Systems change is a major buzz in impact investing and impact philanthropy who are interested in improving long-term social change. NPC has very well described what System Change is. But how can achieve this? In this article, we offer unique challenges in the impact ecosystem and potential solutions.
SOCAP is the world’s leading conference catalyzing the capital markets to drive positive social and environmental impact – convening the marketplace at the intersection of money and meaning. This was my fifth SOCAP representing SOPACT. Five years ago, we organized a Social Impact Measurement circle. We had leaders from Kiva, Grameen, Acumen, U of Michigan, and many aspects of the impact ecosystem. There was no collective agreement or definition of social impact measurement. Fast forward to 2018! I was fortunate to have a much deeper discussion with 25+ impact practitioners from different parts of the impact ecosystem.
This year I see a shift in dialogue from why we need impact measurement and management to how can we use impact management to raise impact capital?
System change starts with common impact language
The most common approach to creating an investment portfolio is to evaluate the standard metrics for risk and market assessment, typically outlined in an array of statistics and graphs.
A panel discussion "Setting the Bar for Impact Measurement and Management" many leading Asset Owners and Foundation leaders had a divergent view of the current state of impact measurement.
Across the entire panel, there was a favorable alignment towards the "Impact Management Project". The SoPact Impact Cloud is one of the first impact management platforms that has made a tremendous commitment and demonstrated deeper implementation of the standard impact management standard outlined in the project mentioned above.
While it is good to see progress in the state of impact measurement and management, there are still many hurdles that are worth discussing.
Christian Rosenholm from IFC highlighted a need to create a common language of impact. Connecting our deeper discussion with ecosystem players, we found that most organizations are still stuck in the first stages.
Most organizations still do not have a quality theory of change. If they do, there is not much alignment between funders, mission-driven organizations, and enterprises. While the SDGs offer global goals through which we can align and initiatives like the Impact Management Project can inform us how to manage the impact, it still doesn't help with alignment issues that we see everywhere.
2 Main Issues in the Impact Ecosystem and Communication Today:
- Lack of commitment from asset owners towards impact measurement funding and punting this issue towards foundations as they feel they are natural impact first entity. This was a clear sentiment of Mirjam Garzon Farnum, Head Business Development Private Sector, responsAbility Investments, and Jamie Martin, Executive Director, Morgan Stanley. While these sentiments differ from other large asset owners, this topic is worth watching.
- Graham Macmillan, Senior Program Officer, The Ford Foundation on the other hand cautioned that there are classes of the impact that shouldn't be measured such as civic justice. While we agree that there is much class of impact that shouldn't be measured, we fundamentally disagree that impact measurement is not about measurement at all. It is fundamentally about building a strategy so that people on the ground can have a faster feedback loop and common language of impact between investor and investee or grantor and grantee.
In the rest of the article, we will focus on how SoPact is setting a new bar for impact measurement and management.
Impact Strategy for Managing Social Impact in Changing Ecosystem
At the heart of common language, it is about aligning the theory of change between funders, mission-driven organizations, and enterprises. To be precise, let's be clear about what we mean by the theory of change.
Align theory of change to impact actions:
We believe that it is a joint responsibility to individually creating TOC, whether you are a funder, a mission-driven organization (Small and Growing Business, Social Enterprise, or Nonprofits), or an enterprise (business units). A TOC allows for the building of an impact map from one's own individual perspective.
Impact Metrics - Relevant in Today's Impact Communication
Global impact metrics and search engines simplify this process for each of the ecosystem players. Global Impact Metrics is a repository of metrics that simply aggregates thousands of standard metrics, defines rich metadata, cross-links and uncatalogued them by area of impact, standards, and theory of change steps. Designed on most advanced search engine gives user experience similar to google search
Most organizations fear impact measurement assuming it is too complex and cost-prohibitive. The primary reason for this is that on average mission-driven organization does not have enough data and technology capacity and experience. SoPact Impact Cloud changes everything with the introduction to revolutionary design-centric metrics and data management processes. At the heart of every results data collection, there are three types of results data collection required for external reporting.
Impact Cloud's wizard-driven approach and out-of-box gallery of templates simplify survey, outcome, and data collection processes Let's examine how we simplify each of them
For organizations providing products and conducting surveys, it is important to collect regular feedback from beneficiaries and other stakeholders. While the design of survey management is out of the scope of this article, fundamental to a good survey management platform is built-in libraries of survey templates such as "Progress Out Poverty Index Forms by Country".
The Impact Cloud also plans to provide a wizard-driven survey for social impact measurement. The platform already beautifully integrates online and offline survey data processes. This allows organizations to continue to use their favorite survey tools and integrate results data for aggregation purposes in a simple data warehouse.
In addition, SoPact already provides a built-in online survey management tool, which directly integrates every survey response immediately.
While most organizations focus on simple activity or output measurement, a true change determination process requires outcome measurement. SoPact's wizard-driven process allows outcome measurement by first defining phases/stages in which a field manager will collect baseline data and allows for incremental evaluation based on an established scoring approach.
Results Data Management
Results data are, broadly speaking, an aggregation of results based on a pre-established frequency. Funders may request monthly, quarterly or annual results. In certain cases, if certain beneficiaries are participating in multiple activities, it is important to find unique results. Certain results may require analytics and formulas to provide good data.
Impact Cloud has intelligent data importing feature that automatically maps any external data, recommends the best possible reporting format, and allows changes. Once this mapping is created any time simply drop a new data after event, survey creation, or any other collection. The system will do the rest including analysis.
While self-reporting is often common, most organizations should move towards the above reporting. This is a common organization that often collects data on paper, excel, google spreadsheets, or Airtable.
Democratize Impact With Impact Data Platform
SoPact is a mission-driven organization. Based on our hundreds of dialogues with impact leaders, we believe that democratizing impact is key to establishing a common language of impact. Without this, high-impact philanthropy, impact investment, and sustainability efforts do not stand a chance to move the global impact needle.
This is why our Impact Cloud for Impact Maker is free forever for all investees/grantees (Funders can simply provide access).