IMPACT MEASUREMENT NEEDS PANDEMIC SHIFT NOT INCREMENTAL
Civic infrastructure creates a fundamental shift in the way communities work across systems to get better outcomes for youth and families.
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Corporates realize that engaging stakeholder is not negative. By engaging social and business value, they can create shared value for all stakeholders.
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With the US election over impact investment and climate change will get a strong jolt. This has already put a strong emphasis on ESG and Impact Reporting.
- Increase social challenges, and limited public funding have put pressure on philanthropy to focus on social return on investment to justify the program's social and financial benefit and its effectiveness.
Big questions everyone is faced with are -
- How do they accurately report and ESG and Impact? Are they the same?
- How do I know what social impact to measure?
- How can we scale the social impact?
- What is scaling social impact mean?
- How can I effectively understand the social return on investment and compare different programs or investments?
Organizations often need impact measurement to understand many things related to stakeholders.
- Design effective products or services
- Access market opportunities
- Develop stakeholder insight
- Improve Stakeholder engagement
- Identify and mitigate the negative impact.
- Measure and report to external audiences
- Enhance and scale impact
- Monitoring program progress
- Predict long term impact
Scaling social impact cannot be equated to business or technology scaling. Scaling has a different meaning in the social sector. Given a complexity such as language, culture, and community needs, the same type of business scaling is not applicable. When we say "scaling," it means that a leading organization improves outcomes through better stakeholder listening and learning.
If they consistently demonstrate better outcomes over the years, other larger players such as the public sector or public/private can come in replicate based on results achieved by the leader. Many documented use cases such as mother and child mortality, employment for people with disabilities, and blindness exist. But even replication cannot be taken for granted as so many cultural barriers can make it difficult to replicate. All of them required a reference design followed up by others willing to apply locally.
Challenges of scaling social impact
Organizations that usually focus on the capacity building provide training to service providers, volunteers, and other organizations. Their focus may be on mental health, grief support, disease prevention, suicide prevention, or public health such as palliative care. These organizations have a tremendous opportunity and obligation to learn from their programs. Traditionally these organizations use a survey-based pre-and-post analysis approach. However, traditional survey management tools can be inefficient with consistent data collection (multiple data sheets) and provide limited stakeholder understanding intelligence. More importantly, the analysis of results outside survey management can be time-consuming, error-prone, and delayed. There is also a danger of stakeholders drop off with the same questions multiple times and long surveys.
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Impact justification barrier to scaling impact
Measuring and evaluating is not new! The philanthropy sector has been doing that for decades. Depending on challenges, different techniques have been adopted in Monitoring, Evaluation, Research, and Learning (MERL). Organizations use Randomized Control Trials (RCT), Monetization/Social Return on Investment (SROI), or Lean Data. While there is merit to each of these approaches, they all are backward-looking, often focused on impact reporting or impact justification, and NOT continuous learning and improvement.
The concept of measurements, such as Net Promoter Score (NPS) and product/customer success analytics, has been successfully used in the corporate world. So, why does the social impact sector lag behind when it comes to using similar concepts? Bringing stakeholders' voices into the mainstream economy is critical for improving the social sector's efficiency. Often, today's technology focuses on the top of the pyramid - 20% of stakeholders. What are the challenges, and what is the right approach in understanding stakeholder want in terms of social change?
While many, especially from impact investing, tout the benchmarking approach for better investment and predictiveness. This approach often comes from the Wall Street mentality. They often miss the point that finding a reliable data source with the right context is challenging in the social sector. On the other hand, the impact rating approach also has limitations. It misses the context of each enterprise's impact by using standardized questions and analysis.
Approaches like Lean data are promising but have limitations as it requires the right technology to drive better results. Lean data requires expensive data collection through an enumerator and provides a snapshot of data and NOT continuous learning data. Their analysis is often based on proprietary benchmarking, which may have the same benchmarking challenges described above. Most important, without continuous learning by front-line managers, we cannot scale social impact.
Focus on monetization and monitoring, and evaluation often demonstrates the impact or justification of funding of the program. This precise goal is a significant barrier to improving stakeholder impact. Stakeholder impact requires continuous learning and improvement from the stakeholders.
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The right approach measures the right social impact through continuous data collection and improvement in stakeholder outcomes.
Missing impact in impact strategy
Social Impact is all about the change that you create for a stakeholder. If stakeholders are not integral to scaling social impact, funders or organizations are impact washing, SDG washing, greenwashing, or, as some say, rainbow washing. Impact is about scaling and not claiming how many children you fed or how many women they trained? If an enterprise does not effectively use an outcome-driven approach, you are impact washing.
SOCIAL IMPACT MEASUREMENT TOOLS
Many vendors classify themselves as social impact assessment, measurement, and management. However, please note that there are significant differences.
Impact Rating & Benchmarking
B-Analytics, B-Assessment ≠ (not equal) Social Impact Measurement
First-generation impact assessment platforms focus on gathering governance, environmental, and social policies to assess entrepreneurs or Small Medium Businesses (SMB) or Small Growing Businesses (SGB). Here are four examples:
1. MIX Markets: For Microfinance Institutes.
2. AERIS Cloud: For CDFI Institutes.
3. B-Assessment: Impact on its workers, community, environment, and customers.
4. B-Analytics: For investors, supply chain managers, business networks, and governments in helping companies to measure and improve their positive impact.
There is a major theme behind these first-generation impact assessment resources. Their main goal is to provide benchmarking to the institutes that they focus on. The problem is that they try to use "impact assessment" with a broader brush. The reality is that impact is context-sensitive and cannot simply be measured through ratings!
Read More: CDFI Program Impact Measurement Case Study 2022
Limitations of Self Reporting
Tools like Clear Impact allow public agencies to create an impact scorecard. However, while scorecard-based reporting is useful in public agencies where regulatory reporting is important, their value remains limited.
Fundamentally, the social impact should be driven and managed throughout a program's life cycle based on a well-defined theory of change or logic model. Tools like Clear Impact require you to define your own custom metrics and do self-reporting.
Unfortunately, reporting organizations can use any data collection system, making them less auditable with limited integrity and limited impact context. In addition, non-existent data management limits an organization's ability to acquire and learn from results.
Customization-Based Systems
Many legacy custom applications require software vendors to modify business objects. Hence, the user must rely on the software vendor to customize the code based on a programmatic approach. .NET, Java, or legacy client/server applications fall into this category.
Is Salesforce Useful for Impact Measurement?
While systems like Salesforce CRM have the capability to configure, each Salesforce instance must be configured by expensive Salesforce developers (either in-house or by an external consultant). So, for example, if you want to upgrade from IRIS 4.0 to IRIS 5.0, you must rebuild your social impact metrics catalog.
There are advanced services possible but building a truly user-configurable system that is flexible takes much effort. Unfortunately, most social sector organizations do not have the capacity to build out such software or keep up with ongoing changes in requirements.
True impact assessment & measurement systems require an immense amount of flexibility, are the theory of change driven, allows rapid integration of data collection of any kind, and are optimized for quality reporting. Such a system takes a long time to build, and most social sector organizations do not have enough resources, skills, and alignment between the IT department and program management teams.
Social Data Solutions companies like Vera Solutions provide a customized Impact Assessment & Measurement Tool. However, while they start with a packaged approach, the reality is that every organization's theory of change, indicators, data collection, impact storytelling, and learning and impact reporting are unique. Things that you should consider before evaluating such systems are:
- What is the total cost of ownership (cost of subscription + upgrades + maintenance)
- Will the system be flexible to meet different grantee or investee requirements, which will undoubtedly change over time? How will you make changes?
- Will you get all the list of features in a comprehensive package?
- How long will it take to deploy?
- What's the training time and cost?
Configuration Driven ≠ (not equal) Customization
Beware of systems that require customizations.
Impact Cloud is designed so that any user can configure business rules without any technical knowledge. It is at least 10 times faster to implement than Salesforce and easier to maintain.
Impact Measurement System must be...
- Flexible
- Comprehensive
- Easy to use
- Rapid deployment with easy to configure rules or metrics changes
- Theory of Change driven.
- Flexible enough to adapt to each organization's use of standards, framework, and tools
- Work well with any data collection tool that enterprises and nonprofits use.
- Simplifies data aggregation and unlocks value and story of data