Measuring the impact of Corporate Social Investment

1. Measuring impact and return on
investment for social development
and community investment
Reana Rossouw
Next Generation Consultants
South Africa

2. South African Context
• Definition
– CSR to CR to TBL to ESG to Sustainability
• Issue
– Giving is mandatory
– Reporting is mandatory
– Question is = how to measure impact for beneficiaries and investors
• Legislation - Local
– BBBEEE - Broad-based Black Economic Empowerment Act, Industry
Charters, JSE-SRI-Johannesburg Stock Exchange – Socially Responsible
Investment Index, King III – Corporate Governance, Companies Act –
Social and Ethics committee
• Legislation – International
– Industry Codes – ICMM, EITI
• Guidelines & Frameworks
– GRI, UNGC, IFC, IIRC
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3. African Context
• Development Aid
• Multinational Operations
• Indigenous Operations
• Foreign Development Agencies
• Regional Differences
– Legislation (Nigeria)
– Size of Development Sector (3rd sector)
• Continental Sameness
– Dependency created
– No skills and capacity developed
• Time for African Solution
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4. What do we want to achieve?
• To provide evidence
• To demonstrate
performance
• To prove accountability
• To show program/
investment effectiveness
• To demonstrate value
• To contribute to
sustainable development
• To empower
communities and funders
• Ultimately - to alleviate,
eliminate and eradicate
poverty
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5. Funders and non-profits often use the words
“evaluation” and “impact” loosely, stretching
these terms to include any type of report on
the use of funds or the results they achieve.
Many evaluation professionals, however,
distinguish between measuring performance
(monitoring inputs, activities, and outputs),
measuring outcomes (near-term results), and
evaluating impact (long-term changes that
can be attributed to grantmakers’ activities) as
well as return on investment (benefits accrued
to the donor or investor) as a result of funds
and other resources invested.
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6. Impact Investment Index
• 3 Years in development
• Aimed at Donors, investors,
development agencies and
implementation partners
• Compared 40 other global
impact assessment
methodologies
• Needed an African solution for
African development issues
and practitioners
– 300 programs
– 15 investment areas
– 12 aspects of impact
– 15 aspects of return
– 200 indicators
– R1 billion of investment
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7. The Impact Investment Index - III
Inputs Outputs/Outcomes Impacts
• How • Community Benefits • Community Impacts
• Cash, time, in kind, • Qualitative • Business Impacts/Return
management costs • Quantitative
• Why • Dimensions of impact (10) • Shared Value
• Community Relations, • +200 Indicators
community investments, • Business Benefits
commercial initiatives
• Qualitative
• Where
• Quantitative
• Geographic Location
• Dimensions of Impact and
• Who Return (10)
• Stakeholders Affected,
Impacted
• What
• Focus Areas, Investment
Portfolios
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8. Impact Assessment – HOW?
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9. Impact Assessment – WHAT?
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10. Calculating Impact – The Process
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11. Identifying Indicators – How?
Community Impact = 10 Business Impact = 5 Total Impact = 10:5
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12. Community Impact
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13. Business Return
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14. Ratings and Rankings
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15. Impact and Return across portfolio’s
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17. Impact and return score cards
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18. Case Study 1: Transnet
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19. Case Study 2: Rand Water
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20. Case Study 3: BHP Billiton Metalloys
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21. Case Study 4: Enterprise Development
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22. Case Study 5: Health
Stakeholder Groups Qualitative Qualitative Total Impacts Total Community Impact = 204
Impacts Impacts
Patients 10 15 25 Total Business Impact = 33
Doctors 6 9 15
Nurses 8 6 14 Final score – 204:33
Department of Health 4 3 7
Government 8 7 15
R20 million is invested annually and
Students, care givers 8 9 17
the program has been running for
Universities 8 7 15
more than 10 years. It reaches 15
Local Clinics 8 7 15
million people (pa) in rural areas – and
CBO’s, NGO’s 7 9 16
Other Funders 7 6 13
provide access to primary health care
Immediate local 9 9 18 to these communities – so did it
communities deliver impact and return?
Local Authorities 6 7 13
Communities along rail 13 9 22
line (secondary)
Transnet 17 16 33
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23. Case Study 6: Impact over time
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24. Case Study 7: Impact across economic,
social and environmental aspects
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25. Some stuff we have learnt
• ANY resources CAN be measured – books, wheelchairs,
buildings, time – cash and non-cash
• The same project can deliver varied results for different
funders
• 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
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26. 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 and eradication!
• It is possible to determine impact and return
– The real value lies in independent, verifiable, assurance of social
investment expenditure, program results, outcomes and impact
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27. In closing
• Involve stakeholders
– Establish the scope and identify the key
stakeholders impacted
• Understand what changes
– Map the outcomes – identify the
indicators to measure impact Community
Impact
• Value things that matter
If you can count
– Look for evidence, don’t forget baseline
and impact studies and define
• Only include what is material indicators you
– Focus on agreed outcomes first then can determine
incidental impact impact and
• Do not over claim return
– Calculate the impact based on evidence Business
Return
• Be transparent
– Report the outcome – the good and
BAD news
• Verify the result
– Share the learning
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28. Above all else:
Measuring impact is important
Measuring the right things is difficult
Measuring impact is possible
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29. Contact
• Reana Rossouw
• Next Generation Consultants
• Specialists in Development
• Tel: + 27 (011) 275 0315
• 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
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