Impact investment index© - evidence of impact


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Measuring the impact of Corporate Social Investment

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Impact investment index© - evidence of impact

  1. 1. Measuring impact and return oninvestment for social development and community investment Reana Rossouw Next Generation Consultants South Africa
  2. 2. South African Context• Definition – CSR to CR to TBL to ESG to Sustainability• Issue – Giving is mandatory – Reporting is mandatory – Question is = how to measure impact for beneficiaries and investors• Legislation - Local – BBBEEE - Broad-based Black Economic Empowerment Act, Industry Charters, JSE-SRI-Johannesburg Stock Exchange – Socially Responsible Investment Index, King III – Corporate Governance, Companies Act – Social and Ethics committee• Legislation – International – Industry Codes – ICMM, EITI• Guidelines & Frameworks – GRI, UNGC, IFC, IIRC2013/04/23 Next Generation Consultants 2
  3. 3. African Context• Development Aid• Multinational Operations• Indigenous Operations• Foreign Development Agencies• Regional Differences – Legislation (Nigeria) – Size of Development Sector (3rd sector)• Continental Sameness – Dependency created – No skills and capacity developed• Time for African Solution2013/04/23 Next Generation Consultants 3
  4. 4. What do we want to achieve?• To provide evidence• To demonstrate performance• To prove accountability• To show program/ investment effectiveness• To demonstrate value• To contribute to sustainable development• To empower communities and funders• Ultimately - to alleviate, eliminate and eradicate poverty2013/04/23 Next Generation Consultants 4
  5. 5. Funders and non-profits often use the words “evaluation” and “impact” loosely, stretching these terms to include any type of report on the use of funds or the results they achieve. Many evaluation professionals, however, distinguish between measuring performance (monitoring inputs, activities, and outputs), measuring outcomes (near-term results), and evaluating impact (long-term changes that can be attributed to grantmakers’ activities) as well as return on investment (benefits accrued to the donor or investor) as a result of funds and other resources invested.2013/04/23 Next Generation Consultants 5
  6. 6. Impact Investment Index • 3 Years in development • Aimed at Donors, investors, development agencies and implementation partners • Compared 40 other global impact assessment methodologies • Needed an African solution for African development issues and practitioners – 300 programs – 15 investment areas – 12 aspects of impact – 15 aspects of return – 200 indicators – R1 billion of investment2013/04/23 Next Generation Consultants 6
  7. 7. The Impact Investment Index - III Inputs Outputs/Outcomes Impacts • How • Community Benefits • Community Impacts • Cash, time, in kind, • Qualitative • Business Impacts/Return management costs • Quantitative • Why • Dimensions of impact (10) • Shared Value • Community Relations, • +200 Indicators community investments, • Business Benefits commercial initiatives • Qualitative • Where • Quantitative • Geographic Location • Dimensions of Impact and • Who Return (10) • Stakeholders Affected, Impacted • What • Focus Areas, Investment Portfolios2013/04/23 Next Generation Consultants 7
  8. 8. Impact Assessment – HOW?2013/04/23 Next Generation Consultants 8
  9. 9. Impact Assessment – WHAT?2013/04/23 Next Generation Consultants 9
  10. 10. Calculating Impact – The Process2013/04/23 Next Generation Consultants 10
  11. 11. Identifying Indicators – How? Community Impact = 10 Business Impact = 5 Total Impact = 10:52013/04/23 Next Generation Consultants 11
  12. 12. Community Impact2013/04/23 Next Generation Consultants 12
  13. 13. Business Return2013/04/23 Next Generation Consultants 13
  14. 14. Ratings and Rankings2013/04/23 Next Generation Consultants 14
  15. 15. Impact and Return across portfolio’s2013/04/23 Next Generation Consultants 15
  16. 16. 2013/04/23 Next Generation Consultants ‹#›
  17. 17. Impact and return score cards2013/04/23 Next Generation Consultants 17
  18. 18. Case Study 1: Transnet2013/04/23 Next Generation Consultants 18
  19. 19. Case Study 2: Rand Water2013/04/23 Next Generation Consultants 19
  20. 20. Case Study 3: BHP Billiton Metalloys2013/04/23 Next Generation Consultants 20
  21. 21. Case Study 4: Enterprise Development 2013/04/23 Next Generation Consultants 21
  22. 22. Case Study 5: HealthStakeholder Groups Qualitative Qualitative Total Impacts Total Community Impact = 204 Impacts ImpactsPatients 10 15 25 Total Business Impact = 33Doctors 6 9 15Nurses 8 6 14 Final score – 204:33Department of Health 4 3 7Government 8 7 15 R20 million is invested annually andStudents, care givers 8 9 17 the program has been running forUniversities 8 7 15 more than 10 years. It reaches 15Local Clinics 8 7 15 million people (pa) in rural areas – andCBO’s, NGO’s 7 9 16Other Funders 7 6 13 provide access to primary health careImmediate local 9 9 18 to these communities – so did itcommunities deliver impact and return?Local Authorities 6 7 13Communities along rail 13 9 22line (secondary)Transnet 17 16 33 2013/04/23 Next Generation Consultants 22
  23. 23. Case Study 6: Impact over time2013/04/23 Next Generation Consultants 23
  24. 24. Case Study 7: Impact across economic, social and environmental aspects 2013/04/23 Next Generation Consultants 24
  25. 25. Some stuff we have learnt• ANY resources CAN be measured – books, wheelchairs, buildings, time – cash and non-cash• The same project can deliver varied results for different funders• 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 line2013/04/23 Next Generation Consultants 25
  26. 26. 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 and eradication!• It is possible to determine impact and return – The real value lies in independent, verifiable, assurance of social investment expenditure, program results, outcomes and impact2013/04/23 Next Generation Consultants 26
  27. 27. In closing• Involve stakeholders – Establish the scope and identify the key stakeholders impacted• Understand what changes – Map the outcomes – identify the indicators to measure impact Community Impact• Value things that matter If you can count – Look for evidence, don’t forget baseline and impact studies and define• Only include what is material indicators you – Focus on agreed outcomes first then can determine incidental impact impact and• Do not over claim return – Calculate the impact based on evidence Business Return• Be transparent – Report the outcome – the good and BAD news• Verify the result – Share the learning2013/04/23 Next Generation Consultants 27
  28. 28. Above all else: Measuring impact is important Measuring the right things is difficult Measuring impact is possible2013/04/23 Next Generation Consultants 28
  29. 29. Contact• Reana Rossouw• Next Generation Consultants• Specialists in Development• Tel: + 27 (011) 275 0315• E-mail:• Web:• PLEASE NOTE: THIS PRESENTATION IS PART OF A LARGER BODY OF RESEARCH!• THIS INFORMATION IS COPYWRITED AND THE INTELLECTUAL PROPERTY OF NEXT GENERATION CONSULTANTS2013/04/23 Next Generation Consultants 29