• What we do
  • The People
  • About Us
  • Why Innovation Africa
  • Contact Us
Innovation AfricaCreating the Future Today
  • Feature Articles
  • Innovation
  • Agriculture
  • ICT
  • Technology
  • Entrepreneurship
  • Health
  • Store
  • Contact Us
Menu
  • Feature Articles
  • Innovation
  • Agriculture
  • ICT
  • Technology
  • Entrepreneurship
  • Health
  • Store
  • Contact Us
  • Let’s Be Realistic About Measuring Impact

    March 15, 2013 Editor 0

    “Measure impact” has become a mantra for creating social change. Claims about making a difference are no longer sufficient; evidence of how much difference you’re making is now required. We should applaud this trend, because results are sometimes ambiguous and claims often go unsubstantiated. But does it really make sense for all mission-driven organizations to measure their long-term impact on society?

    Rather than engage in a debate about what one should measure, let’s take a look at what thoughtful organizations actually are measuring. I studied three organizations at the vanguard of performance measurement: Acumen Fund, Robin Hood Foundation, and Millennium Challenge Corporation (MCC). All three provide capital to organizations on the front lines of social change, either as investors or grant makers.

    What do these organizations seek to measure? It turns out that they assess different things: Acumen measures immediate outputs, such as mosquito nets made and distributed, Robin Hood focuses on long-term outcomes in the lives of individuals such as gains in future income, and MCC aims for both individual outcomes and broader impacts on society such as reduction in poverty rates.

    Let’s start with Acumen Fund, a venture philanthropy firm with a portfolio of over 75 investments in social enterprises in Africa and Asia. Its primary social metric is the number of lives reached in base-of-pyramid markets. This means that for a company that manufactures anti-malarial bed nets, Acumen will count the number of nets manufactured and distributed. For an enterprise that builds toilet and shower facilities in urban slums and business districts, it will tally up the number of times the toilets and showers are used.

    But why stop at these output measures? Why not go all the way and measure outcomes like reduction in malaria or improvements in health and environment? Brian Trelstad, Acumen’s former CIO, is blunt about why not: it’s complicated, expensive, and often impractical for early-stage enterprises. Instead, Acumen’s strategy is to review the literature and consult experts to establish a link between a specific output and impact (for instance, how bed net distribution leads to malaria reduction) and to then count the outputs.

    Robin Hood, on the other hand, is a grant-making foundation created by hedge fund managers with a penchant for hard numbers. With a mission to fight poverty in New York City, the foundation puts each of its 200-plus grants through a cost-benefit analysis every year. One of its primary metrics is the expected increase in lifetime earnings of its clients. For grants focused on education, for example, its staff first identifies a set of results that can be immediately observed — such as school attendance, standardized test scores, and high school graduation. Then, they search for studies that link those measures to expected lifetime earnings or quality of life. For instance, some longitudinal research suggests that a 10% increase in test scores is correlated with a 4% increase in high school graduation rates, which in turn is associated with $6,500 in increased income per year. Robin Hood uses these figures with caution, employing them as placeholders for estimating benefits until better research comes along.

    The MCC’s approach is even more complex as it operates on a 20-year time horizon. The U.S. government agency makes grants to emerging market countries to reduce poverty through economic growth. Its extensive due diligence process — often two years long — first analyzes the barriers to economic growth in the country, and then identifies the sectors where the grants would most likely reduce poverty. For example, the MCC awarded $547 million to the Government of Ghana to build roads and ferries to get farm goods to market. To start, it estimated the number of farmers likely to benefit, and what those benefits would be: reduced cost and time of getting goods to market, access to new markets, and opportunities for wage employment. These data were used to anticipate an economic rate of return, with the primary outcome metric being increases in farmer incomes, along with impact metrics such as a reduction in regional poverty rates.

    Once a contract is signed, a monitoring and evaluation process kicks in to allow for mid-course correction. Benefits are expected to begin accruing only after five years, once the infrastructure is built and operating. The MCC plans to eventually conduct long-term evaluations, but has not yet done so.

    Notice that none of these three organizations typically measures impact directly. They hypothesize what the outcomes and impacts might be but only in some instances are they able to follow through by commissioning their own research or multi-year evaluations. And these are sophisticated funders and investors who are much better positioned to measure long-term results than the front line organizations that contend with funding shortages and operational challenges every day.

    So what does their experience mean for other organizations trying to prove their mettle through measurement? Surely measuring impact matters but we need to be realistic about the constraints. It requires a level of research expertise, commitment to longitudinal study, and allocation of resources that are typically beyond the capabilities of implementing organizations. It is crucial to identify when it makes sense to measure impacts and when it might be best to stick with outputs — especially when an organization’s control over results is limited, and causality remains poorly understood.

    Overcoming these obstacles will require investors and front line organizations to make a long-term commitment to research and collaboration. Simply repeating the mantra of measuring impact won’t get us there.

    Scaling Social Impact
    Insights from HBR and The Bridgespan Group
    • Why Don’t the Best Nonprofits Grow?
    • How General Mills Uses Food Technology to Make an Impact in Africa
    • Accountants Will Save the World
    • Give Us Feedback and Get a Free HBR Article


    Go to Source

    Related Posts

    • CO-OPERATION – THE MISSING VALUE OF BUSINESS EDUCATIONCO-OPERATION – THE MISSING VALUE OF BUSINESS EDUCATION
    • Why Organizations Should Embrace Randomness Like Ant ColoniesWhy Organizations Should Embrace Randomness Like Ant Colonies
    • Innovation and learning through knowledge gatekeepers: a critical examination of the relationship between trust, openness, and the use of gatekeepers in organisationsInnovation and learning through knowledge gatekeepers: a critical examination of the relationship between trust, openness, and the use of gatekeepers in organisations
    • Rethinking the Work of Leadership
    • The Next Big Opportunity for StartupsThe Next Big Opportunity for Startups
    • Innovate and Scale: A Tough Balancing ActInnovate and Scale: A Tough Balancing Act
    Sovrn
    Share

    Categories: HBR, Insights

    Tags: MCC, Measure impact, Organization, Robin Hood, social

    Tanzania: TCAA to Digitalise Transmission of Flight Plans Seedstars World – Discovering the best startups in emerging & fast-growing startup scenes | Application deadline: 31st March, 2013

    Leave a Reply Cancel reply

    You must be logged in to post a comment.

Subscribe to our stories


 

Recent Posts

  • Entrepreneurial Alertness, Innovation Modes, And Business Models in Small- And Medium-Sized Enterprises December 30, 2021
  • The Strategic Role of Design in Driving Digital Innovation June 10, 2021
  • Correction to: Hybrid mosquitoes? Evidence from rural Tanzania on how local communities conceptualize and respond to modified mosquitoes as a tool for malaria control June 10, 2021
  • BRIEF FOCUS: Optimal spacing for groundnuts in smallholder farming systems June 9, 2021
  • COVID-19 pandemic: impacts on the achievements of Sustainable Development Goals in Africa June 9, 2021

Categories

Archives

Popular Post-All time

  • A review on biomass-based... 1k views
  • Can blockchain disrupt ge... 760 views
  • Apply Now: $500,000 for Y... 751 views
  • Prize-winning projects pr... 711 views
  • Test Your Value Propositi... 686 views

Recent Posts

  • Entrepreneurial Alertness, Innovation Modes, And Business Models in Small- And Medium-Sized Enterprises
  • The Strategic Role of Design in Driving Digital Innovation
  • Correction to: Hybrid mosquitoes? Evidence from rural Tanzania on how local communities conceptualize and respond to modified mosquitoes as a tool for malaria control
  • BRIEF FOCUS: Optimal spacing for groundnuts in smallholder farming systems
  • COVID-19 pandemic: impacts on the achievements of Sustainable Development Goals in Africa
  • Explicit knowledge networks and their relationship with productivity in SMEs
  • Intellectual property issues in artificial intelligence: specific reference to the service sector
  • Africa RISING publishes a livestock feed and forage production manual for Ethiopia
  • Transforming crop residues into a precious feed resource for small ruminants in northern Ghana
  • Photo report: West Africa project partners cap off 2020 with farmers field day events in Northern Ghana and Southern Mali

Tag Cloud

    africa African Agriculture Business Business model Business_Finance Company Crowdsourcing data Development East Africa economics Education Entrepreneur entrepreneurs Entrepreneurship ethiopia ghana Health_Medical_Pharma ict Information technology Innovation kenya knowledge Knowledge Management Leadership marketing mobile Mobile phone nigeria Open innovation Organization Research rwanda science Science and technology studies social enterprise social entrepreneurship south africa Strategic management strategy tanzania Technology Technology_Internet uganda

Categories

Archives

  • A review on biomass-based hydrogen production for renewable energy supply 1k views
  • Can blockchain disrupt gender inequality? 760 views
  • Apply Now: $500,000 for Your Big Data Innovations in Agriculture 751 views
  • Prize-winning projects promote healthier eating, smarter crop investments 711 views
  • Test Your Value Proposition: Supercharge Lean Startup and CustDev Principles 686 views

Copyright © 2005-2020 Innovation Africa Theme created by PWT. Powered by WordPress.org