Measuring Social Impact - “What gets measured, gets valued”
Every business/organization operates within an environment and community that not only hosts but also serves as primary stakeholders in their operations directly and/or indirectly. In other words the sustainability and continuous growth of organizations is somewhat tied to the sustainability and continuous growth of the community and environment which they operate in. This has formed the basis for various social projects embarked by companies and organizations through the vehicle of Corporate Social Responsibility (CSR, Corporate responsiveness, Corporate Philanthropy, etc.). However without a clear understanding of the value of the social project being embarked on, both to the organization and the community, CSR will continually be viewed as a necessary evil by corporate organizations.
Social interventions are usually embarked on as routines and the performing organizations only have a vague view of the value. This paradigm has produced various unsustainable projects which might be beneficial to the society in the short term but of little or no value to the performing organization. A key factor that contributes to this is the fact that these project don’t directly related to core business and most organizations do not have the competence or know-how to logically and systematically calculate in monetary terms the impact of their social impact interventions. As the saying goes “what can’t be measured can’t be valued”. It is convenient to note at this juncture that Inclusive Business largely cushions this challenge of vagueness as impacts are usually economic and can be easily identified and valued in monetary terms. However finding the balance between social impact and profit might be the challenge.
How is social impact measured, is a lingering question for many companies. Every investor expects a Return on Investment (RoI) in the form of income and capital appreciation, in the same vein Social Return on Investment (SRoI) should be expected on every social investment made. There is a principle-based and quantitative system to measure social impact but varied approaches can be adopted based on the uniqueness of each project.
Impact measurement is critical to determining the success of an intervention. The first step to take in measuring impact of a proposed project is to capture the expectations of stakeholders and the conditions in situ. This forms the baseline for the proposed intervention and the basis for measuring success. For BIF this forms the commissioning task of our interventions as interventions are flag-off with a baseline workshop.
I recently read an interesting publication titled Measuring Social Impact: The foundation for Social Return on Invest by the New Economics Foundation (NEF). The publication proffered basic knowledge and approach towards measuring social impact and is a useful start point towards measuring social impacts. It is present in a simple and interactive way providing real life case studies which have the ability to impact practical knowledge. The report suggests four elements required to measure the impact of a social project which include; Input, Output, Outcomes and Impact. Click here to view full publication.
In conclusion and in my opinion the most impactful social intervention is the one that provides economic empowerment to the base of the pyramid (BoP) in an environmentally friendly way and still boast the bottom-line of the performing organization.