Social Enterprise Development in Canada with Ann Armstrong
2012SFF - Made to measure
1.
2. Theory of change
Impact Reporting and Investment Standards
Global Impact Investing Ratings System
Social Return on Investment
Demonstrating Value
Randomized Control Trials
3. Measuring Social Value
Dr. Tessa Hebb
Measuring Up, Social Finance Forum
Centre for Impact Investing, MaRS, Toronto
November 8th 2012
4. What is Blended Value
“The Blended Value Proposition states is that all
organizations, whether for-profit or not, create
value that consists of economic, social and
environmental value components—and that
investors (whether market-rate, charitable or
some mix of the two) simultaneously generate all
three forms of value through providing capital to
organizations.” Jed Emerson
5. Metrics and Measurement
Blended value requires measurement of all three
forms of value economic, social and
environmental.
“Measurement should be viewed as a process
whereby the greatest value is achieved through
organizations building up and learning from
data and evidence over time.” (Measuring the Value of
Corporate Philanthropy).”
6. What are social metrics?
Social metrics are measurement tools that can be
used to define and articulate social value, social
outcomes and the results generated by
investment and activities in the social sector.
7. You manage what you measure
“A review of measurement methodologies did not turn up
a “silver bullet” or single numeric against which
performance can be universally gauged. Rather, this
reading reinforced the notion that, to an
extent, measurement is its own reward. It encourages
improvement, management, and the explicit formulation
of assumptions and expectations.” (Measuring the Value
of Corporate Philanthropy)
8. Start with your mission
1. What are the results for which you will hold
yourselves accountable?
2. How will you achieve them?
3. What will they really cost?
4. How do you build the organization you need to
deliver these results?
9. What to Measure (Measuring the Value of Corporate
Philanthropy).
• Links among the mission, programs, and measures
must be clearly defined and articulated in order to
narrow the number of required indicators.
• The measures should be easily collectible and
communicable.
• The measures should be strategically designed and
applicable across the organization at all levels, while
also encouraging of operating units to focus on high-
level strategies.
• Above all, the measures must address progress
toward the mission and illustrate whether and how
the organization’s actions make a difference.
10. Inputs, Activities, Outcomes, and
Impacts
Inputs, activities, outputs, outcomes, and impacts over the
short, medium and long term are the building blocks of
social metrics.
The building blocks are linked to the organizations mission
through its theory of change.
“Activities,” such as the number of staff trained or amount
of goods purchased, and “outputs,” such as the number of
clients served, products distributed, and areas reached may
be the extent of measurement for short-term, one-off
projects. Sometimes simply identifying activities and
measuring output may be all that is feasible.
11. Theory of Change
• “Built around the pathway of
change, a Theory of Change
describes the types of
interventions (a single
program or a comprehensive
community initiative) that
bring about the outcomes
depicted in the pathway of a
change map. Each outcome in
the pathway of change is tied
to an intervention, revealing
the often complex web of
activity that is required to
bring about change.”
(TheoryofChange.org)
12. Logic Model
Input/Resources Activities Outputs Outcomes Impact Indicator
What are the resources What are the What is the evidence of What is the change that What will happen over How would you
that are needed to activities/products that service delivered to the will happen (short term the long term measure the outcome?
accomplish the will generate the intended audience at or medium term) to the How will you know if
activities? outputs? the intended dose? target group or change happened?
(what others will be individuals?
able to see, touch,
count)
Stakeholder 1
13. Conclusion
• Blended value requires economic, social and
environmental values be measured.
• Social metrics help organizations understand
their strengths.
• Social metrics link
mission, activities, outputs, outcomes and
impacts.
• No one size fits all.
14. Contact
Dr. Tessa Hebb
tessa_hebb@carleton.ca
Director,
Carleton Centre for Community Innovation
www.carleton.ca/3ci
16. Theory of change
Impact Reporting and Investment Standards
Global Impact Investing Ratings System
Social Return on Investment
Demonstrating Value
Randomized Control Trials
17. Inputs Activities Outputs Outcomes Impact
IRIS
GIIRS
SROI
Demonstrating Value
Randomized Control Trials
18. The Impact Reporting and Investment
Standards (IRIS) is a catalogue of
metrics that can be used to describe an
organization’s social, environmental,
and financial performance.
Pg 18
19. IRIS is…
My Metrics Your Metrics
Full Time Employees = Full Time Employees
GHG Emissions Reduced = GHG Emissions Reduced
22. Inputs Activities Outputs Outcomes Impact
IRIS
GIIRS
SROI
Demonstrating Value
Randomized Control Trials
23. Global Impact Investing Rating System
Environment
377 B Corporations I $1.82B
Revenues I 54 Industries I
$1M Annual Savings
Community
Workers
Governance
Pg 23
26. Inputs Activities Outputs Outcomes Impact
IRIS
GIIRS
SROI
Demonstrating Value
Randomized Control Trials
27. What is SROI?
Social Return on Investment is a framework for
measuring and accounting for the value created
or destroyed by our activities – where the
concept of value is much broader than that which
can be captured by market prices.
28. val·ue/ˈvalyo͞o/noun
the regard that something is held to
deserve; the importance, worth, or
usefulness of something
the material or monetary worth of
something
31. 7 Principles of SROI
• Involve stakeholders
• Understand what changes
• Value the things that matter
• Only include what is material
• Do not overclaim
• Be transparent
• Verify the result
32. Inputs Activities Outputs Outcomes Impact
IRIS
GIIRS
SROI
Demonstrating Value
Randomized Control Trials
33.
34. Capacity building
‘Snapshot’
Capacity
report
to use
informatio
n
Support for
Capacity
Monitoring to collect
Systems informati Clear
Developme on picture of Information
nt informatio Blueprint
n needs
38. The use of RCTs for Social Impact
Assessment: An Example
Presentation to the 2012 Social Finance Forum,
November 8 and 9, 2012
39. Challenges for Social Impact Assessment
WHAT outcomes to measure – that will best align with your
program goal
WHICH methods to use – that will best isolate program
effects and allow the attribution of these efects to your
program
HOW to quantify and monetize these effects – to
demonstrate financial viability
39
40. Demonstrating Impact
The capacity to measure the difference a new approach or
program makes.
To measure the true impact of a new program, we need to
know what would have happened if the program had not
been introduced.........we need a counterfactual:
• to account for natural maturation processes, e.g., children skills are
constantly improving
• to account for factors external to the program, e.g., state of the
economy fluctuates and influences labour market outcomes
• to account for “regression to the mean” phenomenon, e.g., lone
mothers on welfare eventually go back to work
41. Displaced workers re-integrating labour market as
a result of being offered an earnings supplement
60%
Full-Time Employment Rate
50%
40%
30%
Program Group
Supplement Group
20%
10%
0%
0 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15
Month From Random Assignment
42. Displaced workers being offered supplement
versus those not receiving the same offer
60%
Full-Time Employment Rate
50%
40%
30% Program Group
Supplement Group
20% Control Group
Control Group
10%
0%
0 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15
Month From Random Assignment
43. Why Randomized Experiments?
To measure the true impact of a new program, we need to
know what would have happened if the program had not
been introduced.........we need a counterfactual:
Random assignment of participants to a treatment group
and a control group provides the best method to create a
counterfactual
• Not the only method available
• Not always possible to do RA
44. How Random Assignment Works
Recruitment of participants
A random sample of individuals from the population that is
Note: Both program and targeted for the program intervention is recruited and interviewed
control group members
continue to have access to
Informed Consent
government programs and Potential participants sign an informed consent agreeing to be part
services available to of the experiment and provide information for research purposes
members of their
community. Random Assignment
Volunteers are assigned at random to either
the program group or the control group
Program Group
Control Group
Eligible to receive program
Ineligible
intervention
Informed of eligibility for the program
intervention and the conditions Informed of ineligibility status
attached to recipiency
Do not meet conditions for Not eligible for program intervention,
Meet conditions for recipiency
recipiency, therefore, do not but continue to be part of the study
receive program intervention for research purposes
Receive program intervention
45. Properties of RCTs / Social Experiments
With a large enough sample, random assignment insures that the
two groups of individuals are identical, on average.
• This is true for all observable and unobservable characteristics
(such as motivation, self-confidence, determination, and all other
personal attributes that can explain why an intervention will succeed
with one individual but not another)
Unlike nonexperimental methods, properly implement social
experiments are guaranteed to provide internally valid impact
estimates – no selection bias.
Nonexperimental methods may be equally reliable in any given
application; we simply cannot know a priori that they are reliable, as
we can with experimental methods – you can only match
participants on measured characteristics.
46. The Community Employment Innovation Project
A research and demonstration project testing the value of
community-based employment as an alternative to income
transfers in areas of chronic high unemployment
Two parallel but related studies
• Individuals:
• Aims to preserve employability, through faster re-employment
• Provides opportunities for skill development and strengthening of social capital
• Communities:
• Study of a model which utilizes strengths of local communities to create jobs
• Aims to support their capacity growth and improve the social economy
47. The Program Model
The Offer to Individuals
• EI and IA recipients were offered 3 years of full-time employment, on locally
developed projects in exchange for their entitlements to EI or IA
• Employment was designed to replicate full-time market jobs
• 35 hours per week, at $325 a week, EI/CPP insurable, 15 days annual leave,
medical benefits
• Support Services: some job-readiness and transferable skills training
The Offer to Communities
• 6 communities in the Cape Breton Regional Municipality were offered a free
workforce of 750 workers for up to five years
• Each community was required to elect a representative board, develop a
strategic plan, and approve projects
• Local control given to communities – explicitly links projects to local needs
48. Participants Impact Study
Key outcomes of interest
• Economic well-being
• Employment, earnings, transfer receipt, income, poverty, and
hardship
• Longer-term employability: Skills and experience
• Characteristics of post-CEIP employment, employability
skills, attitudes to work
• Social Capital, volunteering, life satisfaction
49. CEIP impacts on EI sample
100 Program Group
A 53 95 Control Group
percentage 90 Impacts
point 85
impact at 80
75
peak
70
Percentage Employed Full Time
65
60
55
50
45
40
35
30
25
20 No significant
15
10
impacts a year
5 after end of
0 CEIP eligibility
-5
-10 1 3 5 7 9 11 13 15 17 19 21 23 25 27 29 31 33 35 37 39 41 43 45 47 49 51 53
-15
-20
Months From Random Assignment
50. IA Sample: Large in-program impacts on
employment, but not sustained
100 Program Group
Nearly 80 95 Control Group
90 Impacts
percentage 85
point impact 80
at peak 75
70
65
Percentage Employed Full Time
60
55
50
45
40
35
30
25
20
15 No significant
10 impacts a year
5 after end of
0 CEIP eligibility
-5
-10 1 3 5 7 9 11 13 15 17 19 21 23 25 27 29 31 33 35 37 39 41 43 45 47 49 51 53
-15
-20
Months From Random Assignment
51. IA Sample: Permanent reductions in IA receipt
three years after CEIP comes to an end
100 Program Group
Control Group
Impact
80
60
Percentage Receiving IA
40
20
0 A sustained
1 11 21 31 41 51 61 71
12 percentage
point reduction
A stable -20
in IA receipt
42 percentage
point reduction
-40
in IA receipt
during program
-60
Months From Random Assignment
52. Impacts on Social Capital:
Sustained increase in the size of networks
Network Size
Change in number of contacts
from baseline to 54 months
2.5
2.0
54-month gain
1.5
1.0
0.5
0.0
Help with chores Emotional Specialized Help finding a job
support advice
Program Control
53. Community Engagement:
Sustained increase in volunteering and social contact
Volunteering is important to both individuals and communities
Can be an avenue to skill development, improves social
inclusion, and is a large resource for many community organizations
54-Month: Impacts on Formal volunteering with
groups or organizations
50
45
40
35
Percent
30 Program
25
20 Control
15
10
5
0
Volunteered in the past 12 Volunteered in the past 12
months months
EI Sample IA Sample
54. CEIP Theory of Change:
Analytical framework of expected change
Individual Community Response Organizational
Early Engagement Organizing, Planning, Mobilization Mobilization
Mobilization
Years 1-3
Process Process
effects CEIP Projects effects
Provide work experience and
valued community Services
Project
Development
and Interim
Effects
Years 4-5
Skill Gains,
Social
Social Capital Inclusion, Cohesion
Well Being and Community
Improves
Post-program Capacity Improves
Long-run
Effects
Years 6-7 Employment Levels, Market
Conditions Improves
55. Targeted Community Sectors
The two largest project categories were similar across communities
Youth projects were most prevalent in New Waterford and Whitney Pier
Seniors projects were at greatest scale in Sydney Mines
Figure ES.5: Percentage of Work Years Assigned, by Community and Sector Served
100%
90% Health, Environment,
Percentage of total work years assigned to a sector
Beautification
80%
Recreation, Arts and
Culture
70%
Services for the Poor,
60% Unemployed
50% Supports for Seniors
40%
Supports for Youth
30%
Other: Services for
20% the Disabled, CED
Agencies, CEIP
Boards
10%
0%
Glace Bay NewWaterford North Sydney Sydney Mines Whitney Pier
Community
56. Results: Theory Supports Observation
Preponderance of positive change in more successful communities
New Sydney Whitney North
Dominion Glace Bay
Waterford Mines Pier Sydney
Social Capital + + + + +
Social Cohesion + + + +
Social Inclusion + + + - +
Third Sector Relative Size +
Organizational Capacity + + + + +
Economic Outcomes
Social Conditions + + +
Youth Effects + + + + -
Senior Effects + + + + +
Effects on the Poor + + + +
59. Cost-Benefit Analysis Results (IA Sample)
Net benefit-cost per IA program group member over the full 54-month follow-up
Accounting Perspective
Component of Analysis Individuals Communities Government Society
Monetized components
Participant Impacts
CEIP earnings 34 344 0 -34 344 0
Foregone non-CEIP earnings -10 974 0 0 -10 974
Transfer payments (EI & IA) -11 836 0 11 836 0
Tax payments (taxes and premiums) -3 559 0 2 921 -638
Other household member earnings 2 035 0 0 2 035
Third Sector Organizational Effects
Value from CEIP jobs (to sponsors) 0 20 024 0 20 024
Volunteering (CEIP induced) 0 2 404 0 2 404
CEIP administrative costs 0 0 -4 274 -4 274
Admin costs of EI & IA transfers 0 0 471 471
Net Benefit/Cost per Program Group Member 10 010 22 428 -23 390 9 048
60. Benefit-Cost Ratio
CEIP is very cost effective when one considers the combined benefits to
individuals and community -- $1.39 in net benefits per dollar for IA
recipients
Total net benefit for every dollar that government spent on CEIP
1.60
1.39
1.40 EI Sample IA Sample
Benefit-Cost Ratio
1.20
Positive Net Present Value 1.02
0.96
1.00
0.81
0.80
0.60
0.43
0.40
0.21
0.20
0.00
Participants Communities Society
Perspective
61. Cost-Benefit Analysis Accounting framework
Accounting Perspective
Component of Analysis Individuals Communities Government Society
Non-Monetized components
Participant Impacts
Reductions in Hardship, Stress + 0 0 +
Improved Social Capital + 0 0 +
Increased Trust in Networks + 0 0 +
Foregone Leisure – 0 0 –
Community Effects
Increased Social Capital of Residents 0 + 0 +
Improved Community Cohesion 0 + 0 +
Increased Social and Civic Participation 0 + 0 +
Foregone Leisure 0 – 0 –
63. Valuing Intangibles – Examples
Social Capital – each additional contact is valued at 7% of income;
therefore CEIP impact is worth $3,808 per participant
Trust – each additional percentage point increase in trust is valued at
2.5% of income; CEIP impact is worth $2,401 per participant
Hardship – the reductions in stress associated with lower hardship
during CEIP is valued at $3,379
64.
65. Benefit-Cost Ratio
Including the intangible impacts improves the benefit cost ratio to
$1.61 in net benefits per dollar spent
About a 50 percent improvement in overall net benefit to society
Total net benefit for every dollar that government spent on CEIP
1.80
1.61
1.60 EI Sample IA Sample
1.40
Benefit-Cost Ratio
1.20
1.20 Positive Net Present Value
0.96
1.00
0.81
0.80 0.65
0.60
0.40
0.40
0.20
0.00
Participants Communities Society
Perspective
66. Take aways
To find out what difference a program makes, one needs to find an
appropriate counterfactual. RCTs provide the best approach to set up a
counterfactual and derive an Impact.
An Impact measure is required to do a proper Cost-Benefit Analysis;
and a sound CBA is needed to report on the financial viability of a
program
Analytical frameworks and Cost-Benefit Analysis should and can
incorporate social benefits
Short of convincing private sector investors or government authorities to
transform their accounting or fiscal framework to include environmental
and social benefits, attempts should be made to monetize these
benefits.
Output - # of kids in low income neighbourhoods served through after school programOutcome – graduate high schoolImpact – break the cycle of poverty
A Theory of Change would not be complete without an articulation of the assumptions that stakeholders use to explain the change process represented by the change framework. Assumptions explain both the connections between early, intermediate and long term outcomes and the expectations about how and why proposed interventions will bring them about. Often, assumptions are supported by research, strengthening the case to be made about the plausibility of theory and the likelihood that stated goals will be accomplished.
Output - # of kids in low income neighbourhoods served through after school programOutcome – graduate high schoolImpact – break the cycle of poverty
Output - # of kids in low income neighbourhoods served through after school programOutcome – graduate high schoolImpact – break the cycle of poverty
Address lack of standards that exist
So, what exactly IS IRIS?At it’s very basic; IRIS can be thought of as a Dictionary for defining the social and environmental impacts, and performanceof organizations such as yourselves, or organizations like those in many of your portfolios. A dictionary that establishes a common language. For example, if I have a company, it helps clarify that when I talk about jobs and you talk about jobs that our definition of jobs is the same. Are we talking about full time jobs? Part time jobs? Seasonal or contract? This difference matters when we are trying to figure out the quality of the job.Likewise, if I say my company has reduced GHG emissions and you say your company has reduced GHG emissions the way we calculate reductions is the same – so we can compare, so our investors can compare, and so we can benchmark our performance in our sector.
150 questions long – 2 hours to go through
stakeholder
Demonstrating Value provides a step-by-step guide (the Demonstrating Value workbook), report templates and many other resources for small- to medium-sized social enterprises and mission-driven businesses to pull together information about their social, environmental and financial impacts into a comprehensive performance snapshot. The performance snapshot can be used by management to make decisions, plan for the future and improve overall business performance. Performance snapshots are also an effective communication tool to show business impact to external audiences.The complete collection of Demonstrating Value tools and resources are offered online and free of charge at www.demonstratingvalue.org. Demonstrating Value is an initiative of the Vancity Community Foundation and is headquartered in Vancouver, Canada.How is Demonstrating Value different from other methods of social evaluation and measurement? It allows the development of different reporting outcomes based on the capacity and specific needs of the social enterprise. It sets out desirable practices in monitoring, assessment and reporting as well as helps equip the social enterprise with the means to develop these practices through tools, resources, direction to support and direct support. It links internal performance management with external reporting and accountability, resulting in efficient time and resource management by the social enterprise.It limits complicated jargon
Demonstrating Value’s philosophy about measurement and guiding framework:The Demonstrating Value workbook (and all the other tools) are based on the premise that the information you gather in your organization has to be directly relevant to the decisions you make and be compelling for others to learn about your value. To work out what information is most useful, always keep the following simple question in mind: 'What do we want to know and show?‘: i.e. ‘What information is important?' and ‘How is information used?‘The process of working through the workbook answers these questions in a structured way and is at least as valuable as obtaining the performance snapshot at the end. Achieving each milestone in the process helps build a particular type of capacity into the organization.Creating the Information Blueprint builds the organization’s capacity to describe their information needs clearly.Creating Monitoring Systems builds the organization’s capacity to collect and manage information.Creating the snapshot builds the organization’s capacity to analyze and use information to make decisions.
An example snapshot – this one is for The Cleaning Solution, a social enterprise contract cleaning company in Vancouver.This page of their snapshot shows the details of the costs of supporting their employees, approximately 70% of whom are work-ready persons living with a mental illness. The costs of employee supports are shown as a total, categorized by type of support and by issue supported, as an average per employee, and as a percentage of gross revenues.The full snapshot is available on the Demonstrating Value website.
Contact us via twitter and/or the website for more information. We are very interested in working with enterprises, consultants and funders/investors who need to evaluate and communicate the value of their work.Garth or Sarah will be happy to answer your questions!
CEIP is an active re-employment strategy, which takes the form of a “community wage” paid to unemployed individuals who volunteer to work on locally developed community-based projects. Take the funding that would be otherwise paid in EI and SA benefits and transform these expenditures into wages for social economy jobs that serves the community. Beyond fulfilling the need for immediate employment, CEIP hopes to influence participants’ longer-term employability by helping them preserve and possibly improve their human and social capital. At the same time, CEIP aimed to facilitate community development by supporting the “third sector” and encouraging activities that are meaningful for both the participant and the community Consequently, HRSDC and the Nova Scotia Department of Community Services (NS-DCS) decided to test CEIP under real-world operating conditions, and to evaluate it using the most rigorous evaluation methods available. CEIP was implemented in the Cape Breton Regional Municipality (CBRM) in Nova Scotia in 1999. Since the late 1980s, labour market policy discussions have shifted towards what is known as active labour market policy measures. The idea is that transfer programs should encourage recipients to work rather than passively providing cash benefits, regardless of whether they work while receiving them. This interest in active measures has affected policy developments in EI, and is relevant to CEIP’s rationale and design.Parallel to these shifts in employment policies, there has been a growing interest in alternative sources of job creation and mechanisms for supporting local development. In recent years, governments have attempted to form partnerships with non-governmental institutions in pursuit of social objectives, with considerable attention paid to the possible role of the social economy in helping to facilitate economic adjustment or to strengthen the ongoing life of communities. While definitions of the social economy vary, a common element is that of organizations and institutions, which neither entirely produce goods and services for sale in the market, nor entirely operate as part of government , but which share characteristics of both private and public sectors – often referred to as the “third sector.”7
Blue line the program group, those participating to CEIP projects: Nearly 90% of the program group was employed full time during the projectNote the control group, those participating to the study to provide counterfactualReal impact of the program was a maximum of 53 percentage points in month 3, and 36 percentage points just before the end of the projectThen we includes 12 months following period of 3 years eligibilityProgram group dips under the control group, as CEIP projects come to an end, loosing 15 percentage points to the control group. Then comes back as participants exhaust their EI benefits. So the impact of the quantity of employment in the long run is 0 for the EI recipients. But not on the quality of employment as we will see in a minuteWe would have preferred to make these jobs non-EI insurable. Note that some 10% of projects remain active after closure, hiring some 30 people with their own means
AT 54-MONTHS:This chart presents the CHANGE in NUMBER OF CONTACTS that the EI sample experienced from baseline to the 54-month follow-up, broken down by the different resource types (again, the program group is in blue; control group is in burgundy) It seems like Program group members experienced a large increase in network size, but in particular, the differences are statistically significant for contacts for specialized advice and help finding a job - those resources associated with bridging and linking social capitalThis is a striking and important finding, as this is one of the few studies that demonstrate unequivocally that governments can influence social capital directly