Dan Corry’s recent blog raises some of the challenges of impact measurement in the social investment market. There is no quick fix to any of them, but I thought it would be useful to explain what we are doing at Big Society Capital to support better impact measurement in the market.
Impact evidence is a critical aspect of Big Society Capital’s work, as helping to showcase what is achieved through our investments will help inspire other investors and social sector organisations to get involved in social investment, therefore growing the market and delivering more positive social change. All of our deals are required to produce impact evidence, which involves gathering data from front-line organisations, and we have recently published a summary of this information in our first ever impact report.
To support the integration of impact into the investment process we have developed guidance such as the outcomes matrix to help organisations define and measure their impact. We have recently updated our website to include a new interactive version of the matrix, along with better resources for organisations that are starting out on their impact journey.
However, there are still many challenges in implementing effective impact practice across the market.
Firstly, there is a mismatch between the purpose of impact measurement between different audiences. Some want standardisation, comparability, RCT’s, common data or a grading system for investments; whereas others want a bottom-up, organic approach with front-line organisations gathering what is best for them. Both of these approaches have their strengths and weaknesses. As a market we need to recognise that many organisations are only just beginning their measurement journey, and so we need to support them to take small steps to start gathering data which is most useful and relevant to them.
Secondly, there are currently not enough resources available for systematic impact measurement approaches. Many intermediaries and front-line organisations only have a shoe string budget, so can not afford complex impact measurement. We either have to work within these constraints, or try and leverage additional funding if we want robust impact measurement approaches.
Thirdly, the proliferation of tools, standards and resources which are being promoted by different organisations can be confusing and overwhelming for those who are new to impact measurement. Whilst variety is good and necessary to some extent, there is a need for better rationalisation. Efforts such as the Inspiring Impact programme are a good attempt at trying to address this problem.
Finally, there is a need to build the capability of organisations to measure their impact. At the moment, some organisations use external impact consultants, whereas others either skill-up their own staff or employ an impact specialist. All of these approaches have a resource implication. Programmes such as the Impact Readiness Fund have made a good start by providing support for building skills in this area, but the high demand for grants indicates that there is definitely still a need for further support.
Over time, Big Society Capital hopes to build a comprehensive understanding about the impact that social investment can achieve through research, gathering primary data and using evidence from our investees. As a start, we have recently published case studies of social investment in action which demonstrate how it can be used to address a wide range of social issues.
We are committed to working together with investors, intermediaries, front-line organisations and impact practitioners to support the development of impact measurement practice so that it can be used both to support their own work and also to provide the evidence needed to grow the social investment market and deliver more positive impact overall. We have also recently launched an open conversation about transparency to identify how we can increase access to information, as well act as a champion for wider transparency in the social investment market, so please share your thoughts here.