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BYU - 3/04 Microfinance & the Double Bottom Line: ( Measuring Social Value for Microfinance & Microcredit with Education Programs) Drew Tulchin Social.

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Presentation on theme: "BYU - 3/04 Microfinance & the Double Bottom Line: ( Measuring Social Value for Microfinance & Microcredit with Education Programs) Drew Tulchin Social."— Presentation transcript:

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

2 BYU - 3/04 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

3 BYU - 3/04 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

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

5 BYU - 3/04 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?

6 BYU - 3/04 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…

7 BYU - 3/04 First Findings 1.NOT necessarily socially scientific validity E.g. NCAA College Basketball rankings 2.Client motivated activities & program 3.Manager-centric tools & solutions Reduce cost Increase accessibility Apply information in decision-making Enable local, self-reliant organizations Encourage BYU Interns

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

9 BYU - 3/04 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)

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

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

12 BYU - 3/04 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: 1)R&D to develop better & social science valid standards 2)Use existing available data for best use

13 BYU - 3/04 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: 1)R&D to develop better & social science valid standards 2)Use existing available data for best use

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

15 BYU - 3/04 MFI-Microcredit with Education Measurement - Value Added Model MFIBank 5% Financial Return Social Return - Microcredit Social Return - Education 3% Total Return:5%8% 11% 3%

16 BYU - 3/04 Application for Practitioners Learn from others: dont 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 institutions competitive advantage Remember DBL is a tool (and only one tool)

17 BYU - 3/04 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, dont wait for perfection –Disseminate widely; transparently Measure Donors & Investors activities, too –Continue this process upstream Facilitate increased investment –Use DBL for marketing & PR

18 BYU - 3/04 Drew Tulchin Social Enterprise Associates www.SocialEnterprise.NET drew@SocialEnterprise.NET Q&A Thank you!


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