Proven Solutions to Social Problems Exist: With Your Help They Can Scaleback

The Social Impact Exchange business plan competition has only one designated winner in each category, but that doesn’t mean the others are losers. Funders still can — and should! — fund the runners up.

Are you focused on making a difference in youth and education, poverty alleviation, health or just the overall category of impact investing?

Are you impressed with the approach one of these competitors has taken? Did a presenter’s passion win you over? Then open your checkbook.

The runners-up in the competition are pre-vetted. Their programs have benefited from two rounds of feedback from Social Impact Exchange judges. Mezzanine-stage semi-finalists received one-on-one coaching. Early-stage semi-finalists received training from Duke University faculty.

While there are no guarantees in life, this is about as close as you can come to investing in a sure thing.

Rubicon National won first prize in the Early-Stage Competition and is hoping to parlay the nod into the $500,000 they Emerge which helps low-income workers save money, build credit, and access fairly priced, mainstream financial services.

The euphoria of the win hasn’t gone to their heads. Even with all the talk at the conference that this is a tipping point in time, the reality is investors are not beating a path to anyone’s door.Rubicon is still seeing the same old pattern of funding based onrelationships, not on the evidence.Rubicon believes foundations are only beginning to understand the concept of scaling evidence-based projects. However, with rare exeption,few are doing it.Nancy Roob from the Edna McConnell Clark Foundation is one of the exceptions.

You may choose to invest in an organization for any number of reasons. To give you as many options as possible, I’m highlighting not just the Social Impact Exchange Business Plan winners, but all finalists. Having been a coach, I know just how good you had to be to make the cut.

Let’s look first at the Mezzanine-stage organizations, those already proving that social problems can be solved.

  • Illiteracy rates are staggering in the U.S.: 83 percent of 4th graders from low-income families read below proficient levels. Access to books is key to acquiring reading skills, yet more than 80 percent of programs serving these children can’t afford to buy any books at all. First Book is scaling a proven model that provides high-quality books at a low cost to programs and classrooms serving children in need. It’s a win-win for education and for the publishing industry. By pricing differently for the low-income market, publishers have access to a new market while reading programs and classrooms get the books they need at low cost.
  • Micro-loans in the developing world are made primarily to women whose families live on $1 a day or less. The money is used for necessities like education, medical bills, household improvements, or emergencies. In 2007, more than 106 million families received micro-loans. Good news, but there are still two billion people that need this service. The industry is increasingly focused on financial performance without the corresponding measurement of social performance. Without easy-to-use, cost-efficient assessment tools, how can the industry know if it’s reaching the people in most need and which programs are making the greatest difference? Progress Out of Poverty Index — created by Grameen Foundation in conjunction with CGAP, the Ford Foundation, and Dr. Mark Schreiner — is currently being used by 75micro-lenders. Progress Out of Poverty Index is in the process of quadrapuling capacity.
  • Closing the “achievement gap” between those who have and those who don’t is a pressing educational challenge in the U.S. Half of our nation’s school failure rate is attributable to gaps in learning and development that occur before children enter school. Some children from low-income families have never held a book, cannot write their names, count to 10 or sit still. With more than four decades of randomized, controlled trials, the Parent-Child Home Program has an extensive track record. It provides intensive home visits to engage families isolated by poverty, transportation, and cultural barriers for two years.
  • Nearly 3 million homeowners rent the land their mobile home park resides on, putting them at risk of losing the value of their home if the park closes. Through co-op ownership 1,128 homes in eight state have been preserved by ROC USA. The organization plans to grow to 13,000 homeowners by the year 2014.

And the winner was Parent-Child Home, which was awarded $50,000 and nine months of consulting services.

Scaling for impact opportunities with early stage nonprofits.

  • Bookshare program — the largest online library for people with legally qualifying print disabilities, Bookaccess brings accessible books to students who need reading accommodations, about 15 percent of all students.
  • The elementary to middle school transition is tough for any child. It’s a time when adolescents disengage from their family and school, and begin to experiment with unhealthy behavior. As a result, school attendance drops and violence increases. This transition is particularly pronounced in low-income communities. Higher Achievementi s an after-shool and summer program that provides academic training and support.
  • Sweet Beginnings provides transitional jobs to the hard to employ, especially the formerly incarcerated. It manufactures high-end natural, urban honey and honey-based skin-care products under the Beeline label to Whole Foods and Mark Shale Boutique. Over the past three years, fewer than 5 percent of their workers have been reincarcerated and at least 70 percent go on to other work and/or education.
  • 47 percent of Americans live from paycheck to paycheck. Of these, 40 million have stable full-time work and are “under-banked,” relying on nonbank lenders for payroll advances. These predatory payday lendors can charge 400 percent interest or more.Emerge Workplace Loan and Financial Stabiilty Program from Rubicon National Social Innovations provides online lending and financial education in partnership with banks and credit unions, with the end goal of migrating these Americans to mainstream banks.

As mentioned, above Emerge was the winner in this category. Iwill periodically update everyone on progress of the finalists.

Which idea strikes your fancy and why?

For complete coverage of the 2010 inaugural Social Impact Exchange Conference: Taking Successful Innovation to Scale, go to Ventureneer SIEX10.