Our belief is that if appropriate paid employment and work environments are provided for disadvantaged groups, we can help these individuals lead more self-sufficient, productive, and fulfilling lives. Our goal is to ensure that the businesses that provide these work environments reach break-even or better so that we can accomplish these social goals at a lower societal cost. In order to measure the success of our mission, we factor our target employee's progress toward a sustainable livelihood plus the profitability of our social enterprise. We consider success to have been reached when both the target employee and the social enterprise become self-sufficient.
Since SCP's inception we have integrated performance measurement and success metrics into our practice. We view success through both a qualitative and quantitative lens.
From a qualitative standpoint, historically we have utilized the Sustainable Livelihoods Framework to determine whether the target employees are developing the personal assets necessary to become self-sufficient. Poverty studies both domestically and internationally point to the lack of (access to) assets - financial, social, physical, and natural - as a key indicator for why certain groups slip into and/or cannot move out of poverty. The Sustainable Livelihoods Framework is an asset based approach that provides a useful context from which to understand where individuals are, where they want to go, and how they can get there. To learn more about this framework please go to www.livelihoods.org.
From a quantitative standpoint, we learned and borrowed heavily from Roberts Enterprise Development Foundation's (REDF) - based in San Francisco - Social Return on Investment (SROI) analysis. REDF went through a rigorous and resource intensive inquiry to define and articulate the socio-economic value of the investments REDF made in San Francisco based not-for- profit organizations operating social enterprises that employ disadvantaged groups. A huge value to the broader community that REDF provided was to make all of their SROI methodology - and more importantly their learnings from conducting this analysis with their portfolio organizations - publicly available.
SCP's SROI framework and resulting annual SROI report cards with our initial social enterprise portfolio has been - and continues to be - our tool to directly engage ourselves and our portfolio organizations in understanding and demonstrating the blended ' values' generated by these hybrid business models.
We still firmly believe this type of performance measurement makes sense for purpose built social enterprise. We also believe that it behooves the funder community of these types of investments to educate themselves about blended value creation and support capacity building initiatives to measure the performance of these hybrid business models.
Franchise Strategy and Performance Measurement
Similar to how our investment and catalyst strategies have evolved over time, so has our performance measurement framework. When we switched gears in 2005 and decided that in order to scale the ideas and practice of social enterprise we needed to more effectively engage the private sector, we also knew we had to have the right kind of performance measurement framework to engage our new investee profile.
In SCP's work with Canadian franchise networks and ultimately the loans we hold within these networks we position ourselves differently. We are not as directly engaged in the daily business operations management as we have been in the past with some of our early social enterprise investments. Another difference is that a key part of SCP's job and value to our franchise investees is to educate them on the 'supply market' of the community employment services spectrum, social hire profiles and job readiness training available to disadvantaged groups. SCP's job is to understand which social hire profile(s) best fit the employment offering(s) of the franchise business.
Because the franchises working with SCP did not set out to be ' social enterprise franchises' like the purpose built social enterprises in our early portfolio but rather had evaluated the potential value of SCP's financing and social hiring package - we adjusted the methodology regarding how we measure success within this investment portfolio.
We created a monthly employee tracking sheet to monitor our franchise investments social hiring, social hire recruitment channels, employee turnover and employee investments. We track things such as wage increases, career laddering, training investments and reasons why social hires leave, when they leave and what they go on to (if known). We are now positioning ourselves to be more thoughtful about identifying and discussing the correlation between pre-employment training input investments (e.g. life skills or anger management training, resume skills building) and employment outcomes.
Every SCP franchise investment submits these monthly employee tracking sheets as part of our reporting requirement. These sheets form the baseline social hire - and other employee - data for our performance measurement activities. We're at the early stages of this process, and are just beginning to think about how we can report on the performance of our franchise investments.
The kinds of questions we are asking ourselves in this inquiry are:
- What makes a successful social hire?
- What kinds of training investments will return what kinds of employment outcomes?
- What makes effective job retention?
- How can social hiring in the broad sense and job retention more specifically be understood and quantified in a way that makes sense to SCP, our investment portfolio, community service agencies and Canadian employers in general?