Impact Assessment and Measurement
Measurement and the New Capital Movement
Published August 13, 2009 @ 08:05AM PT
Primarily profit seeking investors have a plethora of tools at their disposal designed to help them understand the opportunity and risk and success and failure of their investments. Yet for social investors - be they traditional philanthropists or the new group of socially-focused venture capitalist - the tools to understand the comparative opportunity of an enterprise in terms of each of the financial, social, and environmental bottom lines have been woefully lacking. That's about to change.
At this year's Social Capital Markets conference, a new rating system called the Global Impact Investing Rating System (GIIRS) will be unveiled. The system is designed to make it easier for investors with an impulse to use their capital for good understand the comparative advantages and opportunities of any social enterprise.
In a post explaining the new system and announcing it's unveiling, SoCap09 convener Kevin Jones uses the example of an investor who wants to create jobs in the developing world as part of their social impact to explain the system. "A job on a fair trade farm, for example, may only be seasonal, compared to a job in the city. But on the other hand, that rural job can help hold a rural community together rather than forcing wage earners to move to unsanitary and unhealthy slums in a major city."
The idea is that GIIRS gives an investor the power to think about these options in complex terms, and the goal is for the system to be pretty comprehensive, with investors being able to compare similar terms in fields as diverse as microfinance, health care, literacy...basically anything you see on Change.org.
I've been working out of the office where SoCap09 is being planned for the last couple weeks, and there's something palpable about the excitement around this initiative. Because while what has previously made news in the social entrepreneurship space is new grant awards and innovative new organizations, the implications of this system are much larger.
I believe that the tide is shifting dramatically towards a new moment in which people are looking to integrate their values across all of their interactions with the world, including investments. This movement is particularly strong among young people, where the Genie of doing good has been let out of the bottle, and is not going back any time soon.
If the GIIRS system is successful, it would be one of the most important infrastructural shifts in social enterprise to date. That said, there are of course significant challenges.
It's a tool that has come from the collaborative work of some of the best and most active minds of the space, but it still relies on a common taxonomy of terms that have tended more often to be debated than agreed upon. There will be kinks to be worked out as people get comfortable with a common language.
What's more, the recent conversations surrounding the Tactical Philanthropy blog about investing in high-performing vs. high-impact nonprofits demonstrates that when it comes to how an investor or philanthropist makes decisions about social and environmental impact, there is huge room for subjective assessment. We still have a long way to go before we have systems of measurement fully equipped to handle the huge array of human impact we're looking to achieve.
But this tool also comes at an amazing time. In some ways, I look at it and see an initiative which has a few years to work out the kinks before my generation has the sort of income where impact investing actually becomes a major part of how we contribute to the world.
To learn more about the initiative, check out Kevin Jones' post about it on the Social Capital Markets blog, or visit the Global Impact Investing Network website.
Photo: Leonardo da Vinci's Vitrvuvian man, an example of the Renaissance interest in better discovering and measuring the human body and the world in which it existed.
Featuring Steve Wright from the Salesforce.com Foundation
Published July 14, 2009 @ 09:21AM PT
A couple months ago, we featured a guest post by Steve Wright, Director of Innovation at the Salesforce.com Foundation. The post, "Reimagining Value for the Post Crisis Economy," became one of our most popular ever, garnishing nearly forty comments from social entrepreneurship luminaries across the space.
About a month ago, I invited Steve to follow up that stellar piece with something focused more directly on his particular passion for social impact data. As the Director of Innovation at the Salesforce.com Foundation, Steve has had the chance to work with some innovative projects around improving the way we collect and use data to determine our social impact, such as the Acumen Fund initiated PULSE Project.
Steve's new piece, "A Brave New World of Social Impact Data," is an incredibly important rumination on how to better use data to understand and increase our impact. The key graph for me:
As I see it, markets represent the physics of social change. Understanding their rules is critical to approximating an empirical understanding of social impact. At the moment, in the social sector, we operate in two disparate, conflicting marketplaces. The first is characterized by transactions and competition and the second by ideas and collaboration. It is my belief that we need to find synergies between these two markets if we are to create lasting global solutions. To a large extent, in the same way that an individual organization focuses on the change that it can make, the role of the market place is to focus on the change that can be made globally by leveraging the strengths and weaknesses of the network as a whole, both the nodes and the connections between them.
Yesterday we had some technical, and the post was published in incomplete form and under my byline, but we've corrected that now, and you can read the complete work here: "A Brave New World of Social Impact Data."
Check out Steve's older piece, "Reimagining Value For A Post-Crisis Economy," as well.
Steve is one of the many incredible speakers featured at the upcoming Social Capital Markets conference, being held in San Francisco at the beginning of September. In it's second year, SoCap convenes innovators across the blended value space and works to demonstrate the ecosystem emerging around good capital. Check out their full schedule here.
A Brave New World of Social Impact Data
Published July 14, 2009 @ 08:30AM PT
(This post was written by Steve Wright, Director of Innovation at the Salesforce.com Foundation. We're having some technical difficulties but will correct the byline as soon as possible)
It is my intention to provide a practical explication of systems for social impact data collection and reporting. I will try not to make it as dry as it sounds.
The Direction in Which we Must Err
I believe that despite the enormous odds which exist, unflinching, unswerving, fierce intellectual determination, as citizens, to define the real truth of our lives and our societies is a crucial obligation which devolves upon us all. It is in fact mandatory.
If such a determination is not embodied in our political vision we have no hope of restoring what is so nearly lost to us, the dignity of man.
* Harold Pinter Dec 7th, 2005 Nobel Prize for Literature acceptance speech
I love the above quotation from Harold Pinter because, for me, it clears the fog. It makes clear the "why". Why do we do this work? Why does it matter? Why do we care? I believe that it is important for us to make all of our mistakes in the direction of greater social impact, that we share too openly, that we place our humanity in front of our economy, that we transact specifically as our contribution to evolution.
Mother's Day Flower Fail and the Power of Feedback for Aid
Published May 11, 2009 @ 01:48PM PT
What if we could amplify, aggregate, and publicize the feedback loop in international development?
There is an interesting story TechCrunch just posted about the anger the Twittersphere is expressing towards flower companies for failing to deliver flowers on time for Mother's Day. Very reasonably angered customers have been venting and sites like Twendz.com have been keeping track of the collective sentiment.
We did a sentiment analysis
of tweets about FTD’s brand using Twendz,
Interestingly, another well-known flower company is trying a proactive approach to make amends:
There is also negative buzz on Twitter about 1800Flowers.com
This is the power of real-time feedback and new communications channels for instant responsiveness. Nothing like this currently exists in the world of international aid. There is simply no good, scalable way for individuals around the world to give feedback on aid and development programs.
But as cell-phones become increasingly ubiquitous, and as people build services aimed at extending access - even if its not full time access - to communications technology across the whole of the base of the pyramid, there would seem to be an opportunity for someone to build a tool or service that makes it easier for people to report and reflect on the services they're supposed to have access to.
In the short term, this might be a scary loss of power for some organizations, but I have to believe that in the long-run, we understand that this sort of listening loop is not about "proving" your organization is doing good work but constantly working to improve your impact.
