The Doing Good Guidelines: take 1.

Elizabeth Eagen
6 min readNov 7, 2017

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A few days ago, I came across a handy guide to identifying a good investor that gives some clues about how any startup might like to interact with a key stakeholder. The main takeaway for me? Curiosity is a good quality. A startup benefits from an investor who’s interested in all aspects of the business, not just the return. Same with the business of doing good.

Impact investment starts with identifying the values and problems you want to target. Impact in the “doing good” context places almost equal weight on investing money (purchases, tax breaks, venture capital) and on investing our endorsement (social influence, political capital, reputation). So until we know what change we want to effect, we can’t really invest. But how to evaluate companies making claims that they’ll do that? We need questions that can signal where an organization is headed in doing good. Startups or otherwise, companies promising to do good as part of their bottom line should be ready with answers. They should be able to explain how their enterprise fulfills their mission, and how they expect to achieve impact without harm.

So what framework of questions can get us there? I’ve drawn up a set below, and have also added supplementary tips and trail markers. It’s a living list, drawn from interviews I’ve conducted over the past several months with investors, entrepreneurs, incubator leads, and philanthropists. These questions tell us how organizations make choices and hold themselves accountable. There are no fixed answers, and some of these might seem impossible in a business venture. But what I’m seeking to draw out is how questions for enterprises in the business of doing good are different — really, substantively, different — from financial instruments and enterprises looking to maximize profit.

The Questions

  1. Are the goals appropriate?

Check if the organization understands the problem they’re working on well enough to set realistic goals. Over time, an investor can watch this: do they move the goalposts? Do they know how to admit failure, and pivot and regroup — not just on how the enterprise makes profit, but on how it addresses problem solving? For a great interim impact, and a pivot, check out ethical shoe company Nisolo’s impact report [PDF] — especially pages 25–28. NGOs do this kind of check-in often — sometimes yearly — on the theory of change and the strategic plan.

2. Does the management team have a sense of true purpose (beyond making money)?

Find this out by examining the website and other materials about the mission. For a deeper look,the proxy statement, SEC filings, and public activity of the top leadership can show if they are consistent in messaging, pay, and shareholder notifications. As one investor put it: if all their materials are about shareholder value, that’s not appealing; you want to see ones that do seem to care about stakeholders, the impact they have on the world, whether they’ll leave the world a better place.

3. Does the structure of the organization support the strategy?

It’s important to explore whether the organization has chosen the right structure to accomplish what they want to do, and whether the beneficiary, constituency, and clients make sense. How do issues and work enter the organization’s pipeline of attention? Are there checks and balances along the way to ensure those interventions are working? If the organization’s doing something extremely specialized, how does it include outside audits of its work? Does their board composition lend itself towards continued commitment to a cause — if the cause starts to compete with the return?

4. Is the enterprise finding ways to make sure they, and their actions and advisors, are diverse?

This question isn’t only about diversity in hiring practices. It’s about the fit between problem, mission, enterprise, and the people working on it. Finding out how enterprises get their ideas, develop their theory of change, and cross-check and review them is telling. Who the enterprise invests with real power over the activities, and how it defines the constituents, beneficiaries, and clients of the mission — all those should make sense and represent the complexity of the problem. Enterprises doing good have a pipeline of problems that they work to solve. So the enterprise should be able to explain how their problems are truly the right ones for the pipeline, how they’re timely and needed, and how the issues get in there in the first place.

5. Is it a good place to work?

“When we build organizations focused on outcomes and impact, it can be easy to leave internal values by the wayside. But work can only fulfill its ultimate long lasting goal if it is done in a healthy way, by healthy people.” Others have said this better than I can.

6. Does the organization understand how to balance power in doing good?

There is a great opportunity for social enterprises to embrace the widely applicable principle central to disability rights advocacy: “nothing about us without us.” It’s also about having the bravery to invite dissent into a process. Anyone who’s ever seen an app or an idea go completely wrong will empathize with this: the app to bring us together that turns out to create racial profiling, or the playground water pumps fail and displace existing solutions. TOM’s story about pivoting is also a story about reflection and rebalancing of mission and power.

7. Is the organization well positioned to test their solution and adapt it quickly based on feedback from users?

We can all guess at the idea that looks beautiful on paper, but in practice goes completely off the rails. One interviewee called this the “QA test in the wild,” meaning that the quality assurance team of his company had to find someone to try to break their project just by using it outside the ways they’d planned. That’s more of a technology principle. But the idea holds. Doing good really well requires the mindset of testing your solution with the beneficiaries who have to live with it. If you’re making something, or doing something, and it is easily diverted into less good channels by that test, you need to think about how to mitigate that.

8. Is the group acting responsibly about data?

There’s a perception that hoovering up as much data as possible is, simply, strategic. And yes, there are a billion facebook dollars that will tell you that can be true. But there are other places where a business can turn a profit without monetizing or exposing the data of the clients it hopes to serve. Good data gatherers and storers can get the job done without compromising vulnerable populations. They take steps to limit the amount of data they collect on vulnerable populations. And they can think about hard issues — like differential privacy and a business model — without fainting. If Uber can do it!

9. Does the organization have a plan for its own obsolescence?

Yes, you read that right. Nonprofits are constantly asked this question, and it’s a good one. Think about it: if your goal is to end a social problem, then your aim is to put yourself out of business. On the one hand, social entrepreneurs (like NGOs) should plan to be around for a while, because anyone assisting communities want things to be around for the long haul. But they should be able to answer the longevity question wisely, and work it into their business model. This means not creating path dependencies, like building a one-off software you’re never going to update, or a brick-and-mortar playground with no maintenance plan. Organizations need to set dynamic key performance indicators, and follow them, to keep the social enterprise’s mission and goals current. So maybe it’s not viable to plan to close a business down in 1, 2, or 5 years; but thinking through how, and why, they might pivot or shift in response to success is worthwhile.

This is by no means the final list. What’s on your list of guidelines?

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