Determining Social Impact

Today corporate governance is the watchword that applies as much to corporate social investment and development, socio-economic development and community relations departments as to any other company activity. And return on investment is a universal corporate gauge, no matter where and how corporate funds are applied.

It is therefore negligent to spend company funds on community, social and socio-economic development projects without properly measuring and evaluating their impact. In fact, not only do corporate social investment managers have a responsibility to auditors, shareholders and company management, but also to the development cause and community.

Clearly, if you cannot measure progress, you cannot be sure you are making any social impact. 

Social and community departments and projects must therefore be judged on their developmental impact, and business return on investment. They need to find ways to gauge their success through well-conceived measurement and evaluation processes. Such measurement should not be arbitrary or reactive, undertaken only when management calls for a report. Rather, it must be made integral to each project, planned from the project conceptualisation phase, and based on clearly articulated project objectives right to completion.

Given the nature of developmental activities, this measurement can be challenging.  Certainly project objectives can easily be defined in broad developmental terms – for instance, contributions to a rural clinic should ultimately translate into a sustained improvement in the health of that community; likewise, teacher training should improve learner pass-rates in the long term.

The need for social impact measurement hinges on two core issues:

Demonstrating social/socio-economic, and community investment and development value to business and stakeholders

Community expenditure is an investment in the sustainability of business and should secure the economic, social and environmental vitality of the systems on which business relies. It should help alleviate the social ills that threaten the ability of the business to thrive, such as poverty, ignorance and disease. It should be managed in a way that delivers maximum possible benefit to recipients. And it should elicit public goodwill to mitigate corporate reputational risk. In short, as a corporate investment, socio-economic development must provide the best returns possible, demonstrated and communicated through convincing analysis, interpretation and presentation of the evidence.

Promoting continuous improvement in social, socio-economic and community investment and development delivery

Accurate measurement of social and community performance is the essential prerequisite for learning and innovation. Social and community practice and impact can only improve if a robust framework to collect, analyse and interpret existing community projects is put in place.

Evaluating community and social investment and development is complex, and one needs to consider a number of broad issues to ensure that measurement is appropriate and sufficiently robust. These include the regulatory environment, the organisation’s social/community investment and development strategy, and the nature of the community/social projects.

Every social and community development program is unique, depending on the corporate culture and specific organisational contexts in which its programs are conducted. At the same time, all have common elements that make comparative measurement possible.

Effective measurement targets the common whilst accommodating the unique, with a framework that focuses on two broad areas:

  • How competently the social and community program is managed within the organisation
    This requires one to review the applicability of policies and management procedures, and to assess their practical implementation – usually including how selection criteria are applied to projects, budget and resource management, disbursement practices, data verification and audit procedures, and a review of reporting communications and stakeholder engagement.
  • How well the projects are performing
    Comprehensive evaluation will include in-depth investigation of a sample of social and community development projects. Aside from evaluating how well each project is managed, this should include measuring its impact, sustainability and cost effectiveness.

Next Generation Consultants therefore measures social impact across an additional three aspects:

  • Impact measures the depth and spread of positive and negative, intended and unforeseen consequences of an implementation. These might include the extent to which priority needs are targeted, the depth of skills transfer, and the ripple effects that extend benefits to people beyond direct beneficiaries.
  • Sustainability assesses the extent to which project benefits are likely to continue once the external social and community agents (funders and implementers) withdraw. Sustainability can be measured via indicators such as transfer of project management capacity to beneficiaries and ongoing beneficiary access to the resources necessary for maintaining project momentum.
  • Cost-effectiveness considers whether project benefits are sufficient to justify the cost. Although such assessments can be misused to argue social and community budget cuts, the intention should rather be to determine whether limited development resources might produce better results if spent elsewhere.

No programme operates in isolation. Impact and return are therefore also influenced by stakeholders. Our model integrates, aligns and draws extensively on stakeholder views, perceptions and opinions on the actual impact of the program. This is a critical aspect as it confirms, scientifically, the actual impact derived from the social and community investment and development program.

  • How favourably stakeholders perceive one’s social/socio-economic and community investment and development performance – and how extensively one engages stakeholders, will impact on social and community development endeavours. Stakeholder assessment of social and community development performance, especially in instances where initiatives have ostensibly failed, presents an invaluable learning opportunity that can secure future success. It also adds to the accuracy of measurement by highlighting which indicators stakeholders consider important.

Community, social, and socio-economic development measurement is challenging and requires complex research if it is to be objective and accurate on the one hand, while being comparable across projects and over time. But it should not be avoided on that account, because it provides compelling proof of performance and demonstrates the value of social and community development to the business and stakeholders and set the community investment program on a path of continuous improvement.

Our social impact assessment model

The diagram below shows the ‘secret recipe’ of the analysis in our social impact assessment model.

  • First we determine possible indicators to measure impact for the community and the business.
  • Then we clearly identify and segment the stakeholders.
  • Lastly, we quantify and qualify the impacts per stakeholder group.

We then apply our mathematical model to ‘count/measure’ impact. This impact extends across a number of platforms.

We measure impact per stakeholder group along the following dimensions:

  • Economic, social and environmental impact
  • Positive and negative impact
  • Direct and indirect impact
  • Intended and unintended impact
  • Short, medium and long term impact
  • Qualitative and quantitative impact
  • Combined impact