4 presentation thuy linh nguyen

SOCIAL IMPACT MEASUREMENT IN

SOCIAL ENTERPRISES:

AN INTERDEPENDENCE PERSPECTIVE

NGUYEN THUY LINHVIETNAM NATIONAL UNIVERSITY, HANOI – UNIVERSITY OF ECONOMICS & BUSINESS

THE UNIVERSITY OF SYDNEY BUSINESS SCHOOL (ENTREPRENEURSHIP & INNOVATION PROGRAM)

Nguyen L, Szkudlarek B and Seymour RG 2015 'Social Impact Measurement in Social Enterprises: An Interdependence Perspective', Canadian Journal of Administrative Sciences, vol.32:4, pp. 224-37

What do You See in this Picture?

What are Leaders in the Social Sector Thinking?

Jed Emerson

Blended Value

It is true that “you can’t mange what you can’t

measure” yet also true that “not everything that counts

can be counted, and not everything that can be counted

counts”.

The goal now is not to have one accepted

measurement tool embraced by all. It will never happen

due to the diversity of visions and missions that drive

the work of philanthropy

Indicators vary from one project to another, even the

same project undertaken in different contexts will

need to adapt measurement indicators accordingly.

As we hear repeatedly “one size does not fit all” Pamela Hartigan

Skoll Centre for

Social

Entrepreneurship

Doug Bauer

The Clark

Foundation

What is Social Impact Measurement?

Social impact measurement (S.I.M) refers to the

process of defining, monitoring, and employing

measures to demonstrate benefits created to the target

beneficiaries and communities through evidence of

social outcomes and/or impacts (Jim, et al., 2009).

Internal

environment

External environment

Learning &

improvement

Resources

Accountability &

Transparency

Why Social Impact Measurement?

Resource

providers

Beneficiaries,

community

Public

Employees

5

SOCIAL IMPACT

MEASUREMENT

Mission

Legitimacy

Marketing

6

One Approach ?

INFORMAL APPROACHES …..

Voices of the field

BUTPeople share NO common and consistent language, understanding

about measurement metrics and tools among stakeholders

Many people TALK about it

RECOGNIZE its importance

SEEK to understand it

DEVELOP measurement tools

S.I.M - A socially constructed phenomenon?

“Measures are not the means of estimating some underlying reality; rather they construct and imbue with authority the notions of performance associated with a particular point of view” (Paton, 2003, p.45)

“Success or failure can only be determined by contextualizing performance data in terms of a network of stakeholder expectations and perceptions” (Nicholls,

2008,p. 38)

S.I.M could neither be understood separately from actors who engage with or are concerned about social enterprises nor being placed in a context (Ebrahim, 2003; Paton,

2003)

Research Question

How is social impact measurement

shaped by social enterprises’

relationships with resource providers?

Resources

Social Impact Measurement

Resource

provider

Social

enterprise

Beneficiaries,

communitiesSocial impact

Theoretical Lens: Resource Dependence

Power imbalance existing

between two actors (Emerson, 1962)

The stronger party will have

benefits and dependence

advantages over the weaker

party (Blau, 1964; Kim, Hoskisson, &

Wan, 2004)

Reciprocity and mutual

understanding between actors (Gulati & Sytch, 2007; Newbert &

Tornikoski, 2013).

A committed and cohesive

partnership that is based on

frequent interactions to develop

sustainable and beneficial

collaborations between parties (McNamara, Pazzaglia, & Sonpar, 2015;

Parmigiani & Rivera-Santos, 2011)

Asymmetric Dependence Symmetric Dependence

Behaviours of organizations and individuals undertaking resource exchanges

(Pfeffer & Salancik, 2003)

Research Strategy & Methodology

Philosophical paradigm: Interpretivism

Research Strategy: Multiple case study design

Case Study context: Three social enterprises in Vietnam

Data Collection:

Primary data: 20 Semi - structured interviews with social

entrepreneurs, donors, investors, intermediaries,

government, volunteers, employees. Primary data collected

between 2012-2013

Secondary data: websites, reports, internal documents

Data analysis: inductive approach based on open coding (DeCuir-Gunby et al. (2011); Miles & Huberman (1994); Saldaña (2012)

12

Description of Cases

Case

Description

TRAINING SE LEARNING SE WOMEN EMPOWERMENT

SE

Year of

establishment

1999 2006 2011

Social mission

Transforming the unemployable

youth with low self-esteem to

confident, empowered, young

hospitality professionals,

entrepreneurs, and mentors via a

holistic vocational training

program

Providing opportunities for

disadvantaged children to play,

learn, and create while

generating income to improve

their life quality

Empowering poor women

living in and around marine

protected areas

Business Restaurants, hospitality Lifestyle Souvenirs, gifts Handicrafts

Employees (by

2013)

30 permanent and hundreds of

volunteers

10 permanent, hundreds of100

volunteers

3 permanent; Dozens

of volunteers

Resource

providers

Institutional and individual donors,

corporations, volunteers,

international

organizations

Impact investor, intermediaries,

NGOs (international and local),

volunteers

Intermediaries, local

authority, NGOs

(international and local),

volunteers

Social impact

measurement

Self-developed monitoring and

evaluation system

Reporting requested by the donors

Internal measurement approach,

investor’s impact measurement

(IRIS),

Other resource providers’ process

reporting mechanisms

SROI,

Monitoring and evaluation

system requested by the

donors

Key Findings

S.I.M can be formed along two dimensions of funding relationships

The interdependence between SEs and resource providers is dynamic rather than static and can change over time, leading to different behaviours toward S.I.M

Social Impact Measurement

• Motivations for S.I.M

• Compliance with resource

providers’ S.I.M mandates

• Expectation & Choice of S.I.M

approaches

• Resources spent on S.I.M

• Perceived importance of formal

S.I.M

Symmetric Tie

• shared goals

• reciprocity,

• trust, and

collaboration

Asymmetric Tie

• power

imbalance

• regulation

based,

• control, and

• authority

Interdependence between

Resource Providers & Social EnterprisesSymmetric Quotes for symmetric tie Asymmetric Quotes for asymmetric tie

Complete

trust; long-

term

relationship

We have complete trust between the two…We

take a lasting relationship… There has been a lot

of trust. Trust has been established and because

of that, my support to the enterprise is very easy.

(Resource Provider A -TRAINING SE)

Imbalance

power

Because you have the funding so you have to

please the donors… A lot of donors have a lot of

options. We’re competing for a very small pocket

of money. Everyone competes. Donors have

choices. (Founder-TRAINING SE)

Frequent &

close

interaction;

long history of

relationship;

enjoyable

relationships

I became involved with the SE 8 years ago… At

the moment, one of the enterprise’s trainees lives

in my house. So I interact with them every bloody

day. I interact with other people from [the SE],

probably monthly…I enjoy my interactions from

trainees to CEO. The relationship is very close.

(Resource Provider B-TRAINING SE)

Delegated

authority;

Top down

relationship

We told [the SE] that you have to submit this

information… so that’s the way we work. That’s not

particularly collaborative.

(Investor - LEARNING SE)

Reciprocity;

appreciation;

trustworthiness

; shared

value

The SE also makes contributions to our activities…

Actually, we both appreciate each other. We see

their value. And they may see us as a trustworthy

organization that they could share with their

vision and challenges they face. (Intermediary-

WOMEN EMPOWERMENT SE)

Imbalance

power; Meet

funder’s

requirements

Some are keen on showing impact via SROI

framework, others apply [a] different

measurement approach. So for each potential

funder, we need to think how we demonstrate

these impact[s] to meet their

requirements. (Consultant-WOMEN

EMPOWERMENT SE)

Close; good

relationship;

Open & frank

with each

other

We have developed a close and good

relationship with the founder. We are very open

to each other. We speak what we think and we

discuss frankly on any issues that we may face

during the working process. (Resource Provider M

– WOMEN EMPOWERMENT SE)

Pressure,

uneasiness

Once my husband had an uneasy talk with the

resource provider when they asked us to develop

the measurement system. And it seems that they

even want an impact report than ourselves… And

it then becomes a pressure for us.

(Founder-LEARNING SE )

Funding Relationships & S.I.M

Social Impact

Measurement

(S.I.M)

Funding relationship

Symmetric Asymmetric

Motivations for

S.I.M

Learning & improvement Accessing resource & satisfying resource

providers

Compliance with

resource providers’

S.I.M mandates

Low

Parties are open to discuss S.I.M options

High

SEs tend to strictly comply with resource

providers’ S.I.M mandates

Expectation &

Choice of S.I.M

approaches

Imperfect, partial

Informal, subjective, simple, unrefined,

qualitative

Holistic, intensive

Formal, standardized, complicated, wide &

deep, detailed, professional

Resources spent on

S.I.M

Modest Large

Perceived

importance of

formal S.I.M

Not very critical to resource providers’

decision.

Investment decision & further engagement

are based on:

• Trust built upon actors’ transactions •

How SEs perform

• “Shared values” and “reciprocity”

vision that go beyond the contractual

agreement of the funding schemes

Critical to resource provider’s decision .

Investment decision & further engagement are

based on:

• How SEs perform

• How they demonstrate their impact

formally

Motivations for S.I.M

Motivations

for S.I.M



Learning & improvement, mutual understanding Accessing resource & satisfying resource

providers

Quotes The priority for us now is to have [those]

measurement policies and systems in place for

internal use, rather than go[ing] with the

request of the donors. I think that part is

very important for the growth and the

sustainability of the organisation (Founder –

TRAINING SE)

Different funders have different approaches to

social impact evaluation. For example, [funder

A] applies an SROI framework to measure

impact ... However, [funder B], looks at financial

indicators, balance cash flow, feasibility of our

business plan alongside with impact measures;

[Funder C] is concerned with cost effectiveness

of the enterprise and environmental impact ...

Some are keen on measuring impact via an

SROI framework, others apply different

evaluation approaches. So for each potential

funder, we need to understand what they

expect. We need to think how we demonstrate

these impacts to meet their requirements (

Employee –WOMEN EMPOWERMENT SE ).

Compliance with Resource Providers’

S.I.M mandates

Compliance

with resource

providers’

S.I.M

mandates



Low

Parties are open to discuss S.I.M options

High

SEs tend to strictly comply with resource providers’

S.I.M mandates

Quotes We had a chat to them to see whether they

wanted... That is our process. That is where we

have a discussion and that is a mutual

decision (Resource Provider A – TRAINING

SE).

When we made the investment, this is part of our

standard reporting that we require from all our

organisations and when we made the investment

we agreed, here is the matrix you will need to

report on every quarter. And after that we agree

— what they’re going to do to get it done... The

enterprise we invest in is required to fill in ... so

important for us, definitely very important for us.

Social impact evaluation is ‘mandatory’ rather

than ‘collaborative’ (Resource Provider C –

LEARNING SE)

Expectation & Choice of S.I.M approaches

Expectation

& Choice of

S.I.M

Approaches



Imperfect, partial

Informal, subjective, simple, unrefined,

qualitative

Holistic, intensive

Formal, standardized, complicated, wide & deep,

detailed, professional

Quotes In terms of impact measurement, I guess, it’s

quite simple to go into it. We spoke to a

couple of people, it sounds good… We do not

follow any metrics. We’ve got people on the

ground there. I guess in terms of speaking to

them about the enterprise that forms part of

our impact measurement. But it’s kind of

informal. We support [the enterprise] since

their inception 12 years ago and they have

600-700 graduates currently. That’s the key

metric we use. We have complete trust

between the two (Resource Provider A –

TRAINING SE)

We have a standard reporting system worldwide,

adopting the IRIS standardized measures... To

evaluate social impact, we look at the width and the

depth of activities. For the growth, we look at the

number of beneficiaries that we reach, either directly

or indirectly… For growth, the enterprise is required

to examine the number of people in need that the

social enterprise has engaged, either directly or

indirectly. For depth, the enterprise is expected to

demonstrate the impact from an individual to a system

perspective. For the individual perspective, the social

venture has to evidence whether the people in need

would have a better life including indicators such as

more income, material wellbeing, physical wellbeing

and social wellbeing. From a system perspective, the

enterprise needs to demonstrate whether the

investment has made a systematic change (Resource

Provider C –LEARNING SE).

Resources spent on S.I.M

Resources

spent on S.I.M



Modest Large

Quotes In terms of impact evaluation, I guess, it is quite

simple to go into it. We spoke to a couple of

people, it sounds good ... We do not follow any

metrics. We have got people on the ground

there. But it is kind of informal. We support [the

enterprise] since their inception 12 years ago

and they have 600–700 graduates currently.

That is the key metric we use. We have complete

trust between the two (Resource Provider A –

TRAINING SE)

The reports to [intermediary A] are very simple. I

wrote what we did and how the fund was used in

a simple format. I’m happy with the report that

they required as it’s simple, easy to do and I do

not have to spend too much time on it (Founder,

LEARNING SE)

Every month, we ask the organizations to report

on different indicators. And on quarterly basis, we

have a call with organizations and try to identify

the current situation and plan for the next quarter.

In the end of June, we have a mid-year report,

And in the end of the year, we have the portfolio

review.... It requires a lot of work. (Resource

Provider C – LEARNING SE)

I feel if I can make a good, detailed report as

requested by [Resource Provider C], I have to

ignore many other business activities for a period

(Founder – LEARNING SE)

Perceived Importance of Formal S.I.M

Perceived

Importance of

Formal S.I.M



Not very critical to resource providers’

decision.


based on:

• Trust built upon actors’ transactions •

How SEs perform

• “Shared values” and “reciprocity”

vision that go beyond the contractual

agreement of the funding schemes

Critical to resource provider’s decision .


based on:

• How SEs perform

• How they demonstrate their impact

formally

Quotes Reporting is part of the system. It is nice to

receive the report from Hospitality SE and

emails from trainees but it is not essential

(Resource Provider B – TRAINING SE)

If you want to get additional funding, you need

[to] have a quite good accounting and a quite

good social impact measurement system. If you

have these in place, then more funding will come.

If you do not have anything in place… it is really

difficult to get additional funds… it’s like [the]

chicken and egg…If SEs want to get more,

they’ve got to do more. (Resource Provider C-

LEARNING SE)

Asymmetric Symmetric

S.I.M

Complicated, standardised,

mandatory, resource intensive

S.I.M

Simple, collaborative, less

resource intensive

Social impact evaluation is ‘mandatory’ rather than

‘collaborative’ … social impact assessment is an

important step of the due diligence process…

We have a standard reporting system worldwide,

adopting the IRIS standardised measures... To evaluate

social impact, we look at the width and the depth of

activities.... It requires a lot of work. If you want to get

additional funding, you need [to] have a quite good

accounting and a quite good social impact measurement

system. If SEs want to get more, they’ve got to do more

(Resource Provider C – LEARNING SE).

SEs should spend time to create social impact rather

than to measure it ... or trying to figure out how to

measure it. I think doing any kind of deeper impact

evaluation study is not a priority at this stage ... We

do not want to burden them with doing things like

reporting and studies which are not very practical and

feasible for them. So we stick to simple measure,...

kind of... outputs really, like how many children

attending our classes, how many classes have been run,

how many volunteers are trained or worked with the SE

( Resource Provider C – LEARNING SE).

The Dynamics of Funding Relationships & S.I.M

Conclusions

The need to understand the interdependence of the

parties rather than focus on the technical issue of

measurement alone

A new ‘moral’ system: Power does not always belong

to the resource holders

The need to understand of the intrinsic purposes of a

seemingly asymmetric relation in S.I.M

The dynamics of interdependences between SEs and

resource providers

Implications

Asymmetric dependence may create pressures or inefficiency for SEs regarding

S.I.M

Stakeholders can manage behaviours to enhance mutual understanding, trust, and

commitment for joint actions; facilitate favourable conditions to mobilize resource

and create sustainable impact.

S.I.M should not be a tool to control of resource holders or an additional burden

for SEs

SEs should consider what to measure and how to measure in order to balance

organizational objectives, resources available, and stakeholders’ satisfaction.

SEs could be innovative in S.I.M to demonstrate the social impact that matches their

objectives and contexts since there is no common standard or agreed optimal

approaches to S.I.M or “one size does not fit all”

S.I.M should be part of organizational strategy (Arvidson & Lyon, 2014) and not just a

means to resist and comply with resource providers’ demands (Levay & Waks, 2009).

Q&A

Thank You

Government & Nonprofit

4 presentation thuy linh nguyen