Social enterprises seek to generate a positive impact on society. To what extent can we credit outcomes to their program or service? What portion of those outcomes can we credit to their impact investors? In this blog we address:
- What is attribution in impact measurement?
- The challenges with attribution
- Contribution in impact measurement
- Centering contribution for funders
What is attribution in impact measurement?
In impact investing, there is no single definition of attribution nor a standardized means of measuring it. (DCED) Impact investors seek to generate a financial return as well as outcomes that benefit society. Measuring financial return is relatively straightforward. The challenge comes with the second part, how to measure the outcomes that benefit society. This is where effective impact measurement uses the same monitoring and evaluation and social sciences tools used in public policy. (SSIR)
The Organisation for Economic Co-operation and Development (OECD) defines attribution as the “ascription of a causal link between observed (or expected to be observed) changes and a specific intervention.” (UNICEF) Impact measurement relies on these ideas:
- causality - that the program directly caused the observed outcomes
- counterfactual - what would have happened if the program never occurred (UNICEF)
Attribution analysis asks: How has the program caused the outcomes?
An analogy for attribution
I want to go outside for fresh air so I push the door open and go outside. I caused the door to open (causality) and the door would not have opened without me pushing it (counterfactual). I acted alone, so the outcome can be attributed exclusively to my intervention.
Now, imagine that a friend joined me in pushing the door open. What portion of the outcome can I attribute to me and what portion to my friend? Imagine we broke the door while trying to open it. To whom can we attribute this negative outcome? This is the concept of attribution and the challenge it presents.
Read More: How to Maximize Impact Measurement?
The challenges with attribution in Impact Measurement
Attribution seeks to give credit where credit is due. Social impact programs, though, are often complex and operate in complex social environments. (CDC) There are external factors affecting outcomes as well.
Your jobs training program may show an 80% increase in clients finding a job. Also this year, a large online shopping company opened a new warehouse in town. Demonstrating the exact degree of causality and the counterfactual evidence of your jobs training program can be challenging. In some cases, it may be impossible.
In impact evaluation, measuring attribution often means using a control-group experiment that did not receive the program intervention. It may not be practical, possible, or cost-effective to use such an experiment in real life. (ILAC) We at SoPact recommend social enterprises employ a social impact experiment approach.
Read More: Steps to Streamline IRIS Impact Measurement
Attribution for Multiple Funders
When your program has multiple funders, including impact investment, attributing which portion of the outcomes to their specific input (funding) is complex. (DCED)
A common approach is prorating based on the proportion invested. (DCED) A simple example would be a funder that invested 10% in the social enterprise. 10% of the results might be attributed to them.
This is a simplified picture of the role of the funder. It may not sufficiently express the impact of the program. (DCED) Failure to acknowledge the challenges with attribution can lead to impact washing.
Contribution in impact measurement
Given the challenges with attribution, a more useful approach is to focus on contribution, instead. The benefits of focusing on contribution are two-fold:
- it uses a different method for impact measurement
- it maintains the funder’s focus on shared outcomes for the stakeholders
From an impact measurement perspective, contribution uses a different approach. Instead of using a control-group experiment, contribution analysis relies on the theory of change (ILAC) and will use case studies and surveys (CDC) to determine if changes have occurred.
Contribution analysis asks: How has the program helped to cause the observed outcomes?
Centering contribution for funders
From an impact investing perspective, the contribution is “whether an enterprise’s/investor’s effects resulted in outcomes that were likely better than what would have occurred otherwise.” (GIIN).
Contribution is not concerned with exactly what portion of the program’s outcome can be linked to the funder’s inputs. Instead, contribution focuses on the broader idea of how the funder’s inputs have “increased the likelihood of achieving the outcome.” (SSIR) The Bill and Melinda Gates foundation focuses on contribution because they want to understand how their shared efforts with other partners resulted in a positive impact for the populations they serve. (Gates Foundation)
Contribution maintains the focus on the stakeholders, whereas attribution is me-focused.
- Contribution asks: How have we helped achieve this social impact?
- Attribution asks: What impact can be credited to me?
Read More: Design Effective Impact Experiments
Focus on contribution
No social impact program exists in a bubble. Impacts result within complex and dynamic societies. Determining the precise attribution of outcomes to your program and, in turn, to your funders, may not be possible. Contribution keeps the focus on the stakeholders and the impact that they experience. SoPact is committed to finding the stakeholder’s voice in impact measurement.