Structure: Two-page review for an existing Social Business initiative: TOMS Shoes: One for One
Goal:
To research different Social Business initiatives;
To evaluate different aspects relevant for a Social Business.
Part A: Social Impact Dimension (max. 70 points)
Aim: Does the enterprise set for itself the aim of achieving social impact? (up to 10 points)
Accountability and Transparency: Does it regularly publish and report against social impact indicators (in an internationally recognized format)? Does it have embedded the social impact in its legal structure and regulation? Does it uphold high ethical standards? (up to 10 points)
Scale of Impact: How many people are expected to derive benefit directly from its services when it reaches full development? [the more the better] (up to 10 points)
Systemic Change: Is its impact systemic, making positive spills-overs and having a multiplier effect? (up to 10 points)
SDGs: How does it fit with one or several of the SDGs? [specify 2-5 indicators and targets aligned with the SDGs and the company] (up to 10 points)
Focus on a Real Problem: Does it address important problems or critical barriers to progress in a certain field? (up to 10 points)
Innovation: Does it solve the problem in an innovative way? Is it incorporating a different or innovative approach in the sector to tackle societal challenges? (up to 10 points)
Part B: Business Viability and Sustainability (max. 70 points)
Business Focused: Does the enterprise, once it has finished the start-up phase, generate all or most of its cash flow from sales of goods or services to third parties? (up to 10 points)
Financially Profitable: Is it expected to make a positive gross margin (before financing costs)? (up to 10 points)
Business Scale: Does the enterprise expect to expand over five to ten years from start-up primarily? (up to 10 points)
Ethical Payments: Does the enterprise pays reasonably to the employees and there is no big different between top managers and regular workers? (up to 10 points)
Social Reinvestments: If there are additional revenues, are they reinvesting in the social impact or in increasing the scale of impact? (up to 10 points)
Market Competition: Does the social business stand out in their market competition? (up to 10 points)
Social/Environmental Return of Investment: Does the social business incorporate any other measures of Social Impact Investment? [SROI, ESG (Environmental Social Governance) o SRI (Social Responsible Investment)] (up to 10 points)
Scoring Matrix
The scoring scale has a maximum possible total score of 140 points, within which we suggest the following thresholds:
100 or above:
With 50 or more on both Part A and Part B, implies a fully validated Social Entrepreneurship.
85-99:
With 50 or more on Part A (hence less than 50 in Part B) implies a company/organization with significant enterprise features, bordering on a social business but tending towards ‘non-profit trading activities’;
With 50 or more on Part B (hence less than 50 on Part A), implies a sound business with some social dimensions.
71-85:
With 35 or less on Part B, implies a non-profit with trading activities with limited financial sustainability;
with 35 or less on Part A, implies a business enterprise with limited social impact.
70 or less:
It raises major doubts about the validity of the enterprise’s business model and/or its social impact.
