Towards Best Practice Reana RossouwNext Generation ConsultantsMeasuring Impact and Return
What do we mean by best practice?• Formalised approach/documented strategy• Regular reporting and communication (internal & external)• Active Senior management/board involvement• Alignment to core business and operational business• Working in collaborative partnerships• Dedicated CSI staff/team/ department/ foundation/Trust• Scientific research – social baseline studies• Regular stakeholder consultation and engagement• Employee involvement and recognition• Regular monitoring, evaluation and impact assessment• Replication of successful projects• Development of best practice guidelines• Sharing lessons and insights
Why do we fail so spectacularly?• Responding to local requests in an ad hoc manner• Lack of professionalism and business rigor• Insufficient focus on sustainability• Limited understanding of the often complex local context• A perception of “giving” rather than “investment” (Including lack of clear objectives)• Detachment from the business• Insufficient participation and ownership by local stakeholders• Provision of free goods and services• No exit or handover strategy• Overemphasis on infrastructure and under emphasis on skills and capacity building• Lack of transparency and clear criteria• Failure to measure and communicate results• Misconception that development work in neat funding cycles
Maybethere is asecret?If we knowwhat we aredoing wrong –maybe we cando better.
What do we want to achieve?• To provide evidence• To demonstrate performance• To prove accountability• To show program effectiveness• To demonstrate value• To make a difference• To contribute to a community’s self- sustainability• To empower• To alleviate poverty
The Big Issue / Idea• If we call it investment – there should be a return• If we call it development – there should be impact• So how do we measure impact and return?
Impact Value Chain NEXT GENERATION FOCUSInput: Activities: Output: Outcome: Impact: Return:Resources What the program The direct Benefits or What the short, What thededicated to or does with inputs products of changes for R medium and businessconsumed by to fulfill its program beneficiaries E long term results achieved as athe program mission activities during or after S are on all result of its program U stakeholder investmentFACTORS activities L groups T SMoney, staff Feed and shelter Number of New knowledge, Access to new Increase inand staff time, homeless classes taught, increased skills, infrastructure brandvolunteers and facilities, provide number of changed Decline in infant awareness andvolunteer time, job training, counseling attitudes or mortality reputationfacilities, educate the sessions values, modified Less Mitigateequipment and public about signs conducted, value behavior, dependency on environ-mentalsupplies, of child abuse, of educational improved grants, etc. impacts andinfrastructure, counsel pregnant materials conditions, risksetc. women, create distributed, altered status, Recruitment of mentoring hours of service etc. new talent and relationships for delivered, skills, etc. the youth, etc number of participants served, etc
Impact Assessment – HOW? Also reviewed Strategic Review •Business Strategy (CSI Strategy) •Brand Strategy •Operational Strategy •Sustainability Strategy •Human Resources •Finance and Budgets Operational •Technology Review •Marketing & Communications (CSI Management) •Governance •Grantmaking Processes and Systems •Stakeholder Engagement •Research and Development •Programme Design and Management and Programme Implementation Review •Partnerships (Impact •Resources Assessment) •Focus Areas – Flagship Programmes
Impact Value Chain - Our FormulaHierarchy Inputs Outputs Outcome Impacts ReturnsDefinition Resources Goods and Expected changes Ultimate (long- Direct or indirect invested (e.g. services in access, usage, term) effect of business money, skills, generated by the behaviour or the intervention benefits/ value etc.) use of inputs performance on a key generated by (short-term) (medium-term) dimension of the activities/ development programs/ (e.g. living interventions standards) (long- term)Qualitative Value of Number of % change – Students finding Number ofIndicators investment, schools, number access to health employment, graduates hired number of hours, of volunteer, services, people with skills by company, % number of books, number of education, finding change in hours teachers, government employment grievance, students infrastructure, complaints pass rates received by companyQualitative Stakeholders Perceptions of Beneficiaries Quality of links to Changes inindicators satisfaction with schools, reporting benefits local employment community / the programme educators, and application of opportunities, customer/ learners, skills, education perceptions of employee improved socio perceptions economic status attributable or opportunities directly/ indirectly to CSI
Impact Assessment Model METHODOLOGY: High Community The more beneficiary stakeholder Impact groups affected the greater the impact: Within the stakeholder group, the more impacts achieved the greater the impact Other Beneficiaries / Community and returnCommunity Stakeholders Group 4 Impact 1Impact Beneficiaries / Community Community Stakeholder Group 3 Impact 1 Impact 2 Communities Community Community Community Stakeholder Group 2 Impact 1 Impact 2 Impact 3Low communityImpactLow Business Beneficiary Business Business Business High BusinessReturn Stakeholder Group 1 Impact/ Impact/ Impact Impact Return 1 Return 2 Return 3 Business Impact/Return
Community What we measure Qualitative impact and return Quantitative impact and returnimpact andBusiness ReturnSocietal Value Higher levels of skills and education Level of education Pass rate increases University access Graduation rates Increased availability or accessibility to employment Applicability of skills to other jobs Employment rate Income generation Improved health Reduction of lost work days Cost of treating disease Reduction in medical expenses Greater economic resilience Wage growth per individual Household wealth and disposable income Contribution to GDP and tax Distribution of wealth Number of new businesses Enhanced environmental quality Changes in health Improved access to natural resources Increased quality in natural resourcesBusiness Value Increased revenue – new customers, new products, Market penetration, entry, new markets, price differentiation/ extended use of existing services premium, innovation, demographic changes Reduced Costs and increased efficiency Decrease in production costs, operational costs, sales and marketing costs, exposure, access to natural resources Building intangibles – Improved customer Customer perception, survey, satisfaction – employee satisfaction, perceptions, increased customer satisfaction, talent recruitment and retention, skills development, availability and enhanced brand value, increased supplier quality of labour, media value and mentions, increased security of relationships, added value to investors, increased supplies employee recruitment, retention, satisfaction Managing risk – reduced risk to the business, BBBEE credentials, licences, physical asset security, raw materials reduced risk to the community – reduced regulatory security, enhanced stakeholder engagement and dialogue, reduction risk, enhanced licence to operate in activism, boycotting, strikes, increased sales and tenders
Rand Water – Frances Vorweg - Impact across economic, social and environmental aspects
Some stuff we have learnt• Sponsorship, Donations and infrastructure programs CAN deliver high impact and return• Bursaries do NOT necessarily deliver high impact and return• ANY resources CAN be measured – books, wheelchairs, buildings, time – cash and non-cash• The same project can deliver varied results for different funders – HIV & ME• How and on what you spend the money (inside the program) has a direct influence on the impact and return• The strategy and focus areas has to clearly define the return and impact required• Sustainability has to be clearly defined for exit and completion• Indicators have to be developed, agreed, and documented as part of the contractual phase• Internal monitoring and external evaluation processes has to be established and adhered too - Impact Assessment does not replace evaluation and monitoring• Impact can be measured over time as well as the triple bottom line
Other important stuff…• The type of service provider (NGO) and the level of service provider (sophistication) does have an impact on the outcome of the assessment• You have to consider the impact of the impact assessment on so many levels – As a result of our work we can now categorically state that most programs: • Have only short term impact • Those that have medium term impact are not necessarily sustainable • The long term impact is mostly social or socio economic only as opposed to economic impact which really contributes to poverty alleviation!• It is possible to determine impact and return – And the real value lie in independent, verifiable, assurance of CSI expenditure, program results, outcomes and impact
• We all have impact – but it is not necessarily measurable and sustainable impact What I now know… – Do we want economic or social impact? – By implication social impact help people right now – but may not help them in the future – which renders the project/our intervention UNSUSTAINABLE – Sometimes it is our own (CSI Practitioner’s) fault we don’t have higher impact as we decide what, who and how to fund/not to fund – The most sustainable projects/programs with the highest impact have social, socio economic and ECONOMIC impacts i.e. the number of jobs created – Sometimes there is negative impact – i.e. dependencies are created – Mostly there is only short term impact – again which makes our interventions UNSUSTAINABLE
Towards Best Practice• The Seven Principles • The Seven Stages – Involve stakeholders – Establish the scope – Understand what and identify the key changes stakeholders – Value things that – Map the outcomes – matter identify the indicators – Only include what is – Look for evidence material – Establish the impact – Do not over claim – Calculate the impact – Be transparent – Report the outcome – Verify the result – Share the learning
At the end of the assessment • What do you want to know – Why? • What do you want to do with the information – Why? • Do you know what the impact of the impact assessment will be on: – Your strategy – Your CSI team – The CSI beneficiaries – The CSI programmes • What if it is not good news?
At the end of the day • There is no magic formula • It is not easy nor simple • There is no one size fits all approach • There are many ways to measure • You will have to develop your own formula
Above all else: Measuring impact is importantMeasuring the right things is difficult Measuring impact is possible
What next? • Impact Investment Index: III – Direct vs Indirect Impact – Intended vs Unintended Impact – Levels of impact – shallow, deep, integrated – weighting of impact • We are still looking for more case studies and guinea pigs!
Contact• Reana Rossouw• Next Generation Consultants• Specialists in Corporate Sustainability and Integrated Sustainability as well Socio Economic Investment and Development• Tel: (011) 258 8616• E-mail: firstname.lastname@example.org• Web: www.nextgeneration.co.za• PLEASE NOTE: THIS PRESENTATION IS PART OF A LARGER BODY OF RESEARCH!• THIS INFORMATION IS COPYWRITED AND THE INTELLECTUAL PROPERTY OF NEXT GENERATION CONSULTANTS