Trends and challenges on impact measurement in Brazil
This blog was written by IDIS – Institute for the Development of Social Investment. If you wish to write for the SVI Blog, please contact email@example.com.
What is impact measurement?
Impact measurement is a growing trend among philanthropists and social investors worldwide. Organizations are becoming more concerned about assessing how impactful their projects and programs are, and grantmakers are interested in verifying whether their resources are being allocated in initiatives that bring effective benefits to society.
But what is impact and how can it be measured? This article gives an international perspective on the topic, presenting IDIS’ experiences in Brazil.
Impact is the social change produced by a project or program. While results (or outcomes) relate to concrete, short-term achievements and can usually be measured objectively, impact may have a more subjective nature. It is related to the idea of transformation. When we measure a program’s impact, we evaluate how it changes the lives of those involved. In other words, it is a reflective practice that aims to discover whether an initiative effectively achieved the social transformation it envisioned.
There are many reasons why impact measurement is a valuable strategic tool. It provides organizations with facts and evidence about their work. It provokes reflection and supports their decision-making process. Moreover, it is able to establish causal links with the activities and their effect, to see what is causing real change and what is not. So it means more than evaluating the impact – it is also about learning where the impact comes from, what stimulates it, and what hinders it. Impact measurement also helps with resource mobilization, attracting investors and building trust and transparency. Finally, impact measurement can be used to strengthen dialogue with the public sector as well, helping organizations to advocate for improvements in public policies and to scale effective social programs.
Thus, impact measurement studies go beyond the monitoring of results, digging deeper into the cause-effect relationships between a program’s activities and everything they unfold in people’s lives. This can be a complex task, especially with programs that deal with abstract issues such as empowerment, social skills, among others. Even if this kind of impact is easily perceived, it is difficult to measure and to be translated into more objective terms.
What is SROI and why is it useful?
The Social Return on Investment, or SROI, is a method of measuring impact by comparing the value of the resources allocated in a social program or project with its social and environmental value. It is a way of estimating the worth of intangible assets that cannot be bought or sold.
SROI is a powerful way of measuring impact, which transcends the social impact monetization. It is true that the monetization is what frequently attracts social investors towards SROI, and many of them consider it as the main focus of this type of study. However, it is a rich and insightful process. Much more than informing the social return on investment, in each of its steps an SROI study can reveal valuable information about the project or program.
A key aspect about this methodology is its focus on the beneficiary’s perception – the involvement of stakeholders is one of SROI’s principles, meaning that social impact must be assessed through the experience of those who are directly involved in the social project. Moreover, this method favors the integration of both qualitative and quantitative data: the first provides a clearer vision of the nature of the project’s impact via testimonials given by its stakeholders. Additionally, it can lead to insights on how the project can be improved and become more impactful. The quantitative approach, on the other hand, allows working with statistically significant samples and measuring the intensity of the changes they perceived. Moreover, the monetization of the impact and the calculation of the social return of the investment is positively perceived by philanthropists and social investors.
The demand for impact measurement and SROI in Brazil
In spite of the increasing demand for impact measurement in Brazil, this is still an underdeveloped practice. Its concepts are often misused or unclear, and organizations struggle to define impact indicators. For instance, many of them state that they measure their impact, when they are actually measuring their results, informing the amount of people their projects attend, the number of families they reach, etc. Of course, assessing the organization’s results is very important and should be done regularly. Nevertheless, evaluating impact is a deeper process, an opportunity to reflect upon how a project can provide social value to its beneficiaries and to society as a whole.
The challenge is even bigger when we talk about SROI specifically. The monetization of impact is a hard task, due to the lack of financial proxies databases in the country. Therefore, when establishing proxies’ values, one needs to collect data from primary sources, because there are almost none secondary data available to support the study.
We still see the need to disseminate knowledge about this topic in Brazil, emphasizing the importance of assessing the impact of social projects and programs, even with the complexities and limitations this process entails. Impact measurement may not always result in precise conclusions, but it is undoubtedly preferable to have indications about the social changes caused by a project than to have nothing at all.
Aside from IDIS advisory work, in which we have been implementing several impact measurement studies, we seek to disseminate evaluation concepts and practices and make more organizations interested in this topic through events, publications, social media channels, among others.
What’s next for impact measurement?
We hope that, in the future, impact measurement becomes part of the conception and planning of social projects and programs. Both social organizations, philanthropists and social investors need to recognize how essential this practice is, and work together to strengthen and disseminate it.
We also hope that impact measurement influences public policies, by evidencing the value of projects for social development and contributing to scale solutions. It is worth mentioning an example for this: in 2016, IDIS conducted an SROI study for a project dedicated to early childhood development in the Amazon region. Due to its positive results and to the notable social change the project promoted to its beneficiaries, it became a public policy – reaching a much larger population and improving the lives of more children. Initiatives like this could be more common if we built a culture of impact measurement in Brazilian organizations and more ambitious, in public policies.
New technological tools may also contribute to the future of impact measurement, reducing its cost, information collection necessary time and increasing the precision of the evaluation. Data collection and analysis shall become easier, faster, and will allow the assessment of social change in the long term. Technology can provide impact evaluation with more resources to increase its adoption and allow our societies to learn important information about solutions that can be taken to scale to benefit the most in need.
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