Part 2: Framing Performance


The performance of a social sector organization is ultimately measured by its ability to create and sustain social impact.

“Sustainable social impact,” meaning enduring social impact, is a frequently used term in social enterprise literature and jargon. In some camps, creating sustainable impact is linked to institutional and financial sustainability; the underlying assumption is that if an organization exists in perpetuity its impact is sustained. In the context of this paper, however, and for the purpose of informing social enterprise methodology, sustainable impact, has everything do with solving a social problem or market failure. In other words, when a social problem or market failure is resolved, continued impact is achieved because the problem ceases to exist.

Identifying Common Performance Criteria

The challenge in creating a common performance framework is that both the concepts of social impact and sustainability are hotly debated and highly subjective.

Hence, in creating a common framework, we have chosen to focus on a set of common criteria that can be simply demonstrated and accepted as being essential to sustainable social impact creation, without pretending to define the full scope of ‘sustainable social impact.’

Applying the Performance Criteria to the Social Enterprise Methodology

To be relevant as a methodology for social sector practitioners, social enterprise must address the challenges common to all social sector organizations, while offering novel approaches to addressing these challenges.

At the core of social enterprise methodology lies a simple observation: private sector markets—like it or not—are predominant worldwide, massively overshadowing public sector markets. At the same time, many social sector challenges can be demonstrably related to the inclination of private sector markets to provide for the short-term needs of a few rather than for the long-term common good—particularly when the two are not deemed compatible.