This lecture examines the pressure on philanthropic organisations to provide quantifiable short-term impact measurements.
It is often said of private donors and non-profit actors that social impact is not something they set out to measure –– it’s something they set out to make. Along the way to making a difference, social investors often face questions about the alignment between their activities, missions and strategies, about the progress of the work that is funded through investments and grants, about possible course adjustments, and perhaps taking advantage of emergent opportunities. And of course all need to report to stakeholders and the public. So they inevitably end up monitoring, measuring, and evaluating programs and projects simply to generate the impact they want to make. For private donors and non-profit actors, measuring impact is not an end in itself. That said, when tailored to a purpose and demonstrably benefitting the communities we seek to serve, monitoring and evaluation and learning can play a crucially important part in effective philanthropy and social investment.
There are many good reasons for measuring and evaluating social outcomes and impact, each calling for a distinctive approach and possibly for different measurement tools. In a start-up social enterprise, for example, the chief aim could be to develop a viable business plan ensuring the growth and survival of the enterprise by monitoring costs, income, benefits, and outcomes. For a large mature organization, a robust impact measurement system could provide a helpful management tool for aligning activities with mission and strategy, and guiding internal resource allocations to the best intermediate users. For other organizations, it could serve chiefly as a learning tool, helping to improve practice by adjusting methods and activities to take full account of the lessons coming out of measurement. For others again, it could help to flesh out communications strategies by identifying the success stories that boards and the public appreciate.
The least good reason for measuring social impact is to meet the expectations of donors and funding agencies. And yet, in Australia, the strongest incentive for measuring social impact among service organizations today appears to be a perceived need to meet increasingly shrill demands from funding agencies and donors for quantifiable impact measurements as a condition of further funding. To complicate matters, in fields of community engagement where cooperation among service providers is a precondition for enduring social impact, funders’ demands for impact measurement stimulate competition among providers to beggar their neighbours.
Non-profit service providers are under pressure to demonstrate their impact from several quarters including public pressure for greater accountability, government fiscal pressures to “squeeze more out of existing dollars,” and new pressures from the new social finance market to show social returns on investments.