HBS on The Hard Work of Measuring Social Impact

Professor Alnoor Ebrahim, at Harvard Business School, is teaching Performance Measurement for Effective Management of Nonprofit Organizations in June 2011.  A summary of his thoughts in two working papers has been published in The Hard Work of Measuring Social Impact, a Harvard publication.

As one might imagine, his approach is rather academic, but he does have some interesting conclusions with respect to the practicality of using metrics.  “Not everyone needs to measure (social) impact,” he says, “what you should measure is contingent on what you’re trying to achieve.” 

To start, an organization that has a more limited scope or mission can has what he calls a more “linear” approach.  “If an organization has a focused, or linear, theory of change and a tightly focused operational strategy, measuring results is much easier.”  Defining a “focused” theory of change is “one where the relationship between their actions and their impacts on society are linear and can be observed.”  The delivery of basic services, “such as food and shelter for homeless people,” for example, is linear.  “You can count the number of people being fed, sheltered, and clothed.”

Yet the more complex the problems or issues a nonprofit is taking on – or the more ambitious their “theory of change” – the harder it is to measure impact.  He illustrates by adding the goal of helping the same organization above (i.e. delivering food) reaching higher, to try to also help people to escape poverty.  This would require, as he points out, “greater access to education, health care, and employment resources,” for example.  Measuring results here are more problematic.  The bottom line?  “As you widen your scope to deal with a major social problem, the harder it becomes to measure your impact because it is tougher to isolate cause and effect.” 

The article ends on a positive note.  “Despite the ambiguity surrounding social impact metrics, nonprofits can nonetheless establish their own internal benchmarks to assess performance and determine whether they are achieving their mission.”  Ebrahim is currently working with a number of nonprofit and public organizations, such as the Acumen Fund, the Robin Hood organization, and others, to help create these metrics. 

“’It turns out that highly intelligent thoughtful people end up developing some very different approaches to measuring social performance,’ he says, ‘That suggests we might not see agreement on a common set of metrics in the social sector for a while’…”

Cool.  But what do we do in the meantime? 

We wait for news of what intelligent, thoughtful people suggest…