Put a few social entrepreneurs in a room and wait for few minutes. Three themes of discussion will emerge within 10 mins. Funding is scarce. Hiring Sucks. And Impact measurement is tough.
And impact measurement is the toughest amongst these three. FOr some reason, most of us have reconciled ourselves with the first two. Third one bothers us. And my sense is that most entrepreneurs started with the mission to create impact. And it worries that the impact that thought they will have is either not quantifiable or not clear enough to satisfy various stakeholders.
One such discussion happened at a recent workshop hosted by SEAD, IPIHD, Ashoka and NASE. How do we measure impact of our work which is in line with investors and stake holder expectation, yet we dont end up spending a whole lot of money on the measurement itself.
What emerged was that at different stages of the evolution of the social enteprise different metrics of impact are relevant and measurable. If we take the iooi model of impact evaluation (Input-Output-Outcome-Impact) it would make sense for an early stage social enterprise to focus only on measuring input metrics. And maybe growth stage to measure outcome metrics. What was not clear was when do we go from Input to Outcome to Impact. In my mind, Impact measurements only make sense when the enterprise has scaled significantly, and typically 8+ years into its existence.
The second debate around impact measurement and reporting is who pays for it. Initial stages, some grant funding or investors might willing to pitch in, but if a social enterprise labels itself as such, it seems appropriate that the enterprise builds this into its cost structure. Just like we do statutory audits etc. If creating impact is the core of the organisation, then reporting impact should also be integral.
One side discussion which is always interesting is how do i convince an impact investment fund that we are a social enterprise. My take, you dont, they have to convince themselves. THe logic is that if an impact fund, like any other sector focused fund should have its own evaluation metrics to qualify a social enteprise if it will create impact in line with the fund’s mandate or not. Some will fit that criteria, some will not. The social enterprise doesnt have to jump through hoops to justify. Its tablestake for the funds.
Impact measurement will continue to evolve. We will continue to debate and refine the models. But one things seems clear. Inspite of all the challenges on a day to day basis, more and more people are looking to be changemakers. And its heartening to see people from all ages, sectors, backgrounds and education wanting to make a difference.