Desafíos de la Inversión Social Estratégica como motor de Innovación Social en América Latina
junio 26, 2009

Social Strategic Investment: the Power behind Social Innovations

From a historical perspective the private sector has achieved a higher level of development and found different ways to adapt to changes in the environment. This adaptive capacity was enhanced by the incorporation of better management and evaluation tools.

Some organizations in the social sector have gradually started to incorporate systems that have enabled them to quantify and measure the actual impact of projects and social programs. This breakthrough has generated a source of strategic information to improve the life of projects and on the process of decision-making when investing on the social field. Recently, in most advanced economies this process has been strengthened; however there is still a lot to be done in the developing world. In fact, the asymmetry between the private and social sector is deepening and the technological gap growing in such regions.

This is the case in Latin America where there is a constant demand for professionalism for and from the social sector, which suggests the need to improve the measurement tools and evaluation of social projects. In a regional context with strong roots in traditional philanthropy, the focus of social entrepreneurship has made an important leap in addressing solutions to the most critical social problems. However, not many social entrepreneurs have succeeded in their initiative to provide tools for monitoring impact, evaluating and measuring innovations. Consequently, social entrepreneurs face the same constraints as traditional social organizations. And indeed, these constraints limit their capacity to expand, replicate or scale up innovations.

This recurring limitation to measure the real impact of the initiatives is due, in general, to the lack of technical resources to incorporate of a methodology for monitoring and evaluating projects at the start up stage. This often led to the incorporation of ad hoc evaluation methodologies, and thus, overall results shed very little light on what really has changed during and after implementing the project. Another reason is the lack of interest from the foundations and CSR divisions to ask for concrete results from citizen sector organizations.

In order to reduce these asymmetries, the paper proposed to analyze the use of a Social Investment Strategy where social entrepreneurs and investors create a bridge based on a mid and long term partnership where using effective tools for measuring impact triggers a new wave of efficiency in the sector. This model not only produces a higher return on investment for social investors but also stimulate more innovation and social change.

There is a need to make progress to address a series of challenges:

a) find social innovations in strategic fields such as education, health and technology,

b) engaging a cluster of social investors with experience and commitment to the region,

c) plan for the mid and long term,

d) build new channels of communication that will reduce the use of jargon and better explain the vision and mission of citizen sector organizations,

e) adapt and validate tools for monitoring and evaluation of results,

f) measure the impact of the initiatives (economic, social and environmental) and

g) replicate best practices.

The last challenge to be resolved is how an effective relation between the private sector and the citizen sector could spread to the public sector and create a new wave of policies inspired by social innovation.

(by Maximiliano Luft)

Fundó ZIGLA Consultores en 2009. Es asesor de empresas y consultor de Organismos internacionales y distintas fundaciones globales.