Defining and evaluating social outcomes is not always straightforward. The growing movement away from measuring inputs and outputs, towards measuring outcomes, brings many challenges. Social service providers constantly battle with issues of attribution (was it us that made this change?), externalities (did some other external affect or group make this change?), isolation (did the change happen by itself, or as a knock-on effect to something else?) and much more.
There are numerous circumstances in which social impact measurement is required and each call for a different level of rigour and complexity:
- social enterprises and not-for-profits defining their impact for funders and the general public
- government and service providers defining and measuring outcomes for payment by outcome contracts and social impact bonds
- social and environmental enterprises measuring social impact for investors
- businesses measuring impact for certification purposes such as B-corp
- businesses and corporates measuring their internal social and environmental impact, for instance to meet environmental, social, and governance reporting standards
In our practice of developing impact measurement frameworks for not-for-profit organisations, corporate entities and government commissioned social impact bonds, we have seen the tempation to increase the complexity of the approach in an effort to respond to the perceived needs of investors, philanthropists and other stakeholders. However, we have found that a simple set of impact measures applied over time, based on a deep understanding of how the desired impact is being created, best meets the needs of all parties without placing an unnecessary burden on the organisation itself.
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A great deal of work has been done globally on both outcomes measurement, and evaluating the social impact performance of enterprises and organisations. Some of the key organisations are included below.
- SIMNA is the social impact measurement network in Australia. SIMNA runs public events and offers support to its members.
- The UN’s Sustainable Development Goals are becoming the most used common language around defining areas of intended impact
- iPAR Impact is a tool launched in April 2016 which allows impact investors to compare social and environmental impact across their portfolios.
- The Global Impact Investment Network (GIIN) has developed the Impact Reporting Investment Standard (IRIS) and allows funds and enterprises to adopt a standard set of performance measures, using shared vocabulary. The Global Impact Investment Reporting System (GIIRS) offers an added layer of analysis for assessing social and environmental impact.
- The Impact Investment Exchange launched the world’s first publicly listed social stock exchange, Impact Exchange in June 2013. This includes a social enterprise listing process which will define and track social impact.
- Impact Management Project offers a framework for considering how impact is both managed and measured
- Over 20,000 enterprises have engaged with the B Impact Assessment to benchmark social and environmental performance, including large companies like Ben & Jerry’s, Etsy, and Patagonia. US-based Case Foundation partnered with B Lab to launch the ‘Measure What Matters’ initiative in March 2015.
- The Results Based Accountability (RBA) approach tracks progress against population-level outcomes and baselines. RBA encourages organisations to view their work in the context of the wider system. Many local governments, particularly in the US, have adopted the framework
- The SROI Network and Social Impact Analysts Association are now joining forces to create Social Value International. Social Return on Investment (SROI) provides an internal process for providing clarity on how effectively impact is being created. It tends to focus on the dollar value of impact created, compared to the dollar value invested in the program (ie. a cost/benefit analysis of sorts). As an internal reference, it generally cannot be used for comparative purposes, so functions not so much as an impact measurement tool but rather as a stakeholder engagement and value attribution exercise.
What to Read
Australian Examples to Learn From
- Thank You, an Australian social enterprise that sells a wide variety of products with profits going to projects around the world, allows customers to track the impact of their purchases through their Track your Impact platform
- Who Gives a Crap sells toilet paper and other paper products with profits going to sanitation projects
- Calum Scott at Opportunity International has developed a social performance report on their work in micro-finance and support services to borrowers around the world.
- Uniting Care Queensland has released a support produced in partnership with Deloitte Access Economics to quantify the economic and social impact of their work.