Best Practices In Selecting Impact Metrics & Indicators
Time to Read: 23 min | Audience: C-Level Management | Last Updated: April 2018
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Social Impact Metrics
What is the social impact metrics?
A defined system or standard of measurement to trackprogressof change by your organization. Impact-oriented organizations use eitherstandard metricsorcustom metricsto track change.
Standard metrics Generally established by research institutes, they tend to be categorized around thematic areas or organization type. Examples of standard metricsinclude:IRIS, BOND, GuideStar, Robin Hood, GIIRS, etc.
Custom metrics: Sometimes based on standard metrics, these are created by an organization to be more relevant to their particular context and intervention.
Metrics set: A grouping of metrics organized around a specific program or activity. This can be a good practice when an organization is managingdiverseportfolio.
Difference between Goals, TargetsandMetrics (or Indicators)
Using the structure of theSustainable Development Goalsas an example (set by the UN in 2015 in an effort to tackle poverty and protect the earth), we can see that each "impact" goal defines specific targets to reach within the next 15 years.
Goal 1: PovertyEnd poverty in all its forms everywhere
Target:To be achieved by the year 2030, a reduction of at least half the percentage of people of all ages living in poverty according to their own national definitions.
Indicator: Example, indicator 1.1.1, on the proportion of the population below the international poverty line.
Why measuring impact is important?
By measuring what matters, your organization is able to gain credibility with funders, donors, andpublic. The insights you get as funder from data-driven impact learning into your portfolio and outcomes helps in making future investment decisions.
INVENTORY OF BUSINESS INDICATORS Sustainable Development Goals (SDG) maps existing business goals/targets against other popular indicators such as GRI. You can review commonly used indicators and other relevant indicators that may be useful when measuring and reporting your organization’s alignment to the SDGs. Consultthis listfor a complete database.
Laying the Groundwork
The most important element to a relevant selection of social impact metrics is the foundational impact framework that supports it. A strong impact measurement framework enables us to better define which metrics will serve our needs. That framework emerges from THREE cornerstone elements of any organization.
VISION, MISSION, AND GOALS Whenever you get stuck (which you probably will) as you document your organization's program structure and theory of change, you can refer back to these three elements of your organization for guidance.
PROGRAM STRUCTURE Your program's structure is simply a documented layout of how your programs are organized. It refers to your organization's internal hierarchy of activities and impact efforts. The two-layer structure includes your programs (or initiatives) in layer one and the associated goals of those programs in the second layer.If your organization is broad in scope, your 'Programs' might be "Higher Education," "Health and Wellness," "Financial Inclusion," "Organizational Capacity Building," etc. If your organization has a narrow scope, maybe you work with at-risk youth for college and career readiness, then break it down a step further.
THEORY OF CHANGE The Theory of Change (ToC) documents the change (impact) that you are seeking for both accountability and internal awareness of potential organizational challenges. In the ToC, the primary challenges indicated are your underlying assumptions. The outcomes and outputs outlined in the ToC will be essential in defining your metrics.
What are baseline metrics?
Baseline Metrics are the ‘before’ intervention measurement, in year zero of your program. This is what you will compare your metrics to as time goes on to identify the change that has occurred. You may want to be able to compare with areas outside of your intervention, such as national or regional averages. This is called ‘benchmark data.’ You might only have one metric that you want benchmark data for, or you may decide that it’s needed for every metric.
The distinction between baseline metrics and benchmark data
BENCHMARK DATAis used to compare your program to other settings. This could be similar interventions in different places, or to the population at large (e.g. wanting to bring educational attainment of a minority population up to the national average)
BASELINE DATA is collected at the beginning of a project to establish the current status of a population before an intervention is rolled out. Without a baseline, it’s not possible to know what the impact of the intervention is!
Resources for Benchmark Data
SOCIETAL DATA The General Social Survey (GSS) This survey has been used for more than 40 years and is used (usually by politicians or policymakers) to acquire a picture of the opinions of the U.S. populace on various national issues.
HOUSEHOLD COMMUNITY DATA The Living Standards Measurement Study (LSMS)has a general objective the improvement of evidence-based policymaking. The Study facilitates acquisition of quality data through best practices in survey implementation.
FAMILY LIFE SURVEYS The Family Life Surveys (FLS) are generally implemented by the RAND Corporation (and its partners in regions of the survey) to gather insights on household and community life. Among the survey regions currently available are countries such as: Bangladesh, Guatemala, Indonesia, and more.
OECD REGIONAL DATABASE The OECD Regional Database offers a comprehensive database (35 countries) of statistics and indicators related to demographic factors, economy, and social trends in the OECD regions of the world.
OECD METROPOLITAN DATABASE The OECD Metropolitan Database defines metropolitan areas as urban regions with more than half a million inhabitants. Of those areas (281 of them), the database consists of indicators tracking data across economic, environmental, demographic, and social themes.
NATIONAL AND INTERNATIONAL STATISTICS AGENCIES OECD data are supplied by national statistical offices from member countries and presented in a comparative format. If you are seeking more detailed information or information on non-OECD countries, consultthis listfor an appropriate agency.
Nonprofit being a largest category of social sector do not have a strong precedent in using standards based metrics. While there are many services emerging such as Charity Navigator etc, their use of social indicators is limited.
GuidestarUS based leading organization in recent years is focusing on usage of standardized indicators. While, their social impact indicators are applicable globally, there is a long way to go.
While many foundations are interested in learning outcome of their grants, there is still a push vs pull syndrome. Large foundations such as Robinhood Foundations have not only developed impact metrics but also detailed outcome and research behind social benefit based on social research. Many other large foundations design their own internal custom metrics. However, community foundations on the other hands are still in push vs pull syndrome. They would like to learn outcome from grantees but they are often worried about a push back from the grantees who may not want to provide results. We believe the best way to improve results is build data capacity of foundations by helping them define theory of change, impact indicators, and data strategy. This also gives them additional avenues to raise grants from other funders.
Grant Management's Impact Measurement Are Rudimentary
Use of indicators or metrics in philanthropic foundation very limited and not well aligned. Most foundations tend to use their grant management based systems which have extensions for impact reporting system. In most case use of metrics are purely for managing end of year reporting from the grantees. Hence, use of custom metrics is quite common. Often outcome and indicators are not aligned between grantee and foundation. In many situation, foundations simply ask grantee to define indicators which has a limited value. Often organization that use grant management system based impact measurement are typically designed for satisfying board requirements (survey management like) and do not focus on truly improve data capacity and outcome of the initiative they fund.
The following is a limited set of known indicator list published by foundations:
They often define survey question that can be used as a starding point
Alignment with various reporting frameworks
International Development & Philanthrophy Related
How do I know which standards to align when selecting metrics?
Standard metrics are usually used by specific sectors or types of stakeholders: sustainability focused, impact investing focused, community development focused, etc. To give an example, IRIS metrics are designed to measure the social, environmental and financial performance of an investment.