with ‘value creation’. Their vision is to integrate impact with
financial and operational metrics to help organisations “develop
better products and services, improve resource allocation, and build more
efficient and impactful businesses”.
Microfinance is one example of a sector that
has been through this journey, embedding
measurement as one component of
organisational systems and processes
to create social value. Microfinance
organisations initially concentrated on
measuring outputs – number of clients
reached, numbers of loans disbursed,
and amount of money repaid. There
followed a donor-driven focus on assessing
the impact of microfinance to demonstrate
poverty reduction outcomes. However, later it
was recognized that measuring end results was
not timely or useful for improving practice. The focus
then shifted to ‘social performance management’ – how
product design, organisational systems, governance and
management come together to deliver social value and
impact. This resulted in the development of the Universal
Standards for Social Performance Management by
practitioners and funders working together.
FROM MEASUREMENT TO MANAGEMENT?
At its heart, this is a question of how we move from
impact measurement defined as “set of practices through which
an organisation establishes what difference its work makes” to impact
management – the set of practices through which an organisation
learns about what makes a difference and uses this to improve
its performance towards this end. Measurement thus becomes
just one component of a ‘high performing’ organisation that can
consistently deliver on its good intentions.
A growing number of practitioners, investors and donors are
moving in this direction . The entrepreneurship development
network ANDE for example, in its vision for Metrics 3.0 highlights
the progress made in measurement that focuses on accountability
and standardisation, but points to a need to move to a concern
A focus on managing impact puts impact and
social value at the core of the design, governance and
management of organisations. Measurement provides the data
to inform decisions, focusing on providing management with
feedback on each step of the process and not just outcomes. So
what does this mean in practice?
We would argue that most important is a focus on the people
the organisation serves – some call this taking a client or personcentred approach. The survey reveals that this is actually where
social enterprises and charities focus most effort when it comes to
impact measurement. Ninety percent of the organisations in the
survey collect feedback from clients/beneficiaries, but less than
half (47 percent) feel they do this well (see table overleaf).
90%
THE ESSAY
—
Business case for impact measurement: Several respondents
highlighted a need to focus more on ensuring that impact
measurement drives learning and improvement, and for the
organisational ‘business case’ for measurement to be
clearer, to ensure that the benefits outweigh costs.
There was a call for improved understanding and
focus on what information is of value to social
enterprises and charities in being better at
creating impact, particularly in the case of
external stakeholders. As one respondent
put it: “Funder/donor impact measurement/
management systems need to be couched more in
helping frontline organisations collect useful data
for themselves, and acting as a partner in this, rather
than framing this as an ask from the investee to the
investor, with no utility to the former.”
Whilst acknowledging external stakeholders’
need for impact information, there was a sense from
the survey that there is a need for more accountability in
their use of impact reporting; 74% of respondents felt
that funders should focus more on impact information
when awarding grants. There is a common experience that
information is asked for but not used in decision-making,
or that social investors do not consider impact information
when setting expectations around financial return. This is
of concern if organisations compete for funding based on
claimed impact.
“Social investors say they are concerned about impact but ask only
briefly about it while focusing enormous efforts on financial projections,
governance and competence.”
Is there actually a shared recognition between frontline
organisations and funders that to deliver impact we
need to think in terms of ‘good organisations’ and assess
organisational capacity and culture to deliver impact on
a sustainable basis? Do we need to take a step back and
think about where measurement fits into the organisational
systems that ultimately deliver impact?
OF ORGANISATIONS
SURVEYED COLLECT
FEEDBACK FROM
CLIENTS/BENEFICIARIES
PPQ | 51