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Towards Best Practice
      Reana Rossouw
Next Generation Consultants
Measuring 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
Maybe
there is a
secret?
If we know
what we are
doing wrong –
maybe we can
do 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
                                                                                        FOCUS

Input:            Activities:           Output:            Outcome:                Impact:             Return:

Resources         What the program      The direct         Benefits or             What the short,     What the
dedicated to or   does with inputs      products of        changes for         R   medium and          business
consumed by       to fulfill its        program            beneficiaries       E   long term results   achieved as a
the program       mission               activities         during or after     S   are on all          result of its
                                                           program             U   stakeholder         investment
FACTORS                                                    activities          L   groups
                                                                               T
                                                                               S
Money, staff      Feed and shelter      Number of          New knowledge,          Access to new       Increase in
and staff time,   homeless              classes taught,    increased skills,       infrastructure      brand
volunteers and    facilities, provide   number of          changed                 Decline in infant   awareness and
volunteer time,   job training,         counseling         attitudes or            mortality           reputation
facilities,       educate the           sessions           values, modified        Less                Mitigate
equipment and     public about signs    conducted, value   behavior,               dependency on       environ-mental
supplies,         of child abuse,       of educational     improved                grants, etc.        impacts and
infrastructure,   counsel pregnant      materials          conditions,                                 risks
etc.              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
Program Logic Model
Edcon
Transnet
Rand Water
BHP Billiton Meyerton
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 Formula
Hierarchy     Inputs              Outputs            Outcome             Impacts              Returns
Definition    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 of
Indicators    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
                                                                                            company
Qualitative   Stakeholders        Perceptions of     Beneficiaries      Quality of links to Changes in
indicators    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 return
Community        Stakeholders Group 4           Impact 1
Impact


                 Beneficiaries /                Community          Community
                 Stakeholder Group 3            Impact 1           Impact 2




                 Communities                    Community          Community          Community
                 Stakeholder Group 2            Impact 1           Impact 2           Impact 3




Low community
Impact
Low Business     Beneficiary                      Business        Business        Business        High Business
Return           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 return
impact and
Business Return
Societal 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 resources
Business 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 – HIV & ME
   Impact over time
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 important
Measuring 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: rrossouw@nextgeneration.co.za
•   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

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Towards best practice impact and return

  • 1. Towards Best Practice Reana Rossouw Next Generation Consultants Measuring Impact and Return
  • 2. 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
  • 3. 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
  • 4. Maybe there is a secret? If we know what we are doing wrong – maybe we can do better.
  • 5. 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
  • 6. 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?
  • 7. Impact Value Chain NEXT GENERATION FOCUS Input: Activities: Output: Outcome: Impact: Return: Resources What the program The direct Benefits or What the short, What the dedicated to or does with inputs products of changes for R medium and business consumed by to fulfill its program beneficiaries E long term results achieved as a the program mission activities during or after S are on all result of its program U stakeholder investment FACTORS activities L groups T S Money, staff Feed and shelter Number of New knowledge, Access to new Increase in and staff time, homeless classes taught, increased skills, infrastructure brand volunteers and facilities, provide number of changed Decline in infant awareness and volunteer time, job training, counseling attitudes or mortality reputation facilities, educate the sessions values, modified Less Mitigate equipment and public about signs conducted, value behavior, dependency on environ-mental supplies, of child abuse, of educational improved grants, etc. impacts and infrastructure, counsel pregnant materials conditions, risks etc. 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
  • 13. 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
  • 14. Impact Value Chain - Our Formula Hierarchy Inputs Outputs Outcome Impacts Returns Definition 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 of Indicators 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 company Qualitative Stakeholders Perceptions of Beneficiaries Quality of links to Changes in indicators 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
  • 15. 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 return Community Stakeholders Group 4 Impact 1 Impact Beneficiaries / Community Community Stakeholder Group 3 Impact 1 Impact 2 Communities Community Community Community Stakeholder Group 2 Impact 1 Impact 2 Impact 3 Low community Impact Low Business Beneficiary Business Business Business High Business Return Stakeholder Group 1 Impact/ Impact/ Impact Impact Return 1 Return 2 Return 3 Business Impact/Return
  • 16. Community What we measure Qualitative impact and return Quantitative impact and return impact and Business Return Societal 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 resources Business 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
  • 17. Rand Water – HIV & ME Impact over time
  • 18. Rand Water – Frances Vorweg - Impact across economic, social and environmental aspects
  • 19. 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
  • 20. 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
  • 21. • 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
  • 22. 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
  • 23. 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?
  • 24. 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
  • 25. Above all else: Measuring impact is important Measuring the right things is difficult Measuring impact is possible
  • 26. 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!
  • 27. 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: rrossouw@nextgeneration.co.za • 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