Social Investment trends, forecasts and impacts: 2017/2018

2016 TRENDS
2017 FORECASTS
2018 RECOMMENDATIONS
FOR THE GRANTMAKING SECTOR
The landscape looks different, but nothing has changed

Next Generation Consultants - All rights reserved
Introduction and aim
Next Generation Consultants works primarily with grantmakers and development
agencies to achieve high impact and returns on social investments. We provide advisory,
research, benchmarking, impact assessment and training services.
Our role in providing trusted guidance about best practice social investment and
development requires that we remain informed about trends and changing social contexts,
and understand how they will influence our sector. This presentation provides insight into
grantmaking trends, interprets trends for the development sector and concludes with
forecasts for the next year.
This information will assist and equip the sector with knowledge so that it can better
manage risks, challenges and opportunities that will lead to more innovative
development practices.
It is our hope that our contribution will in some small way be instrumental in
ensuring a more sustainable future for the African continent.

For more information
Copies of previous trend and forecast presentations, white papers and research articles,
as well as subject-specific topics and other publications, are available:
www.nextgeneration.co.za
www.linkedin.com/in/reanarossouw
www.linkedin.com/company/next-generation-consultants
www.facebook.com/nextgenerationconsultants
www.slideshare.net/Reana1
www.twitter.com/Reana_Rossouw
www.plus.google.com/+ReanaRossouw
rrossouw@nextgeneration.co.za

Context
Our annual trend report is informed by:
Global research Local interpretation Research
methodology
Benchmarked
Assessing development
and investment practices
from developed as well as
developing countries,
focusing on continental
and regional trends
Considering, assessing
and comparing
development and
investment practices,
and interpreting these
to guide indigenous
insight and knowledge
Literature reviews,
personal interviews
with key influencers
and recognised
leaders, focus groups
with intermediaries
and beneficiaries,
internet surveys and
published reports
Our proprietary impact
assessment methodology,
the Investment Impact
Index (III)™, also informs
our trend report; we have
assessed programmes to
the value of R3 billion,
covering more than 700
programmes, over 15
focus areas/investment
portfolios, and identified
more than 25 dimensions
of impact and return,
resulting in a library with
more than 7 000
indicators

Overview: 2016
South Africa – the political, cultural and societal landscapes are changing. New social issues
dominate headlines, the economic recession continues and there is enough evidence to
suggest that neither education nor health nor employment is addressed adequately.
Rest of Africa – political influence
followed by legislative influence over
the development sector will have a
far reaching impact. In some
countries development stakeholders
are more restricted than ever, as the
social sector is seen as a risk and
threat to governments.
Globally – major shifts, such as the US election, Brexit, the migration crises in Europe and the financial shortfall to reach
the sustainable development goals by 2030 will affect us all. Africa is no longer seen as noteworthy, as we have to
compete with global issues for foreign direct investment and development aid against a global awakening to patriotism
and localised development.
Nevertheless, as always, our sector is resilient and innovative and we will continue the work that is so valuable to
society to ensure inclusivity, equality and prosperity for all Africans.

Drivers of change
Globally, there has been a social investment revolution, from a traditional approach of offering
multiple small grants that support a variety of programmes to a more engaged and strategic
approach. This is due to:
For business/social investors in particular, other key drivers include:
Increased employee expectations about their involvement and participation in grantmaking.
Alignment, integration and support of business purpose, values and objectives.
An expectation of all company stakeholders (from shareholders and employees to suppliers and customers) to
witness, participate and contribute to social responsibility activities.
A belief among grantmaking entities that becoming more focused on a single issue or set of issues will achieve
greater impact.
A desire to leverage existing resources more and work with other funders to solve systemic social issues.
An deeper understanding of the importance to ensure greater sustainability among non-profit organisations
and the non-profit sector in general.
A recognition of the importance of measuring social outcomes to drive more effective decision-making.

Outcomes of change
The result of this evolutionary shift to more strategic grantmaking is that corporate and business
grantmakers and foundations are operating in a way that more closely resembles a business
approach to development that can be characterised as:
A greater
application of
governance,
business practices
and performance
management/
measurement
processes to
social investment
activities.
An increased focus
on evidence to
determine/confirm
impact and return
on investment of
social investments.
Increased integration
and alignment of
social strategies with
business objectives
and targets, including
shared/blended
value, social
innovation and social
capital models as well
as return on
investment practices.
Greater
transparency,
responsibility and
accountability,
particularly through
governance,
compliance,
reporting and social
media.

Challenges remain
Performance management processes and systems, guidelines and frameworks are limited and
impact measurement and transparent reporting on programme outcomes, impact and return
are almost non-existent.
Collaboration in the sector is acknowledged as important, but this approach is not yet
widespread and is recognised as challenging to achieve. This is particularly the case for
corporates for whom the prospect of collaborating with a commercial competitor is new
and the implications for their competitive advantage/differentiation are unclear.
There remains a lack of funding for non-profit organisations’ core operations and capacity
building as funders still prefer supporting/funding programmes instead of outcomes.
While the level of transparency appears to have increased in recent years, many funders still do not
use sustainability or integrated reporting frameworks to share or explain the social value/capital
created/generated through their social investments.
1
2
3
4

Implications
The sector is at war with itself at the expense of society, who should benefit from collective, collaborative
and inclusive advancement. There is still a ‘them and us’ relationship.
Progress with and evidence of sustainable outcomes are extremely limited, as development learnings are neither
identified nor shared between funders or in the sector.
Funders’ propensity for risk remains limited, which links directly to the scale and replicability of interventions.
Very few interventions are focused on systemic change, and therefore only deal with symptoms instead of causes.
Due to a lack of co-funding, non-profit organisations have to approach multiple funders for support across their
life cycle and may struggle to get funding, which prevents scaling of operations and programmes. The sustainability
of non-profit organisations continues to be challenged, as funding for core operations remains limited.
1
2
3
4

REFLECTING ON PREVIOUS TREND REPORTS

What we got right
The exponential growth in employee volunteerism (2013)
Due to reduced financial resources, the importance of leveraging all company assets has become more important. Changing
workforce requirements and expectations (generation X and millennials), and the growth in social media and the associated
awareness of social issues and causes all contributed to the growing importance of the value of employee volunteerism.
The increased importance of governance and compliance (2014)
As a result of sector-specific requirements (license to operate conditions), governance standards
(King IV) and legislation (BBBEE and Companies Act), due diligence processes and internal
reporting to social and ethics committees increased, BBBEE compliance improved and sector
compliance increased overall, but not without an additional burden on the non-profit sector.
The lack of evidence of what works (2015)
While all stakeholders in the sector agree about
the importance of performance management,
there is no evidence that monitoring, evaluation
and impact assessment or reporting increased.
Lack of transparency and accountability (2016)
There is no evidence of an increase in published impact reports, publicly available evaluation reports or research
publications to indicate progress in the sector. There is no increase in transparency in the form of sustainability or
integrated reports. There seems to be no increased usage of scientific, research-based models for development practices
and no evidence of the application of basic development tools such as theories of change, log frames, impact models or
return on investment models. The industry may talk about transparency and accountability, but there is no visible change
or an increase in implementing performance management systems.
2013 2014 2015 2016

How drastically investment portfolios would change (2014)
The speed and impact thereof – environmental portfolios changed into separate focus areas, with
water and food security now seen as important new investment categories due to the enormous
impact of climate change.
That youth development would become part of a general community development portfolio that
changed completely to reflect different community stakeholder groups, e.g. youth, the vulnerable,
the aged, the disabled.
That the economic development portfolio would change completely, firstly by a move to enterprise
development (to reflect a focus on SME development) and then to entrepreneurship (to reflect a
focus on individuals). Rural development and local economic development focus areas disappeared
completely. Most significantly, economic development moved away from SED/CSI structures into
different parts of the business, most prominently to form part of procurement, supplier and
enterprise development initiatives, as required by BBBEE legislation.
That the job creation portfolio would disappear completely and be replaced with skills development.
What we underestimated
The power of social media (2016)
Changed the sector broadly –
very few funders, intermediaries
or even governments were
ready for the impact and
influence of social media.
2013 2014 2015 2016
The true impact of the global recession (2013)
Evidenced in reduced giving/budgets amidst increased expectations from all stakeholders.
How slowly grantmakers would change (2015)
The low propensity for risk, e.g. to fund social entrepreneurs/enterprises; the
low appetite for collaboration; the refusal to consider funding intermediary
operational/administrative expenses; the slow uptake of performance
management systems; the inability to innovate, scale and replicate remain big
issues in the grantmaking sector.

There is no evidence that performance
management became more effective (2014)
There is still no evidence that the industry
collectively has moved past monitoring and
quantitative, anecdotal evaluations of output to
more qualitative assessments and analyses
focusing on outcomes, impact or return.
What we got wrong
The slow introduction,
take-up and growth of
impact investment in
South Africa (2016)
2013 2014 2015 2016
There is no evidence of more collaboration (2013)
Even though there were attempts at collaborative sector funding
(e.g. education), most fizzled out after big announcements and
most partnerships/collaborations dissolved within 12 months.
There is no evidence of increased funding for advocacy (2015)
To inform policy or influence government or systemic changes
in specific development contexts, e.g. education, health,
inequality, exclusion or job creation.
Crowdfunding (2015/2016)
Civil society is leading the charge – corporate grantmakers and
intermediary organisations missed first mover advantage and
are still missing the opportunity to use this format and medium
to rally support for their own causes.

2016 REVIEWING TRENDS IN THE
GRANTMAKING SECTOR

Feedback from research participants (a)
The biggest issue
in society
Biggest issue currently Biggest future issue
Inequality and economic
disparity
Education, skills
development, employment
creation and youth
unemployment
Government Incompetence
and impact thereof on the
sector at large
Develop own solutions and
programmes; obtain quality
data to inform strategic
decisions and direction
Find new sources of revenue;
generate own income;
determine future value
proposition
More impact with less resources; more
effective solutions to address systemic issues;
developing long-term, holistic, systemic
programmes to address systems change
and achieve scale
Innovation (new approaches and
programmes); better competencies, skills,
infrastructure; better compensation;
managing growth; better research and data
management competencies
NGOsDonors

Feedback from research participants (b)
Current constraints
Current
challenges Future opportunities
NGOsDonors
Inefficient organisational structures,
ineffective due diligence, complicated
governance, compliance and reporting
systems, inefficient data
management systems
Effective programme design More effective, efficient and
transparent reporting and
communication; collaboration
with other funders
and government
Become better at branding,
marketing and communication;
collaborate with other NGOs
Current funding models, increased
competition, ineffective fundraising,
imbalanced power relationships,
push to earn own revenue
Lack of collaboration
and scale
Lack of organisational
capacity and resources
(financial and human)

#1: How bad is bad?
Less than 1% of all
corporate funders
updated their websites
last year, as evidenced
through extensive
online research.
Less than 2% of all
corporates can indicate
the social value that is
created or added to the
business through CSI, as
evidenced through
integrated reports.
Less than 3% of
all corporates are
reporting according to
the GRI guidelines, as
evidenced through
sustainability reports.
Less than 4% of
all corporates have
increased their
budgets last year, as
evidenced in the
Trialogue handbook.
Less than 5% of all corporates have
formal (defined and documented)
monitoring, evaluation or impact
processes, systems, frameworks or
guidelines, as evidenced from
information in the pubic domain.
Less than 6% of all corporates pay
all programme-related expenses,
including operational expenses,
as evidenced from interviews
with funders.
Less than 7% of all corporates
conduct annual stakeholder
engagement, as evidenced
through published reports.
Less than 8% of all corporates use
baseline studies, conduct social
surveys or have clearly developed
theories of change, as evidenced
through our focus group research.
Less than 9% of all corporates
have formally engaged with
their intermediaries or
beneficiaries – as evidenced from
interviews and focus groups.
Less than 10% of all corporates have
conducted any external evaluation
or impact assessments – ever!

#2: The good, the bad and the ugly
Never let a crisis go to waste – last year we witnessed:
The good: There was a complete makeover of portfolios. Funders had to reduce budgets and therefore the number
of focus areas and programmes. They now group programmes together in a single portfolio, supposedly according to
outcomes and not stakeholders or investment themes. For instance, skills development and training are part of
education, as are bursaries, teacher/learner/schools, infrastructure and subject/curriculum-specific development.
1
Silence is also an answer – what is the question?
The bad: Grantmakers went into hiding last year and were noticeably absent from social discourse, discussion
and engagement, and public debate, notwithstanding increasing strikes, protests and general civil unrest.
This was not necessarily to do better, but to avoid questions about difficult issues, providing answers and
support. For instance, no funder publicly stepped up to support or contribute to the #feesmustfall campaign
through increased support to institutions or students.
2
The more things change, the more they stay the same:
The ugly: Notwithstanding general concern and agreement on important issues (the demise of the
education and health sectors), or knowledge of important subjects (the lack of capacity and resources in
the social sector), funders preferred to keep on doing the same stuff, expecting different results. No
stakeholder for this research could provide evidence of new practices, processes or innovation to contribute
more meaningfully to sector or social development.
3

#3: Missed opportunities = failure
Failure to understand the complexities of interconnected systems – education is the big loser
The cost of education, lacking resources, lower pass rates and high dropout rates continue to make this the most
complex sector in which to prove impact and change.1
The high unemployment rate, increased social grant dependency, the intensified activism among the youth and
the growing inequality across society indicate a system that has not only failed but one that has already collapsed.2
The silo approach by social investors and grantmakers, the limited impact of underfunded NPOs and NGOs,
the underestimation of the value of social justice/advocacy organisations, the sector’s lack of political influence
and active leadership to develop interventions that are aimed at systems change are obvious through numerous
misaligned strategies and interventions with little or no impact.
3
4
The sector is systematically failing society with little ability to anticipate, adapt or leverage the changing
environment, with ill-designed interventions and low-impact, short-term programmes. The lack of knowledge,
expert resources and experience as well as the ignorance about real issues that communities have to deal
with contribute to and exasperate poverty and inequality.
New networks, systems and organisations are required – these should be adaptive, nonlinear,
self-organising and as complex as the issues they deal with.
In the education sector, grantmakers’ capacity to achieve positive outcomes is questionable
and has been criticised for lacking the political influence to effect real change.

#4: Lack of knowledge = failure
The increased pressure for credible and comparable data through monitoring and evaluation
has led to poor quality data. Outcome indicators do not match activities or output, resulting
in an inability to show measurable progress, even when it exists, as in the health sector.
More data is
collected than
before, but –
The overemphasis on quantitative data leads to distorted and unbalanced reporting,
which in turn leads to unrealistic solutions and strategies.
The lack of qualitative data leads to uninformed and misaligned programmes in which
the expectations of measurable change are unrealistic.
The lack of synthesised, triangulated, analysed and meaningful data contributes to
the perpetuation of ill-designed and poorly executed programmes.
The lack of experience/capacity and performance management skills are slowly killing
the sector.
Results (outcomes) are measured over periods that are too short (annually) because programmes are implemented and funded
over these short-term (annual) cycles. The whole practice of performance measurement is ill-understood.
Monitoring and evaluation have become meaningless, as the data is neither analysed properly nor acted upon. There is
no evidence that data is used for learning or effective decision-making. Data collection has become meaningless and only
contributes to wasted effort, time and resources.
Funders are changing their minds. Instead of addressing specific health issues, funders are focusing on the underlying
determinants of health and funding areas like preventative diseases and food systems to leverage scarce funding. By focusing
on preventative issues and because they can do little to change the tide of specific health issues, as well as focusing on
business-related issues, pharmacies, medical aids, pharmaceutical companies and the insurance industry are looking at
lifestyle rather than structural health issues.

#5: Social media is a larger force for change than
social development
Social media is fast growing to be a critical part of effective social change efforts, locally as well
as globally.
Social media tools have gained importance in the development sector and there is evidence
that they work.
Crowdfunding
Candystick raised R55 000 in one week for Hanna Charity.
Icebucketchallenge raised $118 million in just four weeks for ASL.
Social causes
#Feesmustfall – additional government funding after four weeks of student
protests in 2015 and reduced fees in 2016 after another four weeks of protests.
Social
platforms
Online giving platforms with opportunities for volunteerism, collective and
individual giving have made every citizen part of the development sector.
Examples include I Have A Name and GoodGiving.

#6: Changing roles and responsibilities is not
necessarily a good thing
The research and evaluation to inform and improve the sector have not kept pace and can only be
addressed collectively.
Government is increasingly looking to business to provide and scale solutions and take on traditional
government functions, including education, health, transport, human services and public safety.
Grantmaking businesses are leading in areas that are usually reserved for government, including providing education
(public and private), supporting basic infrastructure (like water, sanitation and transport) and economic development
(job training and skills development). These new frontiers of public/private partnerships can be seen throughout our
communities in ways that are both exciting and tragic. The failure of government to protect patients, declining health
services and the inability/incapacity of the development sector collectively contributed to the death of more than
100 Life Esidemeni patients early in 2017.
While exciting, the lack of clarity about the boundaries of these new frontiers, combined with the speed of change,
are brewing a dangerous alchemy of role confusion, false expectations of capacity and the potential politicisation
of grantmaking. What makes this more concerning is that many of the solutions we might identify require
policymaking (particularly regarding education and health). In today’s polarised and caustic political environment,
these changes will be hard to achieve.
It is imperative that government leaders, grantmakers and the development industry reclarify their respective
roles to society. They either need to be engaged in repairing ideological divides or find ways to change policies
without the help of policymakers. Thoughtful consideration and decisive action must be taken soon to address the
critical needs communities are facing during these times of social disruption and technology-accelerating change
amidst political dysfunction.

#7: The rise of the individual social activist –
heropreneurship
The new Zachie Achmats, outspoken musicians (like
Bobby and Karlien van Jaarsveld), the David Griers of
the world, combined with the prominence of the Kumi
Naidoos, the fighters for rhinos or toll road payments
as well as the student leaders of the #Feesmustfall
movement have made us more aware of social issues.
The next generation
of social activists are able
to organise, mobilise
and inspire around
specific causes, and are
generally younger.
They are fearless about
exposing corporate as
well as government
failures and will do
whatever it takes to
effect real change.
And yet, corporate
grantmakers do not
fund individuals.
A note of caution – individuals are
not necessarily equipped to solve global
challenges and individual projects
could detract from larger systemic
developmental issues.
But it is better to have someone
fight for the cause than not
knowing about it at all.
These individuals work outside organised structures (NGOs) and without dedicated funds (CSI), and are still able to organise,
mobilise and effect actual/real change.

#8: The rise of community foundations
Community-based organisations (CBOs) are gaining favour,
instead of individual place-based or sector-focused NGOs.
Why? The focus is on local assets/resources, local leadership,
local buy-in and local ownership by communities themselves –
not to act as beneficiaries, but as participants in the
development process.
Community foundations, women’s funds, environmental
funds, grassroots organisations are not ‘specialists’ who work
on a particular issue, but they work holistically, responding to
a range of different and interconnected issues.
But very few corporates fund co-ops or collective community-
based organisations. Foundations are also not geared to fund
other foundations.
New thinking is required to capacitate and acknowledge
the importance of these new stakeholders in the
development sector.
It provides an ideal opportunity for local SMEs to become part
of the grantmaking sector.
The sins of our past:
We created a sector that focuses narrowly
on singular issues (focus areas). We
contributed to an industry with little or no
capacity to grow and that is dependent on us.
Through our funding models, we nurtured a
cadre of contracted, professionalised civil
society organisations. They excel when it
comes to accountability, but perform less
well concerning disruptive social change.
Advocating human rights and sustainable
social justice are an awkward fit while most
donors insist on short-term, measurable
projects/outcomes. It is also leaving the
organisations that may be best positioned
to fight back against closing civic space
severely under-resourced and struggling for
survival or totally reliant on funding.

#9: New directions
New focus area
The big winner in 2016:
Sustainable food/Food security
There has been a massive focus
on all aspects related to food
security, from awareness,
access and self-sufficiency
to access to markets,
supply channels and
supplier development.
Loans, grants, equipment, seed,
impact investment and capacity
development all received
consideration in 2016.
The demise of
focus areas
The big loser in 2016:
Employment and job creation
In 2016, donors realised and
learned how much it costs to
create a job and how difficult it
is to ensure jobs at the end of a
skills development process. A
job does not necessarily come
with the guarantee of full-time
employment or a decent wage,
and a skill or qualification or
certificate might not be worth
anything in practice.
New structures
The big development of 2016:
The explosion and growth of
donor advised funds (DAFs)
This trend is linked
to cooperative and collective
organisations and
community foundations.
There are more DAFs than ever
before, which is good. These
structures provide
opportunities for collective
fundraising, shared services
such as performance
management and reporting,
and coordination and
prioritisation of development
issues, as well as channelling
funding into specific
development issues.
It also provides outsourced
services to the funding sector,
ensuring a more professional
and organised approach to
programme development and
management, programme
sourcing and partnering.

#10: New thinking – new M&E models
The influence of the sustainable development goals (SDGs):
We are entering an era
where the SDGs, the 4th
industrial revolution, the
digital economy and the
human economy intersect.
This is starting to influence
what and how we
evaluate, and the lenses
through which we do this.
This is driven by the UN’s
focus on gender-biased
and human rights-based
evaluation approaches.
An emphasis on monitoring (and lack of focus on evaluation and impact
assessment), as well as a lack of treating development as a complex adaptive
system meant that evaluation in the MDG era was under-utilised and did not add
the value that it should have.
There is still a worldwide fixation with monitoring quantitative indicators. Those
who are more advanced are realising the importance of evaluation in the
knowledge generation process to make better funding and development decisions.
There is an increasing realisation that evaluation must be broadened to go beyond
programmes and projects, e.g. strategic thematic evaluations (inequality, gender),
country programmes (national/regional/rural/urban), subject-specific or outcome-
specific (throughput rates in education or infant mortality) and transboundary
influences, such as global value chains, global policy/standards regimes, climate
change mitigation or food/water/energy security.
It is inevitable that technology and big data will be increasingly influential in development as well as evaluation.
Important topics are evaluation for scaling, unintended consequences or negative impacts, experimentation, adaptive
management, sustaining impact, inequality/empowerment, context, complex systems, sustainability and resilience.
The influence of systems thinking and complexity science on theories (of change and practice) and methodologies (for
evaluation) will increase. The interconnected nature of the SDGs is opening space for new thinking and innovation.

Feedback from research participants (a)
Grantmakers want to connect, share and learn from one another’s experience,
wisdom and especially data. If we want to influence and facilitate change, we need
to create opportunities for this kind of collaboration and find the junctures that can increase
our impact collectively. This can include impact investing, supporting social enterprise,
grassroots grantmaking and advocacy.
A huge challenge for grantmaking is how to best use scarce resources to have the maximum
impact. We must constantly strive for the most efficient and effective grantmaking system,
and collaborate as far as possible to avoid duplicating grantmaker and recipient resources.
We must use rapidly developing technology to assist with this process, and consider the
possibilities of available data, while exercising caution in how we use it. With dramatic
changes in political arenas globally, a huge challenge for the social investment community
in 2017/2018 is to step up to protect and provide for civil society.
There are three crucial aspects:
Limited resources and
overwhelming need1 2 3Too many new entrants
are reinventing the wheel
Economic uncertainty is
leading to apathy, not
measurable impact.

Feedback from research participants (b)
Many donors have an outdated view of grantmaking and how charities should work. The operating expenses underpin
a charity’s success and few donors understand that to help communities, there is a whole operation to pay for, and the best
operation might not be the one with the lowest operating costs. There is a dire need for donor education.
Community engagement, an appetite
for risk and the strategic use of
technology are all crucial ingredients
for successful social investment and
development in 2017.
The biggest challenge for social investors is to become
more effective. It’s easy to ask the development sector
to merge, collaborate and measure, but the same issues
of scale, scope, lack of mission clarity, lack of
measurement and capacity also limit the impact of the
grantmaking sector.
Much of grantmakers’ toolbox was designed in a different time
and doesn’t readily embrace the scale and complexity of our time.
We need to see more real conversations about the type of
society we want and what it will take to achieve that, including
an expanded toolbox, smart risk taking, sharing what’s being
learned, strategic collaboration and investment in the networks
and infrastructure that can take change to scale.
Stakeholders need to be aware of the impact of climate change and technological
change across the sector. We must ensure that we fund programmes that will be
relevant in ten years’ time, e.g. understanding where future jobs for younger as
well as older people will be. We must raise awareness of the importance of
sustainable food systems and food security.

#1: Big bets
More focus on
crowdfunding
Decreasing power
of overheads
Growing importance
of performance
and evidence
Recognise the
importance of funding
advocacy
Crowdfunding is a tool for
raising funds, but not for
ongoing revenue.
Organisations must be
very strategic when they
use crowdfunding, but at
the same time it has
become very powerful.
Funders should focus
on outcomes rather
than overhead
expenses.
“Pay what it takes” and
“Pay for success”
models are required,
instead of “Pay to
implement” models.
More effective
performance
management systems
must be developed
and we need to
understand the
relevance of various
methodologies to
measure impact
(quantitatively as well
as qualitatively) and
become better
equipped to deal with
big data.
Our proprietary impact
assessment methodology,
the Investment Impact
Index (III)™, also informs
our trend report; we have
assessed programmes to
the value of R3 billion,
covering more than 700
programmes, over 15
focus areas/investment
portfolios, and identified
more than 25 dimensions
of impact and return,
resulting in a library
with more than
7 000 indicators.

#2: Big balls
Portfolio and programme focus versus systems focus
Addressing inequality and unemployment is critical for a sustainable future for all.
Funders must become more adept at using data as a driver for change – money is spent on programmes to tackle
poverty, but it is not clear how many lives are transformed and what the outcomes of these programmes are.
Forget about input and output – focus on outcomes and impact.
Don’t focus on the intention to alleviate poverty – shed light on the results of systems change.
Data needs to be qualified, quantified and analysed to end poverty and inequality over the long term.
Share results and outcomes – everyone needs to benefit from information that could potentially lead to
systems change.
1
2
3
4
5
6

#3: Big returns
A number of funders have come to understand the importance of determining the impact of
their interventions and are now moving forward to understand the return on investment of
their interventions and investment strategies.
Social capital, relationship/network capital,
intellectual capital, etc.
Capital creation is considered from a funder
perspective as well as the resources
invested viewpoint.
What difference they want to make – through
explicit theories of practice and change.
Which systems they want to influence – though
rigorous assessment of outcomes (evaluation)
and impact assessment.
Which social issues they want to address –
through vigorous research.
Understanding how their own organisational
sustainability is linked to the sustainability of
their social investments (return on investment).
They can only determine return on
investment because they are clear on:
These funders use their social investments
to generate different forms of capital,
most notably:

#4: Big data
Funders that influence systems change realise that they can only achieve that
because they have effective performance management systems. These systems
allow them to generate data that lead to efficient decision-making, coming from
an adaptive learning approach.
To learn, they need data, which comes from:
Management
assessments
Organisational
assessments
Portfolio
assessments
Programme
assessments
Grantee
assessments
Stakeholder
assessments
Perception
assessments
Impact and
return
assessments
Impact and
opportunity
assessments
Risk and
governance/
compliance
assessments
Due diligence
assessments

#5: Big changes
To avoid reputational
risk, funders are
becoming more
sophisticated with
their due diligence.
Various information
management tools are used
in the due diligence process,
from sales-based to
customer relations
management software.
Unfortunately there is
reluctance to share due
diligence procedures in the
public domain. Our research
indicated a focus on risk,
specifically reputational,
financial and contextual risks,
as well as low-impact and
low-return risks.
In developing partnerships,
funders are moving away
from traditional partnership
configurations that tended to
be donor-led, transactional
and short-term.
Among other changes, organisations
are investigating ways to propel
existing collaborations with business
to a higher level, e.g. by moving
from contractual assignments or co-
funding projects to core business
collaborations. A good example is
the Cipla Foundation’s
#wedontaskforanything.
There is a desire to go beyond 2-year
to 4-year project timeframes and to
develop longer relationships and a
wider spectrum of collaborations
over time. This includes investing
months or even years in preparatory
discussions – building relationships
before forming partnerships.
Exploring new
funding procedures
and vehicles.
A new trend among donors
is the use of innovation funds
(generally in the form of
competitions) to support
early-stage, high-risk ventures
in particular. New funding
mechanisms tend to be open
to a variety of stakeholders
and sectors, and offer different
types of financial support,
including non-grant
instruments. This fuels
different types of organisations
and programmes.

#6: New careers
In order to survive, non-profits realise that they need to form new relationships and reconsider traditional roles
and responsibilities. An exciting development is the appointment of business development/relationship managers.
Previously, funders recruited from the NGO sector to bring in specific sector/subject expertise.
Now we are noticing that NGOs are recruiting and appointing staff with corporate/business experience to be in
charge of private sector/funder engagement.
Different organisations are using different models to reach out to funders. Some organisations mandate all staff
to develop partnerships and allocate more time for participating in relevant networking events.
Development organisations are appointing relationship managers as a regular contact point for strategic/donor
partners. Key benefits include better knowledge retention about partners, the formalisation of responsibilities for
developing deeper and longer-term relationships, and a lower bureaucratic burden for business partners.
In addition to individual roles and responsibilities, the structure and functions of units and teams also changed.
Private sector engagement units or competency centres have been created or expanded. There is also a trend to
work through cross-functional teams, as different units become involved in business engagement and development.
1
2
3
4
5
6

#7: New structures and operations
To facilitate the execution of new roles, several organisations are building staff skills and
experience, brought in new expertise and promoted buy-in into new ways of working.
Organisations have developed a variety of mechanisms to build staff skills and experience:
New staff guidelines
Staff training, including specialised roles (e.g. M&E managers or subject experts regarding fields like education)
Subject/specialist introductory workshops
Day-to-day mentorship and advice from senior staff
Secondments or other programmes to stimulate exchange between the employees of development
organisations and major partner companies
Several organisations have changed recruitment strategies to bring in external specialist expertise,
also from different sectors, and distinguish between leadership and technical roles:
In addition to technical departments, there is increasing demand for partnership expertise in supporting
roles, for example advisory teams
Beyond specific technical knowledge, engagement requires people with critical thinking, the ability to
network and communicate effectively, as well as the willingness and flexibility to experiment with new
approaches and to take calculated risks
Several other changes are evident:
Executive level support (corporate affairs and engagement)
Active internal communication of results (reporting)
Cross-functional teams (sustainability and community relations)
1
2
3

#8: New approaches
It is an increasing priority for several organisations to invest in market analysis and research
in the sectors and regions where they work.
Research skills and competencies will probably become the most sought after skill for funders.
Research as well as evaluation competency will prove to be a powerful combination.
Organisations are increasingly investing in building relationships before agreeing on partnerships.
This approach represents one of the most crucial differences to traditional proposal-based systems for
selecting partners.
It involves non-committal discussions of anything between two months and two to three years before a development
organisation and funders agree on a partnership.
For some organisations, this approach evolved out of necessity: In order to respond to donors’ calls for proposals
they had to find suitable businesses they could team up with and start conversations about synergies and
collaboration opportunities.
While such conversations often took much longer than the timeframes of calls for proposals, they resulted in critical
lessons on how best to sequence discussions with potential partner businesses to identify joint interests.

#9: New discussions
Discussions in the development sector used to be primarily about financial resources.
For funders, particularly
business and corporate
investors, everything now
starts with a high-level
strategic discussion around
business objectives and
strategy in new markets
and/or market/
customer segments.
For development agencies
and intermediaries, the
challenge is to present
their organisations in a
way that is relevant to the
funder’s business.
For recipient
communities, the
challenge is to show
support for the funder,
highlighting the
commitment, buy-in and
support for the specific
development initiative.
Most importantly, it is
about commitment to
take responsibility,
ownership and
accountability for an
intervention after a
funder exits.

#10: The petty cash fund
Funders are starting to recognise that they need to fund their own operations and
programme-related expenses.
Evidence related to this involves the percentage of fund allocations to M&E, research and
development, marketing and communication activities. In general, operating expenses now
account for about 15% per annum of the total budget allocation.
Interestingly, a trend
towards flexible funding
mechanisms can also be
observed in NGOs. Several
NGOs have used saved
investment funds to:
diversify own sources of finance,
e.g. business development
develop new products and services,
e.g. diversifying and outsourcing/outcontracting
attract new sources of funds,
e.g. consulting, research, publications, fundraising

#11: Evidence has become the most
valuable currency
In a time of reduced budgets and increased demand for services, there is a growing need for
an evidence-based approach regarding policy development and development practice.
All actors in the development sector play a key role in delivering services that meet the needs of
vulnerable communities and can make a valuable contribution to developing the evidence base
about what works, how and why it works.
It is vital that organisations have the knowledge, skills and resources they need to generate
useful evidence about their work and use this evidence to inform internal as well as external
policy and practice.
This evidence must:
be robust, relevant
and solve a problem
use an appropriate
balance of quantitative
and qualitative data
draw from a wide range
of available data and
research methodologies
be up to date, timely
and use current data
demonstrate the efficacy
of development
approaches
be clear, reasonable
and shouldn’t
overclaim
be honest about its
limitations

#12: Aligning strategies to effect change
Funders have big decisions to make
Impact-focused versus
mission-focused models
Results-driven versus
programme-driven
Impact is the bottom line of the social sector. It answers
the question “What difference are you making?”.
Mission, on the other hand, is more about the
individual organisation.
Impact focuses squarely on the why, and mission
narrowly focuses on the who.
Impact is realised by many and mission is achieved by
one. While mission statements still serve an important
role, vision and impact statements zoom in on solving
social problems collectively.
QUESTION: What do you want to do? What difference
do you want to make? Solve an issue, change a system,
or only focus on a cause?
In the 20th century, non-profits sold programmes
to public and private funders.
In the 21st century, funders want to buy results
and change.
In order to move the poverty/inequality needle,
the social sector should be thinking beyond traditional
programmes toward addressing systemic issues
and challenges.
New approaches and new models of development
as well as funding should be considered. The sector
requires more layered approaches, such as socio-
economic-ecological models, as well as collaborative,
collective and stakeholder-based models to drive
systems change.

#13: The future sweet spots
Four business overlaps
Business goals
Community
needs
Employee interests
Compliance
requirements
Four sustainability overlaps
Economic development
Environmental
development
Social development
Capital
development

#14: New finance models are bringing
about change
Investor versus
donor model
Sustainable versus
bootstrapped model
Entrepreneurial versus
risk-averse model
Donors want a one-time, feel-good
transaction, while investors want
to play the long game with non-
profits. Many social sector
organisations are now considering
shifting to fully embracing
relationship fundraising and social
entrepreneurship models.
For years, non-profits have been
thrifty, to the detriment of their
causes. Capital investments can
make non-profits stronger, more
efficient and better able to
attract and retain talent. The
trend towards sustainable
development, which focuses on
building well-run, well-equipped
organisations (for-profits) that
allocate resources to their most
efficient use must be rewarded
and recognised.
If the development sector fails, we
are also failing society, and
communities are often the entities
that are most at risk. In the social
sector, we often play it safe to avoid
risk. Recently, there has been a shift
led by social entrepreneurs to take
on more risk and try bold,
innovative ideas through new
funding models such as impact
investing, venture capital and social
impact bonds that pay for and
reward success. Funders now have
an opportunity to allocate more
money toward risk capital for game
changing and innovative ideas.

2
#15: Demographic changes
Younger people are not just entering the workspace – they have completely different ideas about
social giving, social development and social impact.
They want to be involved, not just as volunteers.
They want to see change and are aspirational and success-driven.
They give differently, outside of the established sector through for-profit entities.
It’s serious business – it’s a career.
1
3
4
5
6
They are ambitious, expect a return on investment and big impact.
At the same time, the average age of grantmakers/givers and employees in non-profits are 40+.

#16: Thinking forward, reaching upward
There is a dire need to collect new, better and more comparable data about our industry.
The time has come for the academic industry to step up to the plate:
We need more research
about social investment
and development as an
independent variable.
There is rich and useful
knowledge on the what
and why of social
development, describing
the complexities of the
sector across cultures
and moments of history,
and that explores the
intricacies of its
motivations and
determinants.
As we advance in the social
value chain, the processes
in which social investment
and development create
value become less clear,
and the impact on other
spheres of human activity
is under-researched and
controversial.
This opens up
opportunities of new
agendas of critical
scholarship on the effects
of social investment and
development on
policymaking, the
economy and society,
including the impact on
beneficiaries and broader
communities, which will
undoubtedly broaden the
practical appeal and
implications of the field.
Practitioners and policymakers
want more and improved
knowledge about social
investment and development.
We need answers to questions
like how to attract more
investment resources, how to
better govern social
development institutions, how
to more efficiently or
effectively manage
development organisations,
which advantages social
investment offers relative to
other paths towards achieving
socially valued goals, or how
social investment and
development influence the
achievement of other
economic, social or policy
goals.
Answering these questions will require academia to carefully listen to real-world concerns, to translate them into viable research
questions, to address them rigorously, and to report back on the results in a way that will be understood primarily by those who
will use the answers to solve real problems.

In closing
At the end of an extensive research and engagement period we realised that while it is easy and
exciting to identify new practices that could be interpreted as innovative, with the potential to
move the development sector forward, we recognise that:
We cannot move forward to exponential change and impact until we get the basics right.
Whether you are a funder or an NGO, everything starts with strategy, followed by process and
supported by structure. We must have resilient organisations to operate and function effectively.
We may try new approaches, but very few are scalable or replicable enough and most are
simply too big for any one actor. We should therefore focus on what we can achieve,
with the resources (financial and human) at our disposal, where we are.
As long as we can provide evidence of what we have achieved, we have made a difference
and society is better off because of our efforts.
In 2017 and 2018, may we have the right organisational structures and strategies, may we
invest in the right programmes and may we know at the end of the process that we have
made a difference.

PLEASE CONTACT US
If you have any questions, comments, suggestions, feedback or input,
we would love to hear from you – our research is informed by people like you.
www.nextgeneration.co.za | rrossouw@nextgeneration.co.za

IMPACT AND
RETURN ON INVESTMENT
Evidence – the prime currency of the future

Introduction and aim
Next Generation Consultants works primarily with
grantmakers and development agencies to achieve
high impact and returns on social investments. We
provide advisory, research, benchmarking, impact
assessment and training services.
This presentation focuses on our unique impact
assessment methodology. It contains outcomes and
insights, as well as lessons learned over the past 12
months. It builds on previous presentations and aims
to share our progress in order to support innovation,
growth and capacity development in the social
development sector in Africa.

MEASURING IMPACT
AND RETURN ON INVESTMENT

Context
1
This presentation is informed by:
The outcome of impact assessments conducted on behalf of clients from 2010 to 2017.
2 Our proprietary impact assessment methodology – the Investment Impact Index (III)™.
3 Since 2010, we have assessed social investment and enterprise development programmes
to the value of R3 billion.
4 These assessments include more than 700 programmes across 15 focus areas and investment portfolios.
5 In the process we identified more than 25 dimensions of impact, and similarly more than 25 dimensions
of return on investment, contributing to an indicator library with more than 7 000 indicators.

What is impact assessment?
“Impact assessment includes analysing, monitoring and managing the intended and
unintended consequences, positive as well as negative, of planned interventions
(policies, programmes, plans, projects) and any change processes invoked by such
interventions. The primary purpose is to bring about a more sustainable and
equitable economic, environmental and social context."
The goal of impact
assessment is to drive
improvements that
increase the value of
programmes to the
people they serve.
Impact assessment
helps organisations to
plan better, implement
more effectively and
successfully bring
initiatives to scale.
Impact assessment also
facilitates accountability,
supports stakeholder
communication and
helps guide the
allocation of scarce
resources.
There is a lively debate
on how to measure
social impact, largely
due to the difficult
nature of assessing
social change. It takes
money. It takes time.
It takes imagination
and creativity. But it
can be done!

Components of impact assessment
Impact assessment is a process through which governments, development agencies, grantmakers and/or
social investors can better understand how socio-cultural, institutional, historical and political contexts
influence the social development outcomes of specific investment and development projects as well as
sector policies.
It involves the means to enhance equity, strengthen
social inclusion and cohesion, promote transparency
and empower or capacitate the poor and vulnerable
to be involved in the design and/or implementation
of a project.
Impact assessment creates a framework
for dialogue on development priorities
among social groups, civil society,
grassroots organisations, different
government levels and other
stakeholders.
It brings the mechanisms to identify
the opportunities, constraints,
impacts and social risks associated
with policy and project design,
implementation and management.
It involves specific approaches to
identify and mitigate potential risks,
including adverse social impacts and
negative environmental and economic
impacts of development projects.

The Investment Impact Index™
2010 2017
A shared measurement
system – Provides a menu
of indicators and a
common platform to
report on different
outcomes and indicators.
A comparative
performance system –
Through a consistent
approach, we can compare
impact across individual
programmes and collective
investment portfolios.
An adaptive learning system –
Supports ongoing collaboration
and learning among organisations
and investors to align efforts and
goals, ensure high impact and
return on investment, as well as
measure outcomes and impacts.

Integrated, aligned and benchmarked
The uniqueness and success of the Investment Impact Index™ lies in the combination and integration of various performance
standards and existing research approaches:
The mixed
methods approach
The impact
evaluation approach
The developmental
evaluation approach
The social impact
assessment approach
The social return on
investment approach
The standard OECD DAC criteria form part of all our impact assessments. These indicators include:
Relevance: The extent to which an intervention’s objectives are consistent with the recipients’ requirements,
country needs, global priorities and partners’ policies.
Effectiveness: The extent to which an intervention’s objectives were achieved, or are expected to be achieved,
taking into account their relative importance.
Efficiency: A measure of how economic resources/inputs (funds, expertise, time, equipment, etc.) are converted
into results.
Impact: Positive and negative primary and secondary long-term effects produced by the intervention, whether
directly or indirectly, intended or unintended.
Sustainability: The continuation of benefits from the intervention after major development assistance stopped.
Interventions must also be environmentally and financially sustainable. Where the emphasis is not on external
assistance, sustainability can be defined as the ability of key stakeholders to sustain intervention benefits (after
donor funding has stopped) with efforts that use locally available resources.
United Nations human rights-based approach to development
evaluation criteria:
Equity, gender equality and universal human rights
GIIN (Global Impact Investing Network) and IRIS,
a catalogue of generally accepted performance
indicators.

The Investment Impact Index™
Measures the change
effected by
investment
Determines who
was affected
and in what way
Determines what the
investor gained
To measure impact and return on
investment, we need to
understand the objective (strategy
and strategic goals), assess the
grantmaking process (operations
and programme implementation)
and consider the outcomes.
To determine impact and return
on investment, we need to
identify all the stakeholders.
The extent of change (depth,
breadth and reach of impact) must
be measured, and we do this by
considering various impact and
return dimensions.
Evidence of impact and return on
investment is used to substantiate
findings, and this forms the basis of
the methodology.
We validate impact and return on
investment by assessing the cost of
the intervention against the
benefits achieved, and as such the
value of the return on investment.

• Community
• Investor
• Individuals
• Communities
• Intermediaries
• Other funders
• Government departments
• Indicators – every indicator or impact counts one point.
• Impact dimensions are identified and verified by
stakeholders.
• Indicators – every indicator or impact dimension is
calculated by impact category/by programme/by focus
area/per investment portfolio and expressed as X:Y.
The basics of the III™
Calculation
Stakeholders
Impact and return

Impact across the value chain
Individual
impact
Livelihood – economic
security
Food security
Physical health
Protection and social
inclusion
Education and skills
Community/
organisational impact
Increased access to services
and safety/security
Increased community assets
Strengthening networks
Building capacity and
sharing knowledge
Increased self-sustainability
Societal/sector impact
Measure impact on society or
a specific development sector
(education, health, etc.)
Alleviation, reduction or
eradication of poverty
and inequality
Progress towards sustainability
or economic equality/inclusion
or gender equality and
empowerment
Contribution to GDP or LED
or sector development

Impact by dimension
Impact area Scope of impact Boundary of impact Level of impact
Impact on the bottom
line: Economic, social,
socio-economic,
environmental
Impact over time: Short,
medium, long-term
Other impact
dimensions:
• Quantitative and
Qualitative
• Direct or indirect
• Positive, negative or
combination
• Direct or indirect
• Intended or unintended
• Perceived, empowered,
pre-emptive or post
• Significant, residual,
sustained
• Impact by capital:
Political, cultural,
intellectual,
manufactured, etc.
Project or programme
Focus area or per
investment portfolio
Total/collective
Geographic (region – local
or national)
Demographic (girls, boys,
women, disabled)
Stakeholder-based
(primary, secondary,
tertiary)
Company –
funder/investor
Stakeholders (direct and
indirect)
Funders (primary,
secondary and tertiary)
Partners and
organisations &
institutions
(intermediaries)
Time (3 to 5 years)
Depth and weight
(related to strategic
objectives and
outcomes)
Reach (primary,
secondary and tertiary –
across the value chain)
Static impact – no
movement or change
Changed impact –
increased or decreased
impact
Sustained impact –
impact validated and
confirmed over time
Weighted – according to
strategic objectives

Key attributes of the III™
1
Measures value for society as well as the business: The methodology builds on existing research approaches and
measures the depth and reach of change, complementing these with broader impacts on business on society and
the social value and capital created through the process, as current reporting frameworks require.
2
3
4
5
6
7
Provides backward and forward perspectives: The methodology can be applied by looking back (at completed and
past investments and programmes) to understand the value generated and by looking forward
(to pre-empt future impact) to inform strategy and project/investment-related decisions.
Provides a balanced and extensive understanding of impact: In a specific development sector/context and considering
all the key aspects of impact, the model provides a holistic and balanced view of value creation (impact achieved) –
not just positive impact, but also negative impact, trade-offs, causality, attribution and dead weight.
Provides consistent information: By analysing quantitative as well as qualitative data through comparing, synthesising
and triangulating data over time and between different strategic objectives, and by involving stakeholders, a balanced
and consistent view of impact can be built that is agreed to and confirmed (verified) by all stakeholders.
Provides comparable information: By equalising all impact and return (to the value of 1), it enables comparison across
different types of impacts – this provides value irrespective of the type or size of investment and input resources.
Produces decision-ready and useful information: It provides a strengthened basis for decision-making for all
stakeholders and renders timely and reliable data that employs estimates, assumptions and attributions that are
fit for purpose to make better informed decisions and engage stakeholders in meaningful discussions.
Focuses on material impacts and provides flexibility: One size does not fit all. The framework enables funders to
select their focus and impact as well as return on investment dimensions – this can be done on single interventions,
collective portfolios or total investments.

The III™ process
Information sources
(strategies, applications,
contracts, evaluation
reports, site inspections,
engagement)
Primary, secondary and
tertiary assessment at
programme, portfolio,
sector levels
Impact forms and data
score sheets – identifying
and calculating impact
and return
Indicators for impact per
stakeholder (QL & QN)
across impact dimensions
Return on investent for
investor (internal and
external)
Calculate impact per
dimension of impact and
return
Analysis, interpretation,
triangulation of data
Impact per programme,
per focus area, per
stakeholder group
Return per programme,
per focus area, per sector
or organisation or funder
Cost benefit and
effectiveness analysis
Shared value X:Y
Recommendations:
strategic, operational and
programmatic

2016 Progress
Inputs Activities Outputs Outcomes Impact
Resources
invested in the
programme
Activities
conducted by
the programme
Results that can
be measured and
attributed to the
programme
Changes
attributed and
resulting from
the programme
Goals and objectives
the programme
achieved
What would have
happened anyway?
Added demographic focus – boys/girls/age/race, etc.
Added geographic focus – localised, regionalised, nationalised
Structured impact report and delivered feedback about input (resources invested),
activities/outputs, outcomes + impact + return
Ranking and rating of impact – on average, above and below average
Ranking and rating of returns – internal rate of return vs external rate of return
Considered programme design, management and implementation and the effect on impact
and returns
Cost benefit and efficiency analysis
Attribution

Progress in 2016 (1)
Last year we were able to provide evidence of:
1
2
3
4
5
Impact across the development value chain: We can now prove outcomes of partnerships, relationships
and applied resources, i.e. attribution
Outcomes of individual programmes and portfolios
Outcomes of collective programmes and portfolios
Outcomes at the organisational, individual, community and sector level against strategic objectives and goals
Return on investment for the donor or funder regarding the difference made as well as the value created across
programmes and portfolios. This is done individually and collectively and across brands and divisions, as well as
internally and externally (of return on investment dimensions)

Progress in 2016 (2)
We added specific international and South African frameworks to determine and calculate
extended impact:
1
2
3
4
Sustainable development goals: Impact of social investment programmes on skills, poverty,
youth, employment, etc.
National development plan: Impact of social investment in support of and impact on jobs created.
UN global compact and declaration on human rights: Impact on gender equality, economic inclusivity,
economic equality, health and education, etc.
Industry-specific licence to operate requirements: DMR and FSC – impact on financial inclusion,
financial literacy, land restoration, land rehabilitation, spatial development and infrastructure
development.
We have assessed corporate social investment, community relations, socio-economic
development, enterprise development, local economic development as well as social
and labour plans and programmes.

Considering what will be required from portfolios, programmes, processes and
systems to maintain the impact.
Determine how resilient the impact is – continuous or static.
Determine whether mitigation is required to enhance the impact.
Determine how impact could be accelerated.
Determine how vulnerability could be managed with adverse or negative impact.
Focus in 2017
Direction of impact
Impact manageability
Sustainability of impact
Determine whether some stakeholders benefit more than others –
weighted impact.
Determine if there are or were any trade-offs between potential negative and
positive impact.
Determine whether the impact is sustainable or time- bound.
Determine if the impact escalated or diminished over time.
Some investors are moving from baseline assessments to 2nd assessments
(particularly after extended or additional funding, e.g. signature and flagship
programmes).
We are now able to focus on the sustainability or longevity of the impact and
return, i.e. true sustainability.
Static impact
• No movement –
no change
Changed impact
• Increased or decreased
impact
Sustained impact
• Impact validated and
confirmed over time

Biggest learnings
Strategic
Link between strategic objectives and programme outcomes
The importance of theory of change and theory of practice
Tested through our strategic, operational and programmatic assessments (SOP)
Due diligence
Should not be aimed at intermediary organisations
Should be directed at programme research, development, implementation,
management and measurement
Should be based on stakeholder engagement and community readiness and needs
Measurement
Not only quantitative indicators
Importance of qualitative indicators to really measure social change
Importance of mixed research methodologies
Impact
Defined in strategy
Influenced by clear objectives and outcomes
Too little evidence that approaches will guarantee impact and return, and too
many assumptions

Impact report contents
Detailed insights about
effective strategic and
organisational
decision-making
Strategic, Operational,
Programmatic -
strategies, processes
and systems
Theory of Change and
Practice and Logic
Model Frameworks
Test assumptions,
beliefs, values and
principles of
development
Provide baseline
research and indicators
Detail insights about
programme management
aspects
Programme research,
development and
design
Programme
implementation
Programme
management
Programme
monitoring and
evaluation results
Detailed insights about
stakeholder impact
Primary
Secondary
Tertiary
Detailed impact analysis
Impact dimensions
Number of impacts
Quantitative and
qualitative impact
dimensions
Detailed ROI analysis
Return dimensions
Number of returns
Quantitative and
qualitative return on
investment dimensions
Evidence of total type/
level impact and return
on investment achieved
Per programme
Per portfolio or focus area
Collective and
comparative impact and
return for all investments
Considers cost benefit
and cost effectiveness of
all investments
Detailed analysis and
verification of findings
of impact and
return achieved
Causal contribution
Attribution
Dead weight
Data management and
evidence chain
Data synthesis and
triangulation
Detailed
recommendations
Per program
Per focus area &
Collective - strategic,
operational and
programmatic

The challenge of impact assessment
The dynamic and fluid environment in most social development contexts, with many and
unpredictable factors affecting outcomes and impact (including a range of diverse actors
and stakeholders), is one of the biggest challenges around impact assessments.
In most cases, the biggest
challenge is a lack of data:
In addition to data challenges,
evaluation-specific challenges affect
impact assessments:
Basic data is required to design certain evaluation
methods, such as information on population
demographics or the number of people affected by the
social issue.
Baseline data on key indicators related to health and
wellbeing, for example livelihoods, or access to
education, against which it is possible to assess
whether there has been change.
High quality monitoring and evaluation data that
shows change over time (monitoring or evaluation data
is usually focused on process and outputs rather than
outcomes).
The need for rapid action, where negative impact is
evident in an unpredictable environment. Impact
assessments tend to be planned late in the
programme cycle (after the fact).
Selecting the most appropriate design and blend of
assessment approaches that are best suited to answer
specific cause-and-effect or outcome questions.
Impact assessment requires different skill levels and
skill sets than conventional evaluations. The data
analysis requires more research-orientated skills that
have generally been scarce in the development sector.

New tools for fresh impact
Because we can now link impact and return directly to strategy, we have developed the
Grantmaking handbook.1
2
3
4
5
6
Because we can now link impact and return to performance management systems, we have developed
the Grantmaking performance measurement handbook.
Because we can now confidently say that our impact assessment methodology works, we have developed
the Impact investment handbook.
Because of the number of impact assessments conducted, we have developed an impact assessment
system that will be released soon.
These resources will form part of our training from 2017.
The handbooks will be available for purchase from July 2017.

Social Investment trends, forecasts and impacts: 2017/2018

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