In The Search for Social Entrepreneurship, Paul Light writes, "If the idea is matters, so does management…to the extent that management is essential for scale-up and impact, socially entrepreneurial organizations need to embrace it." Light's idea that high performing organizations should invest in management and organizational development systems makes sense, but in order for many social businesses to do so, the philanthropic landscape will need to change.

William Foster, partner at leading nonprofit consulting firm Bridgespan Group, recently wrote about the need for foundations to provide "growth capital" grants to later-stage organizations with sound business plans, strategic clarity and a sustainable financing model. In his Stanford Social Innovation Review article, Money to Grow On, he suggests that funding organizations should approach grantmaking in a similar way that venture capitalists approach making investments: high performing organizations with proven success should be awarded larger infusions of unrestricted cash to ramp-up and achieve long-term social change.

Foster writes, "Before venture capitalists invest in a company, they conduct a thorough review of the company's management team, business model, and strategic plan, along with an analysis of the company's competition and market. More often than not, they walk away from deals that are in many respects attractive. Few nonprofit donors undertake such rigorous due diligence. But they should." 

For organizations working in the base of the pyramid space, this idea is already starting to take root.

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Many of us in the base of the pyramid community, myself included, often wonder, "is this business really making a social impact?" Sure, there are real indicators of success, but what action drove that particular outcome? As I ponder the social impact of business, I'm reminded of an old marketing adage: We know at least 50 percent of our efforts are working – we just don't know which half. (Hat tip to Brian Trelstad for bringing this up in a meeting.)

In order to build truly inclusive businesses, our sector must start tracking impact over time. This we can probably all agree on. But the challenge is not so much in creating buy-in around the idea of measurement, but in finding a way to integrate an effective and user-friendly system for doing so in an already resource-constrained work environment.

Because of these and other stumbling blocks in creating social metrics, Rob Katz and I were particularly intrigued by the newly released Measuring Impact Framework developed by The World Business Council for Sustainable Development (WBCSD). This framework, which has been in the works for nearly two years, is designed to guide companies – from small enterprises to large multinationals – through the process of measuring and assessing impact, and making better-informed future decisions within the context of a larger development paradigm.

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After a few weeks of non-blogging, I'm happy to write my first post on NextBillion. I've spent some time over the last few weeks updating the Resources section of the site, complete with additions to the case study, reports, books and articles sections. A couple of highlights are summarized below, but we'd love to hear your thoughts and comments on what's particularly valuable and what you think we're still missing in our virtual library. The entire list of resources can be accessed here.

Happy base of the pyramid reading!

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