Social investment faces a huge challenge if it is to fulfil its promise to make social impact as important, and concrete, as financial returns. If it doesn’t achieve this, it will have failed to live up to the great hopes it has generated.
Financial returns are well understood, easy to communicate, and standardised. Social returns are none of these things. The measurement of social impact remains fragmented, poorly understood, rarely implemented robustly—and standardisation is an elusive goal.
If the story sounds compelling about the impact of a model, then the investor can move on and focus on the important stuff—the financial return. There’s a danger, then, that social impact becomes a tokenistic part of the equation. We must seek to avoid this at all costs and NPC is rightly in the thick of the action in this area.
That’s why I’m delighted that tomorrow we’re launching the culmination of a partnership programme on impact and social investment. The Evidencing Social Value framework was commissioned by Big Society Capital and Deutsche Bank, and delivered by NPC, the SROI Network, and Investing for Good. One part is the creation of an investor best practice guide, developed by Investing for Good, which is already helping social investors (including Big Society Capital itself) to review their practice and ensure they embed impact as robustly as possible.
NPC, along with the SROI Network, managed the production of a set of maps of outcomes, indicators and data sources covering the whole of social welfare and the environment. This may sound a daunting prospect—a bit like the task of mapping the world for the first time. The earliest maps left out continents, oceans, let alone smaller details like mountain ranges. So like the attempts of early cartographers, our maps will be imperfect and we’ll need to improve them over time. However, we believe they will be useful in helping to navigate the territory of outcomes and impact in the social sector.
There will be those who violently object to the simplification required to capture the social sector in 65 outcomes. But if we are to make progress on measuring, managing, and investing in social impact, some simplification is essential to ensure we’re speaking the same language.
Whether you’re a social investor structuring a new fund or assessing the impact reports of a potential investee, or a social enterprise or charity working out how best to measure and report your impact, these tools should help you to structure your thinking in a way that matches up with others’ approaches.
You can find out more about the outcomes matrix here, and download the 13 outcomes maps. You can also find out more about Big Society Capital’s approach to social impact, the outcomes matrix and the best practice guidance here.
I hope you find them useful, and look forward to hearing your feedback as we improve them over time.