Concept Paper

How to avoid ‘mission drift’ in a nascent social enterprise?

Sarvodaya, the national NGO of Sri Lanka, is one of the biggest NGOs in South Asia, serving over 5 million people in 15,000 villages. In 1996, Sarvodaya had pioneered telecentre program in the country, by integrating ICT into diverse community development programs such as preschool education, women empowerment, human rights, microfinance, conflict resolution, environment conservation etc. Over 10 years, the same program has evolved as a unique program, thus redefined, in 2006 under the name of Sarvodaya-Fusion. The restructuring included its administration structure, program and policy structure, seeking to develop Sarvodaya-Fusion as an independent Social enterprise towards 2010. One reason was the strong urge to make it self sustainable. The other reason was to facilitate sustainability of its partner telecentres (majority belong to local owners).

Emerging Social Enterprise

Sarvodaya-Fusion has been designed as a holistic approach to ICT for Development. Keeping rural poor communities as the key target group, it delivers activities through chain of telecentres (about 600) and Village Information Centres (VIC; over 100) (rudimentary form of village based libraries). All the VICs are 100% volunteer based, set up and managed by aspired youth community leaders. They are embedded into a fabric of village based community development programs. Majority (90%) Telecentres are owned by local entrepreneurs, and sponsored by the government. Fusion provides leadership, capacity building and sustainability guidance to telecentre operators with the financial support of philanthropic donors (eg. IDRC).

Revenue centres

There are 7 telecentres owned and directly managed by Fusion, as revenue making centres. They offer ICT courses and IT services as fee based services. Operations are line managed towards pre-set economic targets though they are still serving rural & semi-urban communities. Initial investments for these telecentres were from donor funding, yet, since April 2007, they were (along with another 3 centres, which subsequently dropped) were taken to new enterprising format. During 2007 /2008 budgetary period, these centres managed to reach 30% of the annual targets, and generated 25% (4.5 million Rs. SL) of the core budget of Fusion management. For 2008/2009 target was set to reach 42%.

Knowing that alone is not enough to make required volume of finances; Fusion had expanded its Social enterprise ambition to other potential opportunity windows (600 of locally owned telecentres). During 2007, Fusion had carried out a systematic social enterprise planning process with selected operators of those telecentres. Objective was to recognize appropriate ‘marketable’ services to generate revenues to sustain telecentres (in general), and also to derive reasonable revenue to sustain overall fusion. The year long, participatory planning process, facilitated by an outside expert consultant (NESsT), had involved telecentre operators as participants. By the end of 2007, Fusion recognized ‘Certified’ ICT Courses (as a value added service) to be offered at telecentres, and the business model, course material, resource institutions has been identified. At this moment, this program is being launched.

Mission Drift

Mission of the organization is e-Empowerment of the poor rural communities, including children, youth, women and farmers. During first 9 months of its operation (in 2007), Fusion estimated to be saved 1.2mil Rs. (SL), to the rural communities, as Social Returns, by offering ICT courses and IT services to about 24,000 rural people. This calculation was based on the price advantage offered to the communities, who otherwise had to pay higher prices to receive the same services from privately owned ICT centres located at townships (yet excluded commuting time advantage etc. for the same rural communities). Nevertheless, this is only an entry-point calculation (subject to considerable errors) to pursue Fusion’s ambition to develop systematic, more credible impact assessment models.

As of mid 2008, second year into institution’s operation, Fusion spends significant proportion of resources into Social enterprise operation. Fifteen out of 38 full time staff members are fully engaged in Social enterprise work. Recent estimates suggested 60% of the senior manger’s time spent on administering Social enterprise operations. Furthermore, given the challenges presented by cash flow deficiencies, most of the new (philanthropic) fund raising strategies are aligned to support Social enterprise side than Social service side. Thus, Fusion feels a significant ‘drift’ of their focus from Social ‘mission’. I.e. time and resource allocations to monitor social impact, VIC operations, management of volunteer carders (estimated to be 130) are further plunge. Furthermore, Fusion begins to feel the tensions (generated due to perception differences) presented by entirely socially oriented staff members of the mother organization, Sarvodaya, who work in parallel at the same villages (where Fusion works), all across the country.

Fusion is uncomfortable with this situation, on one hand. And, on the other hand, it feels confident and happy about entrepreneurial gains, which provides independence to carry out its activities, especially without being dependant on donor organizations. Yet, it feels the urgency to build-in appropriate performance measurement tools, monitoring systems that can help the management to balance between its main social mission and economic ambitions.

Research problem; how to avoid Mission Drift?

‘Is Fusion losing its original Social mission, in the pursuit of economic goals?’

Or else, ‘is Fusion adjusting to more economically sensitive, yet socially grounded – new mission?’. These are the conceptual questions Fusion struggles to find answers.

Then ‘Can we employ measurable performance indicators to verify the performances and mission?’, ‘What would be those indicators?’, ‘How to employ them?’. Those are the practical questions raised.

Fusion welcomes academic research and intellectual questioning to help through the present course of constructive tensions in transition.

29 Oct, 2008.

Useful sites:

Sarvodaya-Fusion: www.fusion.lk,

Sarvodaya: www.sarvodaya.org

Sarvodaya-USA: www.sarvodayausa.org

Sustainability research – www.sustainabilityfirst.org (of telecentre.org)

Contact:

Dr. Harsha Liyanage,

Managing Director, Fusion

Visiting fellow, telecentre.org, IDRC.

smilingharsha@gmail.com

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2 Responses to Concept Paper

  1. Ray says:

    Harsha,
    We just had some additional questions.
    1. What specific services to the VIC’s offer?

    2. We came up with three major resource inputs on behalf of your organization, they are Human Resources, financial investment, and senior management allocation. Are there any other inputs that we should be aware of?

    3. We were still a bit unsure about the details of the VICs. How exactly are they funded? Also you said that the village supplies a lot of the resources for the VICs. What exactly does the village provide?

  2. [...] question lead to a research carried out by a research team from University of Michigan. The study involved a [...]

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