Determining Impact and Return of Community Investment and Development - 2011

Determining Impact and Return of Community Investment and Development - 2011

• 1.
  Methodology to measureimpact and return on investment of corporate and community investment BSEI 2011 Reana Rossouw Next Generation Consultants
• 2.
  Why the pressureto measure? • The debate on impacts and return on investment are playing out in three arenas: – In private foundations and corporate CSI/CR divisions • Aiming to be more strategic about their philanthropy, grant making and social/community investments – In nonprofit organisations in response to pressures from corporates, foundations and government – • To be more accountable for the investment and program outcomes – Among international development organisations such as bilateral government agencies and non governmental organisations (NGOs) • Seeking to improve development effectiveness and lessen dependency on grant/development aid
• 3.
  Variety of purposes •One can and should use cost and impact data to make funding allocation decisions across program areas • You can compare programs once you get in the sector of global health, but you cannot compare global health vs. arts vs. education vs. sport. • One can and should use cost and impact data to make funding decisions within program areas • It is not about building a unifying measurement across domains, but to build a conceptual framework of having the biggest impact across a dollar (Rand value) unit. So it is not about comparing health to education to sport or the arts, but to determine which program yields the highest return for the most effective use of resources
• 4.
  Three Primary applications •Prospective – Looking forward to determine whether or not the projected costs and benefits indicate a favourable investment • Ongoing – Testing assumptions and projections along the way in order to aid course correction • Retrospective – Looking back to determine whether or not it was a favourable investment given the costs incurred, in order to inform future decisions
• 5.
  What do wewant to achieve? • To provide evidence • To demonstrate performance • To prove accountability • To show program effectiveness • To demonstrate value • To contribute to a community’s self- sustainability • To empower communities and funders • Ultimately - to alleviate poverty
• 6.
  Impact Value Chain- Our Formula Hierarchy Inputs Outputs Outcome Impacts Returns Definition Resources Goods and Expected changes Ultimate (long- Direct or indirect invested (e.g. services in access, usage, term) effect of business money, skills, generated by the behaviour or the intervention benefits/ value etc.) use of inputs performance on a key generated by (short-term) (medium-term) dimension of the activities/ development programs/ (e.g. living interventions standards) (long- term) Qualitative Value of Number of % change – Students finding Number of Indicators investment, schools, number access to health employment, graduates hired number of hours, of volunteer, services, people with skills by company, % number of books, number of education, finding change in hours teachers, government employment grievance, students infrastructure, complaints pass rates received by company Qualitative Stakeholders Perceptions of Beneficiaries Quality of links to Changes in indicators satisfaction with schools, reporting benefits local employment community / the programme educators, and application of opportunities, customer/ learners, skills, education perceptions of employee improved socio perceptions economic status attributable or opportunities directly/ indirectly to CSI
• 7.
  Impact Assessment –HOW?
• 8.
  Dimensions of Impact– WHAT? How do we calculate? 1. We count each and every stakeholder group 2. We count each and every impact 3. We distinguish between community and business impact 4. Get to a figure: X:Y
• 9.
  Impact Measurement
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  Program Logic Model
• 11.
  Edcon
• 12.
  Transnet
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  Rand Water
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  BHP Billiton Meyerton
• 15.
  Typical Scorecard BHP BillitonRichards Bay - ED
• 16.
  Typical Scorecard –SED - Health Stakeholder Groups Qualitative Qualitative Total Impacts Total Impacts Impacts Community Patients 10 15 25 Impact = Doctors 6 9 15 204 Nurses 8 6 14 Department of Health 4 3 7 Total Government 8 7 15 Business Students, care givers 8 9 17 Impact = Universities 8 7 15 33 Local Clinics 8 7 15 CBO’s, NGO’s 7 9 16 Final score – Other Funders 7 6 13 204:33 Immediate local 9 9 18 communities Question – Local Authorities 6 7 13 Communities along rail 13 9 22 did the line (secondary) program Transnet 17 16 33 deliver high R20 million is invested annually and the program has been impact and running for more than 10 years. It reaches 15 million people (pa) high return? in rural areas – and provide access to primary health care to these communities – so what is the impact?
• 17.
  Community What we measure Qualitative impact and return Quantitative impact and return impact and Business Return Societal Value Higher levels of skills and education Level of education Pass rate increases University access Graduation rates Increased availability or accessibility to employment Applicability of skills to other jobs Employment rate Income generation Improved health Reduction of lost work days Cost of treating disease Reduction in medical expenses Greater economic resilience Wage growth per individual Household wealth and disposable income Contribution to GDP and tax Distribution of wealth Number of new businesses Enhanced environmental quality Changes in health Improved access to natural resources Increased quality in natural resources Business Value Increased revenue – new customers, new products, Market penetration, entry, new markets, price differentiation/ extended use of existing services premium, innovation, demographic changes Reduced Costs and increased efficiency Decrease in production costs, operational costs, sales and marketing costs, exposure, access to natural resources Building intangibles – Improved customer Customer perception, survey, satisfaction – employee satisfaction, perceptions, increased customer satisfaction, talent recruitment and retention, skills development, availability and enhanced brand value, increased supplier quality of labour, media value and mentions, increased security of relationships, added value to investors, increased supplies employee recruitment, retention, satisfaction Managing risk – reduced risk to the business, BBBEE credentials, licences, physical asset security, raw materials reduced risk to the community – reduced regulatory security, enhanced stakeholder engagement and dialogue, reduction risk, enhanced licence to operate in activism, boycotting, strikes, increased sales and tenders
• 18.
  Rand Water –HIV & ME Impact over time
• 19.
  Rand Water –Frances Vorweg - Impact across economic, social and environmental aspects
• 20.
  Some stuff wehave learnt • Sponsorship, Donations and infrastructure programs CAN deliver high impact and return • Bursaries do NOT necessarily deliver high impact and return - • ANY resources CAN be measured – books, wheelchairs, buildings, time – cash and non-cash • Both Socio Economic Development and Enterprise Development programs can be measured - equally • The same project can deliver varied results for different funders – HIV & ME • How and on what you spend the money (inside the program) has a direct influence on the impact and return • The strategy and focus areas has to clearly define the return and impact required • Sustainability has to be clearly defined for exit and completion • Indicators have to be developed, agreed, and documented as part of the contractual phase • Internal monitoring and external evaluation processes has to be established and adhered too - Impact Assessment does not replace evaluation and monitoring • Impact can be measured over time as well as the triple bottom line
• 21.
  Other important stuff… •The type of service provider (NGO) and the level of service provider (sophistication) does have an impact on the outcome of the assessment • You have to consider the impact of the impact assessment on so many levels – As a result of our work we can now categorically state that most programs: • Have only short term impact • Those that have medium term impact are not necessarily sustainable • The long term impact is mostly social or socio economic only as opposed to economic impact which really contributes to poverty alleviation! • It is possible to determine impact and return – And the real value lie in independent, verifiable, assurance of CSI expenditure, program results, outcomes and impact
• 22.
  What I nowknow… • We all have impact – but it is not necessarily measurable and sustainable impact – Do we want economic or social impact? – By implication social impact help people right now – but may not help them in the future – which renders the project/our intervention UNSUSTAINABLE – Sometimes it is our own (CSI Practitioner’s) fault we don’t have higher impact as we decide what, who and how to fund/not to fund – The most sustainable projects/programs with the highest impact have social, socio economic and ECONOMIC impacts i.e. the number of jobs created – Sometimes there is negative impact – i.e. dependencies are created – Mostly there is only short term impact – again which makes our interventions UNSUSTAINABLE
• 23.
  Above all else: Measuring impact is important Measuring the right things is difficult Measuring impact is possible
• 24.
  What next? • Impact Investment Index: III • Levels of impact – shallow, deep, integrated – weighting of impact
• 25.
  Contact • Reana Rossouw • Next Generation Consultants • Specialists in Corporate Sustainability and Integrated Sustainability as well Socio Economic Investment and Development • Tel: (011) 258 8616 • E-mail: rrossouw@nextgeneration.co.za • Web: www.nextgeneration.co.za • PLEASE NOTE: THIS PRESENTATION IS PART OF A LARGER BODY OF RESEARCH! • THIS INFORMATION IS COPYWRITED AND THE INTELLECTUAL PROPERTY OF NEXT GENERATION CONSULTANTS