Over the past seventeen years we’ve assisted numerous social investors, philanthropists, grantmakers and development organisations to not only become more sustainable, but to also create greater social impact.
In the process, we’ve collected many insights into social impact innovation, social investment and development.
In this article we aim to share some of our insights in the hope that it’ll contribute to a greater body of knowledge for the sector and build the capacity of practitioners & professionals on the African continent.
This article is informed by our quest to understand what works in development, and how we can make development more effective. Also ultimately, how we can ensure greater impact & return on investment for our clients.
The 5 Things We’ve Learnt About Measuring Social Impact
1. It’s Not About the Best Strategy, but How it’s Executed
The quest for positive and sustainable impact investments is what drives social and impact investors, grant makers, donors and philanthropists.
The effectiveness of the social investment and development system is not evaluated by its parts, but rather by the nature of the various components.
To maximise impact, all the stakeholders must consider the individual parts—the recipients & beneficiaries, the projects & initiatives, the investment & development cycles and how these various parts interact with each other.
2. It’s Not About the Size of the Investment, but How it’s Allocated
Investors mostly see their entire budget as a lumpsum to facilitate change, yet it’s allocated to several development portfolios and investment themes & focus areas.
- There are their own operational costs in addition to program related costs.
- There are supporting or enabling costs (research & development), capex investments and various other activities (due diligence) that make up the entire investment.
- Not understanding how investments are split individually as well as collectively, and in some cases geographically as well as intentionally, makes it almost impossible to understand how impact is created throughout the entire value chain.
- This means there’s no understanding or insight into which part attributes to the impact.
- To execute a project or intervention (organisational costs) and to implement & execute an intervention at scale, investments are allocated to an intervention (program costs). Some part is also directed at management costs, and some part to evaluation or assessment costs.
3. There’s No Such Thing as a Best Practice Strategy and Benchmarking is Difficult
Because each portfolio has different objectives and each intervention is implemented in a specific context with its own constraints and challenges; and because each recipient & beneficiary respond differently to interventions, it’s impossible to compare practices to determine best practice.
In addition – each partner or stakeholder in the process has different objectives.
Furthermore, investors define problems & solutions differently. These vastly different interpretations mean that practice and solutions work differently in different contexts.
4. Measuring Social Impact is Difficult, and that’s Why it’s Valuable.
By being rigorous in reporting and measuring outcomes and impact, as the process unfolds, impact will reveal its value more than once.
First in outcomes, then in insights that emerge from asking hard questions, and finally in the results measured against objectives & metrics as well; measuring impact in complex and interconnected systems with many stakeholders requires extensive resources, processes and systems.
This requires an extensive financial and leadership commitment even though few are prepared to invest and commit to the resources, time and systems it requires.
5. Not All Impact is Created Equal
Impact has many dimensions, some of which are more important than others.
The inability to measure impact has a lot to do with an inability to define robust indicators that measure impact. Some of these measurements of impact indicators include:
- stakeholder groups
- geographies and sectors
5 Things Investors Should Do
1. Establish a Baseline
At the beginning of the project, you should conduct a survey as a baseline to record what the situation is in terms of your target population and beneficiaries.
At the end of the project, conduct an end-of-project survey asking the same or similar questions so that you can reliably compare what happened during the project.
2. Target Indicators
Target indicators should be used as markers of what you want to achieve. Both the baseline indicator and the target indicator should not only measure outputs i.e. what you produce, but also quantitative & qualitative results.
3. Intended Outcomes
To elaborate on the above more precisely, indicators need to focus on the achievement of the intended outcomes or the main goals of the project. For example, how do you measure that civic awareness has increased? Or that the public services are more accountable?
Indicators should be segregated by gender, particularly in projects focusing on women. Further indicator segregation should consider target group specificities such as the youth, elderly, minorities and persons with disabilities.
It’s important to be consistent when collecting indicator data. You must ensure that, compared to the baseline survey, the end-of project survey is asking the same kind of questions to the same group of people that participated in the initial baseline survey.
5. Monitoring, Evaluation and Learning Systems
Include monitoring, evaluation and learning from the start. To use program design as an example, projects should have a strong monitoring, evaluation and learning system embedded in the project design with an appropriate budget to support it.
There’s also a need for each project to have a baseline survey, mid-term evaluation and end-line evaluation on the same sample of project beneficiaries for consistence and to clearly trace results & impact achieved.