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 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 impact ecosystem. There was no collective agreement or definition of social impact measurement. Fast forward 2018! I was fortunate to have a much deeper discussion with 25+ impact practitioners from different parts of impact ecosystem.
This year I see shift in dialogue from why we need impact measurement and management to how can 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" where many leading Asset Owners and Foundation leaders had a divergent view of current state of impact measurement.
Across entire panel, there was a favorable alignment towards "Impact Management Project". SoPact Impact Cloud is a first impact management platform that has made a tremendous commitment and demonstrated deeper implementation of the standard.
While it is good to see a good progress of state of impact measurement and management, there are still many hurdles that are worth discussing
Shared language of Impact: 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 innings. Most organization still do not have a good quality theory of change. If they do, there is not much alignment between funders, mission driven organizations and enterprises. While SDG offers global goals where we can align and Impact Management Project tells how to manage impact, it still doesn't help with alignment issues that we see everywhere.
There are two issues:
- 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 differs 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 class of impact that shouldn't be measured such as civic justice. While, we agree that there are many class of impact shouldn't be measured, we fundamentally disagree that impact measurement is not about measurement at all. It is fundamentally about build a strategy so that people of ground can have a faster feedback loop and common language of impact between investor and investee or grantor and grantee.
Hence, during rest of the article we will focus on how SoPact is setting a new bar for the impact measurement and management.
At the heart of common language it is about aligning on theory of change between funders, mission driven organizations and enterprises. To be precise, let's be clear about what we mean by theory of change.
Align theory of change of impact
We believe that it is a joint responsibility of individually creating TOC, whether they are funder, mission driven organizations (Small and Growing Business, Social Enterprise or Nonprofits) or enterprises (business units). TOC allows building an impact map from their own individual view.
Having established impact map, allows each of them to align around common metrics that they are going to measure internally and important impact metrics that is relevant for external impact reporting. Global impact metrics and search engine simplifies this process of each of the ecosystem players. Global Impact Metrics is a repository of metrics that simply aggregates thousands of standard metrics, defines rich meta data, cross-links them 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 organization 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 introduction to revolutionary design centric metrics and data management process. At 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 simplifies survey, outcome and results data collection process. Let's examine how we simplify each of them
Organization providing product and survey, it is important collect a regular feedback from beneficiaries and other stakeholders. The design of survey management is out-of-scope of this article. The fundamental to good survey management platform requires built-in-libraries of survey templates such as "Progress Out Poverty Index Forms by Country" . Impact Cloud also plans to provide wizard-driven survey for social impact measurement. Platform already beautifully integrates online and offline survey data process. This allows organization to continue to use their favorite survey tools and integrate results data for aggregation purpose in simple data warehouse.
In addition, SoPact already provides a built-in online survey management tool, which is directly integrates every survey response immediately.
While most organization focuses 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 when field manager will collect baseline and incremental evaluation based on established scoring approach.
Results Data Management
Results data are broadly speaking aggregation of results based on 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 a results. Impact Cloud provides both advance techniques which allows rapid summation.
Impact Cloud has intelligent data importing feature that automatically maps any external data, recommends 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. System will do rest including analysis.
While self-reporting is often a common, most organization should move towards on the above reporting. This is common organization that often collects data on paper, excel, google spreadsheets or airtable.
Democratize Impact With Free Platform
SoPact is a mission driven organization. Based on our hundreds of dialogues with many of our leaders, we believe that democratizing impact is key to establish common language of impact. Without this both high impact philanthropy, impact investment and sustainability do not stand a chance to move a needle.
We will allow a Impact Cloud for Impact Maker which is free forever for all their their investee/grantees (Funders can simply provide an access).
Learn More: Impact Strategy
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