Achieving social impact is the goal of every European project: let’s find out how to measure it.
Why the social impact
We have already covered the topic of social impact from various perspectives: presenting in-depth guides and the Social Economy Action Plan. , a review of the main European funds and programs in this area and useful insights into the link between impact investment, European funds and the NRP . In particular, we recalled:
- How the concept of “impact” is central to all European projects, which by their nature are called upon to produce changes: at the tangible level (output/results), at the behavioral and institutional level (outcome/specific goal), and more broadly at the systemic and societal level (impact/overarching goal). It is from the intent to produce these changes that the logic of structuring and implementing of a European project;
- How the impact is – to an even greater extent – a “structuring” aspect both in the more recent design of European funds (moving away from “expenditure reporting” and toward a “reporting of results achieved”), both in the context of thesocial economy and of theimpact investment (which make social impact the order of magnitude of reference for measuring the effectiveness of an economic activity and investment).
Focus: measuring social impact
We devote this new in-depth study to a review of tools and methodologies for measuring the impact.
To do so, we rely on guides and suggestions produced by those who have made impact their raison d’êtreviz. impact investors e venture philanthropists .
There are, even in this area, networks and reference organizations at the Italian, European and international levels, such as. SIA (Social Impact Agenda for Italy) and GSG (Global Steering Group for Impact Investment), which we have already mentioned . We analyze today resources and tools provided by:
- EVPA (European Venture Philanthropy Association);
- SVI (Social Value International);
- IMP (Impact Management Platform);
- UNDP (United Nations Development Programme);
- GIIN (Global Impact Investing Network).
As much as these are instruments produced in the specific area of impact investing and of venture philanthropy , their relevance and applicability extends to European projects and, more importantly, to the organizational arrangements and strategies of organizations working with European projects. A necessary caveat: all materials offered are in English.
- EVPA Impact Library (online tool). A very comprehensive collection of reports, publications and documents (including from outside sources) on the topic of impact;
- EVPA EU Funding Watch (online tool). A convenient online tool to more easily locate financing, financial instruments and opportunities related to the social economy;
- A practical guide to measuring and managing impact (pdf, 2015, 140 pages, supported by CRT Foundation ). Detailed illustration of a 5-step methodology for managing and measuring impact: 1. Establish goals; 2. Analyze stakeholders; 3. Measuring outcomes: outcome, impact and indicators; 4. Verification and impact assessment; 5. Monitoring and reporting. For each of these stages, practical suggestions, guiding questions, methodological tools that can be used and directions for approach are provided;
- Impact management principles (pdf, 2017, 8 pages). A brief summary of the 5 stages of social impact measurement;
- Impact strategies (pdf, 2018, 84 pages, supported by CRT Foundation ). Analysis of options and strategies that an organization can implement to structure its activities around the concept of impact;
- Navigating impact measurement and management (pdf, 2021, 66 pages, supported by CRT Foundation ). A guide that describes the steps and processes an organization goes through to integrate impact measurement into its strategic choices, contextualizing the 5 components of impact management (goal setting, stakeholder analysis, outcome measurement, impact evaluation, monitoring and reporting) in this “journey.”
- Mapping of impact measurement and management initiatives (pdf, 2022, 20 pages, supported by CRT Foundation ). A mapping and summary description of existing initiatives and methodologies in the area of impact measurement (the main ones are captured in this article).
- The principles of social value (pdf, 2021, 6 pages). A summary of the 8 components of the “social value” of an organization or action, understood as positive change produced in beneficiaries or a population. These components also identify the steps needed to produce and maintain “social value” and the basis for evaluating it;
- The purpose of the principles of social value and the SVI standards (pdf, 2022, 13 pages). An explanation of the scope of applicability of proposed principles and standards: includes “all those who propose to measure changes generated by their project activities.”
- SVI Standards and Guidance (online tool). The starting page for accessing various documents. From the pages of each of the 8 components, additional in-depth materials can be accessed (#1 | #2 | #3 | #4 | #5 | #6 | #7 | #8)
- SVI Standard 1: involve stakeholders (pdf, 2019, 27 pages). What needs to be done to engage stakeholders, which is essential for determining the basis of impact, with process steps and methodologies;
- SVI Standard 2: understand what changes (pdf, 2019, 19 pages). Suggestions and methodologies for defining desired effects, related indicators, and for collecting and analyzing data necessary for their measurement;
- SVI Standard 3: value the things that matter (pdf, 2019, 39 pages). Suggestions and methodologies on how to “value” inherently nonmonetary variables;
- SVI Standard 4: only include what is material (pdf, 2020, 16 pages). Suggestions and methodologies on how to make sure that the different components of “social value generation” are supported by verifiable and material evidence;
- SVI Standards 5 (do not overclaim) , 6 (be transparent) , 7 (verify the result) , 8 (be responsive) (online tool). Four more papers still being produced on the next components of “social value.” From each page, however, it is already possible to access various interesting materials related to each component;
- A Guide to Social Return on Investment (SROI) (pdf, 2012, 108 pages). A guide that seeks to shed light on the basic concepts and procedures related to measuring the social impact and value of actions and projects. A single source document then declined into the principles and standards given above;
- Starting Out on Social Return on Investment (SROI) (pdf, 8 pages). A schematic and concise version of the larger guide (see previous item);
- Social impact management tools for young social entrepreneurs (pdf, 2017, 142 pages). A very extensive and detailed guide. In spite of the specific focus (young entrepreneurs), it includes many practical and operational suggestions of general utility, organized into 4 working stages (planning, action, evaluation and review);
- Sustainable development goals reporting and the social value international framework (pdf, 2019, 8 pages). A paper that relates the 8 components of “social value” and related processes with a view to measuring their contribution to the SDGs.
Impact management tool for organizations (online tool). A useful tool to follow and explore step-by-step an impact evaluation methodology, with a specific focus on an organization’s choices but extendable to project activities. It provides a very detailed reference structure, organized into the following stages or components, of which it provides for each: 1) A general explanation, 2) the link to external methodological tools that can be used regarding what is expected at that stage or component, 3) A glossary of key terms referring to that phase or component.
- Definition of the fundamentals (in terms of governance, strategy and management approach) for all subsequent phases or components;
- Identification or revision of the objectives To guide one’s strategy;
- Identification of the issues of sustainability that you want to measure and manage;
- Selection of the metrics for measuring sustainability outcomes and performance;
- Collection of information contextual to assess the impact of actions;
- Estimating the value created (and/or eroded) for different stakeholders, to compare decisions and available options;
- Verification of information to ensure that it is reliable for use in decision making;
- Collection Of all available information useful for decision making;
- Disclosure of information about what has been achieved to various external stakeholders;
- Benchmark and comparison of performance with that of other organizations (benchmark for setting new goals).
- UNDP SDG Impact resources (online tool). The reference page with tools and documents made available by UNDP’s SDG Impact;
- Impact Measurement & Management for the SDGs (online course). A free course on how to integrate impact on Sustainable Development Goals into an organization’s operational and strategic choices;
- UNDP SDG Impact brochure (pdf, 2022, 3 pages). A review of the tools made available by SDG Impact, with links to direct access;
- SDG impact standards – enterprises (pdf, 2021, 24 pages). The criteria a company must adopt to generate a positive impact on the SDGs. They are organized into four main themes (strategy, management, transparency, and governance, also captured in a’ similar publication of the OECD) and associated with a possible certification pathway ( SDG Impact Seal ) and specific tools for businesses ( SDG Investor Platform ).
- GIIN research library (online tool). A very extensive review of documents and resources produced by the organization on various impact-related issues. Some of the materials are very technical and specific, while others may be a useful compendium or sector-specific study;
- COMPASS: the methodology for comparing and assessing impact – investor guide (pdf, 2021, 43 pages). COMPASS represents an all-encompassing methodological tool for measuring and comparing impact. It is intended primarily for those who must make investment choices of which they wish precisely to assess the broader social impact, but tools and methods are applicable to a variety of fields. It is structured around 4 main steps: defining the type of decision to be made; gathering accurate information related to the impact; analyzing the information and drawing conclusions; and applying the results of the analysis;
- COMPASS: the methodology for comparing and assessing impact – data analytics service provider guide (pdf, 2021, 43 pages). It takes up the same points as the general guide (see previous point), but focusing on needs and methods for those who must collect and analyze the data needed for evaluation;
- Methodology for standardizing and comparing impact performance (pdf, 2020, 38 pages). A paper that takes a deeper look at the topic of data standardization, which is necessary for benchmarking and decision-making on impact issues;
- Understanding impact performance: agriculture investments (pdf, 2020, 70 pages). An in-depth thematic discussion and application of impact data analysis to the agricultural sector;
- Understanding impact performance: financial inclusion investments (pdf, 2020, 62 pages). A thematic insight and application of impact data analysis to the area of access to credit and financial instruments.
