One of the biggest issues for the development sector in Africa is how to determine whether we have really made a difference through any given social investment programme, and what kind of difference we have made. Have our interventions improved the lives of those they set out to change for the better? Have resources and funds been meaningfully allocated and utilised? Is a specific programme delivering in terms of the costs involved in running it? Does it make good business sense? (Because if it doesn’t, it is simply not sustainable.)

More pertinently: What criteria and systems should we be using to assess a programme’s effectiveness?

Constructive, insightful and standardised impact assessment remains a huge challenge for social investors. While billions are invested in a broad range of development programmes annually, those in the sector who understand how to properly measure and evaluate any initiative’s effectiveness remain few and far between.

Yet, without compliant, procedural measurement, how can we understand what we are doing wrong and, perhaps more significantly, what we are doing right?

During the past decade, New Generation Consultants has worked intensively to develop a holistic and integrated assessment methodology and impact assessment model that can assist and support social investors in this complex but critical undertaking. Since 2010, our team has assessed social investment and development programmes to the value of R3 billion, including more than 700 programmes across 15 investment portfolios, involving some of South Africa’s largest social investors.

This has resulted in a comprehensive library of more than 7 000 qualitative and quantitative indicators and the identification and development of more than 25 dimensions of impact and return on investment. The process, which has included research, testing and numerous applications in the field, has led to the formulation of the Investment Impact Index™ (III™).

The primary aim of this comprehensive and thorough assessment methodology is to contribute to capacity and skills development in the sector. In doing so, we ultimately strive towards assisting to alleviate, eradicate and eliminate poverty across the African continent and to facilitate the success and sustainability of African societies at large.

Applying the III™ methodology can assist stakeholders to:

• plan better for positive outcomes
• implement programmes more effectively
• successfully bring initiatives to scale
• facilitate greater stakeholder accountability
• support improved stakeholder communication
• guide appropriate allocation of (scarce) resources

Through our work we aim to equip all stakeholder groups, including private, public and community stakeholders, with the means to access and collate relevant information which will facilitate more meaningful, positive change. Through our impact assessments we strive to determine and illustrate both what is possible – and what is realistic.

Measurement is but one critical part of what we do. The other important component is the analysis of information and data that will inform future investment and planning decisions. Our feedback is designed to be easy to understand, implement and interpret. Complex methodologies or approaches that require specialist skills, licensed software or specific hardware do not work. The development sector requires transparent, comparable and flexible solutions that contextualise and take into consideration the complexities, relationships and fundamental development principles relevant to our continent. Furthermore, our impact assessment methodology can be applied at any level, from the evaluation of a project operating in a single village to a multicomponent national development initiative involving several international and national development agencies and funders.

What sets the III™ apart?

• It uses a targeted African continental developmental perspective to determine impact as well as return on investment.
• It is replicable, scalable and can be adapted to assess various focus areas in the development sector.
• It includes qualitative as well as quantitative metrics for short-, medium- and long-term impact assessments.
• It uses a comprehensive and broad-based range of indicators relevant to a range of stakeholder groups.
• It only analyses data derived following consistent global standards or practices, and from reputable sources, making it possible to compare results from different investment approaches, programmes and different investors.
• It considers a variety of impact dimensions including, but not limited to, social, economic and environmental impacts, positive versus negative impacts, intended versus unintended impacts, as well as direct versus indirect impacts.
• It is particularly useful in highly emergent and volatile environments and contexts (where the environment is always changing).
• It is applicable to socially complex situations, requiring collaboration among a range of stakeholders from different organisations, systems and/or sectors.
• It enables meaningful comparison, providing a tool set to measure and evaluate the effectiveness of development spend across portfolios, programmes and focus areas.

By undergoing Next Generation’s consulting process, clients are empowered and informed to develop new strategies, programmes and finance models where needed, or to sustain and replicate those that work successfully. In terms of ROI best practices, the III™ approach is also valuable in helping companies to create CSI programmes that enhance shared or blended value by aligning business goals and competencies with the development priorities of community stakeholders.

The Investment Impact Index™ is a pioneering assessment model that is constantly refined as our work continues and our industry evolves.

• For more detailed information on the above research, assessment and recommendations, view INVESTMENT IMPACT INDEX ^TM

Author Reana Rossouw is one of Africa’s leading experts on social innovation, sustainable development and reporting. As owner and director of Next Generation, a specialised management consultancy, she believes strongly in contributing to the development of the sector.

Next Generation presents annual master classes on social innovation, CSI and related aspects, providing practical, useful discussions with real-life examples to improve the quality of your work and the impact that you make. Contact rrossouw@nextgeneration.co.za to get details about upcoming classes and to secure your seat.