Promoting Social Enterprise: Scaling Is Not About Money

[Lucia Nass]

I have been hired by SNV Ethiopia to backstop the development of a Local Capacity Development Facility (LCDF) in the WASH sector. I used to backstop the development of LCDF’s in the Asia region, and was curious to find out about lessons from SNV’s pioneer LCDF in Vietnam, known as the SPARK movement. SPARK aims to scale social enterprise in Vietnam through capacity development services. Here are my notes from an interview with SPARK Director Vu Thi Quynh Anh.

Lucia: SPARK has an interesting application process for co-financing that includes self-selection. Can you share some of the lessons?

Quynh Anh: The application process is an opportunity for learning. Applicants learn about what works, and learn from peers. When they have a proposal concept, they are invited to a self-screening workshop where they get 3 minutes to present their concept to other applicants. They find it “stressful, but very useful”. In small groups, concept proposals are further discussed, based on a number of criteria (e.g. What has been achieved so far? Is the future impact clearly defined and believable?) The applicants give votes to the proposals, and give feedback to each other. We are still learning to manage this better, to help applicants give constructive feedback to each other. Sometimes the feedback is harsh and demotivates applicants to try again. However, overall the process is seen as very useful. The highest voted go onto the next round of full proposal development.

Lucia: How do you find and invite the applicants?

Quynh Anh: We use a network of ambassadors, volunteers who are interested in promoting social entrepreneurs. We call this “scanning” for local solutions. Together with ambassadors we always look for social entrepreneurs (including NGO projects) who have been successful on a small scale, and we ask how they can bring their initiative to scale. We short-list interesting initiatives and offer mentoring to help them understand how they can be successful at scale by thinking like a social entrepreneur. Mentoring during proposal development is a critical learning process for applicants. Initially they think that scaling is all about money, but they learn that it is about having the right capacities, the right ambitions, and taking calculated risks. Private sector people pick up faster. NGO’s are more hesitant to go to scale: they wonder if they can manage.

We have noticed that less than half of our grants are actually disbursed. So we now work with 25% of our original grant size, which is enough for capacity development. Next to this, we subsidize the initial mentoring, so that applicants can develop good proposals that will succeed. We call to consultants and pay them a symbolic fee for mentoring. They want to contribute for the good of society, and they feel proud to be associated with us. In this sense SPARK is a real movement for the promotion of social entrepreneurship.

Lucia: What was your secret to this success?

Quynh Anh: We have started small, with a few enthousiastic people and organizations who believed in the ideas of scaling through capacity development. Good news travels quickly when you work with something practical. For two years we were just trying to see how we could make a difference, how we could mobilize people to join us because they believe in us. We tried very practical things, and studied the results. Then we had some good evidence that our approach was working, so now we can convince others to invest in us. For instance, we just managed to get a research grant from ODI as part of an international study on social entrepreneurship in Vietnam, Kenya and South Africa. This is a great opportunity for us to research the effects of our investments in capacity development of social entrepreneurs. What makes them successful? We will learn from it for our future activities.

Lucia: Talking about research, what can you share about the market surveys? (see this blog)

Quynh Anh: Local service providers from government and others in the market have been working with the same old capacity development approaches for a decade or more. They just have no idea about more innovative approaches to capacity development. Through market surveys they can learn more about the actual capacity needs of organizations, and they can learn about new successful approaches developed by others. When we organize a market place event, we now do a quick market survey, and we take an hour at the end for learning among providers. The market surveys help them to identify trends in the province, and to match their services to the demand of organizations on the ground.

We have also organized provider workshops to share and discuss market survey findings, which are real learning opportunities for local providers, but our funding is limited now for such kind of events.

Lucia: Thank you for sharing. Can I ask you to accept a conversation with the LCDF coordinator in Ethiopia next time?

Quynh Anh: My pleasure!