Measuring the impact of CSI
Many companies see corporate social investment (CSI) as an abstract concept. While business leaders are well versed in the potential of CSI to improve reputation and attract investment, measuring its actual success presents an entirely different set of challenges.
Money — whether in the guise of income, expenses or profits — presents itself in a fairly clear, easily understandable way. However, linking financial value to less tangible outcomes such as long-term community development and bettering the quality of life is a more difficult concept to grasp.
To transform these outcomes into hard data requires a multi-faceted approach, which many companies shy away from.
Every worthwhile CSI initiative makes direct and indirect differences to the economy, society and the environment. To quantify these changes and ultimately capitalise on the benefits of CSI as a good business strategy, impact assessments and sound measurement are crucial.
Reana Rossouw, managing director of Next Generation Consultants, says that impact assessment is a highly technical skill that is new to the CSI sector.
“Most organisations do not know how to do impact assessments, or use the findings. They don’t have the systems, skills, resources, tools, processes or practices to conduct them either. Identifying indicators to measure change requires research and extensive expertise in a development context,” says Rossouw.
Research by Next Generation shows that 97% of role players believe that impact assessments make funders and development organisations more effective. However, only 50% of funders conduct some measurement in the form of monitoring, evaluation or site visits.
Rossouw explains that impact assessments are vital for determining whether interventions are worthwhile, or if money could be better spent elsewhere.
“Companies should use them to decide whether or not to fund an intervention, whether to expand or scale up an intervention, or to replicate it elsewhere. They can also be used to adapt an intervention to suit another context.”
With the rising importance of CSI funders, investors and stakeholders expect demonstrable results demonstrating the success or failure of initiatives. Impact assessments inform these role players of progress and change, while outlining the ways in which a programme is benefitting society.
Factors hindering the process include a lack of financial resources and a foggy view of what to measure. This is understandable when considering that the concept is still in its infancy. Rossouw says that companies must move out of this primitive phase, turning impact assessment into a standardised practice.
“Standard impact assessment tools need to be developed. There also needs to be a focus on training, capacity and guidance on how to develop and use measurement tools.”
So how exactly do companies measure the impacts of their interventions? Rossouw says that effective measurement starts with a framework focusing on two broad areas: how competently the social and community programme is managed within the organisation, and how well the projects are performing.
She says that the first point requires a review of management procedures and issues such as how selection criteria are applied to projects, budget, resource management and data verification.
“The second point requires in-depth investigation of social and community development projects, measuring depth, spread and unforeseen consequences. Sustainability — that is the extent to which project benefits are likely to continue once funders withdraw — is another important factor, along with cost effectiveness.”
The effect on stakeholders, as well as their perceptions and opinions of a project, also form an important part of the process.
Next Generation has incorporated these areas into a top-down model (available as one of their consultancy services) that effectively measures social impact utilising detailed analysis. The model starts with determining possible indicators to measure impact for the community and the business. Various stakeholders are then segmented into clearly identifiable groups before each group is thoroughly analysed.
To make the model as all-inclusive as possible, each stakeholder group is measured for the following:
- Economic, social and environmental impact
- Positive and negative impact
- Direct and indirect impact
- Intended and unintended impact
- Short, medium and long-term impact
- Qualitative and quantitative impact
- Combined impact
After the process, the model arrives at a score, which businesses can use to assess the true impacts of their CSI interventions across all areas.
The new model is one of the first — and certainly the most thorough — attempts to measure the actual impacts of CSI and place them in a format that business minds can understand.
The benefits of such thorough, understandable impact assessments are huge. They allow companies to be more strategic about their investments, while increasing the accountability of those tasked with implementing projects.
They may foster innovation, learning and improvement of CSI projects, and create a unified standard that all stakeholders can engage with. Most importantly, they illustrate whether CSI projects are living up to their mandate of making a positive difference. — African Eye News Service