Impact Investment Index
How to measure the value and subsequent results (outcome and impact) of corporate social investment (CSI), socio-economic development (SED), and community investment and development (CID) remains one of grantmaking development professionals’ and practitioners’ greatest challenges.
Social and business benefits are often long-term or intangible, which make systematic measurement complex. And yet, grantmakers and foundation staff face increasing pressures to show social/community investment and development to be as strategic, cost-effective and value-enhancing as possible. The industry faces a critical need to assess current monitoring and evaluation practices and measurement trends – in order to validate impact evidence.
The social impact assessment environment in South Africa and Africa
In South Africa and Africa, the development sector is large and complex. It is regarded as ‘the third sector’ – providing employment to millions and business opportunities. The fact that organisations operating in this sector who manage programmes (i.e. provide products and services) run them as businesses – albeit trying not to make a profit in the process – does not detract from the size and influence of this sector.
In essence this sector acts as an implementation arm for both corporates and government and it has access to funds from foreign development agencies. These resources are primarily aimed at assisting government in reaching its development targets for creating a South Africa where all people are equal and have access to basic services that will assist them in living meaningful lives.
Albeit small when compared to government spending on social services and overseas investments, some of the investments made by companies in South Africa are both strategic and innovative – and are really aimed at alleviating or eradicating poverty in the country.
They are also in response to specific legislation (i.e. the Broad-Based Black Economic Empowerment Act) and to society’s (read: customers’) expectations that companies become more responsible and support communities, as well as causes close to their heart.
However, a number of prevailing factors have been eminent in development circles for years now, and these play out in a number of questions and issues:
- On the one hand companies want and need to know that their investments in communities are making a difference. In particular, they need to know that there is a change in the quality of life of the communities in which they invest.
- Similarly they need to know that their investments support and leverage government resources to the extent that these are not only extended, but contribute to a more sustainable environment where, for instance, pressing and basic social needs are effectively addressed.
- Boards, executive management and community investment practitioners are utilising company resources, and as such must be accountable for the investment outcome and impact that they deliver.
- On the other hand the intermediaries and beneficiaries of these investments need to account and be responsible to investors for the future sustainability of such investments.
The challenge of social impact assessment
All of the role players in the development sector are seemingly working together in the hope that these investments and resources will trigger significant and sustainable change in a social developmental context. But the sector’s approach to assessing the value and impact of these investments is not keeping pace with growing societal needs and expectations; in fact, it seems to be fighting a losing battle in that sustainable social development seems elusive. In many cases, traditional evaluation approaches fail to meet the fast-paced information needs of development and investment decision makers in the midst of complex social change efforts.
Next Generation consultants have worked in the social and community investment and development sectors for more than 15 years. Our knowledge and expertise make us credible service providers to the donor community. For the past five years we have assisted numerous donors to understand the impact and return on investment of their social and community investment and development initiatives.
Our Social Impact Assessment services include:
- Conducting impact assessments of social, community, socio-economic development and investment initiatives.
- Determining the impact on intermediaries and beneficiaries of investment and development programmes.
- Determining the return on investment for funders and donors of community and social investment and development programmes.
- Capacity building and training.