Increasingly, social businesses and purely commercial ones are being aware of the importance of running, not only good social and environmental practices, but also of going beyond them, and playing a decisive role within the communities they work with. Implementing CSR and social programs in order to achieve these, comes in hand with measuring the real impact they have.
Understanding it makes it possible to value the efforts and resources invested in them and to motivate further action. Additionally, stakeholders -investors, customers or beneficiaries - demand clear accountability of these programs to continue their support. In particular, social impact investors ask from their companies, strict quantitative measures of the impact of their investments; and if businesses want to reflect their social commitments to their end-consumers it is necessary that they have a clear understanding of the benefits they are generating through their programs.
However, as there are an innumerable number of socially conscious businesses, there are a vast array of measurement standards and measuring frameworks to monitor their social efforts. This fragmentation in a standard methodology responds to different factors, which will be mentioned shortly, but over all it has led to a poor penetration of social impact measuring best practices, and a lack of simple familiar ways for consumers to track the efforts being done by the brands they support.
How Impact Measuring is Currently Done
Factors deciding on what measuring system will be used usually depend on the company’s budget, size, and objectives.
In general, companies use either internal or external systems, or a combination of both, to design, implement, and measure their social programs. External systems refer to consultancies using established standards such as the most commonly known:
- UN Global Compact
- SROI (Social Return on Investment)
- Global Reporting Initiative
- B-Corp Certifications and local country certifications
Internal systems are those designed in-house or through a consultancy, but which are tailored to suit the particular needs and objectives of the company, hence are only used in that context. These methods usually relay on surveys, and the creation of specific frameworks and social boards with members of the company, experts, and representatives of the community. Two case studies of non-standardized designed methods are presented at the end of this article.
External and standardized methods require allocating a considerable amount of resources to the measuring efforts. This is the case, for example, for making an SROI assessment of the company’s programs. Additionally, they require a further step of “de-codification” if the company is interested communicating their impact and efforts to everyday consumers and beneficiaries in a simple manner.
However, these methods offer detailed and hard data that is attractive for impact investors and furthermore, they represent an excellent effort to standardise impact-measuring practices. Opposite to this, non-standardized and less quantitative methods tend to offer more approachable ways to measure impact and to gather “softer data” such as engagement, fairness, and interest around the programs. When choosing one method over another, companies have to be aware of the resources available and of their motivations to implement and measure their social impact programs. Huge benefits are brought in with these practices, however efforts can be wasted if they are not well guided and targeted.
Efforts to reach common grounds for impact measuring have been made outside the SROI network. Different organizations, and consultancies such as The Social Audit Network, Social Impact Analysts Associations, ACCSE, CSR Lebanon, among others have been helping businesses achieve their measuring efforts through different systems that can be adapted to their particular needs and characteristics. However, many reports, case studies, and frameworks have been produced agreeing there is no “one-size-fits-all” measuring system.
Common and Best Approaches for In-House Impact Measuring
Firstly, definitions of needs, goals and success have to be set. When organizations look to develop their own systems the initial stage is to define the goals and the desired impact. This has to be done by establishing dialogues with beneficiaries and other stakeholders to define what is needed, how to approach it, and how does success and failure look like.
Secondly, and especially important when facing limited resources, the Social Audit Network of the UK recommends deciding what tools will be used: Outcome or Impact tools. This part allows the company to prioritize according to its specific objectives either to focus on specific progress and behaviour change of a beneficiary, community or problem; or rather on its impact on economic, social, or environmental conditions.
Stanford Social Innovation’s Review authors Kevin Starr and Laura Hattendorf add the following steps to take before implementing a measuring system:
Once the needs, objectives and tools are defined, they suggest choosing the right indicators. This means narrowing down as much as possible the desired change, for example: decreasing deaths caused by diarrhea in children from a specific community.
With these indicators in mind, real numbers should be gathered in order to establish baselines and samples and define quantitative goals. In-house statisticians usually get involved in this process. After, the indicators can be used as proxies for measuring change, in the previous example this would mean looking at the kids drinking water from a new sanitized well and the drop in infant diarrhea cases. As a rough example it illustrates the need and advantages to be specific in the goals, although many programs require much more detailed and specific data to reflect the change and the impact.
After the needs, goals, tools, indicators and baselines are defined; a monitoring system needs to be set in place during the implementation of the program. Particularly at the beginning, these systems provide real-time data that allows making iterations of the program before doing its first full assessment.
Finally, Starr and Hattendorf, reckon that the most difficult step for organizations is to attribute the changes to themselves. Weather this be done by narrative, matched controls, and randomized control trials; the outcomes have to be clearly and easily communicated along stakeholders.
Common Mistakes bto Avoid
• Know your community
Often beneficiaries accept flawed intervention in regard of no intervention at all. For this reason it is important to have previous and deep knowledge of the community’s culture before working with them to establish needs and goals of the programs to be implemented.
• Meet real needs
Bridgespan Group partner Daniel Stid explains that although end customers and investors are providing the resources to fund the businesses social programs, these have to respond directly to the beneficiaries unmet needs and not to what consumers and investors might want to improve. This will allow delivering the programs and designing them in the most efficient way to have successful and lasting impact outcomes.
• Let the Beneficiaries speak about impact
Equally important is to allow the beneficiaries to directly talk about the impact that the programs are having in them. As a report from the Centre for Responsible Philanthropy shows, only 27% of responding foundations include beneficiary opinions in their assessments. Hence, the close dialogue with beneficiaries before, during and after the implementation is essential to have a correct measurement of the outcomes of the company’s social efforts.
Two Case Studies
Measurement systems in complex global organizations:
Systems to share data among direct and indirect stakeholders and decision makers within a global organization helps to build corporate culture and enables better decision making. Goldman Sach’s 10,000 women initiative agreed on a small number of outcome indicators that every branch would collect.
This fed common indicators with real-time data that allowed easy program improvement and monitoring. This system also permits local offices to choose site-specific indicators and enables better collective decision-making. At the same time, local leaders were able to measure site-specific priorities and make better local iterations.
Keeping it Simple
Simple measurements help keep funders and beneficiaries motivated and in the loop of improvements. World Vision’s Implementation of its program WASH was set on simple and clear definitions of the problem and the solution. By setting “access to clean water” as having a protected clean water source available all year within 30 min, within a 30 min walk from the person’s home. This made easier to assess the reality of how many people fitted that definition and where to start working.
This also helped educate the communities on what is and what was needed to fit the “protected clean water” part of the definition and work on hygiene and sanitization issues.
One of the most important elements that is shared among different measuring systems is the need to work closely with the beneficiaries before, during and after the intervention. Furthermore, the ability to communicate the outcomes and the efforts with them and with end consumers boosts the impact by motivating further action.
In measuring social and environmental impact there is no “one size fits all” system and only best practices such as setting clear definitions and goals; understanding real needs and local culture; understanding the indicators; and communicating the successes, can assure the end goal of having a long lasting sustained impact. In turn, consumers, investors and employees will be motivated to continue supporting the company’s legitimate efforts.
Source: Responsible Business Magazine