People Have an Irrational Need to Complete 'Sets' of Things. 01-05

People are irrationally motivated to complete arbitrary sets of tasks, donations, or purchases—and organizations can take advantage of that, according to new research by Kate Barasz, Leslie John, Elizabeth Keenan, and Michael Norton. 

Here’s a tip for persuading people to finish more tasks, buy more products, or donate more money: Simply present assignments, requests, or items as arbitrary sets, rather than as individual units.

New research reveals that people are irrationally but effectively motivated by the idea of completing a set, even if it means working harder or spending more money—with no additional reward other than the satisfaction of completion and the relief of avoiding an incomplete set. Imagine arriving at your boss’s summer BBQ and presenting her with five beers in a box designed to hold six. No matter that your favorite craft beer store permits you buy bottles one at a time. Chances are you’d still buy six, just to fill all six spaces in the box.

“People really don’t like to leave things incomplete,” says Kate Barasz, an assistant professor of marketing at IESE Business School and lead author of the paper “Pseudo-Set Framing,” written while she was a doctoral student at Harvard Business School. The term “pseudo-set” refers to the idea that the set is kind of arbitrary—manufactured for the sole purpose of creating the idea of wholeness.

“People really don’t like to leave things incomplete”

Do you want customers to refer more of their friends to your company’s website? Ask them to refer friends in arbitrary “batches” of five at a time. Looking to increase charitable giving to your nonprofit organization? Ask potential donors to contribute a set of six gifts. Are you and your fiancé struggling to write thank-you cards for all those wedding shower gifts? Try batching the unwritten cards into sets of eight. Rather than feeling overwhelmed by the prospect of writing one note at a time, you’ll feel oddly motivated to finish a whole set at a time.

Appearing in a forthcoming edition of Journal of Experimental Psychology: General, “Pseudo-Set Framing” was co-written by Barasz; Leslie John, the Marvin Bower Associate Professor at HBS; Elizabeth Keenan, an assistant professor at HBS; and Michael Norton, the Harold M. Brierley Professor of Business Administration at HBS.

The Canadian Red Cross puts pseudo-sets to the test

The researchers proved the efficacy of pseudo-set framing through a series of laboratory and real-world field studies.

In one study, they teamed up with the Canadian Red Cross, a humanitarian charitable organization, to find out whether pseudo-set framing could influence gift-giving behavior during its 2016 holiday online fundraising campaign.

More than 7,000 potential donors were randomly (but evenly) directed to one of three landing pages.

The first page emphasized cash donations.

The second page emphasized specific gifts over cash donations. This page also included an image of a globe. For each new item added to the donor’s online cart, a location marker would appear in a particular geographic region, signaling that the item would be donated to that part of the globe.

The third page invited donors to give one of each of six items in order to complete a so-called “Global Survival Kit”—in other words, a pseudo-set. This page had a globe on it, too, but instead of location markers, it featured a line that grew closer to circumnavigating the globe each time an item was donated.

The rationale: “Who wants to donate six blankets, when you can donate one blanket and feel just as good?” Barasz says. “But, if you frame it as a set, then there is a reason to want to complete the set and to donate all six of the items.”

The results of the field study were stark. Among those who chose to give gifts, 21 percent of those in the “Global Survival Kit” condition chose to donate all six items, compared with just 5 percent in the “gift” condition and 3 percent in the cash condition.

“The strength of the increase was a really nice surprise,” says Doug Wayne, director of national digital marketing and web strategy at the Canadian Red Cross, who decided to collaborate with the research team after meeting Norton through a colleague. “Ultimately, it speaks to how powerful that framing is.”

People incur the cost of a bad gamble just so they can complete a pseudo-set

In fact, the human drive for completion is strong enough that people will strive to complete arbitrary sets even when there’s a risk associated.

In another study, 201 participants had the opportunity to accept up to four online gambling opportunities, with the chance of winning up to 25 cents. (The stakes were notably low—the online equivalent of nickel slots.)

The chances of winning decreased with each successive gamble, and participants could stop and cash out at any time. Gamble 1 offered a 90 percent chance of winning a nickel and a 10 percent chance of winning nothing, Gamble 2 offered a 75 percent chance of winning, and Gamble 3 a 50 percent chance. In the first three gambles, there was no chance of incurring a loss. But Gamble 4 offered a 50 percent chance of winning a nickel and a 50 percent chance of losing a dime.

The odds were stupid. It made no rational sense to take that last gamble. And yet….

The researchers rigged the system so that all participants won the first three gambles, such that they’d all be facing the final risk having accrued 20 of the possible 25 cents. Everyone saw their successive winnings displayed both numerically and graphically on screen.

However: Half of the participants saw a visual display consisting of five nickels—with separate blank circles depicting money not yet earned. The other half saw a single quarter, divided into fifths such that unearned money was depicted as a missing piece.

Overall, 29 percent of participants in the single-quarter condition chose to accept all four gambles, compared with 16 percent in the five-separate-nickels condition. For them, the need to complete that picture of a quarter seemed to supersede their rational knowledge of the bad odds.

“People persist with completing pseudo-sets even when it’s costly for them to do so,” John says. “That, to me, is especially compelling as a researcher—that completing this totally arbitrary set is so motivating to people that they are willing to participate in an obviously bad bet.”

Future research and advice for managers

The researchers acknowledge that it’s possible for a pseudo-set to backfire. For instance, a person who might have given seven items to the Red Cross might decide to give a single set of six items instead. And a badly designed pseudo-set could prove annoying or demotivating—say, if the arbitrary set comprises 200 parts. “If the number of tasks required to fill a ‘pie piece’ is prohibitively high, people may decide not to engage at all to avoid anticipated dissatisfaction with partial completion,” the authors write in “Pseudo-Set Framing.”

Future research may investigate the ideal size of a pseudo-set in any given situation. In the meantime, Barasz offers this rule of thumb, especially with regard to encouraging people to complete repetitive tasks: “My advice to a practitioner would be to find out, on average, how many people usually complete, and then make your set slightly larger than that,” she says.  

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Do today’s philanthropists hurt more than they help? 10-11

Do today’s philanthropists hurt more than they help?

As philanthropy enters a second golden age, real social change is getting lost in the hype of market-based giving.

In one of his short stories, “Counterfeit Money,” Charles Baudelaire describes a fictional encounter between two friends who come across a beggar in the street.

In this short piece, the narrator and friend offer the beggar spare change, but the friend offers a much larger coin. The narrator commends him for his generosity. The friend accepts the compliment and then adds, once they’re out of earshot of the beggar, “It was a counterfeit coin.”

The narrator is astounded. Not only has his friend duped the beggar on purpose, what’s worse, he feels self-congratulatory for his gift. His satisfaction lies in the fact that the beggar doesn’t realize that he has been duped. The narrator sees that his friend’s “aim had been to do a good deed while at the same time making a good deal; to earn forty cents and the heart of God; to win paradise economically; in short to pick up gratis the certificate of a charitable man.”

Baudelaire’s story was written in the latter half of the 19th century, a time when industrialists such as Andrew Carnegie and John D. Rockefeller Sr. began channelling their vast fortunes into some of the greatest acts of philanthropy ever known. From Carnegie’s spending on public libraries to Rockefeller’s investment in biomedical advances, their giving helped to shift charity from the dispensing of alms in a largely unsystematic manner to a business in itself, overseen by paid philanthropic advisors.

Many did not feel grateful for the robber barons’ generosity, however. In his essay, “The Soul of Man Under Socialism,” Oscar Wilde berated the tendency of benefactors to use their charity as a bulwark against redistributive demands.

“The best among the poor,” Wilde wrote, “are never grateful. They are ungrateful, discontented, disobedient, and rebellious. They are quite right to be so … Why should they be grateful for the crumbs that fall from the rich man’s table? They should be seated at the board, and are beginning to know it.”

As philanthropy enters a second golden period, with the gifts from benefactors such as Bill Gates and Warren Buffett rivaling those offered toward the end of the gilded age, sceptics are starting to ask: Are Wilde’s and Baudelaire’s concerns still relevant? Are today’s philanthropists knowingly dispensing “false coins?” Are they trying to “pick up gratis the certificate of a charitable man?”

In most cases, the answer is a firm no. Charity is dispensed in good faith, with empathy toward close and distant strangers. And yet, at the same time, a new trend is growing: philanthrocapitalism, a more muscular philanthropy that seeks to combine profits with poverty alleviation. The effort to do a good deed while at the same time making a good deal is the driving impetus behind the new philanthropy. Another question Baudelaire raised still lingers: Who benefits more from charitable acts, the giver or the receiver?

At the forefront of the new philanthropy is the effective altruism movement, something upheld as radically different from earlier philanthropic approaches through a purportedly novel emphasis on measuring the results of giving. A pioneer in the movement is Peter Singer, the controversial bioethicist who has praised Buffett and Gates for being “the most effective altruists in history.”

His praise rests on the magnitude of their giving rather than evidence of their effectiveness. It’s true that in dollar terms, their generosity is jaw-dropping. Joel Fleishman points out in The Foundation that Buffett’s 2006 announcement of a gift of $31 billion to the Gates Foundation represented, in 2006 dollars, more than Rockefeller Sr. and Carnegie gave away combined.

But as a proportion of the overall U.S. Gross Domestic Product, the size of today’s foundations pales next to their predecessors. The Ford Foundation’s endowment in the early 1960s represented more than double the share of U.S. GDP in comparison to the Gates Foundation 50 years later. Ever since the 1970s, overall charitable giving in the U.S. “as a share of GDP has rarely strayed far from 2 percent,”Suzanne Perry points out in the Chronicle of Philanthropy, “despite the huge growth in the number of charities and fundraisers and periodic crusades to encourage greater giving.”

Corporations have become far stingier. Mark Kramer and Michael Porter pointed out in the early 2000s that corporate philanthropy as a proportion of corporate profits dropped since the 1980s. Since then it’s sunk even further, from 2.1% of pretax profits in the mid-1980s to 0.8% in 2013.

Singer’s presumption that Buffett and Gates are any more effective than earlier philanthropists isn’t backed by data. Some of the Gates Foundation’s work has led to measurable gains. Vaccination rates are rising; global child mortality has fallen—the foundation’s work in global health has contributed to these gains. But in comparison to government donors, Gates Foundation grants are a small drop in the global health landscape: The U.S. government has committed over $65 billion to global HIV/AIDs programs alone. That’s double the amount of overall giving by the Gates Foundation toward U.S. education, global health, and global agriculture since its inception.

To date, there has been far more hype than hard evidence about effective altruism’s achievements; its progress often seems to be measured and underpinned by self-sustaining feedback loops. Donors privilege what critics see as low-hanging fruit: aid projects where measuring the effect is relatively easy to do.

We hear a lot about the positive effects of different programs, such as the benefits of deworming efforts worldwide that were once thought to have contributed dramatically to education attainment in developing nations, until a recent review from independent health research group Cochrane cast doubt on that link. Far less attention is paid to counterfactuals, such as the cost to welfare programs when tax revenue is lost as a result of philanthropists receiving lucrative tax exemptions for pet projects.

Today’s philanthropy enthusiasts are never short on hyperbole. An organizer of a recent effective altruism conference at Google’s Quad campus in Mountain View reportedly averred that “effective altruism could be the last social movement we ever need.” But it’s clear that rises in global giving over the past 10 years have not made a dent in reducing economic inequality in rich nations such as the United States or Britain.

Individual philanthropic foundations have grown at a fast clip in the U.S. over the past 15 years: In that span, the number of individual foundations has doubled from about 40,000 to over 85,000. But this surge hasn’t helped alleviate extreme poverty. A 2012 report from the National Poverty Center at the University of Michigan points out that within the U.S., “the prevalence of extreme poverty rose sharply between 1996 and 2011.”

One of the biggest ironies facing 19th-century philanthropy was the question of whether growing charity simply exacerbated economic inequality by thwarting demands for better wages and the right to unionize.

Carnegie published his first “Wealth” essay, in which he urged the rich to share their spoils, just a few years before the Homestead battle of 1892, one of the bloodiest labor standoffs in U.S. history, where he brutally stamped out burgeoning union efforts even while liberally dispensing charity to his workers. “Paradoxically,” David Nasaw, Carnegie’s biographer, has pointed out, “Carnegie … became, if anything, more ruthless in pursuit of profits once he had determined that those profits would be distributed during his lifetime.”

“In remonstrating that only the millionaire could be trusted to dispense his millions, and that whatever that millionaire thought ‘best’ was best,” Nasaw adds, “Carnegie was promulgating a profoundly antidemocratic gospel, almost feudal in its paternalism.”

Effective altruists insist that private charity is the best means for improving livelihoods. ‘Today’s philanthrocapitalists see a world full of big problems that they, and perhaps only they, can and must put right,’ Matthew Bishop and Michael Green write inPhilanthrocapitalism: How Giving Can Save the World, a book that’s become something of a bible for the new philanthropists.

In contrast to claims of novelty, the results-oriented approach of today’s donors is little different than Carnegie or Rockefeller, who were both outspoken about the need to give away their money in an efficient and effective manner.

And just as in Carnegie’s day, philanthropy is often upheld as justification for gross profiteering.

“I donated a total of $5,000,000 to various causes recently. Looking forward to telling you all about it,” Martin Shkreli, the CEO of Turing Pharmaceuticals who was vilified for raising the price of Daraprim by 5,000%, tweeted in mid-September.

This is a prime example of philanthrocapitalism in action: the use of philanthropy to thwart attention to business practices that hamper access to life-saving medicines. And much like in Carnegie’s time, many aren’t buying it.

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Conscious Capitalism is not CSR 07-11

Conscious Capitalism is not CSR

Many people think that Conscious Capitalism and Corporate Social Responsibility (CSR) are very much branches of the same tree. On first glance, many of the activities undertaken by conscious businesses and corporations adopting CSR appear similar.  However, dig a little under the surface and you’ll soon realise that there are significant differences between the two.

According  to the Conscious Capitalist Institute, “Conscious Capitalism is a philosophy based on the belief that a more complex form of capitalism is emerging that holds the potential for enhancing corporate performance while simultaneously continuing to advance the quality of life for billions of people”.

OK, certainly an impressive aspiration, but how does the Conscious Capitalism philosophy have practical applications in running a business?

At its heart, Conscious Capitalism is a business model where interests of all major stakeholders (employees, customers, suppliers, communities, investors and the environment) are served, and the ultimate aim is to maximise shared value for all (not just maximising the value for one group, ie shareholders). Conscious capitalism is embedded in the core structure of a business which, in turns, influences leadership, decision making, business strategy, processes, recruitment and performance management, customers service practices, and so on.

Corporate Social Responsibility, on the other hand, is a term that describes the way a corporation takes into account the financial, environmental and social impacts generated by the business. Philip Kotler defines CSR as a “commitment to improve community well-being through discretionary business practices and contributions of corporate resources”. For example, businesses may engage in CSR activities to go beyond minimum regulatory standards or expectations of environmental groups or social welfare advocates so that they may seen as good “corporate citizens”.

One way to think about the differences between Conscious Capitalism and CSR is that Conscious Capitalism is the engine that drives the car while CSR is an optional extra (especially if you’re running a business with a “conventional economic” engine). Decisions that drive the engine of a conscious business are based on the philosophy’s four pillars (see below), whereas the practice of CSR is often subordinated to the primary goal of a corporation – that is, to maximise the financial return to shareholders.

Indeed, the key difference between the two terms can be found in Kotler’s definition above. CSR is clearly a “discretionary business practice”, which is markedly different to the approach of conscious businesses where creating value for all stakeholders (not just shareholders) is intrinsic to the success of their businesses. Thus, “doing good” and creating shared value is part of the operating model and DNA of all conscious businesses.   So for a conscious business the term “CSR” is superfluous – by its very nature, a conscious business embeds its financial, environmental and social impacts as part of “business as usual”.

John Mackey, Co-Founder of Whole Foods Market, describes the four pillars of Conscious Capitalism as:

“higher purpose, stakeholder integration, conscious leadership, and conscious culture and management. The four are interconnected and mutually reinforcing. The tenets are foundational; they are not tactics or strategies. They represent the essential elements of an integrated business philosophy that must be understood holistically to be effectively manifested. Higher purpose and core values are central to a conscious business and all the other tenets connect back to these foundational ideas.”

A charged often levelled at CSR is that it is “added on” to a business as a way to improve a company’s public image often through public relations, marketing, philanthropy, donations or corporate support (time and/or money) to a community organisation or public cause. This has led many observers to discredit CSR as a form of “greenwash”, and in some cases the charges have stuck.

According to a  TIME magazine article: “This will not surprise anyone familiar with Enron, the once-high-flying energy company whose bosses were not only responsible for one of the great acts of corporate fraud in history but also an almost unprecedented level of corporate philanthropy in the years leading up to their unmasking. Likewise, just two years before the Deepwater Horizon fiasco knocked the stuffing out of British Petroleum in 2010, CEO Tony Hayward announced that the firm’s safety record was among the industry’s best, reflecting a culture of conscientiousness meant to satisfy internal and external stakeholders. Alas, not everyone was listening, especially those tasked with preventing deep-water rigs in the Gulf of Mexico from blowing up.”

Conscious capitalism is a more integrated, cohesive and impactful approach to business than CSR. As Professor Raj Sisodia, Founder of the Conscious Capitalism Institute, states: “Innumerable companies today have a CSR department or have at least nominated a CSR expert, because it is in vogue at the moment and not necessarily because it fits with their inner attitude and the company culture. Often companies study the negative effects of their industry and then invest a lot of money to mitigate these negative effects instead of creating a new business model, so that these negative effects don’t occur to begin with. Many corporations have a significant investment in CSR without integrating it into the existing business model. Conscious Capitalism is solid business management and not just a CSR department.”

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Growing a digital social innovation ecosystem for Europe 03-02

Growing a digital social innovation ecosystem for Europe

This report coordinated by Nesta and commissioned by the European Commission, DG CONNECT is the first systematic network analysis of the emerging digital social innovation (DSI) ecosystem in Europe. 

Key Findings

• The report identifies more than 1,000 rising examples of digital social innovation organisations across Europe, and the hidden links among them.

• Social innovation in Europe is currently done by a few large organisations alongside a large mass of smaller organisations, but the majority of social innovators in Europe are disconnected from the bigger networks.

• The largest and more interconnected community is focused around open hardware and open networks, and there is a large focus on awareness networks and new ways of making.

• The open knowledge cluster is the second largest, with a focus on collaborative economy.

• THe third largest network is grouped around Nesta and is focussed on funding, acceleration and open democracy. Other communities, such as those grouped around open data are developing connected communities.

A growing movement of innovators in civil society, tech and social entrepreneurs are now developing inspiring digital solutions for a variety of social issues, in areas such as health, democracy, consumption, money and education.

We have identified DSI organisations and projects as part of a larger social network and have mapped this network in a way that has not been possible before. 

Digital technologies and the internet have transformed many areas of business – from Google and Amazon to Airbnb and Kickstarter. Huge sums of public money have supported digital innovation in business, as well as in fields ranging from the military to espionage. But there has been much less systematic support for innovations that use digital technology to address social challenges.

Over the last 18 months Nesta, funded by the European Commission, has led a large research project into DSI. The project seeks to define and understand the potential of DSI, to map the digital social innovators, their projects and networks, and to develop recom­mendations for how policymakers, from the EU to city level, can make the most of DSI.

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Impact Investing Needs Millennials 10-04

Impact Investing Needs Millennials

As impact investing tries to make the move from philanthropic thought experiment to powerful instrument for global change, a vital demographic and financial reality is emerging — it’s going to be millennial investors (particularly those inheriting or building significant private wealth) who make or break it.

Since the term was coined in 2007, impact investing — the idea that private capital can be deployed to alleviate pressing social needs like access to clean water, affordable housing or preventative healthcare while returning a financial profit — has attracted significant public and media attention. However, impact investing’s legitimacy as an alternative asset class remains elusive.

Impact investment continues to suffer from limited transaction flow and anemic dollar commitments. Most relevant to stunted growth, however, is cultural resistance — the inertial apathy of traditional financial players who are wary of novel, risky investment structures and skeptical about trading some amount of profitability for social return. Without the commitment of commercial financiers to include impact investments in their core portfolios, or pressure from mainstream investors to insist that they do, impact investment’s route to scale is uncertain.

Enter the millennials (the roughly 80 million Americans born between 1980 and 2000, and their peers around the world), who conceive of financial return differently, and more expansively, than their elders. For millennials, pressing social problems are not just the preserve of philanthropists or governments. Millennials consistently cite social impact as one of the most important roles of business. Of all the generations alive today, millennials are the most willing to trade financial return for greater social impact, according to “Millennials and Money,” a 2014 study from Merrill Lynch’s Private Banking and Investment Group.

According to another study, U.S. Trust’s “Insights on Wealth and Worth,” wealthy millennials are almost twice as likely as their grandparents to regard their investments as a way to express social, political, or environmental values (see chart), and nearly three-quarters of millennials believe that it is possible to realize market-rate returns investing in companies based on their social or environmental impact.

These opinions matter. Millennials are poised to share in the largest intergenerational wealth transfer in human history — one widely-cited estimate puts its value at $41 trillion in the United States alone by the year 2052.

Millennials therefore represent a sizeable, well-capitalized cohort of investors with a generational commitment to furthering the social good and a desire to engage their peers — and parents — in doing likewise.  As recent events show, they are beginning to act on these principles. At the recentNexus Global Summit on Innovative Philanthropy at the United Nations, which we attended, 600 largely millennial-aged participants from 41 countries representing nearly $750 billion in private and family wealth spent three days exploring and sharing case studies of social investments. Some of the investments had the sophisticated deal structures of large corporate transactions, some showed private sector engagement driving infrastructure development and quality-of-life improvement, and all demonstrated growing connections between policy and profit at national and international levels.

When we contrast our inspiring experience at Nexus alongside the still-limited impact- investment landscape, we conclude that three actions will be critical to accelerating the mobilization of capital by millennials and allowing impact investing to scale to a projected $1 trillion market by 2020.

First, private-sector entrepreneurs need to keep identifying opportunities to build companies that can accept and use impact capital to grow to scale, providing an increasing capacity for deal flow. Some commentators have compared the opportunity presented by impact investing to the early days of venture capital. We find such comparisons premature, but agree in one respect: to scale, impact investing will require a small contingent of ambitious investors prepared to make sizeable bets on promising entrepreneurs in order to demonstrate the asset class’s viability.

Second, millennials should vote with their wallets and demand that retail banks, wealth managers, and advisory firms provide a suite of financial products that range across the risk/return/impact triangle. Wealth management firms acknowledge that they are not yet positioned to give impact investing equal footing to conventional investments. In the “Millennials and Money” report we cited above, Merrill Lynch described one client’s impact investment as “a tricky undertaking for both client and advisor…the collaboration, in many ways an experiment, is ongoing.” For the same investment, the report asks, “what measures should be used to judge the social impact of these investments? How long should you wait for that impact to take hold, let alone a profit stream?” These are the questions investors are looking to advisory firms to answer, not just ask.

Of course, not all millennials will inherit or create millions in personal wealth. But our generation is remarkably consistent in attitude, regardless of financial position — 92% say business success should be based on more than profit. Millennials also believe in the power of private capital. More than half of millennials in the same study (conducted by Deloitte) believed that business, not government, will have the greatest impact in solving society’s most pressing challenges. We expect that wealthy millennials will pave the way for the mainstreaming of impact investment products for their peers as well as their Baby Boomer and Generation X parents and grandparents, whatever the size of their portfolios.

Third, growing impact investing will take collaboration and cooperation. Public- and private-sector actors will need to partner with academia to aggregate information on impact investing deal activity, compile best practices in impact measurement, reduce transaction costs, and inspire new participants through social engagement. The first report of the U.S. National Advisory Board on impact Investment is an important first step; the next challenge for government is to design and foster a supportive regulatory environment, one that regards private capital as positive force to be harnessed, and impact investors as partners in social progress.

We anticipate that millennials’ growing commitment to impact investing on multiple dimensions — dollars committed, deals completed, financial returns achieved, and development goals addressed.  Most importantly, however, we look forward to a growing alignment of developed world capital with a social conscience, driven by one of the core millennial mantras: doing well by doing good.

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Solar Light Libraries, A Social Business effort at Sustainability in Africa 10-04

Solar Light Libraries, A Social Business effort at Sustainability in Africa 
   

Are you looking for a way to grow demand for solar lights in Africa that doesn't undermine attempts to build a sustainable market? We thought so. Then perhaps this Guide to our successful Light Libraries project is right up your street.

You may remember from a previous blog the Light Library project is funded by Lighting Africa, a World Bank/IFC joint initiative, and delivered in partnership with the Senegalese Rural Electrification Agency and the Ministry of Education.

Nearly 5,000 solar lights, 58 schools and an estimated 55,000 people gained direct exposure to the solar lights through the project whose objective was to support market-building by overcoming two of the main barriers to uptake: lack of trust and awareness.

As a follow up to the project, our social enterprise SunnyMoney, delivered its traditional sales campaign to assess change in demand and found that sales were dramatically higher in the Light Library schools at 35% of school population (2,138 lights) than in control schools with15% uptake (966 lights).

The Light Library model not only appears to have increased uptake but also seems to have reduced the perception of risk. Many of the Light Library schools included customers from lower-income families who are generally more risk averse and less prone to become early adopters.

The Guide shares information on the design and delivery of the project and the subsequent delivery of SunnyMoney’straditional sales model. It shares the results of the evaluation as well as the lessons learned, challenges faced and key issues addressed.

We know that the only way we’re going to be able to eradicate the kerosene lamp is by being open, transparent, and sharing our knowledge with others. As part of this ethos we will make the tools and materials designed for the Light Library project available for public use.

Govt mulls setting up 'social bourse 02-21

Govt mulls setting up 'social bourse'

To provide platform for non-profit entities raise capital in transparent manner

The Union finance ministry has sought the views of the Securities and Exchange Board of India (Sebi) for the creation of ‘social stock exchanges’, people with direct knowledge of the matter said. These exchanges will provide a platform to help non-profit entities such as non-governmental organisations, trusts, cooperative societies and even political parities raise capital in a transparent manner.

Sources said the idea behind the exchange was aimed at providing a transparent, technology-based platform for investments in social welfare projects in India.

The UK, South Africa and Brazil have experimented with public trading platforms for social entities. On these platforms, capital is raised by dividing the cost of a project into smaller denominations that are made available for purchase. Investors can choose from a number of projects for investments and keep a tab on the status of the projects by following the disclosures and announcements made by the company.

STOCK EXCHANGE FOR A CAUSE

What is a social stock exchange? A platform for raising capital for social purposes Who can list on this exchange? Non-profit organisations like NGOs, trusts, cooperative societies and even political parities What's the investment rationale? Not to earn any economic return but to make a social impact Are there such exchanges in other countries? Brazil, South Africa and United Kingdom are said to have experimented with the concept When will it be launch in India? The ministry of finance is said to have floated a concept paper on ‘social stock exchange’. It has sought feedback from stakeholders such as Sebi

“It is a wonderful concept. There are many people who want to invest in a social cause, but are not sure about where to invest,” said J N Gupta, former executive director of Sebi and founder of proxy advisory and corporate governance firm SES. “If social enterprises become as transparent as listed companies, it will give them more credibility.”

According to people in the know, the ministry has sought Sebi’s suggestions on various aspects such as trading, disclosure requirements and monitoring.

Some experts said the initiative might involve a number of challenges such as selection of companies, pricing, and market-making. “Scrutinising social enterprises, to keep away the bad ones from listing, will be a difficult task. Such an exchange will have hardly any liquidity and might end up being just an electronic capital-raising platform,” said an official at a stock exchange, on condition of anonymity.

Gupta of SES said the move would help the social economy, but added there could be concerns such as pricing of securities, liquidity and settlement.

Globally, social projects have been listed on exchanges such as Brazil’s Socio-Environmental Investment Exchange and the South African Social Investment Exchange. However, these exchanges have ended up as mere online donation platforms.

About a decade ago, the government had floated a similar idea — that of creating a trading platform for listing of a large number of small and medium enterprises (SMEs) in India. It was felt an SME exchange would help small entrepreneurs raise capital to fuel growth and expansion, with less stringent regulatory norms.

In 2011, Sebi had cleared a framework for listing SMEs, with listing and disclosure requirements that were easier compared to main stock exchanges. In 2012, the BSE had started India’s first SME exchange. Subsequently, the National Stock Exchange also launched its SME platform. Currently, about 50 companies are listed on the SME platforms of these two exchanges.

Experts said setting up a social stock exchange might be difficult compared to an SME exchange, an extension of the main stock exchange.

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Social Business = Social Bonding 10-17

Social Business = Social Bonding Text Reproduced from MIT Sloan Management Review A study by FedEx and Ketchum found that 52% of respondents said social business was strengthening relationships with the general public; 51% said it was strengthening relationships with clients; and 40% said it was strengthening relationships with partners and suppliers. A study by FedEx and Ketchum found that 52% of respondents said social business was strengthening relationships with the general public; 51% said it was strengthening relationships with clients; and 40% said it was strengthening relationships with partners and suppliers. Social business activities can pay off in various ways. Earlier this year, MIT Sloan Management Review and Deloitte highlighted benefits related to better market intelligence, faster customer service as well as improvements to internal operations, such as finding expertise, distributing knowledge and more effective project collaboration. (See our 2012 Special Report, Social Business: What Are Companies Really Doing?) But businesses are also reporting another more subtle benefit from social business. It’s a benefit that embraces both external and internal operations and may provide unanticipated and new advantages that can enhance the company as a whole. What we are referring to is building better relationships. And a recent study by FedEx and Ketchum suggests that this vital activity is being enhanced with social technologies. Here are more details. This past spring, FedEx and Ketchum launched its second “Social Business Benchmarking Study,” a follow up to its initial study conducted in 2010. This year’s research included both a quantitative and a qualitative portion. The quantitative segment was a survey of communication and marketing executives, mostly from firms with 2,000 or more employees with revenues over $2.5 billion. They included a mix of industries as well as firms in B2B, B2C and mixed B2B/B2C companies. There were 55 respondents to this survey, and they represented firms with familiar names such as P&G, Corning, Time Warner Cable, Southwest Airlines and Xerox. The qualitative portion was a discussion with 20 thought leaders, and included conversations with well-known experts in social business like Dion Hinchcliffe, Charlene Li and Jeremiah Owyang, among others. A key finding from the survey was social business’s role in relationships: 52% of respondents said social business was strengthening relationships with the general public; 51% said it was strengthening relationships with clients; and 40% said it was strengthening relationships with partners and suppliers. While building stronger relationships is naturally fuzzier and harder to pin down benefit than, say, “customer response time” or even something like “increased market intelligence,” improved relationships means a stronger business across and beyond the organization. (We’ve previously published on the importance of building trust with employees and customers and suppliers; see, for instance: “Unconventional Insights for Managing Stakeholder Trust,” by Michael Pirson, and Deepak Malhotra, from the July 1 2008 issue of MIT SMR.) The FedEx/Ketchum study’s report of the connection between social business and improved stakeholder relationships is supported by other researchers in the field. In a recent interview with MIT SMR, strategy and management consultant Nilofer Merchant discussed how her research found that social enhances a firm’s relationships with employees and customers. Jacob Morgan, principal of Chess Media Group, a management consulting and strategic advisory firm on collaboration and the author of The Collaborative Organization (McGraw-Hill, 2012), told us that based on his observations, the benefits of collaboration even positively impacts the quality of life of employees at home, outside of the workplace. And Dion Hinchcliffe, in his four-stage Capability Ladder of Social Business, says that the highest level in the ladder is also relationship based, what he calls the ability to “partner with the world.” Of course, it’s not going to be easy, or perhaps even possible, to tease out any kind of measurement or number on how enhanced relationships pays off. But while metrics are important in discrete projects, an attempt to measure the return on good relationships could be seen as futile. Would it be wise for Apple to determine and come up with a metric to measure the payoff from the love its customers have for the firm and its products? Some benefits, like good relationships, don’t require an ROI study. Reproduced from MIT Sloan Management Review