"Where it gets tricky is in the calculation of the social or environmental return. How to calculate the extent of these impacts is a thorny problem no matter where on the financial spectrum you participate. Figuring out the relationship between those returns and financial returns makes it even more complicated. Does a -100% donation (a grant) guarantee a 100% social/environmental impact? Does return of capital (a no interest loan) correspond to more or less social/environmental impact? Does pursuit of a financial return automatically reduce the possible social/environmental impact?I had pretty much just hit the "post" button when I received an email pointing me to this new article at Alliance Magazine. The article synthesizes reflections from Paul Brest, President, Hewlett Foundation, Jed Emerson, Managing Director of Integrated Performance, Uhuru Capital Management, Katherina Rosqueta, Executive Director, Center for High Impact Philanthropy, Brian Trelstad, Chief Investment Officer, Acumen Fund, Fay Twersky, Director of Impact Planning and Improvement, Bill & Melinda Gates Foundation, and Michael Weinstein of the Robin Hood Foundation to the recent publication by Melinda Tuan on "Measuring and/or estimating Social Value Creation"
I don’t have an easy answer to the calculation of social/environmental return question, though I’ve been told there are at least 240 methods for measuring it.** The OECD is hosting a global project to measure social progress, they can point you to another few hundred measures. And how the social impact floats in relation to the financial impact, well, lets just leave that to another blog post."
At the other end of the resource spectrum - but by no means less sophisticated - is the work that socialactions is doing on shared data across online platforms. I've blogged about this work before, but for the latest and most complete update on it I suggest listening to this Google Talk featuring Social Actions' intrepid leaders @peterdeitz and @christineegger. (It is a video but I just played it in the background and listened. The presentation is great and the questions are also well considered, though beware, it is a tad techy). Peter and Christine are working on the same set of possibilities as those interviewed by Alliance - what can we do with a set of tags or common typology that allow us to mash up opportunities to get activities, share them across media and platforms, and track data on inputs and results? They are talking about the evolution not just of the microphilanthropy sector but of the entire "economy of social good." SocialActions is notable, in my mind, because they recognize the multiple roles that we all play in this economy - donors, doers, speakers, activists, etc. They also mention the fine work of Grantsfire and hgrant - another effort well worth watching, now indexing grants data from 10 foundations.
The immediate comparison between SocialActions and the Measuring Social Impact report might not be clear. Let me add two more pieces to the mix and then clarify - in my earlier post I had mentioned the Global Project on Measuring Social Progress. This OECD-hosted effort is, among other things, using wiki-principles to help communities of interest narrow in on shared measures of success. They are building out compendia of indices and measures, allowing communities to comment on them and add to them, using panels of experts to make the different methods and databases comparable and integrable, and sharing all of what they do. It is an impressive, multi-layered, international effort at figuring out what matters, how to measure it, and using the results to change policy and improve communities. I met with the leader of the OECD effort recently on behalf of GSIX, an emerging global federation of social investment exchanges, yet another effort to support diverse, individual efforts that share common goals.
All these examples - the Alliance interviewees and their individual efforts, the socialactions platform, Grantsfire, the Global Project, and GSIX are different approaches with the same assumption and end goal - solving real world problems requires us to realize the potential of sharable and shared information. What is exciting is that these efforts have moved well beyond rhetoric toward real change.
It is important to consider the impact of a donation, how the money is being spent and if the spending is impacting the world in the way you were hoping when you made the donation. Thank you for these resources and the information on these different platforms!
It's incredibly exciting that those with the resources, both in terms of time, money, and knowledge, in the nonprofit and philanthropy sectors are finally making this issue a priority. The nonprofit sector will never be able to wield as much influence as its potential implies- politically, economically, socially- until we are able to present a united front, a brand that explains to external elements what we stand for. The first step towards this is figuring out what we do stand for. How do we define ourselves? What is "success" for us?
As these reports and these discussions about common metrics continue, and are refined,I urge everyone not to forget the importance of the hardest to measure success: human impact. Websites like GreatNonprofits are attempting to present the relative impact of organizations based on the stories and evaluations of those that have had personal experience with the nonprofit. For example, the Green Choice Awards, going on now, will identify some of the best environmental organizations, based on the people who have volunteered for them or donated to them.
We cannot hope to come up with a truly accurate system for measuring effectiveness in nonprofit and philanthropy without finding some way to take these poignant, qualitative elements into consideration.
(For more info about what GreatNonprofits is doing, you can go here: http://www.greatnonprofits.org/green)
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