What difference does philanthropy make? When the benefits
of a donation are intangible, or may not be realised for a decade
or more, assessing outputs is not straight forward. How does a
donor measure social returns?
Social returns
What do we mean by the term “social returns”? It is
not a clear concept with a universally agreed meaning. It’s
generally taken to mean outcomes beyond the purely economic - things
like:
•
wellbeing;
•
social cohesion;
•
feelings of inclusiveness;
•
willingness to work together;
•
cultural participation; and
•
environmental outcomes.
We are talking about measuring change in all sorts of intangibles
- confidence, knowledge, community bonds, attitudes and behaviours.
If it’s intangible, why do we measure it? To know how to
do anything we must first know why. We measure social returns
so that we know what works and what doesn’t, and whether
we’re
accomplishing what we set out to do. If we can’t measure
it we can’t justify doing it. In a fast-paced society,
the old business adage applies: what gets measured gets done.
“
To measure” means (among other things) to gauge, estimate
or quantify against a standard - but this kind of measurement is
relatively new in the non-profit sector and there are no universally
accepted standards.
It’s no wonder that many donors concentrate on the inputs
- such as administration costs, fundraising costs, and so on -
which they can hold against some easily accepted standard. They
do this because it’s so difficult to measure outcomes. In
this void of information they look to input costs as a default
to evaluate not-for-profit organisations and programs.
The giving community
Measurement is particularly important now because the characteristics
of the giving community are changing. Over the past ten years
a number of new players have come to prominence, who will only
fund
well-researched, well planned projects with plenty of evidence
to back up the ideas.
Who are these new donors?
First, corporate Australia is becoming increasingly sophisticated
and prominent in the way it approaches its philanthropic work
and social investment, community involvement and community
development.
Second, we have PPFs (Prescribed Private Funds), a rapidly
growing form of private foundation. In the past, many trusts
and foundations
in Australia were established by bequest. This new structure
has attracted a new class of living donor. Many of the donors
who have
established PPFs are self-made businesspeople who have been
giving informally for many years.
Third, we now have a generation of women who have made their
own money rather than having inherited it from husbands or
parents.
And we have a new class of donors - those who may not be in
a position to establish a foundation at this stage, but who
are
nevertheless
making substantial donations to charity - often in the tens
of thousands every year.
All these donors have a number of characteristics in common.
•
They are people who are used to the concept of doing business globally.
For this reason, their idea of community is global and all-encompassing.
They don’t see their community as part of the world: they
see the world as their community. These are donors who wish to
be active both inside and outside Australia, they wish their giving
to encompass a wide realm.
•
These are business people and they understand the language of business
(and they are often bewildered by the language of the not-for-profit
sector). In general they are well-informed, sophisticated and confident.
They are much less inclined to rely solely on external advice,
and far more likely to actively investigate problems, projects
and potential solutions. In some cases they will wish to apply
their own business skills to assist the organisation or project
they are donating to.
•
These donors don’t assume that good intentions are sufficient
assurance of doing good. They don’t want to rely on the recipient
to know the best way in which to use the money. They want to be
provided with measurable outcomes for their donation.
Other factors are also influencing the way donors behave:
increased scrutiny of charities and calls for their accountability,
our
increasingly fast-paced lifestyles, and the abundance of
choice in our lives.
We are geared to demand more knowledge, more input, and more
choice. Not only corporations and foundations, but even individual
donors
giving comparatively small amounts want to know what happens
as a result of their donation. This is why programs which
sponsor children, or buy a goat for a village, are so popular
- people
see what has happened as a result of their donation and they
feel
informed enough to make a decision about whether they want
to donate in that way again.
Measuring change
For philanthropy, there are some inherent difficulties in
this trend.
We are dealing with people, behaviours, environmental and
social issues, not just numbers. How do we measure not just
the number
of people who attended a program, but the long-term behavioural
or attitudinal changes which resulted? And although we are
dealing with issues which require long-term societal change,
we live
in a society where we want everything NOW. Instant gratification
is
available in so many arenas that we have become a society
focused on the short term.
We want the problem solved in one year, three years, five
years. Few donors are willing to give funding over a ten-year
period,
or to wait 25 years to know whether their donation is making
a difference. How do we deal with our need to measure when
faced with projects which require 20-plus years to effect
real and
lasting
change?
What we need is to develop new frameworks and new standards
to measure social returns. We need to educate donors that
these things do take time. It’s about managing expectations
- both around timing and the type of outcomes that they envisage.
We need to
remind “funders” that some of the shorter-term
benefits of a program may just be achieving goals on the
way to a much longer-term
outcome. And we need to measure the wider impact on the community
- that which may be a less direct impact, far removed from
the time span or direct users of the program itself.
For instance, with a program whose aim is to keep students
at school, the numbers will certainly have to be reported:
how many
students
stay during and after the program as opposed to before. But
we also need to report on the behavioural and attitude change.
You
can evaluate the fact that they are staying in school, but
how do you evaluate the factors which have made them want
to stay?
More importantly, how can we work out whether by staying
at school they have actually benefited? And what has the
effect
been, not
just on those students, but on the entire community? This
is what we mean by social returns.
Frameworks for evaluation
Those working in the environment arena, such as the Australian
Conservation Foundation, deal with outcomes that are very
long term and difficult to measure. They break their programs
into
individual, measurable steps, so that instead of reporting
a large amorphous
outcome, they are reporting on where they are up to within
the context of a larger long-term objective. A donor may
be asked
to fund one stage of a project, in the full understanding
that it
is one brick in the wall and that all stages will need to
be completed before the full outcomes are known. This incremental
measuring
also means that we can see how long-term these projects truly
are.
There have been steps taken towards a new framework for evaluation
which takes both long-termism and intangible outcomes into
account. While in the US recently I attended a session, presented
by Melanie
Moore Kubo from See Change Evaluation and Judith Rosenberg
from a social change organisation called TEAMS, about a new
model
for evaluation of community change. They have developed a
model and
framework based on slowly developing Neighbourhood Action
Teams - giving skills, confidence and support to empower
local community
participants to take action, to generate and control capital
for both themselves and for the benefit of their communities.
The challenge with this program for donors is that there
is no “end
outcome” - instead the long-term goal is to keep doing
Neighbourhood Action Teams. This can be quite confronting
for the donors. The
outstanding part of this program is the sustainability that
the training provides, as once participants have gained skills
they
take them with them, using them in a different context, generating
momentum and causing a ripple effect. It’s about building
peoples’ ongoing ability not just to acquire jobs,
for example, but to create jobs, manage them, and make effective
and ethical
use of the money they generate. It’s a never-ending,
evolutionary process.
The value of stories
Even for a process without an end, there are tools which
can be used to monitor and measure progress. For instance
carefully
constructed
documentaries on video can be used to explain and display
change in communities, relying on both the scientific and
the personal
to demonstrate results.
Numbers will always be part of the evaluation - but when
dealing with social returns, they can never be the whole
evaluation.
The type of project we are dealing with will determine the
extent to
which numbers are a part of it. Stories must remain a vital
part of measuring the social return; because they feed the
joy of
giving.
Another approach to measuring social returns is the Social
Return on Investment model - SROI. This model was developed
by the Roberts
Enterprise Development Fund in California to measure the
social returns of its work in dollar terms: Social Ventures
Australia
are also doing some work with this model.
Let me give you an example of this measurement tool in action.
A UK program called Getting Out to Work provides intensive
one-to-one support and advocacy to young ex-offenders to
help them find
and sustain long-term employment.
The Getting Out to Work program is measured in terms of the
project’s
impact on the people who took part in the project and the
communities where they live. The social returns which were
taken into account
include the increase in the personal income of the people
participating in the project, the value created for the government
because those
people are no longer on unemployment benefits and are paying
taxes, and the social benefits such as reduced crime. An
independent evaluation
has measured all these impacts in money terms and estimates
that for every pound invested in the program, £10.50
of social value is created for society.
We can see that there isn’t just one model for evaluating
social returns, there are several and no doubt many more
will be developed in future.
Donors need more sophisticated ways to help make decisions
and allocate funds: conventional methods of measuring economic
value
for money need to be set within a framework which includes
a wider understanding of the full value of a project or organisation’s
work. We are only at the beginning. But the beginning is
the right place to be, because that’s where this kind
of measurement needs to begin!
The important thing is to start out knowing what you want
to achieve. It really comes back to pre-planning; articulating
what you want
to do; what evidence you have; and how you will know that
you’re
on the right track; and when you have got to the point where
you feel you’ve succeeded. The time to start this process
is not at the end of the project, but at the beginning -
and to build
that evaluation into every step along the way.
This is an edited version of a paper first presented at the
Not-for-Profit Finance Forum, July 2006. The original paper
is available on
Philanthropy Australia's website. http://www.philanthropy.org.au/
Gina Anderson is the CEO of Philanthropy Australia.
This work is licensed under a Creative
Commons License.
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