Authored by: Paula Cardenau and Renee Manuel
“In a social business, community impact comes first,” was one of the fundamental insights in the first Community Impact Development Group (CIDG) meeting hosted by Ashoka and the Siemens Stiftung in October 2010, and one of the essential claims that members of this group wanted to voice within the impact investment landscape. But, what do we understand by Community Impact? Why is it so critical to systems change? What are the diverse strategies that best achieve it? Which type of capital is needed for these types of models? These were some of the questions that CIDG members sought to answer in Munich in September.
After a rich discussion where CIDG members provided their different experiences working with underprivileged communities, the group reached a consensus on the following definition of a Community Impact-driven Social Business: “Desired Community Impact enables communities to identify their needs and hopes, to develop self-sustainable solutions and to mobilize necessary resources. Community Impact empowers a community to take on ownership, enhances capacity and secures dignity. Ownership ensures long term, sustainable community impact and can be triggered and institutionalized in different ways, depending on the nature and the vision of the social business.”
It is clear then, social business is a tool to stimulate not only community access to needed and desired products and services, but also ownership and skills, so a particular community can be better equipped to improve their situation by their own means and resources in the future. In very practical ways, how can this ownership become a reality? CIDG members implement diverse strategies that range from sharing revenues and assets of social businesses with the community, to opening up management opportunities for community members, to a total transfer of know-how and technology, to empowering community members as co-creators of the solution, to becoming implementation partners on the ground. A combination of some or all of these strategies guarantees revenue and power transfer to the community, generating new skills, dignity and ownership, leading to positive long-term effects on the community.