This document discusses measuring the impact and return on investment for corporate social investment programs. It outlines current trends in monitoring and evaluation that focus on outputs and outcomes. The objectives of impact measurement are to demonstrate performance, accountability and program effectiveness to investors and funders. A variety of qualitative and quantitative indicators across different impact dimensions can be used. Impact should be measured over various time periods from short to long-term. Measuring impact allows organizations to improve programs and make more informed funding decisions.

1. Measure impact and return on
investment for corporate and
community investment
Reana Rossouw
Next Generation Consultants

2. Current Trends & Practices
• Monitoring & • Impact Assessment
Evaluation – Focusing on outcomes
– Focusing on project and results of outputs
implementation – Focuses on theory of
– Focuses on delivering change
outcomes – numbers – Confirms project design
– Focuses on achieving and scope as well as
program objectives deliverables
– Focuses extensively on – Measures impact over
numbers – quantitative various dimensions
outcomes

3. Objectives
• For the donor/investor: • Development Sector
– Increased efficiency, knowledge – Funders and non-profits often
and impact use the words “evaluation” and
– Cost savings “impact” loosely, stretching
– Improved data quality these terms to include any type
of report on the use of funds or
– More knowledgeable funding the results they achieve.
decisions – Many evaluation professionals,
– Greater credibility however, distinguish between
– Ability to benchmark against measuring performance
peers (monitoring inputs, activities,
– Improved coordination and and outputs); measuring
strategic alignment outcomes (near-term results);
– Shared learning and continuous and evaluating impact (long-
improvement term changes that are
attributable to the grantee’s
activities).

4. What is the difference?

5. Why the pressure to measure?
• The debate on impacts and return on investment
are playing out in three arenas:
– In private foundations and corporate CSI/CR divisions
• Aiming to be more strategic about their philanthropy, grant
making and social/community investments
– In nonprofit organisations in response to pressures
from corporates, foundations and government –
• To be more accountable for the investment received and
program outcomes expected
– Among international development organisations such
as bilateral government agencies and non
governmental organisations (NGOs)
• Seeking to improve development effectiveness and lessen
dependency on grant/development aid

6. Variety of purposes
• One can and should use cost and impact data
to make funding allocation decisions across
program areas
• You can compare programs once you get in the sector of global
health, but you cannot compare global health vs. arts vs.
education vs. sport.
• One can and should use cost and impact data
to make funding decisions within program
areas
• It is not about building a unifying measurement across domains,
but to build a conceptual framework of having the biggest impact
across a Rand value unit. So it is not about comparing health to
education to sport or the arts, but to determine which program
yields the highest return for the most effective use of resources

7. Three Primary applications
• Prospective
– Looking forward to determine whether or not the
projected costs and benefits indicate a favourable
investment
• Ongoing
– Testing assumptions and projections along the way in
order to aid course correction
• Retrospective
– Looking back to determine whether or not it was a
favourable investment given the costs incurred, in order to
inform future investment decisions

8. What do we want to achieve?
• To provide evidence
• To demonstrate
performance
• To prove accountability
• To show program
effectiveness
• To demonstrate value
• To contribute to a
community’s self-
sustainability
• To empower communities
and funders
• Ultimately - to alleviate
and eliminate poverty

9. 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)
Quantitative 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

10. The Next Generation Model
Inputs Outputs/Outcomes Impacts
• How • Community Benefits • Community Impacts
• Cash, time, in kind, • Qualitative • Business Impacts
management costs • Quantitative
• Why • Dimensions of impact (10)
• Community Relations, • Business Benefits
community investments,
commercial initiatives
• Where
• Geographic Location
• Who
• Stakeholder Engagement
• What
• Focus Areas

11. Impact Assessment – HOW?

12. Dimensions of Impact – WHAT?
How do we calculate?
1. We count each and every stakeholder group
2. We count each and every impact
3. We distinguish between community and business impact
4. Get to a figure: X:Y

13. Impact Measurement

14. Program Logic Model

15. Fundamental Questions
What impact and return were we looking for? –
Internal Rate of Return – i.e. For every one Rand
spend what are communities or the business
getting?
How would we determine ROI?
Is it financial or social or socio – economic return?
WHO IS ANSWERING THE QUESTION?
DONOR or the DEVELOPMENT PARTNER?

16. Edcon

17. Transnet

18. Rand Water

19. BHP Billiton Meyerton

20. Typical Scorecard
BHP Billiton Richards Bay - ED

21. Typical Scorecard – SED - Health
Stakeholder Groups Qualitative Qualitative Total Impacts Total
Impacts Impacts Community
Patients 10 15 25 Impact =
Doctors 6 9 15 204
Nurses 8 6 14
Department of Health 4 3 7 Total
Government 8 7 15 Business
Students, care givers 8 9 17 Impact =
Universities 8 7 15 33
Local Clinics 8 7 15
CBO’s, NGO’s 7 9 16 Final score –
Other Funders 7 6 13
204:33
Immediate local 9 9 18
communities
Question –
Local Authorities 6 7 13
Communities along rail 13 9 22
did the
line (secondary) program
Transnet 17 16 33 deliver high
R20 million is invested annually and the program has been impact and
running for more than 10 years. It reaches 15 million people (pa) high return?
in rural areas – and provide access to primary health care to
these communities – so what is the impact?

22. Typical Scorecard – Rating and Ranking

23. Typical Scorecard –
Quality of Life Impact

24. Typical Scorecard - Spend

25. 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

26. Rand Water – HIV & ME
Impact over time

27. Rand Water – Frances Vorweg - Impact across
economic, social and environmental aspects

28. 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
• Both Socio Economic Development and Enterprise Development
programs can be measured - equally
• The same project can deliver varied results for different funders –
HIV & ME, Dreamfields
• 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

29. 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

30. What I now know…
• We all have impact – but it is not necessarily measurable
and sustainable impact
– 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

31. Above all else:
Measuring impact is important
Measuring the right things is difficult
Measuring impact is possible

32. What next?
• Impact
Investment Index:
III
• Levels of impact –
shallow, deep,
integrated –
weighting of
impact

33. 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

34. Workshop
• What constitutes • How will we measure
current practice? impact and return?
• What are the • How will we report on
challenges to impact and return?
measuring impact
and return • How will measuring
currently? and reporting on
impact and return
• What do we need to
do to change? impact our work and
the industry?

35. 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