Understanding Impact Business Models: Economic Empowerment

What is the intent of the Impact Business Model?    

How do I assess my company’s eligibility for this Impact Business Model?    

What are some examples of products and services that have this impact?    

My company may be eligible for this IBM. How do I open this IBM in the B Impact Assessment?    

My company may be eligible for this IBM. What supporting information do we need to provide?    

Concepts in the B Impact Assessment

What is the intent of the Impact Business Model?

Income disparity and poverty exist through socioeconomic mechanisms, one being inequitable access to economic opportunity. Providing or improving access to income-generating, income-sustaining, saving, or net-worth growth activities for underserved communities helps to address the root causes of inequality and poverty, thereby promoting social and economic progress for the impacted communities. Empowering underserved populations through greater access to employment opportunities helps individuals earn a sustainable income, exercise greater control over their resources and life choices, and raise their standard of living. 

The Economic Empowerment for the Underserved Impact Business Model (also referenced as the Economic Empowerment IBM) recognizes companies that offer products and services that directly or indirectly provide or promote income-generating, income-sustaining, money-saving, or net-worth growth activities for underserved individuals. Products or services might directly provide economic opportunities and connect people to markets or income streams or otherwise enhance access to economic opportunities by providing affordable alternatives to necessities like daycare, benefits, or financial services.

How do I assess my company’s eligibility for this Impact Business Model?  

Companies that have the following characteristics can consider opting into the Economic Empowerment Impact Business Model:

• Products/services create economic opportunity for low-income/underserved individuals as a by-product and are designed for another purpose (e.g., worker benefits consulting, affordable quality daycare, more efficient agricultural equipment) OR

• Products/services create core economic opportunity for low-income/underserved individuals (e.g., financial literacy, micro-insurance, urban planning, legal services for underserved, employment firms)

• Earn revenue from a product or service that directly or indirectly provides access to income-generating, income-sustaining, money-saving, or net-worth growth activities.

  • Indirect examples: Products or services designed for another purpose, whose secondary impacts benefit the economic well-being of underserved individuals (e.g., worker benefits consulting, affordable quality daycare). 

  • Direct examples: Products or services designed with the core purpose of creating economic opportunity (e.g., financial literacy, micro-insurance, urban planning, legal services for underserved, employment firms).

• Ability to provide evidence that customers or beneficiaries of economic empowerment products or services are an underserved population in their context.

What are some examples of companies that have this impact?

Some examples of products and services that would capture their impact in this IBM: 

Products/services that create economic opportunity as a by-product and are designed for another purpose:

Products and services that provide indirect access to economic opportunities and/or enhance access to economic opportunities but do not directly provide economic empowerment opportunities, for example:

• Affordable daycare services that free up time/resources, increasing access to income-generating opportunities for underserved individuals. The daycare services must be targeted at supporting underserved individuals who face barriers to accessing daycare (the beneficiaries must meet B Lab’s definition of underserved; see Serving Underserved Populations Guide)

• Accessibility technology that supports access to work for people with disabilities (e.g., ramps that help individuals with disabilities gain access to workplaces, apps that provide captions for deaf and hard-of-hearing individuals, etc.) 

Product/services that create core economic opportunity

Products and services that are designed to directly create economic opportunities for underserved individuals, for example:

• Job training and job placement services targeting underserved populations (the beneficiaries must meet B Lab’s definition of underserved as per the “Concepts” section below)

• Financial or micro-insurance services for the underserved

• Microlending by fintech companies that provide lower rates and fees for underserved populations

Please note that these examples are illustrative and non-exhaustive. 

My company may be eligible for this IBM. How do I open this IBM in the B Impact Assessment? 

If you are considering opting into this IBM, you will have to answer specific questions about the impact of your product/service that will determine which Impact Business Models you see in your BIA. These questions, called gating questions, ensure that you see the content that is most relevant to your company in your assessment. 

To find the gating questions for the Impact Improvement IBM, navigate to the Customer Impact Area and search for the questions titled “Customer Impact Business Model Introduction” and “Customer Focus of Product or Service.”  Respond “Yes” to these questions. 

This will open the “Beneficial Product Type,” which requires the following answer option selected: 

This will open a question titled “Economic Empowerment Product/Service Description” and the remaining questions of this IBM.

To ensure that the Economic Empowerment Impact Business Model shows up, answer the gating questions as shown in the images above. Any deviation from this will prevent the IBM from becoming visible in your BIA. 

My company may be eligible for this IBM. What supporting information do we need to provide? 

Provide a written or verbal rationale explaining how the product or service indirectly or directly benefits the economic well-being of underserved individuals and how customers or beneficiaries of that product or service are determined to be an underserved population in their context. 

Examples of such determination can include:

• Collecting demographic data about beneficiaries that might qualify the customers/beneficiaries as underserved; 

• Collect data themselves about the access their customers/beneficiaries have to other products or services that produce the desired economic outcomes; 

• Provide secondary research about the markets and customers/beneficiaries the company serves to determine the level of access to products/services and economic outcomes. 

Concepts in the B Impact Assessment

Underserved -  a term used throughout the BIA to describe groups (e.g., populations, individuals, communities, enterprises) that do not traditionally have access to the positive social or economic outcomes delivered by an impactful product or service. Low-income, poor, or very poor individuals, as well as low-income geographic areas, are always considered "underserved" in the BIA.
Definitions for "low income" vary by geography, but those that are accepted in the BIA are usually based on generally accepted definitions (e.g., government definitions), rely on reputable socioeconomic data, and/or focus on small-scale geographic areas (i.e., a regional or local income threshold is more likely to be accepted than a national one). Companies should be prepared to explain the methodology, income thresholds, and data sources referenced.
Non-income based definitions of "underserved" may also be considered in the BIA but will vary widely by context and by geography. Accepted definitions are typically supported by evidence that a group lacks access to the company's positive intervention due to chronic discrimination in a particular market, which may include discrimination based on gender, race, ethnicity, color, disability, political opinion, sexual orientation, age, religion, or social origin.
Beneficiary - An individual for which your company intends to provide a positive impact through its products/services. For some companies "beneficiaries" and "customers/clients" mean the same thing, while for other companies they will be distinct.
For example, a company that sells professional development courses to individuals would consider both its customers and beneficiaries to be the individuals it serves. However, a company that sells solar-powered lanterns to NGOs in emerging markets, which in turn distributes them to underserved individuals, would consider its clients to be the NGOs and its beneficiaries to be the end-users of its product.
Clients - buyers of your company's products and services (IRIS Glossary Term). The terms "clients" and "customers" are sometimes used interchangeably. "Customers" generally refers to individuals, while "clients" generally refers to organizations.
Near-term outcomes - This refers to the immediate or near-future results or consequences of a particular event, decision, or action. These outcomes typically occur within a relatively short period, ranging from a few days to a few months. Near-term outcomes are often tangible and measurable, and they can influence subsequent actions or decisions. Unlike outputs, which focus on what is produced/delivered, near-term outcomes focus on the impact or changes that occur as a result of the outputs. They are the effects or consequences of utilizing or implementing the outputs.
Long-term outcomes -  The results or consequences that occur over an extended period, usually spanning months, years, or even decades. Long-term outcomes often have a broader impact and may be less immediately visible or measurable than near-term outcomes. For instance, long-term outcomes in the context of environmental conservation could include the restoration of an ecosystem, the reduction of carbon emissions over several decades, or the preservation of endangered species.