Research for Global Development

Measurement Is Key to Private Sector Doing Social Good


A few weeks ago, I attended a Salzburg Seminar, Value vs. Profit: Recalculating ROI in Financial and Social Terms.  The seminar brought together stakeholders from a wide variety of sectors including the private sector, academia, the non-profit sector, impact investment, and social entrepreneurs. The goal was to step away from our normal work days and engage in high-level conversations about the private sector’s role in achieving social good.  One of the big take-aways was the importance of measurement and evaluation for these efforts to be successful.

Many interesting ideas came out of these conversations.  We talked about the role of impact investors  and social entrepreneurs and the barriers to growth that they currently face.  Many impact investors claim that there are insufficient “investment-ready” social enterprises in which to invest.  Social entrepreneurs, on the other hand, claim that there are plenty of successful businesses seeking funding; the problem is that impact investors are too risk averse to invest in them.  Throughout these discussions, the group was divided about how important social impact assessment should be in investor decision making.

Other conversations focused on the role of large corporations.  We discussed “shared value” and what it means for corporations to “do good” in the places where they operate.  Many seminar participants believed that there should be ways for institutional investors and regular investors, like you and I, to invest in corporations that are accomplishing social good in addition to providing a financial return. (For more details on the idea, check out this report).

However, as a researcher listening and participating in these conversations, a common theme kept emerging.  Without a reliable way to measure and evaluate social impact, the theories fall apart.  As decades of foreign aid programs have shown, good ideas don’t always lead to good outcomes.  In order for institutional and every-day investors to distinguish, and invest in, companies that are achieving some sort of social good, they need an objective source of impact assessments to determine which corporations are actually having positive social impact.  In order for impact investors to select social enterprises that will achieve both a financial bottom line and social bottom line, they must have some way to measure and validate that social outcome.

I hope as the players in this new and growing area move forward, they keep in mind the importance of measurement and evaluation.  Quality research can not only demonstrate success, but it can also inform strategies and enable improvements.

InterMedia

Measurement Is Key to Private Sector Doing Social Good


A few weeks ago, I attended a Salzburg Seminar, Value vs. Profit: Recalculating ROI in Financial and Social Terms.  The seminar brought together stakeholders from a wide variety of sectors including the private sector, academia, the non-profit sector, impact investment, and social entrepreneurs. The goal was to step away from our normal work days and engage in high-level conversations about the private sector’s role in achieving social good.  One of the big take-aways was the importance of measurement and evaluation for these efforts to be successful.

Many interesting ideas came out of these conversations.  We talked about the role of impact investors  and social entrepreneurs and the barriers to growth that they currently face.  Many impact investors claim that there are insufficient “investment-ready” social enterprises in which to invest.  Social entrepreneurs, on the other hand, claim that there are plenty of successful businesses seeking funding; the problem is that impact investors are too risk averse to invest in them.  Throughout these discussions, the group was divided about how important social impact assessment should be in investor decision making.

Other conversations focused on the role of large corporations.  We discussed “shared value” and what it means for corporations to “do good” in the places where they operate.  Many seminar participants believed that there should be ways for institutional investors and regular investors, like you and I, to invest in corporations that are accomplishing social good in addition to providing a financial return. (For more details on the idea, check out this report).

However, as a researcher listening and participating in these conversations, a common theme kept emerging.  Without a reliable way to measure and evaluate social impact, the theories fall apart.  As decades of foreign aid programs have shown, good ideas don’t always lead to good outcomes.  In order for institutional and every-day investors to distinguish, and invest in, companies that are achieving some sort of social good, they need an objective source of impact assessments to determine which corporations are actually having positive social impact.  In order for impact investors to select social enterprises that will achieve both a financial bottom line and social bottom line, they must have some way to measure and validate that social outcome.

I hope as the players in this new and growing area move forward, they keep in mind the importance of measurement and evaluation.  Quality research can not only demonstrate success, but it can also inform strategies and enable improvements.

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