda

7%

3%

Estados Unidos

2%

1% Suiza

1%

The completed questionnaires came from 23 countries: 21% located their Social Initiatives in Costa Rica, 19% in Colombia, 11% in Argentina, 10% in Mexico, 8% in Chile and 7% in Brazil. The other questionnaires located their Social Initiatives in Peru, Ecuador, Honduras, Paraguay, Bolivia, Venezuela, Guatemala, Nicaragua, Spain, United States, Uruguay, El Salvador, the Netherlands, Panama, Dominican Republic, Cuba and Switzerland. The non-Latin countries were initiatives that mainly operated in Latin countries. The results emanating from this data need to be analyzed in respect to its development: We used the expression “Social Entrepreneurship” as the conceptual entry point for data analysis, but did not use this concept for data gathering. Most of the business persons we could refer to as “Social Entrepreneurs” would not use this expression to describe their own activities. Therefore, we did not use the expression “Social Entrepreneur” in the application process so as to avoid confusing applicants and create a bias among those who applied or were considering doing so. Instead, we called on entrepreneurial actors who have a social, environmental and economic impact in society. Although we attempted to overcome the limitations that obviously exist, we need to be aware of the following limitations when interpreting the data: The questionnaire was executed in the context of an award, and we did not identify the number of all possible Social Entrepreneurs that exist in Latin America. In fact, this figure is non-existent. Despite the reality that we are unable to add more to the results obtained beyond the profile of the award-applicants, the data acquired can be interpreted as a thermometer reading that attempts to acquire some preliminary profiles of Social Entrepreneurship in Latin America. As far as we know, this is the first survey of its kind. Another shortcoming is the online application. We can assume that Social Entrepreneurs without Internet access or without an ability to use a computer were not able to participate.

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Frankly, this is a strong limitation of which we are aware and need to address in the next round of the Stephan Schmidheiny Award. For the first round a pragmatic decision was taken to focus solely on online applications. Most of the data is based on Social Entrepreneurs who indicate their initiatives as being located

in three countries: Costa Rica, Colombia and Argentina. Although we included data from 23 countries, these countries are not equally represented in the data. We are thus unable to assume to have data that is representative for Latin America but it can, as mentioned, be considered as a first measure of Latin American Social Entrepreneurship.

Discussion at the CiC Taller in Costa Rica. 2013.

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Summary of Results and Challenges Ahead Social Entrepreneurs: Statistically seen and based on our data, the majority of the applicants to the Stephan Schmidheiny Award were men with an average age of 37 years, university graduates, and having an average of 5.4 years experience working on their social innovation.

This data indicates that in Latin America Social Entrepreneurship seems to be a highly complex endeavor that calls for professional knowledge and broad experience.

Social Initiatives: Most of the Social Entrepreneurs’ initiatives are structured as nonprofits or public organizations (47%), less are Startups (26%) or Social Businesses (21%), and only 6% are companies committed to Corporate Social Responsibility. Their missions are mostly of a social nature, focusing on communities’ quality of life, while their area of impact is diverse and the number of beneficiaries relatively few (below 1,000). Interestingly, 71% are legally registered and thus do not want to work in the informal structure.

The Social Initiatives have a local reach, a social rather than an environmental mission, and are characterized by a relatively small number of beneficiaries.

Perceived impact on society: The Social Entrepreneurs describe having a strong impact on the satisfaction of basic human needs such as health or food requirements; they mainly focus on education and training and motivate their beneficiaries to perceive and take advantage of opportunities presented to them.

The Social Entrepreneurs seem to support the self-development of people and communities: Helping people to help themselves.

Embeddedness of Social Initiatives: The social initiatives have their impact and their head office in the country and community in which the Social Entrepreneur grew up, have strong ties with other local organizations and individuals and therefore have to deal with a high number of diverse stakeholders.

The Social Iniciatives local embeddedness seem to be quite strong.

Strategic management: Most of the Social Entrepreneurs work with strategic plans. The constant factor among medium-term and longterm goals is their strategic focus on “social issues” and “societal development”. But there are also differences in these goals: In the medium-term, Social Entrepreneurs focus on direct impact on communities through education and products, and on increasing efficiency. In the long-term, they focus on growth through projects (in the country in which they work). Interestingly, in the long-term they also focus on companies. In a similar vein, Social Entrepreneurs indicate companies to be the second most important client after communities.

The Social Entrepreneurs seem to look for business solutions in which they can integrate communities with companies. We can assume companies to be important as a financial resource and a strong partner in having impacts on communities.

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With the necessary caution when generalizing data, we propose the following observations with regard to the question: What can we learn from the data regarding key challenges faced by Social Entrepreneurs in Latin America? Searching for concepts to scale impact: As most initiatives are locally embedded, quite small and focus on helping people to help themselves so as to increase impact, knowledge about effective scaling is required. For further information on how to manage scaling see, for example, the work of Dees, Anderson and Weiskillern (2004). Searching for strategies for Public-PrivatePrivate Partnerships: Social Entrepreneurs seek an integration of the economic and social/ environmental focus, involving communities’ quality of life and companies’ economic success. There is a need for approaches that integrate companies, local governments and social mission-organizations as proposed and described by Kania and Kramer (2011). Strengtheningthe implementation competence of Social Entrepreneurs: Our data indicates areas to increase the professionalism to realize social-business models: “implementation of strategies”, “marketing”, “impact assessment” and “leading volunteers and professionals”. Strengthening Social Entrepreneurship as an own profession: As Social Entrepreneurship is a highly complex endeavor we need to strengthen the provision of professional education for social entrepreneurs who operate on the interface of social/environmental and economic issues. In particular cases, management concepts and university courses are needed.

Roberto Artavia, President VIVA TRUST and Director of CiC

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Characteristics of Social Entrepreneurs and their Initiatives A) Social Entrepreneurs Summary Statistically seen, the Social Entrepreneurs (who applied for the award) can be characterized as follows: Most of them (59%) are male. They have an average age of 37 (33% are 19-30 year olds; 34% are 31-40 year olds). Most of them (84%) have at least a university diploma. On average, they have 5.4 years of experience in developing their social innovation (59% have between 2 and 5 years of experience).

The genders of respondents were relatively close in number, with slightly more males (59%) than females.

Gender

In general, women are still poorly represented on the top management teams of private companies. For instance, less than 20% of top private-sector leadership teams in banks are women (Clancy, 2012). In light of these numbers, 41% of the Social Entrepreneurs being women is quite a high number.

59%

41%

Total number of responses: 360

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The respondents were generally well educated with 84% having obtained a university degree and close to half of that number having obtained a master’s or doctorate degree. This is a surprisingly high number in relation to the relative low access to higher education offered in Latin American countries (Social Progress Index 2013: Costa Rica, Peru and Colombia are ranked 21st, 22nd and 23rd respectively, Dominican Republic 26th, and Brazil 33rd (www. socialprogressimperative.org). The ventures and projects of the respondents were relatively new, with roughly two thirds of the respondents indicating that they had worked for five years or less on their innovation.

Age How old is the social entrepreneur?

19-30

34%

31-40

33%

41-50

17%

51-60

12%

61-70

4%

It was not possible to determine the age of 1.4% of the participants in the survey as they indicated their age to be between 3 and 10 years. There were only one between 81 and 90. Total number of responses: 360

Education What is the highest educational level you have reached? University Diploma

46%

Postgraduate Studies

38%

Secundary School

13%

None

2%

Primacy School

1%

Total number of responses: 161 Work experience For how many years have you been implementing the innovation? 2-5

59%

6-10

25%

0-1

7%

11-15

12%

16 +

4%

Total number of responses: 360

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B) Social Entrepreneurs’ Initiatives

Summary The initiatives are characterized by the following structures: Most initiatives are Nonprofits/Public Organizations (47%), less are Start-Ups (26%) or Social Businesses (21%), and only 6% are companies practicing CSR. In their mission most of the initiatives also focus at least on education. While their area of impact is quite diverse, most (15%) focus on education. Most (57%) provide services to up to 1,000 beneficiaries. Most (71%) are legally registered or in process (20%) of becoming registered

Almost half of the initiatives (47%) were structured as non-profit organizations. Just over one quarter (26%) were in the start-up phase. One fifth (21%) considered themselves to be social businesses. The remaining 6% were companies practicing corporate social responsibility. The 6% of companies is very low considering the rising importance of CSR in Latin American companies. In a 2011 survey more than 72% of the questioned customers and managers perceived national companies as improving their CSR and while 64% perceived international companies to be improving their performance (Kowszyk, Cavarrubias, & GarcĂ­a, 2011).

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Type of initiative Indicate the category to which your organization belongs:

Total number of responses: 360 Classification of the organization according to years of experience of the Social Entrepreneur

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Mission Information on the theme obtained from the mission statements of the organizations. Categories such as Education, Health, and Agriculture were established based on the organization’s mission statement.

Provide the mission statement of your organization. The words used most frequently often in the mission were the following: • Quality of life • Community • Environment • Products • Projects

Total number of responses: 360

Total number of responses: 360

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A divergence exists in the number of beneficiaries served by the organizations, with almost half (47%) reporting that they served 1-500 beneficiaries and another third (36%) reported serving between 500 and 100,000 beneficiaries. The remaining 9% served between 100,000 and one million beneficiaries and 8% more than one million. As 66% of the respondents have up to five years of experience working on their initiative and 26% are start-ups, this relatively low number of beneficiaries may be explained by the early stages of the organizations’ life cycles.

Beneficiaries Indicate the approximate number of your organization’s or project’s beneficiaries:

Total number of responses: 161

Services and Products What are the services or product provided to the beneficiaries?

Both

13%

Product

17%

Service

70%

Total number of responses: 360

Over 70% of the organizations were legally registered, 20% were in the registration process, and the remaining 10% were not legally registered. This is a relative high number in comparison to the high percentage of informal markets in Latin American countries that lies at about 38.3% of GDP (Vuletin, 2008).

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Legal Structure Is the organization legally registered?

Legally registated

71%

In process

20%

Not registrated

9%

Total number of responses: 360

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C) Embeddedness of Social Initiatives in their Social Context Summary Most of the social initiatives (90%) have their impact and their head office in the country and community where the Social Entrepreneur grew up. Most of the social initiatives (87%) involve collaboration with other organizations, whereas 35% involve cooperation between organizations, and 33% receive support such as volunteer work. All Social Initiatives include a high number and diverse stakeholders.

To measure the organizational embeddedness with its local communities and regions we analyzed the number of Social Entrepreneurs who grew up in the country where the head office of the Social Initiative is located and where the beneficiaries are. 90% of respondents show a high level of embeddedness with their local context. Of the remaining 10% of organizations, the majority (70%) had headquarters located in the country of principal impact, but this was not the country of origin of the social entrepreneur. Only 3% or responding organizations did not have head offices located in the country of principal impact.

Country of Origin versus Heaquarters and Organizational Impact

Indicate the country in which your organization is headquartered. If you have offices in different countries, please indicate the countries. Where did the social entrepreneur grow up? Information on the country of impact was taken from the following two parts of the questionnaire. Provide the organization’s mission statement. What is the difference between this organization and other similar organizations?

Total number of responses: 161

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Of the 161 completed forms, 1,450 participants indicated that they do carry out work in partnership with other organizations. Partnerships: The work of the organizations is carried out together. The two organizations benefit equally. Support: An organization supports the other in a specific area where it has greater knowledge and experience. Project: The partnership is established for a limited period of time for a specific project. Financing: Support is based on financial assistance.

Partnerships between Organizations If your organization or project carries out work in collaboration with other partners or organizations, please describe them.

Partnership

35%

Support

33%

Project

22%

Financing

6%

Internationalization

4%

Of the participants 14.3% do not work in collaboration with any other institutions. Total number of responses: 161

Internationalization: The reason for the partnership is international growth. 87% of the organizations indicated that they worked in partnership with other organizations, the large majority (90%) of these relationships involving cooperation, ongoing support in a specific area, or cooperation during a specific project. The organizations reported interactions with a broad variety of stakeholders. This strengthens the observation of the strong embeddedness of the organizations with their local communities and regions. Also the type of stakeholders strengthens the observation of the strong embeddedness. The most important stakeholders seem themselves to be locally embedded: 9% of the stakeholders are local government, 13% are representatives of the local communities, a further 12% comprise small and medium-sized enterprises (SME) and a further 13% comprise non-governmental organizations (NGO) that likely work in the local contexts.

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Stakeholder Distribution What stakeholders are involved in the organization? NGO Representative from the Local Community

13%

SME

13%

Educational Institution

12%

13%

Local Government

9%

Large-scale Enterprise

8%

National Government

8%

National Organisarion

7%

Others

7%

Local Organisation

7%

Religious Organisation

4%

Total number of responses: 161

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Strategies of Social Entrepreneurs A) Social Entrepreneurs’ Perception of their Impact on Society

Summary We asked Social Entrepreneurs to describe their impact. Overall we observed the following patterns on how they perceive their improvement of society. To structure these patterns we used the basic framework of the Social Progress Index (www.socialprogressimperative.org) that structures the impact on the social progress of a country on three levels: Basic human needs, foundations of wellbeing and opportunity. The Social Entrepreneurs questioned perceive an impact in all three dimensions (Porter et al., 2013): Basic Human Needs The Social Entrepreneurs describe a strong impact on basic human needs such as health, food, safety, basic goods at affordable prices, and the preservation of nature and resources. Foundations of Wellbeing They perceive their main contribution in the field of education and training. They also mentioned impact on labor quality of the work environment, development in general, culture, future generations and products. Opportunity They motivate their beneficiaries to perceive and use opportunities they have. They care for them, provide recognition and respect, give them responsibilities, create a human and ethical community atmosphere, and enhance transparency. Self-esteem seems to produce significant value and generates satisfaction.

Needs of the beneficiaries What are the needs of the direct beneficiaries or clients? Adolescents Assistance Classes

Education Messages

InformationInstitutions

Care

Material Improve

Provide solutions Work Opportunities

PopulationProducts Recognition Restoration

Health Food Security

Words most often used. The bigger the more often used. Total number of responses: 161

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Value creation From the perspective of your beneficiaries or clients, what is the value offered by your organization? Social Value

Ethical value

Words most often used. The bigger the more often used. Economic Value

Emotional value Environmental

EnvironmentLove

Self-esteem Clients Educational

Development

EmpathyRenewable energy

Generate

Team

Families Form Youth Local Better Nature Loss Products Role Satisfaction Solidarity

Total number of responses: 161

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How do Social Entrepreneurs improve the quality of life of their beneficiaries? Describe how the services or products strengthen the ability of the beneficiaries or clients to improve their quality of life. Organic Agriculture

Students Balanced Forest Creation Local Culture

Education Energetic Effort Environment MineralsD eath Permit

Education

Hospital

Identify

Previously

Prolong

Natural ResourcesRestoration

Being

Social

Through

Total number of responses: 161

Albina Ruiz, Director of Ciudad Saludable

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B) Strategic Goals Summary Most of the Social Entrepreneurs report they have an annual budget (71%) and a strategic plan (80%). The words mostly used to describe mid-term goals are: Education, Communities, Products, Consolidate, Achieve, Improve The words mostly used to describe the long-term goals are: Country, Companies, Projects. The words used to describe long-term and mid-term goals are “Development” and “Social”. The most important clients of the Social Entrepreneurs are Communities, Companies, Youth and Families.

An analysis of the expressed medium- and long-term goals of the responding organizations yielded some commonalities. The words “Development” and “Social” were amongst those most frequently used in expressing goals. Additionally, for mid-term goals, Education, Communities, Products, Consolidate, Achieve and Improve were frequently used terms. For long-term goals, Country, Businesses and Projects occurred most frequently. A reason for this could be that the Social Entrepreneurs intend to strengthen their short-term impact in the local area of their activities while planning to grow beyond this context by involving firms as investors over the long-term. This is in line with the observation that many initiatives are still relatively young and that the respondents assume business to become a more important financial source in the future.

Annual budget Regarding the organization’s finances and accounting: Does the organization have an annual internal budget for planning? Of the 161 participants 71% used an annual budget. The majority plan the following years expenses. Total number of responses: 161

Strategic Plan Does your organization currently have a strategic plan? Of the 360 participants 80% who answered the question have a strategic plan. Total number of responses: 360

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According to the strategic plan, what are the organization’s objectives in the medium (1–3 years) and long (4-10 years) terms?

Form

Seek

Carry out

Build

Reach

Long-Term Strategic Plan

Production

Medium-Term Strategic Plan

Education Health

Social

Waste

Years

Consolidate Local Level

Market

Area

Workshops Achieve

Costa Rica

Development

Youth

Natural Resources

Words most often used. The bigger the more often used. The most important clients of the Social Entrepreneurs are Communities, Companies, Youth and Families, with many other stakeholder groups listed with less frequency. Although the respondents did not specify we assume that the companies are SMEs that were considered to be important stakeholders in the organizations. Obviously, the majority of the initiatives assume markets to support their social goals.

Total number of responses: 360 Direct Beneficiaries Who are the organization’s target beneficiaries or clients?

Total number of responses: 360

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Social Entrepreneurs’ Management Professionality A. Human Resources: Volunteers and Professionals Summary Most (72%) of the Social Entrepreneurs report on work with volunteers. Of these volunteers, the respondents indicate that 3% hold a position of responsibility, and 8% work in administration. Most (67%) report on having a board of directors. Most (76%) also have employees who receive a salary. Most (89%) make a special effort to include women in their organization.

Almost three-quarters (72%) of respondents indicated that their organizations used volunteers in carrying out their work. Of those that used volunteers, 65% of organizations used 1 to 10 volunteers, with more than two-thirds of that group using only 1 to 5 volunteers. 33% of responding organizations reported using volunteers in the regular execution of activities. Another 21% primarily used volunteers in support roles. Other uses of volunteers included special projects, training, fundraising and professional services. We can assume that the high percentage of organizations that work with a low number of volunteers results from the early stage of the organizations life cycle. In the first years people likely work without salaries as the fundraising structures often are not yet established.

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Work with Volunteers Does your organization work with volunteers? Of the 360 72% participants indicate that they work together with volunteers.

How many volunteers does your organization have?

Total number of responses: 360

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If your organization works with volunteers, explain their functions.

Considering the 26% of the 161 participants who do not work with volunteers, there remain 6.85% who do employ volunteers but did not specify their functions. Total number of responses: 161

More than three-quarters (67%) of responding organizations had a Board of Directors or a Leadership Committee. More than half (58%) indicated that they had 1–5 salaried employees in their organizations. Salaried-employee counts of 6–10 were 18% and 11 or more were represented by 24%, while 24% of organizations had no salaried employees.

Work with Professionals Does the organization have a board of directors or some formalized committee of leaders? Of the respondents 67% indicate having a board of directors or a similar top management team. Total number of responses: 161 How many salaried people are there in your organization or in the project in which it participates? 11+

24%

6-10

18%

1-5

58%

Of the 360 respondents 76% indicated that their employees receive a salary. Total number of responses: 360

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Women’s Inclusion Does the organization make an extra effort to include women? Of responding organizations 89% indicated that they were proactive in supporting women, either through inclusion as beneficiaries or direct contracts as vendors or employees. Total number of responses: 161

What is the process to include women in the organization? Of the 161 respondents, 89% said that they make an effort to include women in the organization. The different types of inclusion of this 89% follow: Total number of responses: 142 (89%)

Ruth Angulo, Director Casa Garabato

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B) Financial Sources and Use of Funding

Summary Of all Social Entrepreneurs that applied for the award 47% report to have high administration costs that are more than 20% of the annual budget, and 24% report them ranging between 11% and 20%. Almost half of all Social Entrepreneurs (48%) use software for their cost tracking. Only 31% report having an external audit. Between 2011 and 2013 the Social Entrepreneurs report the highest increase in their income to come from economic activities. In 2013, economic activities are the highest source of income (25%), with the second most important being membership fees (18%). The classical income sources of nonprofits are less important: In 2013, 7% report to have financial support from foundations, 11% involve government subsidies and 14% involve donations.

A large portion (53%) of organizations reported administrative costs (overhead) at rates between 0 and 20% of the annual budget. Assuming 20% to be a healthy level of overhead costs, this result sounds satisfactory. Nonetheless, 18% of organizations fell in the 21%–30% range, while a further 17% fell between 31%–50% of the budget. 12% of organizations reported overWhead rates in excess of 50%. Just about half (48%) of the respondents included accounting software among their management tools, while 31% used external auditors.

Administrative Costs Approximately what percentage of the annual budget is spent on administrative costs (overhead)?

Total number of responses: 360

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Organization’s Finances and Accounting

Regarding the organization’s finances and accounting: Does the organization use an accounting (software) program? Did the organization carry out an external audit this year? Of the 161 participants 48% use a specific software program for their organizations’ finance and accounting. Only 31% carried out an external audit in 2013. Total number of responses: 161 One quarter (25%) of the organizations reported generating at least some portion of their 2013 funding through engagement in economic activities. This is in line with the international trends of economic activities becoming more and more important (Young, Wilsker, & Grinsfelder, 2010). Membership fees was next in frequency as a funding source (18%), with donations, government grants and foundations following in that order. Note that the data does not indicate the level of funding received from each source, just the distribution among the most common sources. This general trend was reported for each of the years 2011–2013.

Sources of Income Indicate your organization’s sources of income between 2011 and 2013.

The total percentage of each bar of the same color (which represents the sources of income for each year) equals 100%. Total number of responses: 360

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C) Communications and Marketing

Summary Only 54% of the Social Entrepreneurs report informing the public of their activities. Most of the Social Entrepreneurs (94%) have a presence online with the most important ones being Facebook (32%) and their own web page (27%).

The majority of organizations indicated using published reports and/or having an online presence as part of their Communications and Marketing activities. 54% issued a published report. Only 6% of organizations reported they had no online presence. For the remaining 94% of the organizations, Facebook, their website and Twitter (in descending order) represented their most common online communications platforms.

Publication of a Report Does the organization publish a report? Of the 70% who responded, 54% do publish a report while 46% do not.

Of the participants 30% did not answer this question. Total number of responses: 161

Online Presence If the organization has an online presence, please provide the web (URL) address.

Of the participants 94% have an online presence, using the following online communication channels. Total number of responses: 360

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D) Social/Environmental Impact Assessment

Summary Of all Social Entrepreneurs that applied for the award 70% report on measuring their impact. They mainly use indicators that are based on economic perspectives such as growth and number of beneficiaries. Of all Social Entrepreneurs asked, 23% report on having their social business model replicated. While 46% said this took place nationally, although in a region different from where the social business is located, 49% said their business model was replicated in a country other than that of the social initiative’s origin.

Of all Social Entrepreneurs who applied for the award, 70% report on measuring their impact. The main indicators used are based on economic perspectives such as growth and number of beneficiaries.

Measure of Impact Does the organization measure its impact? Out of the 161 Respondents 70% measure their impact, but only 88% out of these 70% indicate that they use indicators to measure the impact. Total number of responses: 161

The majority of respondents measure their impact with economic indicators. Growth and Beneficiaries are the indicators used.

What are the three main indicators used to measure impact?

26%

Growth

16%

Beneficiares

6%

Employment generation

5%

Facebook likes

4%

Development compared to previous data

10% Others

6%

Existing Index

4%

Amount of Sales

3%

Number of volunteers

Total number of responses: 99 out of the 161

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7%

Survey

6%

Recovery

4%

Homepage visits

3%

Quantity of projects


Replication of Organizational Model Was the organizational model replicated in another country/region or in another activity? Of the 360 respondents 77% did not replicate their organizational model. Total number of responses: 360 The 23% (82) who replicated their organizational model either did so in the same region or another part of the same country in which the organization is located, or internationally (a country other than that of the organization’s origin).

Where was the organizational model replicated?

Total number of responses: 82

Katherine Molina, Fernando Chamorro y Daniel Villafranca

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Appendix I: Questionnaire

1. Complete name of social entrepreneur: 2. For how many years have you been working on the innovation? 3. How old is the social entrepreneur? 4. Provide the name of the organization in which the social entrepreneur works. 5. Indicate the country in which the organization’s headquarters is located. Should you have offices in various countries, please indicate these. • Country in which the headquarters are located. • Other countries 6. Who completed this questionnaire? • Name • Relationship with the social entrepreneur • Position • Organization • Telephone number (please include the country code) 7. Please include your e-mail address. 8. Please indicate the area or areas in which you are being nominated. • Innovation in social impact • Innovation in environmental impact • Innovation in responsible production • Institutional innovation 9. Is the organization legally registered? • Yes • No • In process 10. Regarding the organization: • Under what name is the organization registered? • What type of organization is it? (Association, cooperative, foundation, corpora-tion, public administration, other) • When was the organization legally registered? 11. Indicate the category into which your organization falls: • Start­up • Non-profit organization or public enterprise • Corporate social responsibility • Social enterprise 12. If the organization has an online presence, indicate the web address (URL). • Facebook • LinkedIn • Twitter • Website • YouTube • Other

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13. Provide the organization’s mission statement. 14. What is the difference between this organization and other similar organizations? (Your response should not exceed 500 words) 15. Does the organization currently have a strategic plan? • Yes • No 16. According to the strategic plan, what are the organization’s medium-term (1–3 years) and long-term (4–10 years) objectives?? • Medium term • Long term 17. Who are the organization’s beneficiaries or target groups? 18. Who are the organization’s indirect beneficiaries or target groups? (For example, if a child is the direct beneficiary, its parents will be the indirect beneficiaries.) 19. What services or products does the organization provide to its beneficiaries or clients? 20. How many salaried people are there in your organization or the project in which you are participating? 21. List the staff members responsible for key functions within the organization (name, position, and the role they play). 22. Does the organization work with volunteers? * (* A volunteer is a person who willingly spends time, free of charge, in an organization whose objective is to benefit people of a particular cause.) • Yes • No 23. How many volunteers does the organization have? 24. Indicate the organization’s source of income

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25. Approximately what percentage of the annual budget is spent on administrative costs (overhead)? 26. Has the organizational model been replicated in another country/region or in another activity • Yes • No 27. Where was the organizational model replicated? 28. How did you learn about the Innovation for Sustainability Award • Facebook • Twitter • Google+ • YouTube • CiConocimientos.org website • E-mail • Google Ads • Online publicity • Reference of someone you know • Other (specify) 29. Complete name of the social entrepreneur: 30. How old is the social entrepreneur? 31. Is the social entrepreneur male or female? • Male • Female 32. Who completed this questionnaire? • Complete name: • Relationship with social entrepreneur: • Position: • Organization: • Telephone number (please include the country code): 33. Please indicate your e-mail address. 34. Where did the social entrepreneur grow up? 35. Did he or she have a formal education? • Yes • No 36. What is the highest level of education reached? • Primary school • Secondary school • University degree • Postgraduate degree (master’s, doctorate, etc.) • None

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37. Who are the organization’s stakeholders? • Local government • National government • Local public organizations • National public organizations • Small and medium-sized enterprises (SMEs) • Large enterprises • Non-profit organizations (NGOs) • Representatives of the local community • Educational institutions • Religious organizations • Other (specify) 38. What are the direct needs of the beneficiaries or the clients? 39. From the perspective of your beneficiaries or clients, what is the value provided by your organization? • Economic value • Social value • Ethical value • Emotional value 40. Describe how the services or products strengthen the abilities of the beneficiaries or clients to improve their quality of life. 41. Indicate the approximate number of your organization’s or project’s beneficiaries or clients: 42. Does the organization make a special effort to include women in the organization? • Yes • No 43. What is the process to include women in the organization? Please provide details. 44. If your organization works with volunteers, explain their functions. 45. If your organization or project carries out work in collaboration with other partners or organizations, please describe them. Please indicate: Name of partner or organization with which you are collaborating; what you do together; duration of the cooperation. 46. Regarding the organization’s finance and accounting:

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47. If your organization plans an annual budget, indicate the 2012 budget in US dollars. 48. Does the organization have a board of directors or some formalized committee of lead-ers? • Yes • No 49. How are members of the organization’s board of directors or committee chosen? 50. List the members of the organization’s board of directors or committee (1. Name, 2. Position and name of the company in which they work, 3. Position and role played in the organization’s board of directors or committee). 51. Does the organization measure its impact? • Yes • No 52. Does the organization have indicators to measure its impact? • Yes • No 53. What are the three main indicators used to measure impact, and what results have been obtained in recent years? 54. Does the organization publish a report on its impact? • Yes • No 55. What would be missing in the society IF THE ORGANIZATION DID NOT EXIST? Explain the three most important aspects. 56. ¿What do you think about this questionnaire?

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Appendix II: Perception of the Questionnaire by the Applicants

The large majority of participants are satisfied with the selection process and the form’s questions. Selected replies to the question: What do you think about this questionnaire? We considered its content to be excellent and will undoubtedly help us improve our performance as a social organization. However, the way in which SurveyMonkey builds surveys of this type is less efficient in terms of internal planning as there was no option to download the questions and, as a result, obliges the team to answer all the questions, page by page, in order to read them all. It is a complete questionnaire that enables a better visualization of the strengths and weaknesses within the organization, driving us to improve and complement the organizational aspect. A recommendation would be to enable the saving of answers while progressing through the questionnaire, as if an electrical or technical failure were to occur, the registered information cannot be recovered, complicating its completion. The questionnaire is fine. However, I think that knowledge on the differentiation of the business and the scalability of the proposal could be slightly broadened. It is a very thorough questionnaire to capture information on projects that are already developed. However, we think there is a need to consider the detail that not all projects have or are in the same evolutionary stage at the time of filling out this form. The way in which the projects were filtered in rounds was positive, in such a way that only those that classified had to answer further questions. In the majority of competitions of this kind, all participants have to answer

all the questions on the form when it is not always necessary. It was also interesting how the replies to some questions conditioned which questions followed. However, the question that attracted my attention most of all, and challenged me most was number 55 because it made me think a lot. Great question! What would be missing in the society IF THE ORGANIZATION DID NOT EXIST? The form presents interesting and concrete thought-provoking questions. It would be excellent if photos could also be included to explain slightly more or to request information from third parties in the case of the entrepreneur him or herself filling out the form. I would like you to ask: Why do you think your project is innovative or cutting-edge? There are some points that do not allow for different options, and likewise there are factors that are asked about but remain devoid of context. There should be a section for a broad and detailed explanation of the participating project. As far as the rest is concerned, it is a pleasure, and we remain at your disposal. I think that you should have greater access to attach documents, and questions that are more open for all types of organizations, in our case, because we are a network that operates with the same name, but where we have local partners who are the organization’s entrepreneurs at the country level. We think that the other questions help us understand the type of organization we are and where we want to go. It was a little bit long. However, attempting to synthesize the work of our organization in this way has proven to be a very useful exercise. Thanks for providing us with the opportunity.

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Appendix III: Literature Clancy, S. A. (2012). Why women matter: The link between gender diversity in leadership and performance in the banking sector in Latin America. Unpublished manuscript, Managua. Dacin, M. T., Dacin, P. A., & Tracey, P. (2011). Social Entrepreneurship: A Critique and Fu-ture Directions. Organization Science, 22(5), 1203-1213. Dees, G., Anderson, B. B., & Wei-skillern, J. (2004). Scaling Social Impact. Strategies for spreading social innovation. Standord Social Innovation Review, 1, 24-32. Dees, J. G. (2007). Taking Social Entrepreneurship Seriously. Society, 44(3), 24-31. Drucker, P. F. (1993). Innovation and Entrepreneurship. New York: Collins. Jäger, U. (2010). Managing Social Businesses. Mission, Governance, Strategy and Accounta-bility. Houndsmills, New York: Palgrave Macmillan. Jäger, U., & Schröer, A. (2013). Integrated Organizational Identity: A Definition of Hybrid Organizations and a Research Agenda. Voluntas, Published online: 3 July 2013. Kania, J., & Kramer, M. (2011). Collective Impact. Stanford Social Innovation Review, 63. Kowszyk, Y., Cavarrubias, A., & García, L. (2011). The State of Corporate Social Responsibil-ity in Latin America. Mair, J., & Marti, I. (2006). Social Entrepreneurship Research: A Source of Explanation, Pre-diction and Delight. Journal of World Business, 41(1), 36-44. Porter, M. E., Stern, S., & Artavia, R. (2013). Social Progress Index 2013. A Publication of the Social Progress Imperative. Vuletin, G. (2008). Measuring the Informal Economy in Latin America and the Caribbean. Unpublished manuscript. Young, D. R., Wilsker, A. L., & Grinsfelder, M. C. (2010). Understanding the determinants of nonprofit income portfolios. Voluntary Sector Review, 1(2), 161-173.

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