2015-05-26 The power of transparency, By Elisa Birnbaum, Financial Post
. . . We’ve gone beyond gross domestic product to more meaningful measures of social well-being, said Anshula Chowdhury, founder of Social Asset Measurements (SAM), a software-as-a-service social impact reporting firm operating out of Ryerson University’s Digital Media Zone in Toronto.
The right things
It began over a pint of beer.
Brainstorming business ideas, Steve Beauchesne and his father, Tim, observed that eastern Ontario lacked a notable craft brewery. “The next day, we sobered up and it still seemed like a good idea,” recalled Beauchesne, who quit his job in Toronto and moved back to his hometown of Vankleek Hill, Ont., a town of 1,800 people and 2,000 cows, to launch Beau’s All Natural Brewing Co.
Since its first keg in 2006, the popular, award-winning Beau’s – experiencing 100 times growth in the past eight years and selling 3.5 million litres last year – has been committed to more than great beer. “From Day 1, we’ve been trying to build sustainability into our DNA,” said Beauchesne, whose certified organic brewery is the first in Canada to use 100 per cent renewable electricity and 100 per cent green natural gas, and to become B Corp Certified.
Community engagement is vital, too. The company employs 130 local residents and donates to 100 charities each year (its annual Oktoberfest celebration raised $100,000 last year). “If we’re going to sell beer in a town, we have to be a part of it in a very meaningful way,” he said. “We’ve been doing the right things for the right reasons, and the reward has been consistent growth.”
But it’s not just about doing the right things. For business owners intimately connected to the dicta of social entrepreneurship – people, planet and profit – the need to measure and demonstrate social impact has become increasingly important. Whether to placate investors, donors, employees or a customer base growing ever more concerned with purchasing decisions, companies are realizing that measurement of those “right things” is as central to business practice as engaging in them.
“There’s definitely been an evolution,” said Stephanie Robertson, CEO and founder of Calgary-based SiMPACT Strategy Group, a consultant to clients who want to maximize and communicate their social impact. When she started her business in 2004, the very mention of measurement was a conversation killer, Robertson said. But these days, financial and social performance are no longer deemed mutually exclusive.
We’ve gone beyond gross domestic product to more meaningful measures of social well-being, said Anshula Chowdhury, founder of Social Asset Measurements (SAM), a software-as-a-service social impact reporting firm operating out of Ryerson University’s Digital Media Zone in Toronto. Chowdhury started her business in 2011 after noticing that traditional solutions for impact reporting were too labour intensive. She also saw a dearth of options for startups and felt technology was limited in its capacity to scale impact reporting across industries.
To fill the gaps, Chowdhury developed Social Return Intelligence Suite (SRI), software designed to drastically decrease the cost, time and investment required. She estimates SRI can reduce time spent on measurement by a minimum of 45 per cent, but usually a lot more. “That’s time they could now spend on all of the stuffthat’s really important to move the bar meaningfully on social outcomes.”
SAM caught the attention of Jeremy O’Krafka, founder of MENTORnetwork, a business launched in 2012 focused on building a culture of mentorship across Canada. After winning a grant for consulting services to help promote his social impact, O’Krafka engaged Chowdhury with the idea that measurement stats could help his customers – mostly government-funded organizations – make a successful business case to their funders.
Keep in mind, if a business generates social value, job creation, for example, that’s a cost savings to government and society. Social impact is the natural next frontier of measurement, SiMPACT’s Robertson said, and an important indicator of success. Third-party certifications cover Beau’s measurement needs effectively. The Pro-Cert Organic designation, for instance, ensures a watchful eye over its ingredients and methodology, while the B Corp certification guarantees an in-depth look at governance, community engagement, environmental impact and more.
“We became junkies for measurement-type activities because it’s rewarding,” Beauchesne said of its impact on internal culture. Their efforts also helped garner attention from restaurants and the media. “And people in the community skeptical of our claims were more open to it,” he said. “It opened doors for us that wouldn’t be open otherwise.”
Impact measurement is key for Bruce Poon Tip, founder of G Adventures – a travel company in its 25th year, with a reputation for unique, sustainable travel opportunities and supporting under-served communities along the way. “More and more consumers want to know where their dollars are going, and brands are expected to be transparent, especially in today’s digital world, where consumers can connect directly with companies through social media,” he said.
It was a 2013 partnership with the Multilateral Investment Fund (MIF) of the Inter-American Development Bank (IDB) that brought measurement to the forefront for G Adventures. The company was asked to help develop and finance community-based tourism projects in rural communities in Central and South America and to measure their impact with the help of a third-party consultant.
Evaluations were conducted before the projects launched and compared with results after 18 months, and three and five years. The comprehensive measurements looked at things such as living conditions, job numbers, income levels, customers, expenses, revenue, waste management, access to nutritious food and educational opportunities.
Though time-consuming, the process was legitimizing, said Kelly Galaski, technical director of the IDB/MIF project and program and operations manager at G Adventures’ charitable foundation, Planeterra. They saw a rise in job numbers, for example, an average of 300 per cent increase in income, while a community restaurant brought in $200,000 in revenue in one year. “This will help us look at impact at a granular level,” Galaski said, “to really show that these projects work.”
Measurement doesn’t come cheap, though. Beauchesne said he spends $2,000 and $5,000 a year on organic certification and B Corp designation, respectively. Consulting engagements can run as low as $20,000 but more realistically cost $40,000 to $50,000 for one program. Not surprisingly, many social entrepreneurs choose not to undergo the costly process or do it on their own, creating new challenges due to a lack of systematic approach.
SAM – gearing up for its first seed round of financing – came up with a set of resources for small-scale businesses that can’t afford its consulting services, including workshops, adviser matchups and a program that helps them create impact reporting. The software starts at $60 a month for small-scale social entrepreneurs, with an optional one-time fee of about $2,500 for bespoke consulting – often rolled into monthly fees. O’Krafka has already completed Phase 1 and is a fan so far. The decision was a no-brainer, he said, adding his biggest customer uses SAM.
Beauchesne swears by the power of transparency. “We grew faster than any other brewery in the past nine years while living to a high level of corporate ethics and community involvement,” he said. “Our growth isn’t despite all that but largely because of it.”
Elisa Birnbaum writes about social entrepreneurship and is the publisher and editor of SEE Change Magazine. She can be reached at firstname.lastname@example.org
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