Evaluation Study & Critique memorandum to

EvaluationStudy &amp Critique memorandum

date: March 8, 2015

Thegoal of this social enterprise and evaluation-learning plan is toresearch on the development of knowledge relating to the developmentof my for-profit Wine and Champagne Lounge &quotGrape Stains.&quotThe Wine and Champagne Lounge aims at generating ample revenue andprofits. A percentage of these profits will go to non-profitorganizations with the aim of promoting education in South CentralLos Angeles second district. Grape Stains will work in a mannersimilar to other firms that have maximized their purpose by runningin what can be termed as a caring capitalistic business venture as isthe case with such firms as Tom`s Shoes. Tom’s Shoes is a companythat distributes shoes to the needy. Tom`s Shoes operates by givingaway a pair of shoes to the needy for every pair sold. Grape Stainswill rely on social investors and social stakeholders to break evenand successfully attain its primary objective, which is makingprofits for use in bolstering education in South Central Los Angeles.Grape Stains will therefore operate as a profit-generating firm thatwill further provide a large percentage of its profits for corporatesocial responsibility activities.

Thesocial enterprise evaluation strategies employed by many firms seekto determine the best approaches for inclusion in the organizationalbest operating practices through the development of ample frameworksderived from impact assessments (McKinsey &amp Company, 2010).According to McKinsey &amp Company (2010), social impact assessmentsseek to determine the areas that require improvement to attain theoutcome of value addition for the various programs with the eventualoutcome of improving the benefits of the population. The reportfurther goes on to show the declining nature of evaluations carriedout by many non-profit making organizations. It is, for instance,evident that many firms tend to measure outputs, in which case theywould be focusing on history to forge their way forward instead oflooking at areas that require changes to ensure that programs areproactive in terms of the determination of future performance. It isadvisable that Grape Stains determines the non-profit organization tosupport using its profits by looking at the impacts that theorganization has had in the past and further compare these impacts tothe amount of funding that the said organization has benefited fromin the respective operation durations. This will help Grape Stainsdetermine the value that the donations will have on the desired areaof interest in this case the improvement of education in SouthCentral Los Angeles. The main issue is the determination of theparameters to consider in the measurement of the organizationalimpacts (McKinsey &amp Company, 2010).

McKinsey&amp Company (2010) looks at the learning driven approach that seeksto make social enterprise evaluations work. The five importantpractices in this case include hearing the voice of the constituentswho include the organizations that benefit from the funds in thiscase the implementing non-profit organizations benefiting from theprofits made by Grape Stains. The second practice entails taking upassessments through thorough inquiries. This entails evaluativethinking through the assessment to ensure strategies and assessmentsdevelop concurrently (McKinsey &amp Company, 2010). Thirdly, it isessential to ensure that the assessment plans for a particularinitiative attain specific objectives. The aspect of practicality isalso important as it ensures that information acquisition occurs in amanner that eliminates aspects of undue pressure. This ensures thatone is able to acquire information without introducing limitationsthat can help propagate lies on the part of the beneficiaryorganization. Ensuring that a learning culture is encouraged leads tohonesty and continuous assessment practices within the firm. It isalso important to note that the beneficiaries in the form of thenon-profit making organizations understand the impact of socialinvesting and further understand the importance attached to impactmeasurement as a method of maintaining credibility in the sector.Based on this, Grape Stains can develop an evaluation and monitoringprogram that will ensure that the funds given to the beneficiaryorganizations ultimately serve their original purposes.

Asmuch as for-profit business entities primarily lay emphasis onenhancing their profitability and sustainability in both thelong-term and the short-term, it is also imperative that theydedicate parts of their profits and revenues to getting positivesocial impact. This is achieved through some element of corporatesocial responsibility, which involves incurring some short-term coststhat may not be offering immediate financial benefits to thecompanies but rather enhance the positive social change (Hopkins,2007). A case in point would be the provision of funds for thecatering of the disabled or enhancing the provision of education toindividuals that are challenged in one way or another. It isacknowledged that communities are always grappling with numerousproblems that are structurally multifaceted and global in scopeincluding persistent poverty, diseases, and even lack of basicamenities. There are numerous cases of individuals that are unable topursue education right from elementary level to the higher education.Of particular note is the fact that the failure of such individualsto obtain the necessary services puts billions at stake, in whichcase a speedy and large-scale action should be undertaken (Hopkins,2007). As much as the social responsibility would not have a directimpact on the profitability of the company, it is generallyacknowledged that businesses tend to reap positive outcomes from suchactivities. This is particularly considering that consumers oftenlike being associated with business entities that give back to thesociety. Essentially, CSR would have a positive impact on thereputation of the company, which results in increased profitabilityand sustainability.

Chamberlain,Kate, Peter, Joanna, Hall, and Matthew (2013) on the other hand lookat the scope, size, and socioeconomic impacts of business venturesowned or operated by non-profit organizations for purposes of gainingreturns on their investments or simply social enterprises. The reportposits that the social enterprises in Ontario present characteristicsthat are similar to those of Grape Stains. Grape Stains will createemployment and generate wealth, which will aid in the economic growthof the locality. It will also help improve the society by providingfunds for education promotion at the local level. The line ofbusiness taken by the firm will further offer opportunities forcommunity engagement and possibly even aid in the development ofsimilar initiatives aimed at supporting general socio-economicdevelopment of the region. Grape Stains further seeks to challengethe status quo by fostering innovative thinking while remainingsuccessful as a business venture (Chamberlain et al. 2013).

Thesocial economy, which is an overlap of the public, private, and civilsociety organizations points towards the non-profit and the voluntarysector within the economy. This further means that the social economyconsists of organizations that are keen on combining social andeconomic objectives. This is the case with Grape Stains and thevarious non-profit making organizations that seek to improve thesocial status by improving education. While this report fails toprovide concrete social evaluation strategies, it helps shed light onthe various aspects that depict the operations of these firms. Thevarious tenets guiding the operation of social enterprises can bepieced together to develop a framework that profit making firmsseeking to help non-profit making ventures within the society can usein the development of frameworks aiding in the determination of thebest firm to support (Chamberlain et al. 2013). In other words, itpresents ideas that can help Grape Stains develop a framework for theevaluation of the various non-profit organizations in Los Angeles andfurther help in the narrowing down of the firm to serve as abeneficiary. Understanding the fact that many there exists non-profitmaking organizations that simply source for funds and ultimatelymisappropriate the same leading to the personal gains of the ownersas opposed to the target beneficiary population presents a concernthat makes evaluation a necessity in the social enterprise sector.

Trevorand Graham (2007) look into the options for the development ofmethodologies for the identification and analysis of the impact ofsocial enterprises. This point towards the importance of analyzingand evaluating social enterprises based on the levels to which theymeet their objectives. According to this report, it is possible todevelop a methodology for the study of social enterprises howeverthis framework is only conclusive if developed for a specific socialenterprise. This limitation emanates from the fact that varioussocial enterprises operate on differing scopes making it difficult togeneralize the criteria applicable for evaluation. In this regard, itis imperative that Grape Stains develops a framework for socialenterprise evaluation in line with the scope of the social enterprisechosen by the firm as the beneficiary of the profits. The scope ofoperation of the social enterprise chosen can for instance presentbenefits by easing the analysis necessary if it has past informationand the evidence to support the proper utilization of funds providedby other firms for onward transmission to various socialresponsibility activities. The diversity normally associated withsocial enterprises and the overlapping objectives of the same in thesociety can present problems during evaluation and monitoringespecially where scopes of operation are similar to those of othernon-profit bodies in the area. This simply leads to the developmentof evaluation frameworks that try to alienate each organization toensure accountability and actual impacts on the society are the mainconsiderations. Trevor and Graham (2007) for instance consider thedevelopment of an understanding of the local impacts andsocio-economic and spatial differences as an approach in theevaluation of social enterprises locally. A regional approach furtherentails understanding regional differences in terms of performance bylooking into secondary reports and data to ascertain primaryinformation gathered from the firms under scrutiny.

Overall,it is imperative that Grape Stains develops a tentative list of allthe non-profit organizations in the catchment area and furtherdevelops a framework based on the scope, size, and the pastperformance of the said organizations in a bid at ensuring that itprovides funds to legitimate organizations that are keen on providingthe outputs that align to the objective of the donor firm. GrapeStains as a firm straddles both the income-generating segment of theeconomy and the social responsibility segment and this makes it apotential success with many social investors. As a venture, that hasthe educational needs of the society in mind, Grape Stains is likelyto join the market and become an immediate success story, as manypeople in the society will prefer associating with a Champagne Loungethat has a concrete social responsibility program in place. Thismeans that the Lounge has the potential to make large profits andpossibly benefit from social investors seeking to help the society bysupporting the education improvement programs supported by GrapeStains. It is therefore imperative that the firm ensures it providesfunds that are ready to support educational improvement programs inthe region. The risk of giving funds to unscrupulous non-profitmaking organizations out to benefit from the social investment ishigh thus, the need for thorough social enterprise evaluationpractices prior to giving out funds. It is noteworthy, however, thatcoming up with a single effective technique for evaluating theappropriateness of a non-profit organization may be difficult.Different techniques will be used in determining the worthiness of anon-profit organization for funding including the level of communityengagement and the growth of the entity, as well as leadership(Coombs&ampHolladay, 2012).Community engagement levels underline the reach of the entity to thecommunity, which is actually the target of such forms of funding, inwhich case the higher the engagement level the more worthy an entitywould be seen to be. Similarly, it would be expected that thenon-profit organization continues to grow both in its reach and theelements that it incorporates. Indeed, the problems that have beenidentified in the society may not be static, in which case the entityis required to persistently evolve and demonstrate some element ofdynamicity and growth so as to continue being relevant. This is alsoin line with being updated regarding the appropriate measures forcombating the problems identified (Coombs&ampHolladay, 2012).It also goes without saying that the effectiveness of the corporatesocial responsibility would be determined by the performance of themeasures put in place to enhance the lives of the consumers. Variedmetrics would be used in determining the effectiveness of corporatesocial responsibility including level of penetration, sales revenue,employee satisfaction, profitability, customer loyalty and enhancedreputation of the entity among others. The development of knowledgerelating to the development of caring capitalistic business ventureis the first step with this followed by the development of policiesthat will eventually lead to the realization of the firm`s goals andthe sustenance of the firm. Once this is in place, the firm mustensure that the money donated translates to the outputs that help inthe realization of its secondary goal as a firm, which is thepromotion and improvement of education in South Central Los Angeles.


Chamberlain,P., Kate, D., Peter, R. E., Joanna, F., Hall, P., and Matthew, T.(2013). Inspiring Innovation: The Size, Scope, and Socioeconomic Impact of NonprofitSocial Enterprise in Ontario. Ontario:Mount Royal University.

Coombs,W. T., &amp Holladay, S. J. (2012).&nbspManagingcorporate social responsibility: A communication approach.Chichester: Wiley-Blackwell.

Hopkins,M. (2007). Corporate social responsibility and internationaldevelopment: Is business the solution?. London: Earthscan.

McKinsey&amp Company. (2010). Learningfor Social Impact: What Foundations Can Do.New York: McKinsey &amp Company.

Trevor,H., and Graham, H. (2007). Assessingthe Economic and Social Impacts of Social Enterprise: FeasibilityReport.United Kingdom: University of Hull.