This document discusses three "holy grails" of improving social impact: 1) defining outcomes, 2) measuring and transparently reporting outcomes to change resourcing decisions, and 3) collaborative and participative approaches. It argues that without clear outcomes, effective measurement, and collaboration across sectors, the social impact system will not be able to meet future challenges. Measurement is valuable for focusing organizations on outcomes and allowing funders to reallocate resources, but barriers include costs, timeframes, and lack of agreement on methods. The document advocates for defining shared outcomes, shared measurement, open data, long-term collaborative approaches, and a learning system oriented toward community outcomes rather than individual programs.

1. Holy Grails of System
Change:
Outcomes, Measurement &
Collaboration
RESEARCH & EVIDENCE SYMPOSIUM
AUGUST 2013

2. 2
INTRODUCTION

3. 3
QUESTIONS
• If your organisation improved outcomes delivered by 30% this year . . .
?
• Is your evaluation . . .
. . . program-focused or community outcome focused?
• NFPs: Do you find accessing government data easy?
• Govt: How confident are you that you have the information you need
to make great decisions about future resource allocation?
• For every $100 spent on services, how much is spent on
measurement?
• How confident are you that we are trying to measure the right things?
• How confident are you that our measurement is meaningful?

4. 4
Context: Introducing
the Australian “Social Impact System”

5. 5
THE SOCIAL IMPACT SYSTEM
NFP
$100bn1
$30bn1
Govt
(Social)
$200bn
For-Profit Total?
Top 500: $1,543 bn
All Govt: $500bn+
For-Profit
(Social): $?
The turnover of the “Social Impact System”
is over $250 bn pa.
12006-07 PC Report data aged at 4%
?
Governments
• 1 federal, 6 state, 2 (largish)
territories, 564 local governments
• Many departments across Health,
Welfare, Education, Justice . . .
• Multiple roles - sets policy, funds
programs, runs programs . . .
Not-for-Profit
• 700,000 NFPs
• 60,000 economically significant
Corporate
• Philanthropy, corporate social
responsibility, creating shared value
Evolving forms
• Social enterprises, B-corps . . .

6. 6
How are we
(the “Social Impact System”)
doing?

7. 7
HOW ARE WE DOING?
1980 1990 2000 2010
Outcomes/$Invested
1. Exponential growth
2. Slow and steady
3. Status quo
4. In reverse
System Effectiveness
5. Consensus?

8. 8
EXAMPLES
• In Australia, disadvantage has a postcode.
– Despite an increase of funds allocated to Australia’s most disadvantaged
localities, their positions on rankings of disadvantage have remained stable
for over ten years.
Ingrid Burkett 2011; Tony Vinson 2009
• The proportion of children living in jobless households is higher in Australia
than in all but four of 27 EU member states.
Australian Social Inclusion Board, 2009
• Australia is half as successful as other OECD countries in
finding employment for people with a mental illness.
OECD, 2003
• Indigenous Australians are significantly less likely
to finish school or university.
ABS, 2011

9. 9
A System Challenge
It is the long history of humankind (and animal
kind, too) those who learned to collaborate and
improvise most effectively have prevailed.
- Charles Darwin

10. 10
SYSTEM CHALLENGE
The number of working age Australians (15-64) per older Australian
(65+) is decreasing from 7.5:1 to 2.5:1 over 80 years.
• The implications for our workforce are significant
• The implications for our tax dollar are significant
Source: Australian Treasury Intergenerational Report, 2010 and CSI Research Fellow Ingrid Burkett

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SYSTEM CHALLENGE
1970 2000 2030 2060
Outcomes/$invested
Effectiveness
100
200
2010
2050
20% of Commonwealth outlays
on health, welfare & education*
56% of Commonwealth outlays
on health, welfare & education
*David Murray, The Australian
• # working age Australians per older Aust falling from 5 to 2.5
• Expenditure on Ageing increasing from 25% to 50% of govt spending
Effectiveness “target”
Actual/projected
Future target/need
CHALLENGE:
Exponential growth
A learning system

12. 12
AUSTRALIA – THE LUCKY COUNTRY?
“America – the greatest country in the world.”
http://www.youtube.com/watch?v=9zZxBNRTkd4

13. 13
Meeting the Challenge . . .
We have learned to create the small exceptions that can change
the lives of hundreds. But we have not learned how to make the
exceptions the rule to change the lives of millions.
- Lisbeth Schorr, Social Analyst

14. 14
INTRODUCING . . .
The Centre for Social Impact
This is a Centre which can bring together research, teaching and
cross-sector partnerships to create positive social impact at the
intersections between government, business and community life.
I am confident that the Centre will be a great source of answers
and of practical initiative.
- The Hon Julia Gillard
28 February 2008

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THE CENTRE FOR SOCIAL IMPACT
• The Centre for Social Impact
– University partnership:
– Federal government support
+ 8 founding funders:
– 2008-2012: Organisation established, research & teaching programs created.
• Our Mission: “to create beneficial social impact in Australia through teaching,
research, measurement and the promotion of public debate.” Cross-sectoral focus.
• 2012 strategy consultation question:
What are the keys to improving social impact in Australia?

16. 16
So what ARE the keys to
improving social impact in Australia?

17. 17
CSI: SOCIAL IMPACT FRAMEWORK
Transparent reporting
of social outcomes
Social Outcomes
Purposes/strategies
defined in terms
of social outcomes
Social Impact: resilient, inclusive, healthy society with positive wellbeing
Funding rewards
social outcomes
Social
Outcomes
Ecosystem
Social
innovation
pipeline
Collaborative
and participative
approaches
Great governance,
leadership and
management
Effective
Implementation
Effective
Measurement

18. 18
THREE HOLY GRAILS
1. Define outcomes
2. Measure (and transparently report)
outcomes
(and change resourcing decisions based
on this)
3. Collaborative (and participative)
approaches
From Monthy Python and the Holy Grail:
Then shalt thou count to three, no more, no less. Three shall be the number thou shalt count, and the number of the counting shall be three.
Four shalt thou not count, neither count thou two, excepting that thou then proceed to three. Five is right out. Once the number three, being the
third number, be reached, then lobbest thou thy Holy Hand Grenade of Antioch towards thy foe, who, being naughty in my sight, shall snuff it.

19. 19
1. Define outcomes
2. Measure (and transparently report) outcomes
(and change resourcing decisions based on this)
THREE HOLY GRAILS

20. 20
WHAT IS THE VALUE OF MEASUREMENT?
• Jeremy Nicholls (SROI, UK) – what is the most important benefit of outcome
measurement?
– “Maybe that it forces [management] to revisit and define and focus on their
social outcomes in the first place.”
• Morino, M. Leap of Reason1:
– “<It’s> not about pushing nonprofits to drink the metrics Kool-Aid, implement
fancy reporting technologies, or adopt complex measurement methodologies. It
is about encouraging nonprofits and funders to cultivate for themselves an
outcomes-focused mindset and the passion to be as effective as we possibly
can for those we serve!”
• Peter Drucker: “You can’t manage what you can’t measure.”
• Typical (US) Foundation Manager:
– “You can achieve incredible progress if you set a clear goal and find a measure
that will drive progress toward that goal . . . this may seem basic, but it is
amazing how often it is not done and how hard it is to get right.”
1Venture Philanthropy Partners in partnership with McKinsey & Company, 2011. 2The Wall St Journal January 26, 2013.
Bill Gates2

21. 21
THE VALUE OF MEASUREMENT
What is the value of
measurement?
Let’s calculate it.
Consider this scenario . . .

22. 22
THE VALUE OF MEASUREMENT
Imagine a system:
• A funder has $100 pa to spend on social outcomes.
• 10 organisations each receive $10 funding.
• The organisations’ effectiveness varies.
Funder
$100
Org 1
55
Org 2
65
Org 3
75
Org 2
85
Org 3
95
Org 1
105
Org 2
115
Org 3
125
Org 2
135
Org 3
145
100
Outcomes
Effectiveness:
Outcomes per $100 funded

23. 23
THE VALUE OF MEASUREMENT
• There is a cost of measurement - 5% of program funding – in all scenarios
(except the base case).
• Measurement has a 3 year time-delay before it improves internal effectiveness
and a 5 year delay before it results in funding reallocation.
Scenario Comment
Internal
Effectiveness
Funding
Reallocation
Base
Without measurement, there is no reallocation of
funding between organisations. Organisations
improve internal effectiveness gradually.
1% pa -
1a 3% pa -
1b 5% pa -
2a 3% pa 5% pa
2b 5% pa 5% pa
Measurement is used within organisations to
improve programs and/or reallocate resources.
Measures are transparently reported; the funder
reallocates resources from the bottom half to the
top half of effective organisations at the rate of $5
per year.

24. 24
THE VALUE OF MEASUREMENT
Outcomes
Base case
3% pa internal improvement
5% pa internal improvement
Typical funding period

25. 25
THE VALUE OF MEASUREMENT
Outcomes
5% pa improvement, no reallocation
5% pa improvement, with reallocation
3% pa improvement, no reallocation
3% pa improvement, with reallocation
Base case

26. 26
THE VALUE OF MEASUREMENT
What is the value of measurement?
With a combination of internal improvement in effectiveness (4% pa) and systemic
resource reallocation (4% pa) we can double system effectiveness in 20 years.
Scenario
Internal
Effectiveness
Funding
Reallocation
2033
Outcomes
Discounted
ROI
Base 1% pa - 122 -
1a 3% pa - 162 1.8
1b 5% pa - 224 3.4
2a 3% pa 5% pa 192 5.3
2b 5% pa 5% pa 266 7.3

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So why aren’t we doing this already?

28. 28
BARRIERS TO MEASUREMENT
Barriers
• Cost
– Someone has to pay for it – it’s a cost
now for a benefit later
– In some cases, it can be a show-
stopper; example social investment
where even
1-2% change kills the business case
• Timeframes
– Typical govt funding timeframes and
budget cycles not conducive
• Perceptions
– “You can’t measure what we do”
– Fear of focus on “the number”; you
are heartless
• Methodology debate - lack of
agreement about methods/tools
Solutions?
– Build business case with examples &
cases
– Educate Boards and funders
– Give more attention to the cost of NOT
measuring – the opportunity cost
– Choose when to apply measurement –
and grow from there
– Advocacy. Funding has to move from low
cost to long-term outcomes
– Great case studies in a range of fields
– People make decisions, not
spreadsheets. Measurement is an input
– Build best practice guidance; focus on
the bigger picture

29. 29
MEASUREMENT – KEY TO IMPROVING IMPACT
• Measurement starts with defining outcomes
• We need effective measurement – AND transparent
reporting
– Governments must open data
– Shared measurement will reduce cost
– Reward those who are open and future-focused
• Measurement is pointless unless we change behaviour
– Resource reallocation must follow – funding and people
– Funders (including governments) must be brave
– We must support them

30. 30
THREE HOLY GRAILS
1. Define outcomes
2. Measure (and transparently report) outcomes
(and change resourcing decisions based on
this)
3. Collaborative and participative approaches
Politeness is the poison of collaboration.
- Edwin Land

31. 31
COLLABORATION MATTERS

32. 32
COLLABORATION MATTERS
Partnerships and Collaboration
A partnership is an arrangement where parties agree to cooperate
to advance their mutual interests
Collaboration is working with each other to do a task. It is a . . . process where two or more
people or organizations work together to realize shared goals
Wikipedia
Assumption #1: We have mutual interests and/or shared goals
Assumption #2: For our purposes, this alignment of interests is associated with the
achievement of better social outcomes <for people in a community>

33. 33
PARTNERSHIP AND COLLABORATION
Partnership
• Cooperate to advance mutual
interests
• To continue to improve
performance (eg improving referral
or delivering contract outcome)
• Some short-mid term interests
• A few percent of our organisation
budget (or less)
• A good working relationship with
another organisation or manager/s
Collaboration
• Work together to realize shared
goals
• To address our most significant social
issues (eg third generation
unemployment in difficult region)
• Our mission (or a good slice)
• Whole programs, or even the
potential to re-think what we do
• Cultural fit with a collaborative group
of organisations (from different
sectors)
Partnership and collaboration are not the same thing.
Define
Needed
Alignment of
Involving

34. 34
COLLABORATION MATTERS
• Collaboration is hard. At the very least, it’s inefficient.
“Collaboration should not be seen as a goal in itself. Collaboration is only
required when no one entity has the resources or authority to make the required
change.”
Liz Skelton (SLA) in Pro-Bono Australia, 2013
• . . . but it’s the only way:
“Most of the most complex social problems <in the UK today> . . . cannot be
solved by services that work in isolation.”
Daniela Barone Soares, CEO, Impetus Trust

35. 35
BARRIERS TO COLLABORATION
Barriers
• Misalignment of “mission” or
objectives
– Lack of outcome focus
– Competitive approaches
eg winning a funding contract
• Decisions, Structures & Systems
– Lack of established heirarchy for
decisions
– Disparate data and communication
systems
• Funding
– Short-term, competitive, activity,
low cost and compliance focus
– Fragmented (govt siloes)
Solutions?
– Create joint understanding of the problem BEFORE
determining activity to fund/deliver
– Co-design solution
– Shared goals, shared measurement
– Culture change: outcome before organisation
– Well defined project management and governance
– Differentiated roles. Each org does what it does
best.
– The Cloud, modern technologies
– LOTS of communication -> Trust
– Creative funding models. Longer term.
– Fund approaches, not just program.
– Non-government funders to get us started?/
layered funding

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BARRIERS TO COLLABORATION
Barriers
• Time
– It takes too long!
• Ego
– My organisation does it better
– My objectives are ABC (misalignment
of system vs organisation aims)
• Skills
– Collaboration requires different
leadership and management skills
Solutions?
– Change our definition of success
(we’re spending a lot of time not achieving
much the current way)
– Change our organisation definition of success
– . . . and flow on to individual metrics/
definitions of success
– Empower collaboration (government?)
– Invest in skills for collaboration

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COLLABORATION – KEY TO IMPROVING IMPACT
1. Collaboration starts with defining shared outcomes
– Agreeing the problem (in its entirety)
– Co-designing the solution
2. And continues with shared measurement
– Governments must open data
– Use technology effectively
3. Collaboration requires communication and trust
– Investing time in relationships – building trust
– Communicate often, led by the leaders, and empowering others
– Skill development
4. Collaboration requires investment
– In organisation capacity, people and systems . . . in collaboration
5. Collaboration requires a long term view

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FOR RESEARCHERS: TAKE THE SYSTEM VIEW
System optimisation & local optimisation are not the same thing.
• From program-by-program justification
to shared measurement, community outcomes
• From retrospective analysis
to proactive definition of outcomes, great logic frameworks, embedded
measurement, cultural change
• Attribution important – but secondary
• Ask the big questions
• Seek openness.

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In Conclusion

40. 40
MEETING THE CHALLENGE
1970 2000 2030 2060
Outcomes/$invested
100
200
• We must create a learning, evolving system to move from fragmented
progress of the past 30 years to meet the challenges of the next 30.
• Without clear outcomes, effective measurement and transparent
reporting, we cannot achieve this.
• Funding another program will not address complex, sustained social issues.
We need new collaborative and participative approaches.
• The research community can play
a critical catalysing role:
– Demonstrating collaboration
– Doing great work in measurement
– Focusing on shared outcomes and
measurement.

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CONCLUSION
The secret is to gang up on the problem,
rather than each other.
- Thomas Stallkamp