Welcome to our next method profile on Nico! Our previous entry focused on using Pedometer Approach in social enterprise. In operating any venture, everything flows from your approach, and identifying a proper method helps you effectively fulfill your team’s initiative.
Together, we’ll be profiling interesting social enterprises to discuss an anchor method to strive for social good. The term “anchor method” expresses the intentional and grounded nature of the approaches propelling a social enterprise forward.
This post is an outside observation of a company for inspiration in social enterprise initiative improvements.
In today’s post, we’ll look into the hometown hero Nico leveraging Impact Framework. Local residents are encouraged to participate in investing in the neighborhood and build wealth through real estate investments.
Knowing the Company: Nico
Nico, based in Los Angeles, CA, focuses on sharing neighborhood investment among local residents. The initiative is helping neighbors attain equity in the long-term finance of the neighborhood. In their own words, the mission is to “localize wealth creation and broaden access to neighborhood equity.” Nico is recognized as an official B Corp (benefit corporation), so they are naturally obligated to prioritize social and environmental goals.
As stated previously, a major priority for the company involves wealth creation. Building a connection to local economics could help communities develop generational wealth. In recent years, awareness about the ripple of generational wealth increased. Gaps exist between individuals from families of more established generational wealth and individuals from families lacking an established generational wealth. Resources, such as schooling and job access, show noticeable differences between the two scenarios.
On the about page, Nico states their reason for focusing on real estate:
“We started Nico because too many people are left out of earning wealth created within their own neighborhoods. Nico changes that by radically lowering the threshold for owning an interest in local real estate.”
Nico’s plan is to launch Nico Echo Park to be Neighborhood REIT for residents of Echo Park in Central Los Angeles. When a company owns a portfolio of income-producing properties, and allows people to become shareholders, the arrangement is called a real estate investment trust (REIT). For the Neighborhood REIT, the project’s properties must be located in a certain neighborhood. Echo Park is home to the Dodgers stadium, small businesses, and varying economics. The densely populated section of Los Angeles, near downtown LA provides multiple opportunities for investment.
Nico works with the neighborhood from inside the neighborhood by having the company headquarters in Echo Park. For the start of the initiative, Nico plans to “own three rent-stabilized, multi-family and mixed-use apartment buildings across Echo Park.”
Forging A Path of Accessibility
Neighborhood REIT projects buy rental properties through investments from local shareholders and other investors in the neighborhood. Nico will manage each property to monitor cash flow and the long-term development. Attending to the property directly improves the possible value increase, which helps prevent the loss of the project’s original aim.
Building wealth through equity is not readily available to most citizens. The average person is not always able to invest in real estate or a company. A shareholder model geared towards communities lowers the economic barrier. People are more connected to each other by owning portions, and don’t need to carry the burden alone. A small adjustment in the culture of equity creates a new ripple to more independently empowered communities of individuals.
A common theme in social impact is accessibility. Most aims set out to create a path to needs that communities or individuals have difficulty attaining. If your social enterprise is unsure of where to begin a business model, understanding what path of accessibility you are building can help you evaluate your initiative’s standing.
Approach to Evaluate Social Impact
Nico published a report on how the company hopes to develop impact as part of a B Corp requirement. The full name of their document is “Nico Impact Assessment Framework”. Looking at the title, two words form a very critical concept.
Social enterprise metrics are difficult to define and measure in most business models. A balance act between social concerns and financial concerns cause numerous clashes or numerous gaps. Deciding on a business model does clarify a few concerns, however, the models lean more towards the exact operations of the business. An Impact Framework anchor method focuses solely on defining the social impact aspects.
In plain language and thirteen pages of PowerPoint-like content, Nico describes what impact they imagine their company will create. The content also describes brief tactics for how each approach will be followed through. The report, like the name suggests, speaks on how they will asses their process of social impact. Nico communicates the model without drowning readers in information.
In the report, the company states:
“Nico’s Impact Framework is the logic for how we will work to achieve our vision of positive social and environmental change. It connects our actions to a defined set of outcomes and it identifies five elements of change that we believe are key to building stronger neighborhoods.”
To give context, the five elements are written below:
- Increased financial inclusion and wealth creation
- Distributed power and stakeholder alignment
- Improved environment and quality of life
- Neighborhood diversity and stability
- Strong local economy
Soon after introducing the framework, the company adds:
“The Impact Framework is our roadmap for how we will prioritize and measure the non-financial impact of our business on the neighborhood and local community over time. It is not a claim that we are having any specific impact when we launch.”
Certain words standout for this idea, which include: framework, roadmap, and impact. For the anchor method, we will separate the term “assessment” as being a section within the framework.
Measuring is difficult if you don’t know what you are expecting the outcome to be. Imagine a problem you are solving concerns height. Grams will not be used for an outcome related to height. Like units between height and weight are separate, social enterprise may need to take on this approach of knowing what is being measured.
The word “framework” brings this idea that there is a blueprint around what is built for impact, what the outcome will be, and how to get to the outcome. Through this lens, social enterprises can ask questions that communicate the way the impact will exist, or look like. Then, it will be easier to decide on the metrics to measure, or the operations to set in place.
Here is why knowing what you are measuring is different from knowing how you are measuring. Methods of measuring can differ. In our units example, height can be measured in multiple ways: feet, inches, or meters. When you recognize what outcome the social impact is connected to, you can better test the metrics you use. If you are not clear on where your actions lead towards, you could end up in a situation where you are using grams to measure height.
An anchor based on Impact Framework gives a better understanding of an initiative’s structure and commitments to impact. Defining the outcomes can be particularly helpful for social enterprise models that don’t rely on a physical product, like shoes, and more of a concept-based service, like mentorship. Both models can benefit from a framework for impact to create a less vague translation between the path of accessibility and the result after arriving at the need.
Nico’s architect-like Impact Framework completes this profile.
People Helping People Podcast is seeking methods clearly supporting an effective impact. Observations and discussions on happenings in the social enterprise community is a significant part of our contribution to social good. Continue to check-in for more conversation-starting content.