Big tech companies and multinationals make huge profits with a big global impact, but how can we in the not-for-profit and for-purpose sector have a similar impact?
One of the first steps is transforming the way your organisation uses data. Data drives financial impact and growth in the for-profit sector, and the same approach and mindset can be applied to your organisation.
While many organisations are already employing some aspects of data, many are unclear about how to start using data-driven analytics for social impact measurement. Working through a series of simple data health checks can be a first step.
Move beyond 'vanity metrics'
"Vanity metrics" are measurements that make you feel good about the fact that you're gathering some data. The problem is, they don't actually tell you anything very useful beyond their face value, and they don't point you towards what to do next. They include things like whether your project was on budget; how many followers you have on Facebook; whether you delivered a program within deadline; and the number of beneficiaries of a program.
The most valuable measurements are the ones that focus on outcomes. They give you information that you can translate into action. We call it "actionable intelligence".
We would urge you to make gathering this type of intelligence an organisational goal. The best kind of data can be used to enable you to make good decisions for better results.
Measure outcomes, not activities
First ask: Are you clear on what your organisation is trying to achieve?
Lay this out, then assess whether the information you are gathering enables you to illustrate that are you (or aren't) achieving those goals.
Consider what data could be used to show your effectiveness. The better the data and the more aligned it is to what you are trying to achieve, the better you can show your effectiveness and the easier it will be to get more funding and make a positive change in the world.
Crimes against data measurement
Here's an example that demonstrates this point more in the breach than in the observance.
In July 2016, the NSW government signed a contract for the first Australian social impact investment aimed at reducing re-offending by parolees and their subsequent re-incarceration.
The program provided individual support to 3900 parolees in the first 16 weeks of their parole. It aimed to support parolees to successfully reintegrate into the community following their release from prison.
National Australia Bank funded the project and worked with a not-for-profit over five years.
However, the only measurement metric the program had in place to understand whether the program was effective was a single check-in 12 months after release, where they investigated whether the parolee had reoffended and was back in prison. If the parolee was not back in prison, the program received a tick of success for that particular individual.
This measurement did not indicate employment or housing status, or whether the parolee had found any benefit from the program in being able to reintegrate into the community, such as positive family interactions.
It did not provide the foundations to evaluate the program's effectiveness in terms of broader social benefit or provide data for modelling the best future investment.
There was no ongoing measuremeant, meaning that if a parolee re-offended on the 366th day after release from prison, the program funders were none the wiser.
It did not give any information on which types of approach by different consultants were proving to be the most effective, or on whether certain parts of the program were providing greater benefit than others, let alone on what happened after 12 months.
Create your own data health check
Step 1: Map all levels of stakeholders, including beneficiaries.
Step 2: Conduct a "value-mapping" exercise. What is important to stakeholders and why are they involved? You'll need to find out.
Step 3: What KPIs and metrics will show your effectiveness to each stakeholder? What do successful outcomes actually look like to them?
Case study: applying the formula
Here's a simplified version of how Impactful Ventures applied this method to an Australian association giving business advice and training to those wanting to tackle global problems like climate change, poverty, or industry social innovation.
Step 1: The stakeholders: organisers, speakers, attendees, sponsors/partners.
Step 2: The value map, or what each stakeholders wanted to get out of the association.
Organisers: To amplify their capacity to have an impact on solving global problems.
Speakers: To expand their network and gain business opportunities.
Attendees: To learn and gain skills to help in their own businesses, and to expand their networks.
Sponsors/partners: To gain a positive brand association and business opportunities.
Step 3: The metrics: We mapped data to measure how members were benefitting from being involved, integrated numerous data sets, which helped give better insights to add new members, and used analysis that showed which event themes generated bigger audiences and more value to members.
The value of your work
Impactful Ventures has worked with a regional industry group which believed it was already data-focused. It kept track of Facebook likes, followers, and click-throughs from posts.
Yet, it was relying on these to try to boost paid memberships, to keep the organisation alive, while only looking at one dimension of the group's efforts - its Facebook audience. The data didn't show whether these likes, follows and click- throughs translated into increased business for the members, and said nothing about the impact members had on the community.
Impactful Ventures recommended different data that could more accurately measure the group's effectiveness to help it to attract more paying members and to win more grants.
Beyond reporting: data to increase your impact (and funding)
Once you've generated outcomes-focused data and actionable intelligence, you can work towards improving program delivery, highlighting areas to focus on, showing outcomes in real-time, and mapping that against what stakeholders value most.
With the right technological set-up, this can include automated notifications of variations or "states", to demonstrate how your program is generating change.
You can generate detailed reports minutes after the end of a community or fundraising campaign, and use them to guide your future efforts, grant applications, fundraising, and social agenda, all by making the most of the data you've got.