Social good lingo… does it sometimes glaze you over too?

What’s a social venture? How is that different from a social enterprise? To be innovative, does there have to be a new App? Who is a Social Entrepreneur and how does that vary from being an entrepreneur? What’s a Social Objective? How can we define Social Impact? How about outputs and outcomes? Is a social profit the same as the social return on Investment (SROI)?


If we are really going to talk about creating positive social change, thought it would be helpful to start a glossary of terms we banter around.  Please contact me with additions and tweaks, this is list is by no means exhaustive……


  • Innovation: a break from practice, large or small, that leads to significant positive social impact.

Six elements for building innovation capacity: (1) Catalytic leadership that empower staff to resolve problems; (2) A curious culture among staff to look beyond status quo; (3) Diverse teams; (4) Porous boundaries for information flow within and among stakeholders; (5) Idea pathways to transform ideas into solutions; (6) Ready resources (funding, time, training, and tools) to support innovation. (Stanford Social Innovation Review)

  • Social Indicators: A quantitative or qualitative factor or variable that provides a simple and reliable means to measure how well a desired goal is being achieved. (OECD/DAC, 2002) Enables measuring and monitoring changes of a specific dimension of human well being.

Output—measures what happens as a result of directed inputs and activities.  It is usually a  unit of measure, counting things like the number of individuals served or the number of times an activity is carried out.

Outcome— A qualitative and/or quantitative measure that defines what has been accomplished as a result of all the outputs.  In other words, as a result of the synergy of all activities and inputs targeting a positive change, what change has actually occurred?

Impact— A qualitative and/or qualitative measure to  illustrates whether or not the interventions in the social sector targeted made any difference.  This is the  ‘so what?” of why you do what you do and often is reflected as the change desired in your organization’s mission. One way to look at this is to measure  what resulted from the program interventions (outcomes) and compare those values with similar populations that did not receive your program’s interventions— and then factor in for what would have resulted anyway.  Impact tells us what real difference we contribute to in society, in terms of the specific work we are doing.

Entrepreneurs: are motivated by responding to a market need and generating a return on investment (ROI). Return on Investment (ROI): is the most common profitability ratio. There are several ways to determine ROI, but the most frequently used method is to divide net profit by total assets. So if your net profit is $100,000 and your total assets are $300,000, your ROI would be .33 or 33 percent.

Social Entrepreneurs: are motivated by bringing an impactful change for social good in society, usually for the marginalized or disenfranchised.    Social Return on Investment (ROI):  is a method for measuring values that are not traditionally reflected in financial statements, including social, economic and environmental factors, which can identify how effectively an organization uses its capital and other resources to create value for the community. SROI is useful to because it can improve program management through better planning and evaluation; increase understanding of  program impact; and allow better communication regarding the value of the program (both internally and to external stakeholders). Philanthropists, venture capitalists, foundations and non-profits may use SROI to monetize the social impact, in financial terms.

A general formula used to calculate SROI:

SROI = (social impact value – initial investment amount) / initial investment amount *100%)

Four main elements that are needed to measure SROI:  (1) Inputs – resources investment in your activity (such as the costs of running a job readiness program); (2) Outputs – the direct and tangible products from the activity (for example, the number of people trained); (3) Outcomes – the changes to people resulting from the activity (i.e., new jobs, better income, improved quality of life for the individuals) and increased taxes and reduced support for the government; and (4) Impact – the outcome less an estimate of what would have happened anyways (for example, if 20 people got new jobs but 5 of them would have anyways, the impact is based on the 15 people who got jobs as a result of the job readiness program). (Investopedia)

Social Ventures: an undertaking by social entrepreneurs that seek to provide systemic solutions to achieve a sustainable, social objective.Social ventures may be structured in many forms, including sole proprietors, for-profit and not-for-profit firms, non-governmental organizations, youth groups, community organizations, and more. Typically, government organizations are not considered to be social ventures.solve social problems and provide social benefits. The social venture may generate profits, but that is not its focus. Rather profits are a possible means to achieve sustainability in providing a social benefit. The problems addressed by social ventures cover the range of social issues, including poverty, inequality, education, the environment, and economic development. The context in which social ventures operate is very complex as they are trying to bring about solutions where markets or governments may have failed or actually impede solutions. Further, these ventures are trying to provide solutions where money is usually in short supply—often these ventures have little assurance that their services can be paid for by those they seek to serve. These conditions necessitate that the social entrepreneur be creative, adaptable, and determined in finding new solutions to problems.
Three models for social ventures: (1) leveraged nonprofit-– in this venture the entrepreneur uses external partners for financial support in providing a public good; (2) hybrid nonprofit— this venture recovers a portion of its costs through sales of its goods or services; and (3) social business– this venture generates profits, but rather than return those profits to shareholders, like commercial ventures, it reinvests those profits to further the social venture and the resulting social benefits.[1]
Social-profit organizations is a term that can better capture the contribution made by entities that have too long been known as charities or nonprofit groups. This term  focuses on the investment, risk taking, and entrepreneurial imagination that have always been so essential to organizations that serve the social good. Today’s social investors seek and expect a return on their efforts, in the form of an increase in the greater good.

Planning concepts that matter 

  • Social Objective: Clearly defined, desired impact related to human well being as a result of a specific intervention.
  • Strategic Planning: Strategy in the social-profit sector can be similar to strategy in the private sector in terms of planning for inputs, outputs, and outcomes and resources to be leveraged. If a social enterprise is also involved, mission-aligned financial gains can sustain longer term social impact for the social profit.  However, a major area where the social sector is different from the private sector in strategic planning, is in measuring and reporting on the social return on investment (SROI).  In the social profit sector, the SROI is the ‘so what’ for investing in social change– it is the ‘bottom line’ measure for justifying any social profits existence.  So in the social profit sector, strategy must also include measures for social impact (beyond outputs and outcomes.)
  • Theory of change: You know your mission and your vision for social change.  You even can define what ‘bite out of the social problem’ you plan to impact in the upcoming three to five years.  Do you have a clear, rigorous, evidence-based model for translating your organizational mission into a specific plan of action?  If not, you need to be able to clearly communicate your  theory of change to potential investors in your social change vision.
  • Core competencies: What are the distinctive skills and capabilities of your social profit, and do they align with the programs that you are committed to pursuing?
  • Resource Mapping: The resources of internal and external stakeholders must identified, harnessed and leveraged as part of the strategy to impact and sustain positive social change. Not only does this enhance program efficiencies, but it also builds stronger networks on the social profit landscape for sustainable change.



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