Social Entrepreneurship · Social Impact

How can you measure the true impact of a social venture?

Marley Crossland Founder and CEO at Match.edu

April 1st, 2015

I was inspired by the Uber debate, and want to pose this question to fellow FD members: how can you measure the true impact of a social venture? (social venture Including hybrid/blended business model, social entrepreneurship, 3rd Sector, B-corporation, etc,.) I am interested in how others are attempting measuring the social impact? What are the best practices? Is anyone doing a good job of this?

Karen Francis-McWhite B Corps Fellow

April 1st, 2015

Thank you Daniel,

That's a very good and important point. The B Corp label places customers, employees and other businesses in the supply chain on notice that the B Corp has achieved a sufficient level of social and environmental impact to be certified by the B Lab. That designation is not meant to be a substitute to being legally formed as a benefit corporation.

Nevertheless, the Impact Assessment stands out as an effective tool for establishing a baseline of the social and environmental impact of a business. If the business doesn't like it's performance and would like to revamp its business model and/or operations to improve it's measured impact, then a lawyer should be engaged to help make many of those changes.


Danny Sung

April 1st, 2015

This doesn't answer your question, just food for thought... One of my friends pointed out one of the really unique things about San Francisco was that *everyone* takes public transportation: business people, moms, kids, retirees, college students, and "hooligans".

While I enjoy as much as anyone else the relaxation private vehicles often afford, I think there's something about this that really keeps people in touch (even if only subconsciously) of the rest of the city and the people around them.

New York is kind of an extreme example of both public and private transportation.  In the public spaces you end up with really creative street performers.  But in the private space you end up with horrible congestion and poor quality.  

Uber and similar folks might be covering the quality aspect of services like this.  But I can't help but feel there's a certain aspect of our culture that we'd be sacrificing with the proliferation of services like this.

Karen Francis-McWhite B Corps Fellow

April 1st, 2015

Have you looked at the B Lab's Impact Assessment? bimpactassessment.net It measures social and environmental performance and is freely available for any business to use, whether or not it aspires to eventually certify as a B Corporation. Best, Karen 

Julien Fruchier Founder at Republic of Change

April 1st, 2015

How can you possibly have standardized measurement when there is no standard model for social ventures? Each venture can only measure what they do. 

For example, we measure how many trees we plant per year (based on planting trees being inherent to our business model), how many dollars we're redirecting away from profit-focused businesses and toward businesses that are "for profit/for benefit" (again, inherent to our business), and how much we invest in organizations focused on solving climate change based on our 1% for the Planet membership. Aside from our 1% FTP membership, I'm not sure how you could possibly measure our impact against the impact of another, significantly different business. 

As an aside, I can also tell you from working with hundreds of small businesses making a positive difference that most of them don't actively track their impact. They do things like support charity, have good labor practices, incorporate energy efficiency into their operations and sell low-footprint products/services because they personally believe it's the right thing to do. Most of them don't even advertise it. Conversely, large corporations like to drum up their CSR initiatives, track their impact and take every opportunity to highlight it but in my experience, they only do things that save them money and make them look good.      

Daniel D'Alonzo

April 1st, 2015

Impact does not have to relate to exact numbers of, for example, "how many homeless people did you feed this week?" If you decide that your project is to prevent humans from becoming homeless in America, then you would develop a detailed project plan outlining the steps you must take in order to accomplish your goal. Let's say the first step in your project plan is to develop relationships with employers (because you will utilize the relationships in the future). Once you have completed your objective of establishing relationships with X number of employers you have now made a measurable impact towards accomplishing the high-level goal of homeless prevention. These are the types of incremental, measurable impacts/milestones are of interest to true impact investors.

Karen's link to the impact assessment is helpful, but keep in mind B Lab is not how you become a true Benefit Corporation. The little "B-Corp" label you see on websites is not a determining factor of what company is or is not a Benefit Corporation by law. There are about 26 states in the USA who have Benefit Corporation legislation. I recommend speaking with Laura Jordan, the founder of the first Benefit Corporation if you are interested in learning more about this entire process.

Hope this helps!

Daniel

Jesse Chen

April 20th, 2015

A little late to the party here, but I wanted to follow up on Karen's suggestion regarding the B Lab Assessment and Daniel's comment regarding the Benefit Corporation legal entity. In multiple situations, I have found that the real value for measuring social impact is in the GIIRS rating/assessment, not the organization is B Lab certified or that it's a Benefit Corporation.

This is a slight distinction, and one that might be clear by now, but it's also a distinction that I think is important regarding the original question. GIIRS is the Global Impact Investment Ratings System and it provides the flexible framework to let organizations determine their own metrics (per Julien's concern above) and measure to them in a meaningful way.

I would also strongly second Julien's comment regarding CSR being a marketing checkbox by many companies rather than a meaningful commitment to social impact. It's not enough just to have an employee volunteering program or charity donation program - the impact has got to be more substantial and more meaningful to the communities the company works and lives in throughout the year and within everything they do. 

Check out GIIRS and you'll find some great examples of companies who are being effective. Hope this helps!