In the philanthropic world we are focused on how to make the greatest impact possible, and with that comes the question of what to track and how. When we look at impact, we aren’t just speaking about financial or environmental factors; we are also speaking about social impact (SROI, Social return on investment is a commonly found term).
For foundations and fonds de dotation, especially those just starting out, understanding how to measure social impact is key in assessing the effectiveness and reach of their funding initiatives. But how? Social impact can be hard to track, identifying the who, what, where, why and how is of key importance. Let’s start by fully understanding what social impact measurement means with two definitions: the first from the US based Stanford Social Innovation Review (SSIR), the second from the France-based Superior Counsel of Social Enterprises:
1. “Social impact measurement is the measurement of social change for the targeted population attributed to the activities of an organisation during a specific period of time. The change might be positive or negative and there may be unintended consequences of one’s actions to consider.” For example, a program that reduces homelessness by providing affordable housing and support services creates a measurable social impact by improving living conditions and community health. In terms of a negative impact, we can imagine for example that should that housing project be too far from public transportation, it may in fact limit the population from accessing potential jobs.
2. In France, the Conseil supérieur de l’ESS Defines social impact as: "the set of consequences of an organisations activities on both its external stakeholders—whether direct or indirect within its territory—and its internal stakeholders, as well as on society at large." Essentially saying that impact goes beyond a purely economic analysis, including any other consequences generated by these activities (environmental, health, community engagement for example).
Why Social Impact Measurement is Necessary for charities…..
Assessing Effectiveness: Measuring impact helps charities and operating foundations or fonds de dotation to determine if their programs are effectively addressing the social needs they aim to resolve. It allows them to refine their strategies, improve services, and better serve their communities.
Demonstrating Value: Impact measurement can provide evidence of success, which is crucial for securing ongoing support from funders and stakeholders. It helps to build trust and demonstrate the tangible benefits of the charity’s work. I feel it’s important to note here that a true social impact study is time-consuming and costly. Foundations that require impact studies from the charities they look to support should also include the financing necessary for its completion.
… And For Your Foundation or Endowment Fund
As a grantmaking foundation or fonds de dotation, it’s also important to evaluate your own impact and that of your donations and funding partnerships.
Enhancing Funding Efficiency: Understanding the impact of your funding initiatives allows you to allocate resources more effectively, ensuring that every dollar spent maximizes social return. Are your funding programs strategic in the way they allocate funds? How do you select charity partners? Do you leverage funding with other foundations and/or extra-financial support?
Improving Funding Processes: By measuring impact, your foundation or fonds de dotation can refine its selection process, reducing unnecessary administrative backlog, decisions timelines and improving communication. This can foster stronger relationships with fundees, as both parties work towards clearly defined outcomes. Is your donation policy complicated to manage? Are you spending more time buried in paperwork than working with charity partners and beneficiaries?
7 Things to Think About for Your Social Impact Measurement Program
1. Define the Key Elements to Measure before the Project Starts
Defining what to measure at the start ensures that the impact assessment is aligned with the strategic goals of your foundation. This alignment helps maintain focus on the mission and ensures that all efforts contribute to the broader objectives.
2. Include Quantitative and Qualitative Impacts: It’s essential to measure both quantitative (e.g., number of beneficiaries, cost savings) and qualitative impacts (e.g., changes in community sentiment, empowerment). While qualitative elements are often harder to quantify, they provide crucial insights into the depth of change.
3. Define the Metrics in Collaboration with your Charity Partners
Your charity partners have the closest connection to the problem and the people affected. Collaborating with them to develop the key impact metrics allows you to leverage their expertise. This ensures the measurement criteria will focus on the most relevant outcomes, thus enhancing the program’s effectiveness.
4. Consider the Timeline
Not all projects, or at the very least, not all metrics, will provide measurable results in a year. It’s important to take into consideration the timeline needed to show mesurable social impact. For those programs and projects using a systemic change approach, such as educational reform, or social justice and empowerment of communities facing discrimination, changes can take decades to materialize.
5. Flexibility in Implementation
Social impact measurement can sometimes show negative results. When innovating, we don’t always know how things will turn out. If interim findings suggest that another approach could lead to better outcomes, being flexible allows for adjustments in workflow and delivery. This adaptability ensures that the program remains on track to achieve the desired impacts - and perhaps even some unexpected ones.
6. Engaging an Outside, Unbiased Evaluator
This pertains to both program/project evaluation and that of your own foundation or fonds de dotation’s operations. An external evaluator provides an unbiased assessment of the program and/or your foundation’s impact, offering a fresh perspective that internal teams might overlook. Just as your charity partners will perhaps feel more free speaking to a third party about your collaboration and support, so to may the beneficiaries of the charity evaluating the impact of its programs. Again, remember that this comes at a significant cost and so it’s good practice to consider funding this work for the charities you support.
7. Sharing Data for the Greater Good
Sharing impact data between foundations and partners fosters a collaborative environment where everyone benefits from collective learning. It can help avoid duplication of efforts, optimize resource use, and accelerate the achievement of social goals.
A final word…
Social impact measurement lacks universal standards, making it challenging to compare results across different programs or foundations and fonds de dotation. Each philanthropic initiative is unique, requiring a balance between general criteria for comparability and specific metrics for relevance.
By considering all of the above elements, your foundation can ensure that it is making a meaningful and measurable difference in the communities it serves. Remember, the goal of impact measurement is not just to prove but also to improve, ensuring that your foundation’s efforts are as effective as possible in driving social change.
Should you have any questions about your foundation’s or fonds de dotation’s impact, please don’t hesitate to reach out.
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