One of the most important things for social economy organisations seeking to grow is clear and objective proof of their effectiveness and achievements. They should be able to show that they meet their goals and that their strategy and theory of change work. To do this, they need tools that let them explain how they spent their money and how every single euro or dollar brings positive outcomes. That is the only way to attract new investors and win new contracts.

It is also the only way to improve weak points and become better and more efficient along the way. Thanks to an effective measurement system, those looking for solutions can choose the most efficient, productive and sustainable social enterprises or NGOs.

There are various types of evaluation that can be applied to social enterprises or to non-profit organisations trying to become economically independent and sustainable.

Some of them are described in a booklet called “Evaluation: Some Tools, Methods & Approaches“, published by Social Impact (SI), a global social enterprise. SI is dedicated to helping international agencies, civil society organisations and governments become more effective in achieving positive social and economic change. The booklet was prepared for the U.S. Department of Washington DC and describes its purpose as follows: “[The booklet is designed] to present some of the most useful and promising evaluation tools and methods to facilitate planning, managing and using evaluations.”

The approaches it covers include performance and process evaluations, summative and ex-post evaluations, impact evaluations, global and regional programme evaluations, and experience reviews and special evaluation studies.

The booklet also explains impact evaluation: “Impact evaluations (…) refer to those evaluations which use control groups to measure the precise impacts of an effort. In such evaluations, two groups – treatment and control – are established at the launch of an effort. The treatment group receives the services and goods from the effort in terms of technical assistance, training, advice and/or financial support from the effort while the control group does not. The overall impact of the effort is measured by comparing the performance, conditions or status of the two groups.”

Nonetheless, every evaluation system designed or adapted for a particular company or organisation is different. To create such a system, its authors need insight into the qualities and factors specific to the enterprise in question. That is why a supportive network is an important catalyst in the process.

The largest social value network

The largest international social value network in the world is Social Value International (SVI), with more than 900 individual and organisational members in 49 countries. Its main goal is to promote accounting for value. The network brings together social economy organisations and individuals working to understand, account for, measure, analyse or manage the wider value created by all kinds of social enterprises. SVI was formed in the UK in September 2014 from two important organisations that had already been working in the field for several years: the SROI Network and the Social Impact Analysts Association (SIAA). As a result of this transformation, the SROI Network in the UK is becoming Social Value UK, and the SIAA is becoming Social Value International. The transition will be completed in July 2015. Both organisations are led by their members. They offer training, accreditation and assurance in impact measurement, SROI practitioner training and accreditation, as well as webinars, events and conferences.

The Social Impact Analysts Association (SIAA) is an international professional body for social impact analysts. It has six Country Impact Groups, at various stages of development, in Austria, Bulgaria, Canada, Estonia, Hungary and Portugal. For more information, see www.siaassociation.org.

Social Return on Investment (SROI) is a framework for measuring and accounting for the value created or destroyed by our activities – where value is understood much more broadly than what market prices can capture. By taking this broader value into account, SROI seeks to reduce inequality and environmental degradation and to improve wellbeing. See www.thesroinetwork.org for more information.

The SROI Network currently has six established national networks and many others under development around the world. The six national networks are: the Social Impact Measurement Network of Australia (SIMNA), SROI Canada, the Hong Kong Institute of Social Impact Analysts (HKISIA), SROI Japan, SROI Netwerk Nederland en Vlaanderen and Svenska SROI-nätverket. Anyone who wants to know more about Social Return on Investment can take an introduction to SROI in three online sessions. The total cost is £125, and you can register here.

The principles developed by the SROI Network to guide the SROI methodology are:

• Involve stakeholders;
• Understand change;
• Only include what is material;
• Value what matters;
• Do not over-claim;
• Be transparent;
• Verify the result.

A broad range of techniques, tools and methods may be useful in applying these principles. For organisations that want to be more accountable, the SROI Network offers a Practitioner Training course on how to measure and manage social value. It is delivered by SROI Accredited Practitioners.

150 tools and resources for assessing social impact

A valuable source of information on assessing the social impact of social enterprises and philanthropic organisations is the TRASI database – Tools and Resources for Assessing Social Impact. It was prepared by the Foundation Center, an organisation established in 1956 that aims to be a source of information about philanthropy worldwide. It presents over 150 tools, methods and best practices, sorted by name, sponsor or type of approach.

One of them is the Ashoka Measuring Effectiveness Questionnaire, designed in 1997. It is an annual self-reported survey that tracks the progress of groups of Ashoka Fellows over time. It is sent to social entrepreneurs on the fifth and tenth anniversaries of their Ashoka fellowship.

The survey uses a set of proxy indicators that track data which can be aggregated across very different fields of work, such as how often a fellow’s work has been replicated by other organisations and how much influence the fellow has had on public policy. This report brings together data from the first six years of Ashoka’s Measuring Effectiveness project.

Another report from 2013, “How Do You Know When You’ve Revolutionized an Industry? Ashoka’s Approach to Assessing Impact“, analyses five different “paths” of systemic social change followed by Ashoka Fellows and gives concrete examples of social enterprises and their outcomes:

• Market dynamics and value chains;
• Public policy and industry norms;
• Full inclusion and empathy;
• Business-social congruence;
• A culture of changemaking.

At TRASI you can also find the Gates Foundation’s “Guide to Actionable Measurement“. The foundation’s system is based on three principles:

1) Measurement should inform specific decisions and/or actions;

2) Do not measure everything, but do strive to measure what matters most;

3) The data help us learn and adapt our initiatives and strategies.

Why are these principles so important that they form the basis of the whole system?

They reflect some important truths about impact evaluation:

1) You can only measure what is measurable – many factors can be positive but extremely difficult to measure.

2) When assessing your effectiveness, it helps to know your objectives and priorities. Some things may go wrong, but the point is to get the most important things right.

3) The outcomes, even negative ones, should mainly serve to improve your performance and make the necessary changes – not to close the company or give up on the mission. In the end, you learn most from your mistakes.

Paulina Wajszczak for socialeconomy.pl