Working with social entrepreneurs, we have developed a hard-won approach over years of working directly with founders. Having run an accelerator called GoodCompany Ventures in Philadelphia since 2009, we have worked with hundreds of early-stage social entrepreneurs and mounted national and increasingly global innovation consortia. We have also had the opportunity to collaborate with the Obama Foundation on climate adaptation innovation, and in the process we identified that social entrepreneurs were often building and managing their companies blind to the impact consequences. As a result, we developed a methodology to meet early-stage founders where they are in order to help them engage with investors for the greatest impact leverage.
ImpactableX is responding to the demand for guidance and data points by offering services to help stakeholders optimize for revenue and impact. There is a need for a shared language to interpret impact through a financial lens and for different stakeholders with different skillsets and mandates to come to the table to create systemic change. Having the same information and agreeing to the same basic terms is essential for taking action towards a shared vision.
The cost of recidivism can differ drastically between different geographic locations and demographics. To properly evaluate the impact of social enterprises, it is important to be able to quantify the economic effects and translate them into the language of capital and economics. Analytics that measure the capital-to-impact or revenue-to-impact leverage of an enterprise can help investors and entrepreneurs have informed conversations about the impact assumptions and research that informed the decision-making process. Integrating impact analytics into financial management practices is essential to professionalize and elevate the social enterprise space.
Our approach provides entrepreneurs with a model that allows them to understand the data points used to generate their analytics, and to make changes to their five-year sales projections or their primary data if needed. This allows for businesses to be dynamic and to meet entrepreneurs where they are. Impact investors are often faced with the difficult task of determining which project to invest in, and a common language of data points provides a way for social entrepreneurs to quantify the impact they can create with investors' money. By providing these data points, social entrepreneurs can demonstrate the return on investment for each dollar of capital invested.
We are committed to helping both social entrepreneurs and impact investors in order to create a more effective business environment. Though there are still some aspects that need to be addressed, we are working to bring all the necessary components together in order to further strengthen the impact space.
In order to measure the impact of a social venture, it is essential to be clear on what metrics to be used for evaluation. This could be straightforward, such as the amount of carbon abated from the atmosphere, or more complex, such as the rate of reincarceration of inmates prevented or the number of university graduates from certain populations. Once the metrics are established, entrepreneurs should think through the impact of their venture on a unit level, such as a person, product, or prison. Additionally, entrepreneurs should familiarize themselves with the Sustainable Development Goals (SDGs) and how their innovation can contribute to the SDG targets and indicators.