Getting better at understanding community/social investment programs and strategies. What works - how it works and why it works?

1. Measuring the social impact
and return on investment of
development programmes
Reana Rossouw
Next Generation Consultants

2. Introduction / Basics
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3. Definitions
What is impact?
Measures ‘the difference being made by an intervention’
Impact measurement is the process of providing evidence that
your organisation/program - is doing something that provides a
real and tangible benefit.
What is return?
Measures ‘the funder benefit/gain’
What is an impact measurement framework?
The activities an organisation carries out can have long-term effects
on beneficiaries, beneficiaries’ families and the broader community.
An impact measurement framework seeks to identify and
quantify/qualify this impact/change.
An impact measurement framework provides the structure for
assessing all aspects of impact.
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4. Why is measuring impact and return
important?
Measuring impact can help to
Build on the things you are doing well and to learn from the challenges you have
faced/experienced.
This feeds into good practice and means the organisation will learn and improve
continuously.
Just as financial accounts prove the viability of a business, impact measurement
can show a robust and rigorous approach to providing community or economic
or environmental benefits.
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5. Why the pressure to measure?
The debate of impact and return on investment are playing out in three
arenas:
In private/corporate foundations and CSI divisions
Aiming to be more strategic about their social/community investments and
development programmes
In nonprofit organisations in response to pressures from investors, corporates,
foundations and government
To be more accountable for the resources received and programme outcomes
expected
Among all other role-players such as government agencies, intermediary
organisations, and international development agencies
Seeking to improve development effectiveness and lessen dependency on
development aid
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6. Why now?
Funders are increasingly asking for verifiable results – to understand the
difference they make, directly and indirectly in the economy, society and
the environment
This trend is accelerating, and the sector is increasingly looking to pay
for/by results – and to learn from what they, and those they fund, do
It is not just donors that care about impact. In a age of competition,
transparency, and recessionary economies there is a growing competition
for resources
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7. Impact Assessment - Variety of purposes
One can and should use impact data to make programme decisions across
investment and development portfolios
One can and should use impact data to make funding decisions within
investment and development portfolios
It is about building a unifying measurement standard, as well as a
conceptual framework for understanding the biggest impact across a Rand
value unit. So - it is not just about comparing one investment or one
development portfolio to another or one organisation to another, but to also
determine which programme/organisation/investment yields the highest
return/impact for the most effective use of resources
Therefore, we require a combination of the breadth of quantitative with the
depth of qualitative evaluation/assessment methods
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8. Differences
Definition Detail
MONITORING:
Regular systematic collection and
analysis of information to track the
progress of programme implementation
against pre-set targets and objectives.
DID WE DELIVER?
• Clarifies programme objectives
• Links activities and their resources to objectives
• Translates objectives into performance indicators and sets targets
• Routinely collects data on these indicators and compares actual results with
targets
• Reports progress to managers and alerts them to problems
EVALUATION:
Objective assessment of an on-going or
recently completed project, programme
or policy, its design, implementation and
results.
WHAT HAS HAPPENED AS A RESULT?
• Analyses why intended results were or were not achieved
• Assesses specific casual contributions of activities to results
• Examines unintended results
• Provides lessons, highlights significant accomplishments or programme
potential and offers recommendations for improvement
IMPACT ASSESSMENT:
Assesses what has happened as a result
of the intervention and what may have
happened without it, from a future point
of time.
HAVE WE MADE A DIFFERENCE AND
ACHIEVED OUR GOAL?
• Seeks to capture and isolate the outcomes that are attributable (or caused
by) the programme
• Will review all fore-going monitoring and evaluation activities, processes,
reports and analysis
• Provides an in-depth understanding of the various causal relationships and the
mechanisms through which they operate
• May seek to synthesize, compare, contrast a range of interventions in a region,
timeframe, sector or reform area
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9. The impact value chain
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Input
Resources that are
deployed in
service of a certain
(set of) activities
Cash, Products,
Services, Hours,
Non-cash –
buildings, time,
books, resources
(wheelchairs,
books)
Invested resources
or capital
deployed
Activity
Actions, or tasks
that are performed
in support of
specific impact
objectives
Actions by an
organisation to
facilitate a change
Activities
undertaken to
deliver on program
objectives goals
Output
Tangible,
immediate
practices,
products and
services that result
from the activities
that are
undertaken
Number of
beneficiaries
served by an
organisation/
program
Services rendered
through the capital
provided
Outcome
Changes, or
effects on
individuals/commu
nities that follow
from the delivery
of products and
services
Changes among
beneficiaries i.e.
increased
capacity to earn a
living
Impact
Changes or effects
on society or the
environment that
follow from
outcomes that
have been
achieved
Changes in
broader
environment for
instance reduced
incidences of
crime
Impact on society
due to capital
deployed
Return
Benefit
gained/achieved
by the funder as a
result of the input
resources
Changes in the
business or
operating
environment for
instance better
stakeholder
relationships
Benefit by the
funder due to the
impact capital
invested

10. Guidelines/process for impact measurement
Goal setting
Framework
development
and indicator
selection
Data
Collection
Data
Validation
Data Analysis
Data
Reporting
Data Driven
Management
Set goals
Articulate the desired impact of the investment – establish a theory of change/value
creation process to form the basis of strategic planning and decision-making to serve
as a reference point for investment performance
Develop Framework and Select indicators
Determine metrics/indicatos to be used for assessing the performance of the
investment - the framework integrates indicators and outlines how specific data are
captured and used, it uses indicators that align with existing standards to measure
progress/impact
Collect data
Ensure that the information, technology, tools and resources, human capital and
methods used to obtain and track data for the anticipated impact are effectively
utilised
Validate Data
Validate data to ensure sufficient quality – verify that impact data is complete and
transparent by checking assumptions and calculations against known data sources,
where applicable (baselines)
Analyse Data
Distil insights from the data collected – review and analyse data to understand how
investments are progressing against impact goals/objectives
Report Data
Share progress with stakeholders – distribute impact data coherently, credibly, and
reliably to effectively inform decisions by all stakeholders
Make Data-driven management decisions
Identify and implement mechanisms to strengthen the investment/development
process and outcomes – assess stakeholder feedback on reported data and address
recommendations to make changes to the investment or Theory of Change for
sustainable development
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11. Indicators
Indicators define/measure and demonstrate the outcome of an objective
Indicators should be easily measurable (within reason) and meaningful to stakeholders
In selecting indicators the following factors may be influential:
Who — the target population to be measured/assessed
How much — the degree of change that is expected
How many — the amount of change among the target population that would indicate a successful level of
achievement
When — the time frame in which this change should occur
Indicators can be quantitative or qualitative or both
Quantitative indicators measure changes expressed as numbers or statistics, e.g. frequency of
behaviours, number of attendees
Quantitative data can also measure changes in attitudes, beliefs, and perceptions when respondents
express opinions in the form of ratings or rankings
An advantage of a quantitative data collection approach is that data can be easier to collect and analyze
than qualitative information. However, data that is easy to gather may not be the most illuminating or
insightful
Qualitative indicators relies on observations of changes with the intent of understanding patterns and
relationships. Data are often in the form of descriptions, narratives, and open-ended responses
Qualitative data might be used to capture individual and collective stories of social change, including
personal perceptions
Sometimes qualitative evidence is the only way to document changes in relationships and contexts
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12. Important indicator selection issues
Involve stakeholders in defining indicators
Consider both quantitative and qualitative indicators
What is most important to a program or initiative may not be easiest thing to measure. In
collecting data that is easily accessible or purely quantitative, stakeholders run the risk of being
dismissive of the true and deeper impact of a program
Conversely, a cursory anecdotal review of a program done by those who are predisposed to
view it as successful would not likely hold up to scrutiny from outsiders
Determine if your outcomes—and therefore the indicators you define—are short-,
intermediate- or long-term
Measurement of short-term change will most likely focus on the implementation of a project
(How did it work? How effective was the design?) or on establishing a baseline from which to
assess change down the road.
Intermediate change can be measured by defining benchmarks. A benchmark is a type of
indicator that refers to the level of change an organisation expects to make from its baseline.
Most evaluators and researchers agree that impact takes time to occur and that outcomes are
only measurable in the intermediate- or long-term. The longer a program runs, the more complex
its selection of indicators and the more likely, or even necessary, it becomes to use benchmarks.2016/04/15Next Generation Consultants
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13. Important indicator selection issues
Consider a program’s context and its complexity as this will affect results and the selection
of indicators. Select indicators at the beginning of a program or project in order to plan for
data collection, but also allow for indicators to be defined or revised as new outcomes
emerge during program implementation.
Decide on a modest range of realistic indicators. It is nearly impossible for a few indicators
to capture complex social change, particularly since change tends to happen
incrementally and can be attributed to numerous inputs.
Avoid common pitfalls.
One frequent mistake is that people choose outcomes that they believe they can easily achieve
and measure based on the desire to show success. Conversely, they may ignore outcomes that
are difficult to achieve and measure.
Another mistake is to disregard negative outcomes or not be alert to unexpected outcomes that,
if recorded and assessed, can be just as important in terms of understanding impact.
Yet another pitfall is the tendency to attribute causality for social change to one modest program
when that change is caused by multiple factors.
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14. What Impact Assessment is all about
Impact
Identify, interpret, improve, investigate, involve, inform
To provide evidence
To demonstrate performance
To prove accountability
To show programme/investment effectiveness
To demonstrate shared/blended value
To empower and capacitate all stakeholders
Ultimately - to alleviate, reduce and eradicate poverty
and contribute to sustainable development
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15. Conducting an impact
assessment
Methodology: Impact Investment Index™
Developed by Next Generation Consultants
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16. Impact Assessment – WHAT?
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17. Calculating Impact – The Process
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(Strategies, applications,
contracts, evaluation
reports, site inspections,
engagement)
Primary, secondary and
tertiary assessment
Data score sheet –
identifying and
calculating impact and
return
Impact per stakeholder
(QL & QN)
Return for investor
Dimension of impact
and return
Analysis, interpretation,
triangulation of data
Impact per programme,
per focus area per
stakeholder group
Return per programme
per focus area
Cost benefit analysis Shared Value X:Y
Recommendation
strategic, operational
and programmatic

18. How much was spent – where – on
what?
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19. Case Study 1 - Multichoice
Total Impact – Per programme Total Impact – Per Focus Area
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20. Case Study 1: Multichoice
Total Return per Brand Total Return by Investment
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21. Case Study 2: Pioneer Foods
Spend per focus area Impacts per focus area
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22. Case Study 2: Pioneer Foods
Impact across the triple bottom line
4
3 3 3 3 3 3 3
2 2
0
0,5
1
1,5
2
2,5
3
3,5
4
4,5
Economic Impact
7
5
4 4
0
1
2
3
4
5
6
7
8
F&TFA-
Limani
Aqua Noir Heart MOT
Social Impact
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8 8 8
3
2 2
0
1
2
3
4
5
6
7
8
9
Environmental
Impact

23. Case Study 2: Pioneer Foods
Impact over time
6
3
2 2 2 2 2
0
1
2
3
4
5
6
7
Short-Term Impact
4
3
2 2 2 2 2
0
0,5
1
1,5
2
2,5
3
3,5
4
4,5
Medium Term
Impact
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7
4
3 3 3 3 3
0
1
2
3
4
5
6
7
8
Long-Term Impact

24. Case Study 2: Impact per focus area
97
91
Paardeberg WWF
Impact Scores for SED
Focus Area -
Environment
100
97
91
79 78
60 60
50
38
Impact Scores for SED
Focus Area - Food
Security
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103
61
MOT PFECT Bursary
Scheme
Impact Scores for PFECT
Focus Area - Education
71
25
Aqua Noir Katmakoep
Impact Scores for Focus
Area - Enterprise
Development

25. Case Study 3 – BHP Billiton Metalloys –
Programme performance
Top five
94
76
69
64 62
Bottom five
34
44
46 46 47
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60
54
52 52
Middle four

26. Case Study 3: BHP Billiton Metalloys -
Impact across focus areas per programme
Commuity Impact High
Developmental
Business Impact High
Strategic
HIV and Me 94:7
Community Impact Low
Charitable
Inkululeko 52:1
Cansa 44:2
Reach for a Dream 34:3
Business Impact Low
Commercial
Health
Average 56:3
Community Impact
High
Developmental
Eureka School 76:2
Meyerton High School
69:1
Business Impact High
Strategic
Dr Malan School 64:3
PC Literacy for Educators
52:4
Community Impact
Low
Charitable
Springfield Primary 46:1
Sibongile School 46:2
Business Impact Low
Commercial
Wings for Life 54:3
CASME 47:3
Education
Average 57:2
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Commuity Impact High
Developmental
Business Impact High
Strategic
Kotulong Community
Centre 62:4
Raizcorp Business
Incubation 60:4
Community Impact Low
Charitable
MCD Training 52:3
Business Impact Low
Commercial
Poverty
Alleviation
Average 58:4

27. Impact vs. Return: Programmes vs.
Focus Areas
Commuity Impact Above Average
Eureka School 76:2
Meyerton High School 69:1
Dr Malan School 64:3
Business Impact Above Average
HIV & ME 94:7
Kotulong CC 62:4
Raizcorp Business Incubation 60:4
Community Impact Below Average
Wings for life 54:3
MCD Training Centre 52:3
Adv. of Science and Maths 47:3
Reach for a Dream 34:3
Sibonile School 46:2
CANSA 44:2
Inkululeko Project 52:1
Springfield Primary 46:1
Business Impact Below Average
PC Literacy for Educators 52:4
Total Impact 852
Total Return 43
Overall Averages
56:3
Commuity Impact Above Average
Business Impact Above Average
Education 454:19
Community Impact Below Average
Health 224: 13
Poverty Alleviation 174:11
Business Impact Below Average
Total Impact 852
Total Return 43
Overall Averages
284:14
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28. Case Study 3: BHP Billiton Metalloys –
Impact vs. Cost
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Individual cost per impact and return on investment for the community investment and development programmes
Total Spend Programmes Total Impact Total Return
R 62 678 764,00 15 852 43
Cost per Impact R 4 933. 39
Cost per Return R 78 841. 21
Individual cost per impact per Focus Area
Focus Area Spend Programmes Total Impacts Cost per Impact
Health R 1 364 500.00 3 217 R 2 096.00
Education R 36 314 264.10 8 472 R 9 617.00
Poverty Alleviation R 25 000 000.00 3 158 R 52 742.60
Individual cost per return per Focus Area
Focus Area Spend Programmes Total Returns Cost per Return
Health R 1 364 500.00 3 15 R 30 322.22
Education R 36 314 264.10 8 27 R 168 121.59
Poverty Alleviation R 25 000 000.00 3 11 R 757 575.75
The table below indicates that the Poverty Alleviation portfolio/focus area delivers the least community impact,
whilst the health and educational portfolios delivered more cost effective impact for communities.
The table below highlights the fact that to achieve a single impact in the community R4 933 needs to be spend per programme.
Similarly, R78 800 needs to be spent to achieve a single return on investment for BHP Billiton Metalloys South Africa.
The table below clearly indicates that the health portfolio not only had the highest return on investment for BHP Billiton Metalloys, but
was also the most cost effective portfolio.
The Educational portfolio delivered the second highest return on investment and the Poverty Alleviation was not only the most
expensive, had the least community impact, but also the least return on investment.

29. Return on Investment
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30. Business value of determining ROI
Knowledge
Deep understanding of value and
impact as well as risks
Comparative data –
industry/sector
Insights into and across impact
dimensions
Insights into stakeholder groups
affected
Action
New or enhanced business
decisions, practices and
behaviours
Develop new
products/services/markets
Changes policies, strategies and
practices to increase impact and
return
Report in a more credible,
integrated and useful way
Results
Improved performance –
profitability/competitiveness
Reduce potential risks –
community activism/licencing
Save costs – of court
cases/mitigation of risks
Enhanced stakeholder
relationships
Improved licence to operate
conditions
Improve trust and transparency
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31. Return on investment – Indicators
Strategic Aspects
Support of corporate values and
strategies
Support of sustainability
strategy/programs
Support of future growth,
development and market access
Investor /
Shareholder Aspects
Share price not affected when
industry or sector are targeted by
activists
Rated as industry leader in
Sustainability Indices
Increased investment from socially
responsible investment funds
Inclusion and high ratings in
awards programs
Reputation Aspects
Recognition/awards
Media coverage
Increased brand awareness
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32. ROI Impact
Profit Aspects
Sales generated from programs
linked to products
Value of new products and
services generated from CI/CSI
programs
Increased worker productivity
Increased share price (e.g. from
attention of socially-screened
investment funds)
Environmental
Aspects
Costs mitigated from rehabilitation
Costs saved from waste
management/recycling
Carbon emissions sequestrated
Costs of fines
Sector Specific Aspects
Financial Sector
• Economic trends and demographics and
expanding workforce needs
• Increasing regulatory activity (e.g. CRA, PRI, CRESA,
JSE, investment screening)
• Increasing equality/disparity between haves/have-
nots – financial inclusivity
• Globalization
• Opportunities to brand company through
community involvement
Mining
• Intensity of opposition
• Previous negative incidents
• Regulators’ sensitivities
• Compatibility with existing development objectives
• Reputation of company
• Level of community involvement
• Involvement of external advocates
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33. ROI Impact
Stakeholder Aspects
Increased community/government
awareness/positive
relationships/stakeholder relations
Decreased complaints/grievances/
activism/strikes/boycotts/negative
press coverage
Cost savings/avoidance
Prevention of operational
stoppages/delays
Reducing/decreasing legal costs/law
suits
Support for market entry/expansion
plans
Savings Aspects
Tax rebates received from
philanthropic/
charity/social/community
contributions
Saved costs of free advertising space
received from media coverage of the
CI/CSI programs
Legal fees averted (includes legal
department staff time and projected
billable hours from contracted firms)
Savings Aspects Continue
Crisis PR efforts averted (includes PR staff time
and projected billable hours from contracted
firms)
Costs of avoided down-time from failure to
receive building approval, work stoppages,
etc.
Reduced employee recruitment costs, reduced
turnover costs, and/or reduced absenteeism
Reduced employee training costs (e.g.,
through community service learning initiatives)
Reduced customer turnover
Other staff management hours saved
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34. ROI Impact
Customer Aspects
Surveys indicating improved customer
perceptions and impacts on shopping
decisions
Sales leads generated in specific
geographic or demographic markets
Development/increased sales of specific
products/services in targeted geographic or
demographic markets
Annual brand tracking surveys indicating
higher scores
Collaboration/participation/co-design of
new product/service development
Greater participation/involvement/
contribution in community investment and
development programs
Increased brand awareness
Increased customer acquisition/retention
Operational Aspects
Mitigation of operational risks
(health/environment/safety)
Support and enhancement of
business operational requirements
(integration, skills development,
etc.)
Compliance Aspects
• B-BBEEE
• Licence to operate
• SLP Mandate/Strategy
• DMR/King III/ICMM/IPIECA
• Approval rates/new
explorations/extensions
• Rehabilitation
• Drop in complaints/grievances
• Global Compliance
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35. ROI Impact
Employee Aspects
Positive response to utilizing volunteerism for professional development/skills
development and team building
Employee surveys demonstrating that volunteer activities contribute to
leadership development
Voted one of the best companies to work for
Surveys showing increased employee morale from participation and
increased numbers of employee volunteers, volunteer hours, and the
number of company-sponsored volunteer projects
Satisfaction surveys indicating positive impact and anecdotal evidence
Employee training programs designed to use volunteers and products with
most donations
Employees learning to use products to that they are more equipped to
sell/market them
CSI/CI projects used for team building or during orientation/induction or
other training
Recruitment from communities where CSI/CI projects are run
Internal surveys showing an increase in employee pride, morale and
commitment as a result of employee involvement in volunteer activities
Social Aspects
Improvement of quality
of life
Community job creation
/ empowerment
Improved stakeholder
relations within the
community
Poverty reduction
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36. IN CLOSING
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Impact: Thinking beyond evaluations:
Decision
•Now what?
Synthesis
•So what?
Analysis
•What impact
was
achieved?
•What does
the evidence
show?
Method
•How will we
determine
impact or
gather
evidence?
Information
•How will we
know?
•What
evidence do
we need?
Standard
•What would
indicate
impact?
Criteria for
impact/
value of
impact
•What
matters?
Key
Question
•What do you
want to
know?

38. Thank You
Reana Rossouw - Next Generation Consultants
Next Generation Consultants are internationally
recognized and have published extensively and
spoken at local and international conferences.
Copies of these articles, research papers,
presentations, whitepapers and awards are available
on:
Website: www.nextgeneration.co.za
Linkedin: https://www.linkedin.com/company/next-
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Google+: https://plus.google.com/+reana rossouw
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Slideshare: http://www.slideshare.net/Reana1
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Permission must be obtained for
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