1. Drew Tulchin Social Enterprise Associates BYU Provo, Utah March, 2004
Microfinance & the Double Bottom Line: (Measuring Social Value for Microfinance & Microcredit with Education Programs)
Drew Tulchin
Social Enterprise Associates
BYU
Provo, Utah
March, 2004
BYU - 3/04

2. Too much information, too little time
Review of Paper
The Problem
Research Conducted
Definitions
Frameworks & Logic Models
Measure for Microcredit with Education
Application for Practitioners
Next Steps
Q&A
Too much information, too little time
BYU - 3/04

3. Acknowledgements This Research Owes Gratitude to: Ford Foundation
BYU, Grameen Foundation USA, MicroCapital Institute, Mix Market & Prisma Microfinance
The many individuals who have provided feedback & support:
Dr. Monique Cohen, Erica Mills, David Myhre, Wendy Prosser, Andrew Ralph, David J. Satterthwaite, Anton Simanowitz, Didier Thys, Dr. Joseph Tulchin, Dr. Koenraad Verhagen, Dr. Gary Woller & Many Others
BYU - 3/04

4. Social Enterprise Associates
Introduction
Who are you? How familiar are you with microfinance, ‘SRI’ & the Double Bottom Line?
Who am I?
Drew Tulchin,
Social Enterprise Associates
A network of professionals making communities better by applying business skills & sustainable practices.
BYU - 3/04

5. The Problem 3 billion people in poverty (live < $2 / day)
Demand exceeds supply (< 10% demand met)
Microcredit Summit 67 mil. clients
Potential aggregate portfolio value $5-7 bil.
Few MFIs financially self-sufficient (1-10%)
Not enough donor funds ($.5 to 1 bil. / year)
How can MFIs serve self-reliant entrepreneurs to achieve ‘massification’ as sustainable making an impact on poverty alleviation?
BYU - 3/04

6. Research Conducted Outgrowth of other work, ‘subsidized research’
Interviews: more than 30 investors, 30 practitioners & 20 DBL / SR specialists – still ongoing
MFI literature Review & Catalogue
Investigation of SR, DBL & related literature outside of MFI industry
Applied action research. Share findings w/ others, get new ideas, revise, disseminate…
BYU - 3/04

7. First Findings NOT necessarily socially scientific validity
E.g. NCAA College Basketball rankings
Client motivated activities & program
Manager-centric tools & solutions
Reduce cost
Increase accessibility
Apply information in decision-making
Enable local, self-reliant organizations
Encourage BYU Interns
BYU - 3/04

8. Continuum of Return Expectations
Donations
Investment
Morino Institute, Blended Value Proposition
BYU - 3/04

9. Value of Social Return Broadly What is its function?
Enhance impact measurements
Marketing / PR
Tie to Socially Responsible Investment (SRI)
Mobilize new investment/sources of cash into microfinance
Specifically Who is social return for?
Use by managers in decision-making
Segment interested investors.
Craft tailored messages to SRI, use social return for some
Consider social benefits from financial inputs (investment)
BYU - 3/04

10. United Way’s Logic Model
Impact Framework
United Way’s Logic Model
Org.’s Activities Outputs Outcomes Community
Mission Goal
Effect, impact & measurement related back to MISSION
BYU - 3/04
Source: United Way & Kellogg Foundation

11. Double Bottom Line Framework
Track Social & Economic Value Creation
Input Activities Outputs Outcomes Impact
(Investment)
Effect, impact & measurement related back to INPUT as a return ratio
BYU - 3/04
Source: Soc. Ent. Assoc Microfinance and the Double Bottom Line, Ford Foundation

12. Double Bottom Line Measurement Goals
Develop an industry metric & apply it uniformly
Establish comparables (apples to apples)
Aggregate Data (industry totals, vs. other sectors)
INTERNAL audience:
Easy to use, add value to operations
EXTERNAL audience:
Easy to understand, add meaning to investment decision &/or evaluation
SROI operating on two fronts:
R&D to develop better & social science valid standards
Use existing available data for best use
BYU - 3/04

13. Double Bottom Line Measurement Goals
Develop an industry metric & apply it uniformly
Establish comparables (apples to apples)
Aggregate Data (industry totals, vs. other sectors)
INTERNAL audience:
Easy to use, add value to operations
EXTERNAL audience:
Easy to understand, add meaning to investment decision &/or evaluation
SROI operating on two fronts:
R&D to develop better & social science valid standards
Use existing available data for best use
BYU - 3/04

14. Measurement - Discount Model
Social Return 5%
Alternative Investment: Financial Return
10%
Financial Return 5%
Bank
MFI
Total Return: 10% 10%
BYU - 3/04

15. Measurement - Value Added Model
Social Return - Education 3%
Social Return -Microcredit 3% 3%
Financial Return 5% 5% 5%
MFI-Microcredit with Education
Bank
MFI
Total Return: 5% 8% %
BYU - 3/04

16. Application for Practitioners
Learn from others: don’t reinvent the wheel
Impact Assessment, Other industries
Avoid decision paralysis, take a first step
Use information MFI already captures
Examine collected data
Consider all client ‘touch’ opportunities
Talk to your client, Listen to what they say & Respond
Emphasize institution’s competitive advantage
Remember DBL is a tool (and only one tool)
BYU - 3/04

17. Next Steps Responsibility of the entire industry / movement:
Increase MFI DBL Dialogue
Bring in other allies (i.e. BYU & community)
Motivate more activity (like Call for Papers)
Measure what you can, build a tool
Version 1.0 ok, don’t wait for perfection
Disseminate widely; transparently
Measure Donors’ & Investors’ activities, too
Continue this process ‘upstream’
Facilitate increased investment
Use DBL for marketing & PR
BYU - 3/04

18. Social Enterprise Associates
Q&A
Thank you!
Drew Tulchin
Social Enterprise Associates
BYU - 3/04