Impact and the Social/Solidarity Economy

Social Impact measurement for the Social and Solidarity Economy OECD 2021 PDF

This is perhaps the most comprehensive document I’ve read on impact measurement and its relation to social purpose organizations.

Fact #1: There exists no single internationally accepted conceptual framework to value social impact nor to understand the drivers and obstacles to create that impact.

Fact #2 Social purpose organizations are increasingly requested to demonstrate their positive contribution to society through measuring their social impact.

Definition: Social impact measurement aims to assess the social value and impact produced by the activities or operations of any for-profit or non-profit organisation (OECD 2015)

Pros and Cons

page 10. Public authorities need to understand the pros and cons of different approaches they may take. While public support is direly needed to advance social impact measurement, it might trigger unintended consequences by increasing reporting burden, discouraging innovative practices, disadvantaging emerging or small organisations, etc. Whilst the promotion of simple, harmonised indicators could facilitate more widespread adoption, it may fail to capture more complex phenomena.

At the same time, raising the bar for social impact measurement, especially without the appropriate capacity building efforts, is likely to discriminate against smaller entities that do not have the resources to develop adequate protocols. Care is also needed when considering the scope of the measures, since social impact is not immediate but emerges over a period of time. Metrics that focus on short-term impacts are therefore likely to bias funding towards more immediate solutions, rather than in support of long-term social progress.

Difference between market-based and community or gov’t focused impact measurement

Market-based actors that design and implement social impact measurement are primarily interested in using it to assess particular projects or services, rather than as a tool to foster social progress across society more broadly.

The discourse on social impact measurement has thus reached a crossroad between publicly driven evaluation and this range of investor and corporate reporting on impact. Governments require social impact measurement in order to monitor social outcomes (not only outputs), whereas market-based actors use it to demonstrate the transactional value of investments.

The former are therefore more embracing of participatory practices to social impact measurement, whereas the latter retain an emphasis on quantitative (often monetised) methodologies, which do not systematically imply stakeholder engagement.

In this conjuncture, the targets set by the United Nations Sustainable Development Goals have introduced a common, global framework to which public and private actors are massively adhering in an unprecedented collective effort. pg. 15

Social impact measurement is an essential practice

page 16. Based on the primacy of the social mission, social and solidarity economy organisations need impact information in order to:

Effectively allocate resources to social value creation: identify the interventions which are
helpful for the given social mission, and those which are not, in order to prove and improve progress on the societal problem at hand;
Improvise, experiment and innovate: creatively adapt standards (e.g. engaging difficult-to-reach target groups; changing public perception of a product/service, promoting inclusive governance practices), particularly relevant when engaging in “social bricolage”;
Increase stakeholder participation and collaboration: work with diverse stakeholders from
across sectors and industries in order to foster novel solutions (e.g. addressing HIV infections with a combination of hygiene and education stakeholders);
Persuade: attempt to influence stakeholders through political and public advocacy (e.g. presenting to parliament).

Further, social and solidarity economy entities rely on social impact measurement across all stages of growth, to inform their scaling strategies and secure funding opportunities. Learning from social impact measurement is intimately linked to the ability to identify what operational processes and strategies are effective at creating positive social change, and where improvements are needed, as well as to capture and convey this progress to external stakeholders such as financiers, local supporters, and targeted beneficiary groups.

As part of their commitment to social progress, policy makers are gradually shifting their grounds for decision-making from activities to results … Social impact measurement can help ensure that public resources and other forms of support to social and solidarity economy entities lead to the intended positive social outcomes. Reliable and consistent methods are necessary to confirm that social impact represents a substantive commitment and not just a marketing brand.

page 24: The UN Research Institute for Sustainable Development recently embarked on a 4 year project to assess and improve methodologies and indicator systems that measure and evaluate the performance of the social and solidarity economy (UNRISD, 2018[48]).

The inclusive, bottom-up establishment of a powerful and unified voice on the importance of impact evidence is the most important factor driving transformative change in the social and solidarity economy and beyond (Buckland and Hehenberger, 2021[49]).karim

Obviously, a middle ground needs to be found between imposing uniform indicators versus
promoting flexible standards for all social and solidarity economy entities, for instance in the form of shared processes or principles, and by defining specific measures that are relevant for, and reflective of the capacities of, specific types of organisations.

The latter option seeks to identify a middle ground between universal practices and completely ad hoc approaches, by proffering a mix of indicators that are differentiated by certain sub-sets of the social and solidarity economy together with common indicators that cut across all its members.

Rather than focusing on creating a universal set of metrics that every social and solidarity economy organisation must narrowly adhere to, this approach recognises the diversity of drivers, actors and intentions for social impact.

Although promising, its continued development will require extensive consultation at a grass root level, and creative mechanisms for enabling collaboration between financers and the social and solidarity economy frontline actors.

Randy Terada
Centre for Social Innovation Annex
720 Bathurst St.

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