Monica Barrett, a student of the Wharton-Harvard Kennedy dual-degree program, reflects on her summer experience conducting research in the agricultural sector in Kenya. Barrett received funding from Wharton Social Impact Initiative to participate in an internship with Innovations for Poverty Action.
Increasingly, new enterprises are infusing social missions into the fabric of their organization and brand.
These companies are grounding their operations on the basis that they can create social good, while maintaining healthy financials.
While sales figures may be relatively straight forward, it’s less clear how these organizations can use evidence to substantiate, and even guide, the impact they promise. In other words, how can they use data to identify the effect that their activities generate? Additionally, how can they understand the impact well enough so that it, too, can be managed as its own metric to be optimized?
This summer, I spent ten weeks exploring social impact research with Innovations for Poverty Action (IPA), a nonprofit research organization that designs and evaluates potential solutions to global poverty.
IPA wants to understand how social interventions affect the intended beneficiaries. But what they analyze is not the number of kids who are provided deworming medication or how many women are provided microloans;but rather, what effect the deworming pills have had on primary school attendance, or how microloans have affected formation of small businesses.
To do this, IPA employs randomized controlled trials (RCT) to definitively measure the impact of interventions, much like those utilized in the pharmaceutical industry to understand the efficacy of new drugs.
These trials brought me to rural western Kenya, where I joined in research in the agriculture sector. Through the trials, we addressed a theory as to why Africa has not taken off in agricultural production as Latin America and Asia did in the “Green Revolution” of the 1970s. The theory suggests that fertilizers and other agricultural inputs have not been adopted because of the risk involved in using a fertilizer that is unsuited to the local soil, and the lack of knowledge that farmers possess about their own soil. The project identifies how farmers value this information, if there is a market opportunity in providing the information, and if creating this market for information changes the behaviors of these farmers and subsequent agricultural yields.
The day-to-day activities of these trials resemble rigorous market research: managing survey design and deployment, and making and testing assumptions about how people have and will behave. However, there is an additional need to establish a counter-factual to show what would have happened in the absence of the program.
While traditional market research seeks to predict behavior, randomized evaluations and other statistical tools can better substantiate causation rather than correlation.
The ultimate goal of a social enterprise should not only be to understand what the organization has done, but also to understand what direction an organization should take to maximize its effect. Incorporating experimentation in the design of interventions, with the backbone of statistics, would ensure that social enterprises accomplish both goals.
Just as conventional businesses analyze and present their financial performance to attract investment, social enterprises should understand and communicate their social performance to attract investors and consumers alike.
Monica Barrett is a Wharton MBA student (W’15) as well as a candidate for the Masters of Public Administration in International Development (MPA/ID) at the Harvard Kennedy School of Government. She is passionate about spurring economic growth through social enterprise and small business acceleration and will pursue a career in development consulting upon graduation.