More or less everyone involved in social enterprise agrees that demonstrating your impact is really important but not very many are actually doing it… my latest mythbuster for The Guardian‘s Social Enterprise Network.
Tag Archives: social impact
On Thursday (24th), I’m one of the panellists for The Challenge Of Measuring Social Impact event at The Hub Westminster. The organisers have asked us to blog our thoughts in the run up to the event, so these are my initial responses to the questions we’ll be attempting to answer on the night – although obivously I can’t promise not to have changed my mind by Thursday.
My fellow panelist, Dr Pathik Pathak, has already blogged some of his thoughts.
What is social impact and how can it be measured, does it influence funding decisions and how do small organisations with limited resources manage to do this?
For social enterprises and social entrepreneurs, social impact is generally short for ‘positive social impact’. It’s the positive change that takes place – or that we hope will take place – as a result of what we do.
Monitoring and evaluation – which has always been part of the voluntary sector landscape, at least over the 12 years that I’ve been voluntary sector professional – can be a way of measuring social impact but isn’t always.
Keeping a record of how many people have turned up to use your service – for example, a creative writing course delivered in your local community – and who they are is monitoring but is not social impact measurement. Measuring the impact of your course might involve asking the participants some questions at the beginning of the course – do you they enjoy writing? are they confident about writing sonnets? – and then asking the same questions at the end of the course.
Opinions will be divided on the level of social impact delivered by some people in your local community being more confident about being able to write a sonnet. Is society a better place as a result? It’s (relatively) easier for people who services involve working directly with people to stop them doing crime to explain how their work delivers positive changes for society and (often) harder for people whose services are websites that provide people with generic information.
The promise of social impact definitely does influence funding decisions. Most grant funding applications have questions about why the thing you’re promising to do is needed and what will happen as a result of you doing it. In terms of commissioning, wider social impact – beyond the idea that the service that (usually) a public sector body is paying to deliver, delivers positive social change by virtue of its existence – isn’t currently of interest to most commissioners. Many social entrepreneurs hope The Public Services (Social Value) Act 2012, which comes into force this month, will begin to change that.
For small organisations, the danger is that they get bamboozled by questions such as ‘what is our theory of change?’ and miss the the underlying point that demonstrating social impact means explaining why what you do is useful and why someone, whether it’s a customer, a grant-funder or a public sector commissioner should give you money to do it. And also, equally importantly, knowing yourself whether your work is succeeding or whether you’re wasting your time.
Being small is not an excuse for not being able to do that at all. You don’t necessarily need to set up complicated measurements system but you do need to have some way of working out whether what you do is working.
Social investors state that measuring the impact of the products or services is just as important as increasing the capacity of an organisation to actually deliver the product or service, but what does this mean in practice?
The premise of this question is slightly optimistic. While Nesta’s impact fund, Joe Ludlow is on the panel, is an honourable exception, the vast majority of social investors do not yet have a specific commitment to supporting organisations that deliver measurable social impact (as opposed to being organisations committed to doing social good in a general sense). As the recent Big Lottery-backed report Investment Readiness in the UK noted, when discussing the perceptions of voluntary sector organisations seeking social investment: “Investees appear to think that their ability to create social impact will be more significant to investors than seems to be the case on the evidence of those who have received investment. This perception amongst potential investees appears to weaken as they get closer towards securing finance.”
There is a way to get money if you can deliver positive social change but can’t do so as part of a sustainable business. Apply for a grant. So far, the social investment market is far less sophisticated than the traditional grant-funding market in terms of defining the connection between measurable impact and cash.
There are difficulties on both sides. There are (so far) very few social investors who can currently explain what effect, if any, investees’ ability to measure social impact will have on their investment decisions. There are equally few trading charities and social enterprises who are measuring their social impact in any meaningful way. Although clearly there’s also no agreement on what ‘a meaningul way’ might mean. It’s a chicken and egg situation but with a lack of clarity about what exactly a chicken or an egg might look like when either or both arrives.
How are organisations developing the evidence that a particular product or service is having a positive impact, to ensure that what is being funded is making a difference?
Some (relatively) large social enterprises produce social impact reports. HCT Group is one of them. FRC Group is another. Matter & Co’s RBS SE100 provides an annual guide to the social enterprises who are best at measuring social impact (and have entered their competition).
I’ll have a bit more to say on this on Thursday. A few further questions, though, that I think are important are:
Is it useful for social impact to measured using systems – such as SROI – that attempt to put cash figures on the social impact generated by particularly activities?
What role does social impact measurement play in the overall battle for resources? Should resources be targetted at generating the greatest possible volume of positive social impact – if we were in the position to agree on what that meant – or are certain types of positive social impact a higher priority than others?
“Facebook was not originally created to be a company. It was built to accomplish a social mission – to make the world more open and connected. We think it’s important that everyone who invests in Facebook understands what this mission means to us, how we make decisions and why we do the things we do.”
So says Mark Zuckerberg, founder of popular social networking website, Facebook, in a letter that forms part of the company’s registration to float on the stock market (valued at between $80 Billion and $100 Billion). It’s becoming increasingly difficult to remember what life was like before the creation of Facebook. It’s certainly made an impact on the world of social enterprise. I did attend a few meetings with enthusiastic up-and-coming social entrepreneurs before Facebook’s launch in 2004 – at the time, quite a few of them we’re inventing new currencies that were a bit like money but much better – but I can’t remember any of them claiming to be working on a new website that would be the social enterprise equivalent of Friendster.
Fortunately, though, it’s no longer necessary for anyone to worry about creating the social enterprise Facebook because Mr Zuckerberg is happy for that role to fulfilled by Facebook itself and who’s going to argue with a bloke whose shares are worth $28 Billion?
That said, the specific reason why I’m not going to argue with the claim that Facebook has a social mission – or, at least, was initially built to accomplish one – is that I think it’s at least partially true. Unlike the founder of Wikipedia, Jimmy Wales, who doesn’t even take a salary from his world famous website, Mark Zuckerberg hasn’t actively avoided making a few dollars from his creation but equally there’s no suggestion that this was his primary motive. Assuming that this book is partially true, a lot of the inspiration was the desire of its founders to make a name for themselves on campus and, of course, to meet girls but more important was their excitement about the idea, which grew into excitement about the possibility of making an impact on the world by changing the way people communicate.
Clearly, with 845 million monthly users, Facebook does have a social impact. All business have a social impact and as a business used by a phenomenal number of people around the world, Facebook has a particularly big one but when we in the social enterprise world use the phrase ‘social impact’, we generally take it to include the silent word ‘positive’ at the beginning.
‘Does Facebook have a positive impact on global society?’ is a question that’s probably already starting to appear as an essay question at universities and business schools with a particular interest in social and ethical business. Mr Zuckerberg’s letter certainly provides an interesting outline of what the business intends to do and why. Here’s a further extract: “There is a huge need and a huge opportunity to get everyone in the world connected, to give everyone a voice and to help transform society for the future. The scale of the technology and infrastructure that must be built is unprecedented, and we believe this is the most important problem we can focus on.”
As Clay Shirky’s Here Comes Everybody explains, social media has create new ways for people to connect with each other and bring about social change. The Arab Spring, that unfolded during 2011, may not have happened primarily because of social media but social media certainly did play a big role in the way that it happened.
The point for us in the social enterprise world is to understand both that our sector does not have the monopoly on social impact and, crucially, that we do not have the monopoly on positive social impact. Whether or not we think that Facebook is changing the world for the better, making it worse or is somewhere in between, there are billions of people in the world whose lives are not affected by social enterprise but are affected by the social impact of mainstream businesses.
Mainstream businesses do good both by providing people with stuff they need and want at prices they can afford, and by providing employment. Mainstream businesses also do things that are not so good. The challenge is both to encourage the growth of social enterprises that have a positive social impact – and to make the argument for mainstream business to find the balance between economic success and achieving positive social aims.
Limbering up for tomorrow’s Social Impact Camp, I’m trying to work out what I actually think about the current ongoing debates around the subject. I enjoyed last month’s event, particularly the presentation by Rob Greenland but, though Rob succeeded in outlining the challenges faced by smaller organisations trying to measure their impact, the search for workable solutions goes on.
SROI may be a great idea (and practically useful to large organisations) but as someone running a real economy micro-business (that according to the latest research is also a social enterprise medium to large business), I find it it hard to imagine a point where I’ll have time to read enough of the literature to understand it, let alone implement it as a measure of the work we do.
Discussing how to assess the impact of one of our projects – a national magazine by and for people with mental health difficulties – with participants at an action learning set on social enterprise organised by London Civic Forum last week, the consensus seemed to be that it was best to go for qualitative methods of reporting such as case studies of individuals involved in the project. That certainly is valuable but it’s difficult to plot on a graph.