Impact Conference Chatter

We have had a great August out meeting face to face with impact measurement practitioners, managers, CEOs and board members across the not-for-profit, social enterprise and housing sectors.

We thought it might be good to share with you four key talking points and our perspective on these hot topics being discussed in relation to impact measurement.

No one is willing to pay for impact measurement

What is clear from the events that we attended over the last month is that there is a continuous lack of investment in impact measurement, both within organisations and being funded directly by government and philanthropic organisations.

The message coming from state and federal government representatives is that you can no longer expect to receive funding if you can’t prove the outcomes you’re creating or the impact your having. At the same time, the same government representatives and departments are unwilling to fund impact measurement as a separate part of program or grant budgets.

Speaking to social sector organisations attending these conferences, we consistently heard the same narrative of them all knowing the importance of measuring their impact to sustain and grow their organisations. They are, however, unable to find funding that is sufficient to create a solid impact measurement approach that will meet the demands of their funders.

Investing in impact measurement reaps rewards

It’s quite frustrating that we have this gap between what everybody wants to achieve, which is an evidence-based approach focused on outcomes, and what everybody is willing to invest financially to achieve this goal.

This is even more frustrating when you see organisations presenting at these conferences, who clearly demonstrate that their decision to take the plunge and invest in impact measurement, have led to them reaping big rewards.

There were two particular organisations who presented at the Criterion Outcomes conference in Sydney, who over the last couple of years, have invested significant amounts of money in impact measurement. They put impact measurement frameworks in place, trained staff and made it a part of the culture of their organisations. In return for this investment, they have received significant amounts of further investment, based on the trust that philanthropic organisations now have in their organisation as a result of their evidence base. These philanthropic organisations can clearly see the outcomes being achieved and that the results are based on rigorous evidence.

Some delegates in the audience balked at the initial investment these organisations had put into their impact measurement approaches. But the question for those delegates and the rest of the social sector is, is it worth taking a risk investing $80,000 in an impact measurement project that returns new investment to fund your organisation to the sum of $900,000?

Evaluation needs to be proportionate to grant size

Another theme that came up with grantmakers was around how big does a grant need to be before you evaluate it or require an impact report. Some grant providers are requesting grantees to evaluate the impact of grants that they are providing for as little as $1,000. This begs the question, what is the purpose of this evaluation that is being requested and what will the results be used for?

The reality is that grants of this size do not need a full evaluation or impact measurement. It is debatable how you can expect, or get any true insight or value out of, evaluating such small interventions. Impact measurement needs to be proportionate to the size of the grant being provided.

Social impact bonds as a new stream of revenue

Social Impact Bonds continue to be a hot topic, potentially opening new streams of revenue and business models for organisations. The social housing sector, in particular, seems to be grappling with how to use impact bonds to fund their growth outside of government projects. What is clear from the work currently happening in this space is that the only evidence that is being accepted as part of these bonds, is the cost savings to the government.

Cost savings, also known as secondary benefits, are those benefits to society such as increasing tax revenues, reductions in welfare costs or reductions in healthcare costs, for example. These are the only trustworthy and valid data points that are being tracked to provide evidence of a social impact bond working.

Social impact bonds, in their infancy, have been very challenging to set up and there are huge costs involved before the investor’s dollars will start flowing in to fund your initiative. At this point in time, they seem to be a funding mechanism that only large organisations, who can afford to invest in their setup, can take advantage of. We would advise caution and careful consideration as to whether a social impact bond is the best funding option for your program.

Thanks to all those who we met, and debated the way forward with, over the last few weeks. We have lots to think about, primarily around how we can best support organisations to achieve their goals around impact measurement.

The views, information, or opinions expressed in this article are solely those of the individual and do not necessarily represent those of Alliance Social Enterprises.