When my mother told Klaus about my intention to start measuring the impact of charities, his reaction was, according to her, to say that he does not understand why there is such a pressure on charities in particular to evidence their social impact - the difference they make to their beneficiaries and to society as a whole, taking into account the positive effects as well as the potential negative ones. He said that there is not as much pressure on businesses to research what impact they make (in fact there is legislation saying businesses need to account for social impact as well, on which Deloitte is heavily cashing in). But indeed the idea of social return on investment and public benefit reporting seems to be mainly a matter in the voluntary, charity and social enterprise (VCSE) sector. Is this an unfair set-up? Why should the pressure to showcase doing good be higher on those explicitly and selflessly trying to do good, charities that have to go on their knees for every penny and cannot afford a whole lot of overhead expenses, than it is on ventures that are primarily intended to make profit, and that might therefore be more likely to have a negative social impact?
My argument in response to my mother was that rather than seeing this as an unfair situation, it could be reframed as charities taking the lead on social impact, and businesses slowly following after them. Making a social difference has always been the stuff of charities; it is what they are for and what they have expertise about. For for-profit ventures it makes sense to think in terms of finances, as the maximization thereof is the expressed purpose. Finances are kept track of through numbers and excel sheets, but while you can count some aspects of charity services (do people keep coming back?) if you want to know what difference the users have experienced due to the services offered, you will eventually wind up having to ask them. In that way it makes more sense for a charity to have a qualitative approach to measuring their impact. They are normally closely in touch with the people they are attempting to help. For large businesses, however, being in close touch with the customer and having the ability to receive dihrect input and feedback is something that has come as a side effect of the development of the internet. It is something that they are only figuring out now. And on this journey, charities can serve an exemplary function.
An example of a cool project regarding social impact: homelessnessimpact.org
They are bringing together information about the impact of different initiatives regarding homelessness, to figure out what works to actually help people, so that everyone can concentrate on doing those things that help, and we can cut any initiatives that do not actually make a difference and/or that make people feel worse.
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