GSBI+Methodology+for+Social+Entrepreneurship

T H E M I L L E R C E N T E Rf o r So c ial E n tr epr e n e u r s hipThe GSBI Methodologyfor Social Entrepreneurship:Lessons from 12 Years of Capacity Developmentwith 365 Social EnterprisesBy Andrew Lieberman, Pamela Roussos, and Keith Douglass Warner OFM

EXECUTIVE SUMMARYThe Global Social Benefit Institute (GSBI®), a pioneer in social enterprise capacity development, hascontinuously improved its methodology since its founding in 2003. The lessons GSBI has learned fromworking with 365 social enterprises are broadly applicable to capacity development efforts acrosssectors and geographies. This paper introduces GSBI and explains the GBSI® methodology, with thegoal of helping the global social enterprise movement create more exits from poverty.GSBI has become a leading, comprehensive program for social enterprise capacity developmentworldwide. Its suite of stage-specific programs for early and mid-stage social enterprises, along with itsnetwork of partners, collectively serve hundreds of impact organizations annually.GSBI has developed a methodology that revolves around three dynamic, interactive aspects: socialenterprise selection, stage-specific programs, and executive-level mentoring. GSBI invites applicationsfrom social enterprises that are “impact first,” meaning that their primary mission is to deliver goodsand services to those in need.GSBI evaluates candidates in two phases. GSBI staff filter for general program fit, then score candidatesaccording to criteria that predict each enterprise’s potential for short-term success in GSBI as well aslong-term growth. Priority is given to social enterprises with earned income business models, becausethis approach lends itself to scaling. To match a social enterprise with the curriculum most appropriateto help it grow, GSBI developed a Social Enterprise Stage Assessment Tool.2

For its first nine years, GSBI provided a single “one size fits all” program. Today, GSBI offers a range ofprograms and curricula through its three stage-specific programs:→→→→→→GSBI Boost helps entrepreneurs at early-stage enterprises outline their businesses and developtheir business models.GSBI Online works with entrepreneurs at early-stage enterprises to create their business plansand test assumptions.GSBI Accelerator prepares mid-stage enterprises for scale and investment.In early stages of their growth, social enterprises focus on developing and refining impact models toachieve their missions while simultaneously refining their business models. Once these models aremature, the enterprise begins to scale, which requires two new parallel areas of focus. One area isoperational excellence, defined as the formalization of the business structures and processes requiredso the enterprise has the capacity for rapid and extensive growth. The other area is investment readiness,defined as having the installed capacity, documentation, and growth plan needed to be successful whenraising funding for scaling.GSBI distinguishes itself from other capacity development organizations for social enterprises throughthe quality and depth of its mentoring. GSBI mentors, who are successful Silicon Valley businessexecutives with decades of experience and connections, volunteer to work intensively with GSBI socialentrepreneurs in an in-depth relationship. GSBI mentors provide hands-on knowledge of what it takesto build enterprises.The mentors coach, educate, and encourage program participants for two hours a week for the duration ofGSBI programs. GSBI selects mentors carefully. In addition to business acumen and strong operationalexperience, mentors must have the values and interpersonal skills to interact and empathize with aperson from a different culture, who is often struggling with minimal resources and funding.In addition to the mentors who work one-on-one with a single enterprise, GSBI also uses domain orcontent experts such as chief financial officers; sales, marketing, and business development leaders;and lawyers with experience in mergers and acquisitions. These domain experts work across multipleenterprises engaged in a particular GSBI program.Over the years, social entrepreneurs have, in effect, taught GSBI how best to enhance its ownmethodology. In addition to the insights garnered from working with social enterprises, the successof GSBI can be traced to its two major influences: the ethos of its Jesuit university host institution,imparting the ethical responsibility to work toward a more just and humane world; and the acumen ofits Silicon Valley milieu, with its culture of innovation and entrepreneurship. GSBI demonstrates howSilicon Valley and universities can collaborate with the social enterprise movement to create morepathways out of poverty.3

IntroductionSocial entrepreneurship offers the potential ofa path out of poverty for hundreds of millionsof people around the world. But fulfilling thispotential will require broad and sustained effortsto help social enterprises scale. The Global SocialBenefit Institute® (GSBI) has been a pioneerin social enterprise capacity development. Ithas formulated, refined, focused, and tested asuccessful methodology while scaling its ownimpact.The GSBI methodology revolves around threedynamic, interactive aspects: social enterpriseselection, stage-specific programs, andexecutive-level mentoring.These aspects of the methodology are reflectedin three distinct GSBI programs targeting earlyto mid-stage social enterprises. Early-stageparticipants refine and validate their socialimpact models and business models. To scaletheir impact, mid-stage social enterprisesdevelop operational excellence and work tobecome investment ready. Through all GSBIprograms, experienced Silicon Valley executiveshelp social entrepreneurs apply the curriculumto their specific social enterprises.The success of GSBI programs can be tracedin part to two major influences: the ethos of itsJesuit university host institution, imparting theethical responsibility to work toward a more justand humane world, and the acumen of its SiliconValley milieu, with its culture of innovation andentrepreneurship. However, the lessons GSBI haslearned from working with 365 social enterprisesare broadly applicable to capacity developmentefforts anywhere. This paper introduces GSBIand explains its methodology, with the goal ofhelping the global social enterprise movementcreate more exits from poverty.4

Social Entrepreneurship and GSBIThe social entrepreneurship movement is anemerging social change strategy that draws fromthe creativity and drive of entrepreneurship.Social entrepreneurs apply business tools andstrategies to solve social problems, especiallythe suffering of the poor. They found and leadentrepreneurial organizations that engage indirect action to address social needs. 1Social entrepreneurs believe that markets canbe powerful forces for creating a more just,inclusive, and sustainable society. They leveragetheir enterprises to create new markets thatserve the economically marginalized. Ratherthan criticize the failures of government andcorporations, they choose to create enterprisesand markets that serve human beings. In anera of rising skepticism about globalization,social entrepreneurs have shaped an economicdevelopment model that is more humane andinclusive. 2Social entrepreneurs apply techniques fromconventional entrepreneurship, but with adifferent impetus. They are motivated by solvingsocial problems rather than accumulatingprivate wealth. 3 Here are some examples thatillustrate how social entrepreneurs identifysocial problems and convert them into businessopportunities:→→→→In communities that lack clean water, socialentrepreneurs create small businesses thatdeploy water purification technologiesto sell potable water where it was notpreviously available.More than 700 million Africans lack accessto any grid energy. A number of socialenterprises are developing businessesthat sell innovative solar power lighting→→systems to African communities, oftenproviding micro-finance or rent-to-ownpurchase models to make the systemsaccessible to more people.In regions with a legacy of bias againsteducating girls, organizations areproviding training for young women, thuscreating livelihoods and access to higherpaying jobs.Social entrepreneurs share the sameopportunity-seeking orientation, imagination,and determination as conventionalentrepreneurs. However, they measure successin a fundamentally different way: by assessingsocial impact. Social entrepreneurs use successmetrics such as the number of households withroutine access to clean water; the net increasein household income and improvement inchildren’s respiratory health as a result of thetransition from kerosene to solar energy; orthe number of women employed for the firsttime and the subsequent benefit to householdfinances.Unlike traditional non-profit organizations,social enterprises develop business models thatfree them from grant dependency. By chargingthe beneficiaries themselves for a product orservice, social enterprises cultivate a customerorientation, in contrast to traditional aid modelsthat perceive beneficiaries as (often passive) “aidrecipients.” This business approach forces socialenterprises to understand the needs of theircustomers and to find ways to meet them. Evenif the product or service is heavily subsidized,revenue from these economic transactions helpscustomers value the product or service andprovides a source of revenue to the enterprise.5

Defining SocialEntrepreneurshipA classic definition of social entrepreneurship was provided by the lateJ. Gregory Dees, a pioneer in the field. Social entrepreneurs play therole of change agents in the social sector by:→→→→→→Adopting a mission to create and sustainsocial value (not just private value)Recognizing and relentlessly pursuingnew opportunities to serve that missionEngaging in a process of continuousinnovation, adaptation, and learning→→→→Acting boldlywithout beinglimited by resourcescurrently in handProfits are generally re-invested to furtherpursue the social mission.Social entrepreneurship is a global movement.Although this movement has diffuse origins, thepioneering work in microfinance by MuhammadYunus and the Grameen Bank demonstratedthat helping the poor to become activeparticipants in the economy can provide a pathout of poverty. 5 Social entrepreneurship buildsupon the logic of microfinance and extends itby creating enterprises that provide essentialExhibiting a heightened sense ofaccountability to the constituenciesserved and for the outcomes created 4 6goods and services, as well as opportunitiesfor employment. In the Global South, socialentrepreneurship has been used to pursue theUN’s Millennium Development Goals. 6The social entrepreneurship movement promisesa different kind of economic globalization, apro-poor form of economic development. Whilethere are many thousands of social enterprisesaround the world, at issue is whether they canscale and fulfill their collective potential.GSBI: Strengthening Social EnterprisesGSBI is a pioneering social enterprise capacitydevelopment program launched in 2003. Itwas founded to enable promising technologyinnovations to reach poor communitiesworldwide by helping social enterprisesgrow. GSBI is now a leading, comprehensiveorganization for social enterprise capacitydevelopment worldwide.GSBI has expanded from one annual programfor early-stage social entrepreneurs — “GSBIv1.0” — to a suite of stage-specific programs anda network of partners addressing the distinctiveneeds of early and mid-stage entrepreneurs,collectively serving hundreds of impactorganizations annually. Program offeringsinclude:

→→→→→→GSBI Boost for early-stage entrepreneursto outline their business and develop theirbusiness models.GSBI Online for early-stage entrepreneursto create their business plans and testassumptions.GSBI Accelerator preparing mid-stageenterprises for scale and investment.→→GSBI Network for mission-aligneduniversities and capacity developmentorganizations to share best practices,collaborate on joint initiatives, and expandthe resources available to the socialentrepreneurs within each member’snetwork.→→GSBI Xchange provides workshops andcustomized technical assistance to othercapacity development programs thatenables them to adapt GSBI content andmethodology into their programs.GSBI tracks social enterprise participants inthree programs (see Fig. 1). As of this writing,GSBI has worked with 365 social entrepreneursoperating in 61 countries, and deliveredprograms in seven countries. The GSBI Networkincludes 23 capacity development organizations(including universities) in 15 countries. GSBI isscaling itself.GSBI has honed an enterprise stage-appropriateset of programs with a common methodologyvalidated by the breadth of successful programgraduates. The methodology itself centers onthree dynamic, interactive aspects: selection ofsocial enterprises and determination of theirstage of development; matching stage-specificprograms with each social enterprise; and indepth,customized mentoring by experiencedSilicon Valley executives.Fig. 1: GSBI Social Enterprises by Program & Year, 2003 – 201414012094941008052604027262015161717161419v1.01572003200420052006200720082009201020112012201320146189191612147

Lessons LearnedGSBI has grown into an interactive, open access,co-learning laboratory with global reach to helpsocial enterprises. GSBI offers specific programsinformed by years of learning about “whatworks” to help social enterprises. The GSBImethodology is derived from 12 years of practicebasedlearning while developing capacity withinsocial enterprises. Several core beliefs, drawnfrom our collective experience of working in thisfield, guide our work.Lessons learned about social enterprises:→→→→We believe that the scaling of socialenterprises can provide an exit frompoverty for people worldwide.We believe that social enterprises withearned-income business models are morelikely to scale their impact.→→We believe that customized mentoring isessential for social entrepreneurs to applya stage-appropriate curriculum to theirorganization.Lessons learned about the social enterprisemovement:→→We believe that social enterprises mustfirst refine and validate their social impactand business models before they are readyto scale.→→We believe that Silicon Valley acumen,with its tradition of innovation andentrepreneurship, can help the socialenterprise movement.→→We believe that once social enterprisesdevelop operational excellence andinvestment readiness, they are on a path toscaling.Lessons learned about capacity development:→→→→We believe that interactive co-learningmodels, with practice leading theory, canhelp social enterprises scale.We believe that determining the stage ofa social enterprise is critical to providingcurriculum tailored to help it grow.→→We believe that universities can supportand learn from the social enterprisemovement.→→We believe that universities with asocial vision – such as Jesuit, Catholicuniversities – can advance their missionsin practical ways by partnering with thesocial enterprise movement.Subsequent sections of this paper will explainthe practical, programmatic implications ofthese beliefs. Together, these comprise the GSBImethodology.8

Bringing Light to Rural MexicoGSBI has many vivid success stories among itssocial enterprises. One example is Iluméxico,founded by Manuel Wiechers after hegraduated with a degree in renewable energy.His vision for Iluméxico was to provide solarpower to the Mexicans who needed it most:remote rural communities, mostly indigenouspeople, who live beyond the electric grid and farfrom modern roads.Iluméxico was selling its rural energy products— solar home systems, solar-powered energyfor community development, and solar-powerwater pumps for rural clinics — to poor people,but the business faced significant hurdles. Itsoffice in México City was a long way from itsrural customers, who lived in jungles and onthe sides of mountains. Reaching them wasexpensive, and it was hard to know when, what,and why they would buy.Manuel participated in GSBI Acceleratorin 2013. He refined his business modelby launching rural energy distributioncenters, known as Ilucentros. These centersreflect GSBI’s emphasis on understandingbeneficiaries as customers. He was able to offsetthe start-up costs of new centers with grantsfrom governments of several Mexican states.What started as a dream in 2009 has evolvedinto a thriving company. GSBI curriculumand investor presentations helped Manuelclarify his vision, crystallize his plans, andcommunicate his mission. Today, there are fiveIlucentros serving 3,500 installed systems and18,000 households, displacing 1,800 tons ofCO2 in the process. In March 2015, Iluméxicoreceived a variable payment option (demanddividend) 7 investment to help it scale and reachmore customers.9

Jesuit Ethos and Silicon Valley AcumenIn addition to the insights garnered fromworking with 365 social enterprises, the successof GSBI can be traced to its two major influences:the humanistic ethos of Jesuit higher educationand Silicon Valley acumen. GSBI is the flagshipprogram of the Miller Center for SocialEntrepreneurship at Santa Clara University, andit draws heavily from Silicon Valley’s culture ofinnovation and entrepreneurship.As a comprehensive Jesuit, Catholic institution,Santa Clara University provides both intellectualresources and a social justice orientation thatare ideal for developing the capacity of socialenterprises. Its Jesuit tradition emphasizesprofessional training, ethical civic engagement,and a commitment to service to others, especiallythe poor and marginalized. 8 Santa Clara educatesits students and simultaneously seeks to foster amore just, humane, and sustainable world.The Miller Center for Social Entrepreneurshipwas founded in 1997 9 as one of three Centersof Distinction at Santa Clara University. Thesecenters embody the university’s mission tounite students and faculty with local and globalleaders to address significant public issues. TheMiller Center accelerates global, innovationbasedentrepreneurship in service to humanity,turning its strategic focus to poverty eradicationthrough its three areas of work: GSBI, ImpactCapital, and Education and Action Research.Santa Clara University business school facultyfounded the Center and GSBI, but professionalstaff in the Miller Center now direct it. TheImpact Capital department creates innovativefinancial inclusion vehicles to unlock capitalflows, prepares social entrepreneurs forinvestment readiness, and educates impactinvestors. The Education and Action Researchdepartment anchors the Center firmly in theuniversity through classroom and field-basededucation on social entrepreneurship. Itprovides transformational social justice learningthrough the Global Social Benefit Fellowship,and it links social entrepreneurs with on-campusresearch. All of these efforts reflect the Center’scommitment to a pedagogy of accompaniment,of learning with and from social entrepreneurs.Silicon Valley grew up around Santa ClaraUniversity, and thus GSBI is able to draw onthe expertise of local entrepreneurs, investors,and executives to serve as program mentors.More than most other social enterprise capacitydevelopment programs, GSBI helps socialentrepreneurs strengthen their business modelsin order to scale.10

THE GSBIMETHODOLOGYThe GSBI methodology is both practical and inspirational. The methodology revolves around threedynamic, interactive aspects:→→→→→→Social enterprise selectionStage-specific programsExecutive-level mentoringHere is a deeper look at each of the three aspects that interact to form the GSBI methodology.11

Social Enterprise SelectionGSBI invites applications from social enterprisesthat are “impact first,” meaning that theirprimary mission is to deliver goods and servicesto those in need. GSBI attracts candidate socialenterprises through an open, competitiveapplication process. It actively markets to andrecruits potential candidates through a globalnetwork of mission-aligned organizations thatinclude other capacity development programs,investors, awards programs, universities,and social entrepreneurs who have alreadycompleted GSBI programs.GSBI evaluates candidates in two phases.First, the staff filters for general program fit,determined primarily on the criteria of thepotential social impact of the enterprise, theenterprise’s developmental stage, and alignmentof the candidate’s goals with the programsthat GSBI offers. Second, a team of GSBI staffand mentors interviews and scores the topcandidates according to criteria that predict theenterprise’s potential for short-term success inGSBI and long-term growth. Priority is given tosocial enterprises with earned income businessmodels, because this approach lends itself toscaling. The legal structure (nonprofit versus forprofit)is not important to candidate selection,although sometimes as a result of participatingin a GSBI program, a non-profit might transitionto for-profit status or vice-versa.To match a social enterprise with the curriculummost appropriate to help it grow, GSBI developeda Social Enterprise Stage Assessment Tool. TheMonitor Group’s publication “From Blueprintto Scale: The Case for Philanthropy in ImpactInvesting” 10 proposed a framework for trackingsocial enterprises through their developmentalstages. GSBI aligned its curriculum to thisframework and assigns social enterprises to aspecific program based on this tool.Fig. 2: GSBI Programs Align With Lifecycle StagesBlueprint Validate Prepare ScaleFlow is from the MonitorGroup’s 2012 study,Blueprint to Scale: TheCase for Philanthropy inImpact Investing12

→→Blueprint: Developing the blueprintfor the future business, which includesa compelling initial business plan anddemonstrated core technologies and/orproduct prototype→→→→Validate: Testing and refining the businessmodel, including validation of viability andscalability as well as indication of customerdemandPrepare: Enhancing the conditions requiredfor scaling, which includes effective supply→→chains plus the organization systems,talent, and assets in place to support scalingScale: Expanding the reach of the enterpriseto serve customers with additional productsor in new geographic regionsSocial enterprises have different needs atvarious stages of their development, in areassuch as capital requirements or managementskills. Figure 2 provides an overview of howGSBI programs match with a social enterprise’sassessed stage of development.Stage-Specific ProgramsGSBI implements a range of programs andcurricula, each designed to serve the needsof social enterprises at various stages of theirdevelopment. For its first nine years, GSBIprovided a single “one size fits all” program buthas since evolved to offer three programs:→→→→GSBI Boost: A 3-day workshop that useslectures and examples to help startup socialenterprises learn business fundamentalsand improve their strategic thinking.Participants emerge from GSBI Boost witha draft business plan that demonstratessocial impact, growth, and long-termfinancial sustainability.GSBI Online: A 6-month training programfor early-stage social entrepreneurs toimprove their business models and growthstrategies, while helping them present theirplans in a compelling manner. By the end ofthe GSBI Online program, each participanthas a viable strategy for growing his or hersocial enterprise in a financially sustainablemanner with a validated business model.→→GSBI Accelerator: A 10-month program,structured around nine days in residence atSanta Clara University, for mid-stage socialenterprises. GSBI Accelerator addressesinternal gaps in a social entrepreneur’sorganization and prepares the socialenterprise for the investment process. Thegoal of the GSBI Accelerator is to enablesocial enterprises to scale. This programhelps social entrepreneurs refine theirstrategies for expanding to serve newgeographic regions, or serving existingcustomers with additional products orservices.In early stages of their growth, social enterprisesfocus on developing and refining theirimpact models to achieve their mission whilesimultaneously refining their business models.Once these models are mature, the enterprisebegins to scale, which requires two new areasof focus that must be built in parallel. One areais operational excellence, which we define asthe formalization of all the business structuresand processes required so the enterprise has13

Operational ExcellenceImpact ModelBoost & OnlineAcceleratorInvestment ReadyBusiness ModelFig. 3: Path of Social Enterprise Developmentthe capacity for rapid and extensive growth.Meanwhile, the enterprise works to becomeinvestment ready, which we define as having theinstalled capacity, documentation, and growthplan needed to be successful when raisingfunding for scaling.As shown in Fig. 3, the stage-specific GSBIprograms can be applied as appropriateaccording to the impact model, business model,and operational excellence needed to help asocial enterprise grow and become financiallysustainable.For social enterprises, scale means more than asimple expression of linear growth or enhancedrevenue. Social enterprises can scale theirmission in depth or breadth, or both.→→→→Depth of scale means a deepening of therange of products and services a socialenterprise offers within its community.For example, perhaps a social enterprisebegins by providing tuberculosis detectionand treatment in the state of Bihar in India.If that social enterprise adds testing formalaria or other diseases, and/or healtheducation for the people of Bihar, then itis deepening its effect on the population itserves.Breadth of scale means growing in sizeand in the number of people served. If thatsame social enterprise in Bihar expandsto the nearby states of Uttar Pradesh orWest Bengal, adding new staff membersand offering TB detection and treatment tonew populations, then it is broadening thenumber of people it affects.14

BanaPadsRichard Bbaale grew up in rural Uganda. During hischildhood, he watched as his sister began missingschool when she reached puberty. She had startedher menstrual cycle, but had no access to sanitarypads. Because the products American women canpurchase easily are not available in much of thedeveloping world, hundreds of millions of womenuse leaves or rags, or simply stay home, during theirmenses.When Richard was at university, he learned thatdried banana stem fibers have superior capacity toabsorb blood. Remembering his sister’s experience,he recognized a business opportunity to transformthe circumstances of African women. He foundeda group through his university to tackle thedifficulties Ugandan women faced in menstruationmanagement. In 2010, this group registered as asocial enterprise under the name BanaPads, with thegoal of manufacturing and distributing affordable,eco-friendly sanitary pads to keep girls in schooland create jobs.Richard adopted a “business in a bag” modelfor BanaPads saleswomen, who were known asBanaPads Champions. BanaPads Championspurchase a bag with dozens of sanitary pads and sellthem at schools and in villages. They use a portionof their revenue to buy another bag. Richard’senterprise was meeting social needs and helpingthe BanaPads Champions, but it was not generatingsufficient revenues for Richard to meet his payrolleach month. He believed in his vision, but he wantedhis BanaPads enterprise to pay for itself.In 2012, Richard applied to GSBI and completedpreparatory work online from Uganda, then spenttwo weeks in-residence at the Santa Clara Universitycampus. He learned the nuts and bolts of growing asmall business, including logistics, unit economics,operations, and devising a growth strategy. He alsolearned how to pitch his vision.Richard returned to Uganda and made immediatechanges to his business. He reached out todevelopment agencies and investors and partneredwith local organizations to conduct education. Soon,demand for BanaPads began to exceed supply. Heidentified an opportunity to expand into Tanzania.Funders came to share in his vision, awarding grantsand making investments.Richard credits GSBI with helping him to improvethe management of his enterprise and to leveragethat improved management into funding forexpansion. Today, BanaPads is helping to changethe paradigm of health and employment for EastAfrican women. In November 2014, Richard wonAfrican Social Entrepreneur of the Year.15

Executive-Level MentoringThe importance of mentoring in the GSBImethodology cannot be overstated. GSBIdistinguishes itself from other capacitydevelopment organizations for social enterprisesthrough the quality and depth of its mentoring.GSBI mentors are successful Silicon Valleybusiness executives with decades of experienceand connections who volunteer to workintensively with GSBI social entrepreneurs inan in-depth relationship. Many are foundersof successful startups, venture capitalists, orexecutives at Fortune 500 companies. All arechosen for their experience in startup enterprisesand/or profit and loss (P&L) responsibility inlarger organizations. Most mentors find the GSBImentoring process to be personally fulfilling, andthey return year after year.In addition to the mentors who work one-on-onewith a single enterprise, GSBI also uses domainor content experts such as chief financial officers;sales, marketing, and business developmentleaders; and lawyers with experience in mergersand acquisitions. These content experts addresscommon issues across multiple enterprises in aGSBI program cohort, working in concert withthe mentors assigned to individual enterprises.At any given time, approximately 60 ofthe 80 mentors are working with GSBIsocial enterprises. The mentors provide indepthassistance, coaching, education, andencouragement of program participants for anaverage of two hours a week for the duration ofGSBI programs. GSBI mentors provide hands-onknowledge of what it takes to build enterprisesand make the curriculum come alive for theentrepreneurs they are working with.GSBI selects mentors carefully, based not onlyon their business acumen, but also on theirempathy and values. In addition to strongbusiness and operational experience, mentorsmust have the interpersonal skills to interact andempathize with a person from a different culture,who is often struggling with minimal resourcesand funding.Trusted AdvisorExpressingHumanityHumbleRespectfulEncouragingInspiringEngaged/CommittedActive ListenerPragmaticChallengingHonestFig. 4: Effective Mentors Become Trusted Advisors16

As shown in Fig. 4, GSBI mentors act astrusted advisors to the social entrepreneurs,accompanying them on their journey rather thansimply imparting information. Mentors are notexpected to have all the answers. Rather, theyare expected to have enough knowledge, and tocare enough, to ask the right questions of theentrepreneurs so they can work together to findthe right answers and to chart the best course fora particular social enterprise. This attitude is animportant aspect of how GSBI builds capacity inits social entrepreneurs.On average, each GSBI Accelerator programparticipant benefits from more than 300 hoursof individualized mentorship. Surveys of socialentrepreneurs participating in GSBI Onlineand Accelerator programs indicate that theyparticularly appreciate:→→→→→→Mentors’ constructive feedbackTheir individualized discussions as theywork to refine their business plansMentors’ support and advice in response tothe particular challenges and endeavors theentrepreneur faces on any given dayConsistently, the social entrepreneurs who attendGSBI report that the mentors provide the mostvaluable aspect of their experience. For example,in the 2013 and 2014 GSBI Accelerator program,96% of participants believed that the mentoringthey received allowed them to be successful inthe program, and 100% plan to stay in touch withtheir mentors after completion of their GSBIprogram.Mentor ValuesThe mentoring aspect of the GSBI methodologyis crucial to its success, and it has evolved overtime. Mentor candidates are referred to GSBIthrough other mentors or by the GSBI staff.Prospective candidates meet with the GSBIMentor Director, who selects for demonstrablesigns of the qualities valued in GSBI mentors.GSBI staff and the mentors have developeda list of mentor values, and this is used as alitmus test for evaluating mentors. Does thecandidate listen? Is he or she curious? Humble?If the Mentor Director or other evaluators donot see evidence of these characteristics fromthe beginning, that person does not continueforward.can shadow other mentors, attend the InvestorShowcase, listen to a panel at the end of GSBIOnline, come to a mentor training, or sit induring the in-residence portion of the program.In these ways, prospective mentors can gain asense of GSBI’s mission and the mentor cultureand can understand what is required from them,so they can make an informed decision.GSBI mentorship requires a significant timecommitment of at least two to five hours perweek, often at odd hours to communicate acrosstime zones via Skype and email. Despite thesechallenges, some of our mentors have been withGSBI for more than eight years. And when asked,they contribute even more than what is expected.Evaluation must happen in both directions. Thestaff has created multiple ways for prospectivementors to become familiar with GSBI activitiesbefore committing their involvement. Candidates17

Fig. 5: Types of Capital for Social EnterprisesGIFTS• Generally unrestricted funds given by individual donors.• Donors expect to be thanked and updated to see that impact has beengenerated.GRANTS• Funds from foundations and government agencies tied to a specific set ofproject milestones.• Grantors require reporting of social impact metrics and, to varyingdegrees, financial reports on the use of funds.SOFT LOANS• Loans from foundations or government agencies with payment termsthat are negotiable or are guaranteed by another impact investor insteadof requiring collateral.• Lenders require reports showing social impact and a good faith effort torepay with a nominal amount of interest.TRADITIONALLOANS• Loans from a bank, foundation, or other investor with a fixed repaymentschedule and interest rate. Loan guarantees are often required.• Lenders may have criteria of only lending to social impact organizations,but once those screens are met, these loans are treated like any othercommercial financing arrangement.VARIABLEPAYMENTOBLIGATION• Investments that are paid back over time with payments being tied tothe organization’s performance, such as a percentage of sales revenue,profits, or free cash flow.• Investors expect a longer payback period than a traditional loan and arecarrying more risk, so they expect a higher financial return. They alsoexpect reporting of social impact.CONVERTIBLEDEBT• Investments that can either convert to equity or be paid back to theinvestor at a profit.• To close a deal, an exit strategy needs to be in place.EQUITY• Investors are purchasing a stake of the enterprise.• Equity-impact investors are looking for long-term social impact and alsowant to see an exit strategy in place.18

Becoming Investment ReadyA top priority for the social entrepreneursparticipating in GSBI is to raise investmentto enable them to accelerate the growth oftheir businesses. GSBI describes all manner offunding (gift, grant, debt, debt, equity, or other)as an investment in a social enterprise, itsmission, and its social impact. Helpingeach social enterprise determine the mostappropriate funding source to achieve itsgoals is a main focus of GSBI programs.Funding AmountMentors and entrepreneurs review theseelements throughout the program. GSBIhas learned that tying the curriculumtothe “ask” makes its contentmore relevantto the entrepreneurs, which keeps themengaged and facilitates deeper discussionwith the mentors. This focus also givesmentors a strong tool for working withentrepreneurs by being able to say: If I were aninvestor and you came to me with that “ask,” hereare the questions I would ask in response.InvestorReturnUse of FundsType ofCapitalThe mentors help social entrepreneurs developtheir “justifiable ask” to include:→→→→A funding investment amount that isjustified by a financial model and growthplan.The type of capital that is being soughtand evidence that the effects of the capitalinfusion are incorporated into the growthplan. For example, if the capital comesfrom a grant, does the growth plan includeall the resources that will be required tofulfill the expected reporting requirementsof the grant? If the capital is a loan, arethe repayments taken into account in thefinancial model?Fig. 6 The Justifiable Ask→→→→An articulation of how the investmentfunds will be used: How much goesto working capital? How much forinfrastructure investments? How much forhiring and subsidizing new hires until thebreak-even point is reached?A statement clarifying the expected returnthat will be generated by this infusion ofcapital. In impact investing, the expectedreturn has both social and financialcomponents, which vary based on theinvestor’s goals and the type of capital.19

THE GSBIPROGRAMSGSBI works with early-stage through mid-stage social enterprises, and it matches social enterprises withprograms best designed to assist with the issues facing particular stages of enterprise development.Its primary programs are GSBI Boost, GSBI Online, and GSBI Accelerator.20

GSBI BoostGSBI Boost is designed to help socialentrepreneurs move from the “Blueprint” to the“Validate” stage. GSBI Boost is an in-country, inpersonworkshop that focuses on strengtheninga social enterprise’s mission statement,social impact strategy, and business model.Participants must be managers or directors ofthe social enterprise. The enterprises should beestablished, with a product or service alreadydeveloped and distributed to beneficiaries.Two facilitators lead the three-day GSBI Boostworkshops for 15 to 20 participants. These GSBIstaff members and volunteer mentors are familiarwith the curriculum and with social enterprisesworking in the geographic and impact-sectorcontext of the participants. The workshoptrains entrepreneurs to critically evaluate theirenterprises and articulate specific strategies fortheir development, using worksheets and othertools (e.g., simple financial models built in Excelfrom templates).At the end of the GSBI Boost program,participating entrepreneurs will have thestrategies and materials they need to expandtheir enterprises in a financially sustainablemanner. Each participating enterprise developsa business-plan presentation: a short descriptionof the business and growth strategy for usein emails or as an elevator pitch. The socialenterprise can leverage these componentswhen creating new proposals or applying forthe funding and capacity-building programs theenterprise needs to reach its next level of growth.GSBI BOOST MODULES:→→→→→→→→→→→→Social impact modelTarget market and value propositionMarketing, sales, and partnershipsFinancial modelGrowth strategyExecutive summary presentationGSBI OnlineGSBI Online is a virtual mentored trainingprogram that empowers a social enterprise toevaluate and strengthen its business modeland growth strategy, while helping the socialentrepreneur present those findings in acompelling manner. While the focus and contentis similar to the Boost program, GSBI Onlinegoes much deeper.The expected outcome of GSBI Online is for theenterprise to move from the “Validate” stage tothe “Prepare” stage. This means that the socialentrepreneur will have a strategy for growing theenterprise in a financially sustainable mannerthrough a validated business model and be ableto secure the funding necessary to do so.Between 15 and 25 enterprises are recruited intoa single cohort for each six-month GSBI Onlineprogram. The work is conducted online using acustomized web portal, Skype calls, and email.This approach enables the social entrepreneursto concurrently manage their organizationswhile participating in the GSBI program.A GSBI staff person facilitates the program, andeach enterprise is assigned one GSBI mentor.The program’s curriculum is broken into topicmodules such as social impact model, valueproposition, marketing and sales, cost structureand revenue streams, and financing plans. Thesuggested timeline is to complete one moduleevery three weeks, but entrepreneurs adjust theirtimeline depending upon their travel schedulesand other commitments.Content experts provide instruction throughvideo lectures and supplemental materials.21

Mentors help the social entrepreneurs interpretthe lessons and implement the findings viaweekly Skype calls, to ensure that the curriculumis appropriate to their organizations’ goals andcultural context.By the end of the GSBI Online program, eachparticipating enterprise has developed abusiness plan complete with a stage-appropriateaction plan, operational and social impactmetrics, a slide deck for investor presentations,and a two-page investment summary document.The enterprise has also identified a list ofpotential funders, developed a plan for pitchingthem, and practiced presenting their slide deckto mock investors.GSBI AcceleratorGSBI Accelerator is a 10-month, online programhighlighted by an in-residence workshop atSanta Clara University. Designed for 14 to 18enterprises in a cohort, the GSBI Acceleratorselects social enterprises at the third stage,“Prepare,” and helps them to move to the final“Scale” stage.Two mentors are assigned to each socialenterprise, with additional expertise provided bycontent experts working with the entire cohort.The focus of both mentors and participants isto prepare the enterprises for the investmentprocess and to address any remaining gaps ormissing organizational pieces that might impedethe organizations as they grow in scale.Upon completing the GSBI Acceleratorprogram, each participating social enterpriseis expected to have developed a strategy andfundraising plan to expand its reach for newbeneficiaries within current regions; to serveexisting beneficiaries with additional productsor services; or to expand to new regions. Thisprogram exemplifies the underlying belief thatoperational excellence plus appropriate capitalWith these program deliverables in hand, theenterprise is well prepared to seek fundingand follow-on support from other programs.Further, as the social enterprise evolves, theentrepreneurs and their staff are able to updatethe materials themselves.GSBI ONLINE MODULES:→→→→→→→→→→→→→→→→Program introduction and team buildingSocial impact modelTarget market and value propositionMarketing, sales, and partnershipsFinancial modelOperations planFinancing planFinancing tools and skillsinvestment will enhance a social enterprise’sability to scale its social impact.The GSBI Accelerator’s initial phase, whichtakes place from February to July, consists ofpreliminary work designed to foster a strongworking relationship between the participatingentrepreneurs and their two mentors. Together,they evaluate the enterprise’s business model,pathway to scaling, and strategy for attractinginvestment.The curriculum modules of the GSBI Acceleratorare structured to help the social entrepreneurslearn new concepts and vocabulary and applythem to their organizations. As with theother GSBI programs, core entrepreneurialconcepts are explained through videos andsocial enterprise examples. Entrepreneurs areencouraged to build new documents usingexisting materials already developed for theirenterprise. Unlike other GSBI programs, there isless reliance on templates due to the complexityof the enterprise at this stage.22

The in-residence portion of the GSBI Acceleratorprogram occurs for nine days in August at theSanta Clara University campus. Each morning,social entrepreneurs participate in seminars ledby content experts, and they present portions oftheir business plans and enterprise operations tobe critiqued by experts, mentors, and fellow socialentrepreneurs. Later in the day, entrepreneurswork with mentors, peers, and experts to addressand incorporate the feedback they have received.Such live responses may lead the entrepreneursto refine certain aspects of their presentation sothat their business plans and strategies are moreunderstandable. In other cases, the feedbackleads to lively discussions about the corebusiness strategy, generating useful ideas andresources for improving the enterprise’s scalingstrategy and tactics.The in-residence portion of the GSBI Acceleratorculminates in an Investor Showcase. Here,entrepreneurs pitch their enterprise plansto a specially assembled audience of impactinvestors and members of the social enterprisecommunity. These presentations are followedby private meetings arranged in advance withindividual impact investors.During the third phase of the GSBI Accelerator,which takes place from September to November,mentors and entrepreneurs continue meetingvirtually to implement the strategic initiativesand tactical steps arrived upon during the earlierportions of the program. The goal is to move theenterprise forward on its path to scale.Throughout this final phase of the program,the GSBI team serves as a resource to addressspecific developmental needs, including supportin closing financing deals. The GSBI Acceleratorprogram ends with a Gratitude Ceremonywebinar in December. This event celebratesthe achievements of the cohort and provides anopportunity to reflect on the various milestonesachieved throughout the year.By the end of the GSBI Accelerator, participatingenterprises will have developed a folder ofmaterials including financial statements andstrategic planning documents, plus informationon governance and the board of directors. Thesematerials demonstrate each organization’sinvestment readiness while also making it easierfor potential investors to conduct due diligence,which can speed the investment process.GSBI ACCELERATOR MODULES COMPLETEDVIRTUALLY BEFORE IN-RESIDENCE:→→→→→→→→→→→→→→→→Program overview and mentoring launchThe right capital for your enterprise:fundraising strategiesMission, impact model, and businessmodelReaching your beneficiaryBusiness modelOperationsTeam and managementBusiness plan and in-residence overviewIN-RESIDENCE DAILY FOCUS:→→→→→→→→→→Day 1: Orientation, mentor introductions,welcome pitch eventDay 2: Business plan reviews (feedbackpanels)Day 3: Seminars on social-impact model,metrics, and presentation skillsDay 4: Review of due diligence folders(feedback panels)Day 5: Seminars on board of directors,advisors, legal, and governance→→Day 6: Operations reviews (feedbackpanels)→→Day 7: Seminars on leadership andmanagement→→→→Day 8: Investor showcase and meetingsDay 9: Wrap-up23

GSBI Boost Methodology in Action:Global Alliance for Clean CookstovesOne of the immediate results of GSBI Boostis a simple financial model that is based upontemplates created by the GSBI staff. Duringa 2014 GSBI Boost workshop conducted inChina and presented in partnership with GlobalAlliance for Clean Cookstoves, one of theparticipating organizations filled in its financialmodel.This enterprise was using more than 180distributors to bring its cookstoves to market.By using the GSBI template, this enterprisewas able to conduct a “what-if analysis” andquickly found that if the number of distributorswere reduced to 50, revenues would increasesignificantly due to reduced overhead to supportdistributors who weren’t producing sales. Suchrelatively small adjustments continued tocreate impact by getting essentially the samenumber of clean cookstoves distributed, whilesignificantly increasing revenues.24

GSBI Online Methodology in Action:Jacaranda HealthJacaranda Health was born from a passionto improve neo-natal and maternity care inKenya. The enterprise, after working throughthe business model with its mentor through theGSBI Online program, understood that offeringonly these forms of specialized care would notcreate a financially sustainable organization.The participants decided to add other services,such as pharmacy and basic lab work, to provideadditional higher-margin revenue to theorganization. Jacaranda Health stayed true toits mission and impact while creating a businessmodel that would allow the enterprise to deliverits services in a financially sustainable way.25

GSBI Accelerator Methodology in Action:Juhudi KilimoThe GSBI Accelerator is for organizations readyto scale. Based in Nairobi, Kenya, Nat Robinsonstarted Juhudi Kilimo in 2009. Financingenables rural smallholder farmers to purchaseproductive assets such as high-yield dairy cows,poultry, and irrigation equipment, all of whichcan act as both collateral and income generatorsto service the loan. In addition to working on thebusiness and operations, Robinson’s mentorsworked with him on his governance structure.The organization was growing and there weresignificant amounts of capital coming in. It wastime to formalize his board. Robinson’s mentorsworked with him to identify the skill sets andcharacteristics to be represented on the board.They also encouraged him to take a boardposition as well, so he could participate andmanage more effectively.26

CONCLUSIONHaving worked with 365 social enterprises, GSBI has learned how to best help social enterprises scale.GSBI is itself scaling because of its methodology. Social entrepreneurs, in effect, teach GSBI how bestto develop its own methodology. This is a true pedagogy of accompaniment.While some aspects of GSBI are unique, we believe many of the lessons we have learned — and theGSBI methodology — are broadly applicable and can help the social enterprise movement realize itspotential. We invite all people working with social enterprises to work with GSBI to continue refiningthis methodology and to adapt it for their own efforts.GSBI offers a comprehensive set of capacity development programs. More than that, however, GSBI hasevolved into an open access, co-learning laboratory. In partnership with the GSBI Network, GSBI nowhas global reach.GSBI draws heavily from the expertise of Silicon Valley, which we believe can, when properly oriented,contribute substantially to the social enterprise movement, and broader efforts to promote a more just,sustainable, and humane world. We believe universities can play a vital role in the social entrepreneurshipmovement, provided that they allow practice to lead theory. In so doing, Silicon Valley and universitieswith a social justice mission can create more exits from poverty worldwide.27

About the AuthorsAndy Lieberman is Director of New Programs, GSBI. His passion is toleverage his background in technology, education, and internationaldevelopment to create innovative solutions that help social enterprisesscale their reach and impact. In his role at GSBI, he leads curriculumdevelopment and builds partnerships for new programs. Before joiningGSBI in 2008, Andy lived in Guatemala for many years, pioneering effortsto bring educational technology to rural communities and founding theNGO Ajb’atz’ Enlace Quiche. His work received awards from the UnitedNations World Summit on the Information Society and The Tech Awards,and he participated in the GSBI v1.0 program in 2005 as a Guatemalansocial entrepreneur. Andy has a B.S. degree in Electrical Engineering andComputer Science from U.C. Berkeley, an M.S. degree in Education fromCapella University, and he did coursework in the Social Leaders program atthe Tecnológico de Monterrey. He is also a reading judge for Mentor CapitalNetwork’s Socially Responsible Business Plan Competition.Pamela Roussos is Senior Director, GSBI. She has worked with and forearly-stage software companies as a business and marketing strategyleader, helping founders create, refine, and execute their business strategyand go-to-market plans. She has over 20 years of experience growing teamsand delivering products for both large and startup software companies,working in various managerial capacities as business unit manager, vicepresident of marketing, COO, and CEO. Some of the companies Pamela hasworked with include: Amdahl, Pure Software, Rational Software, 555-1212.com, Consera, Zend, and AppFirst. Pamela has been a mentor for the GSBIfor 5 years. She also serves on the board of PACT, an international NGO thatbenefits communities by promoting healthy lifestyles, decent livelihoods,and sustainable natural resources, and as board chair for Livelyhoods, anorganization that creates jobs for youth in slums.Keith Douglass Warner OFM is a Franciscan Friar, and Director of Educationand Action Research at the Miller Center for Social Entrepreneurship. Sincecoming to Santa Clara University in 2003, he has designed and implementedinnovative, interdisciplinary educational programs that advance socialjustice and Catholic identity in higher education. He directs the GlobalSocial Benefit Fellowship, which provides a comprehensive program ofmentored, field-based study and research for undergraduates with GSBIsocial enterprises. He has a Ph.D. in Environmental Studies from UC SantaCruz and an M.A. in Theology from the Franciscan School of Theology/Graduate Theological Union in Berkeley.28

Endnotes1. Martin, R. L., & Osberg, S. (2007). Social Entrepreneurship: The Case For Definition. StanfordSocial Innovation Review, 5(2), 28-39.2. Elkington, J., & Hartigan, P. (2013). The Power Of Unreasonable People: How Social EntrepreneursCreate Markets That Change The World. Harvard Business Press.3. Kickul, J., & Lyons, T. (2012). Understanding Social Entrepreneurship: The Relentless Pursuit OfMission In An Ever Changing World. Routledge.4. Dees, J. Gregory. (1998). “The Meaning Of Social Entrepreneurship.” Page 4. https://csistg.gsb.stanford.edu/sites/csi.gsb.stanford.edu/files/TheMeaningofsocialEntrepreneurship.pdf.Accessed March 23, 2015.5. Yunus, M. (2007). Creating A World Without Poverty: Social Business And The Future OfCapitalism. Public Affairs.6. The Millennium Development Goals Report 2014. http://www.un.org/millenniumgoals/2014%20MDG%20report/MDG%202014%20English%20web.pdf, accessed March 23, 2015.7. For more information on the demand dividend, a variable payment option loan, appropriate forsocial enterprises, see http://www.scu-social-entrepreneurship.org/impact-capital-resources/8. Modras, R. E. (2004). Ignatian Humanism: A Dynamic Spirituality for the 21st Century. LoyolaPress. Kolvenbach, P., S.J. (2000). “The Service of Faith and the Promotion of Justice in AmericanJesuit Higher Education.” Santa Clara Lecture (7)1, Santa Clara University. http://www.scu.edu/ic/publications/upload/scl-0010-kolvenbach.pdf9. The Center was originally named the “Center for Science, Technology, and Society” but wasrenamed in 2015 to reflect its actual mission, in light of the success of its flagship program, GSBI.10. Koh, H., Karamchandani, A., & Katz, R. (2012). From Blueprint To Scale: The Case For PhilanthropyIn Impact Investing. Acumen/The Monitor Group. http://acumen.org/content/uploads/2013/03/From-Blueprint-to-Scale-Case-for-Philanthropy-in-Impact-Investing_Full-report.pdf. AccessedMarch 23, 2015.29

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Founded in 1997, the Miller Center for Social Entrepreneurshipis one of three Centers of Distinction at Santa Clara University.The Miller Center accelerates global, innovation-based socialentrepreneurship in service to humanity. Its strategic focus is onpoverty eradication through its three areas of work: The GlobalSocial Benefit Institute (GSBI®), Impact Capital, and Educationand Action Research. To learn more about the Miller Center andits social entrepreneurship programs, please visit www.scu.edu/MillerCenter.© Copyright 2015. GSBI is a registered trademark of Santa Clara University. All rights reserved.