Effective tools and methodologies for measuring and reporting actual impact have not been the sole provinces of challenges for social entrepreneurs and impact investors. They also pose unique questions for academics and university programs, like Professor Thane Kreiner at Santa Clara University near San Francisco.
Background
Thane Kreiner, PhD, executive director of the Miller Center for Social Entrepreneurship at Santa Clara University and an expert on social impact offers his views.
Santa Clara University is leading educational institution committed to sustainability. It has stated commitments to climate change, justice and well-being, diversity and transparency.
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Impact investors are becoming increasingly sophisticated about measuring impact. What impact measures should social entrepreneurs be prepared to deliver from day 1?
It depends on the sector, impact model, and temporal relation between outputs of the social enterprise and impact. In some sectors, impact is much easier to measure than in others because the impact or outcomes are directly or independently caused by outputs. Conversely, when the time between output and impact is long (e.g., years or decades), impact measurement may not be possible at all, much less in a day. Impact measurement can be costly, particularly when many factors in addition to the output of the social enterprise contribute to the impact or when there is temporal separation between output and impact.
What impact standards should social entrepreneurs use to frame their impact reports?
Social entrepreneurs in almost all sectors should report the number of lives impacted; in doing so, they should explain the Theory of Change (or logical framework) and provide qualitative examples of what each life impacted means in humanistic terms. Number of jobs or livelihoods created is also an impact reporting standard. Most other impact measures vary by sector or other factors related to the specific form of the impact. For social enterprises serving the poor, economic impact, whether increased income, decreased expenses, or reduction of productivity is a useful measure.
While measuring impact should have the effect of improving impact, how does a social entrepreneur avoid burdening the effort with bureaucracy that stifles impact or thwarts economic success?
Clear communication among stakeholders is essential when defining the impact model, impact metrics, and impact measurement and evaluation process. Impact investors who demand impact measurement should be prepared to fund it. Social entrepreneurs should be realistic about what can be measured quantitatively (“not everything that counts can be counted” – attributed to Albert Einstein, perhaps erroneously) and what cannot. They should also be cautious about attribution error, as many people and communities served by one social enterprise are served by other means.
Source: Yourmarkontheworld.com
