3 Reasons We Need Social Impact Benchmarks
Imagine you’re coaching a friend who’s running the 100m dash. Let’s assume, for the moment, that she’s done great training and is ready to go as she steps up to the starting line.
The gun goes off with a bang, and she’s off! She’s running as hard as she can. As she crosses the finish line, your trusty stopwatch shows that she hit a time of 13 seconds.
So, how did she do?
It’s pretty clear that if your friend cares about performance, the only way to answer this question is by comparing her to other racers. To do this, you first have to know who she wants to be compared to (presumably other women in the same age and experience bracket). Then, you have to know the race times of these other sprinters.
This example may feel like it’s a long way from impact performance, but it gives us some helpful perspective. So often, our conversation about understanding impact stops at “measurement.” In our above example, it’s like our runner knowing that her time was 13 seconds. We might have detailed, accurate data about one program, business, or intervention, but without knowing how other similar programs perform, we actually know very little. A 13 second 100m time might seem good at first—until you compare it to others. We can only make sense of our impact data when we put it into context. Who are our record breaking solar home system companies, agri-processors, or ed-tech companies? We need benchmarks to figure that out.
Moving to an ‘outcomes oriented’ mindset
Our ability to compare with others, based on a benchmark of performance, is what vaults us from evaluation (simply having data) to managing impact performance. To do this for social performance, we have to get standard, comparable data from customers and beneficiaries. This, in turn, requires standardized, repeatable surveys that measure key impact indicators: a structured, repeatable approach that allows any organization to compare their social performance to their peers’.
The intention to create benchmarks of social performance is not new. Indeed, in 2009, the Global Impact Investing Network (GIIN) adopted the IRIS Catalog of Metrics, a set of shared, operational guidelines and categories in the social impact sector. If an organization wanted to measure education initiatives, they could find a glossary of terms and suggested metrics in the IRIS Catalog.
Shared definitions was a good first step, but two additional things needed to happen: (1) A narrowing from the full catalog of indicators to a core set that everyone would measure—including, in this core set, a critical mass of metrics that are social outcomes, and not simply operational metrics; and (2) Guidance on how to actually gather these data, including which questions to ask. In the decade following the release of the IRIS Catalog of Metrics, there was limited progress in both of these areas.
As a result of this limited progress, everyone has ended up frustrated. Investors still find themselves with an alphabet soup of potential indicators to choose from, with no guidance on how to gather these data. Companies are routinely asked to feed operational data into impact reports that don’t meaningfully teach them, or others, about their relative or absolute social impact.
“We prioritize social performance by boiling down our work in each sector to a core set of meaningful social outcomes metrics”
At 60 Decibels, we’re working to change this, by building solutions that allow companies and investors to align around impact performance. We put social performance at the heart of our work by boiling down our work in each sector to a core set of meaningful social outcomes metrics; and by knowing what questions to ask to get these data quickly and easily for both investors and companies / NGOs. Our benchmark database includes results from more than 685,000 customer interviews in 80+ countries across a wide range of sectors. This breadth of data enables a deeper understanding of impact and sets the foundation for benchmarks of social performance.
These benchmarks are now available at three levels: (1) Indicators; (2) Dimensions (or Themes); and (3) Companies. Our social impact benchmarks start at the individual indicator level: the proportion of users of product X that live under income level Y. They build to Dimensions, for example a set of questions that all relate to consumer protection in financial inclusion. And, at the highest level, the combination of these Dimensions allows us to compare the social performance of one company or NGO to another. We believe that this ability to compare lies at the heart of improvement in social performance.
Three reasons why we need social impact benchmarks:
1. Celebrate what’s working (and analyze what isn’t)
Relative performance allows you to identify trends and patterns that help determine what behaviors and product features improve customer impact and which ones don’t. This information can be used to optimize programs and services and ensure that resources are being used in the most effective way possible.
2. Improve operations, saving time and money
Through better understanding your customers (who they are, what they need, what they value, etc.), you can confidently tailor services and programs to better meet their different needs. By benchmarking costs and resource usage against industry peers, organizations can identify areas to streamline operations and reduce waste, allowing them to maximize the impact of every dollar spent.
3. Learn from or build upon others’ practices
By studying the practices of other social impact organizations, both within and outside of their sector, organizations can identify best practices and adapt them to their own needs. This can help them optimize their position in the market and better appeal to their target audience, driving greater impact.
What we all know, most of all, is that we have no time to waste. Image a world 10 years from now: the earth will be hotter and natural disasters more frequent, making it all more urgent to develop solutions that support the resilience and wellbeing of ever-larger sections of the population facing climate disruption. It’s time to build a culture and a practice that allows us to understand what is and isn’t working, adjust to these data, and get the most of every dollar, to ensure that the resources we are putting in are creating the greatest value for customers. It’s time for social impact benchmarks.