S-ROI measuring the immeasurable?

I truly believe that valuing the socio economic impact of non-profits is key in order to ensure future creation of a truly sustainable and impact oriented citizen sector. S-ROI is therefore crucial in the future of the non-profit sector.

Social Value is created when resources, inputs, processes or policies are combined to generate improvements in the lives of individuals or society as a whole. It is in this arena that most nonprofits justify their existence, and unfortunately it is at this level that one has the most difficulty measuring the true value created. Public sector "pay for performance" and other trends are a move in this direction, but need to be taken one step further, with social impacts being tied back to the "investment" required to achieve such impacts. Therefore and despite all the difficulties of valuing the direct benefits of social action in $ terms it is to develop such measurements.

Regarding potential negative impacts of using S-ROI type of measures I would like to counter argue Jessica’s identified threats.

Firstly, I think that it will not result in a bias of investment towards less risky projects because often these less risky investments and actions are also the ones with the less impact on the future and so the different discount rates that dictate the riskiness of investments allows us to compare two different riskiness investments that also with different returns. This will result in much more rationale decisions on where to apply a very limited pool of resources.

Secondly and regarding the short term bias it is again not a credible reason since also short term projects (e.g., food aid) have less impact than building a democracy or structural projects and will therefore not be under valued even using a discount rate.

Regarding intangible outcomes one may argue about their value if they don’t have any impact on society as a value producing community. Certainly that intangible changes impact is valuable but given the difficulty in measuring it aren’t we better off applying $ elsewhere. I am sure that if well structured projects exist in terms of intangibles they have very rationale reasons that can and will certainly be translated in $ terms (e.g., openness of cultures to equality regarding voting rights will translate into a more efficient democracy and hence economic impact will be generated that can be measured by looking into other countries that have gone through the same process).

Finally one must not forget the objective of measurement. It exists not to compare projects with the for profit sector or even between radically different projects among different organizations, but yes to compare potential projects in similar areas by one organization or comparable ones. Therefore I truly believe that by using objective measurements we are giving a great step towards a more sustainable and economically efficient social sector that will in turn translate into bigger impacts.

Finally and regarding balance scorecards I would like to reinforce Quin’s argument about the top-down approach. One can only apply an effective scorecard if its objectives and structure is fit with the desires and needs of those that will use it. It can be applied at different levels in the organizations if each one has its own centre of responsibility.

S-ROI and balance scorecards are nevertheless not comparable since they serve different purposes. A scorecard is in my view more oriented to the day-by-management, more directed to inside management while S-ROI has a more general usefulness in such that it can be used by external investors in the making of their money allocation decisions.

Volunteering: Isn't it great ?

Volunteering can be approached in non-profit world from multiple perspectives: should NGOs be dependent on it? Is it vital for the evolution of NGOs directly or indirectly? Is volunteering efficient? What are the main positive impacts of volunteering?

What is in it for the corporate sector? Does it make sense to use its resources in activities out of its core competencies and activities? is this trade off in efficiency counter balances by the increased motivations and work force cohesiveness and potential retention of talent. Hardly is this is enough to counter balance the costs of such initiatives. In my opinion I do believe that Corporations should not engage in such activities as for they represent a simple and direct waste of resources in non-welfare creating activities (given the opportunity cost). This however does not mean they should not exist. I think that if these types of activities are to exist than they better be integrated in a global strategic plan of action where the way to create the biggest possible social impact is formulated and where a specific plan of action is created (e.g., partnership between Randstad and VSO for example).

Nevertheless, lets not forget the role of government and other ruling bodies that should create the best conditions possible for Corporations to better perform/organize volunteering programs (e.g., tax benefits, subsidies, enforcement laws). This is especially important for the fact that Corporations management is there to serve the prime stakeholders of their organization the shareholders. Therefore the government has to create the conditions for objectives to be more aligned or to simply empower other stakeholders to have a "word to say" in management decisions.

I don't ignore the social outcome of individual participation in volunteering activities that impact the social cohesiveness of our society and the awareness of its members but nevertheless one may not consider that shareholders should be the ones to support the costs of this endeavour ! (unless its their will of course). As an individual I still have the will to, if I desire, to participate in volunteering activities outside of work in my free time.

In all, I truly believe and support the social upside of volunteering but I do think that the opportunity cost of this is often disregarded or downplayed.

Corporate Philanthropy: The Evolution of The Species

While reflecting on this topic and after reading many different opinions on the topic I believe that Corporate Philantrophy has a very important role in the development of the non-profit sector in both efficiency and effectiveness.

Individuals and foundations tend to be very reactive in terms of funding needed NGOs and other non-profit organizations usually reacting to letters and other types of requests. Continuing donations are more times out of habit than oon a continued trust link between donor and beneficiary based on simple but objective performance criteria. This is exactly where I think that Corporate Philantrophy can play an important role.

In today's society and due to the inequitative power of the various social stakeholders not all have accesss to the same resources and iinformation. Therefore I believe that Corporations are in a key position to effectively leverage on superior management resources in order to better assess resource allocation for NGOs and or foundations. This has sometimes not been the case in most Corporations leading to a continuous destruction of value for the entire society by not allocatiing effectively resources. This failures have probably lead to today's critiques of CSR and other jargons used in defence of uncounsicous giving and other social actions.

I believe that in the future philantrophy will be reformulated in order to respond to an increasing awareness and control for the use of Corporate resources specially money/cash flows. As a result, I think that the next step is to evolve to a more strategic type of philantrophy where Corporations will share other, and perhaps, more valuable resources such as specific skills or abundant human resources. Through Public Private Partnerships a better and more efficient system of Corporate Philantrophy will be in place that has higher chances of creating a win win situation for both parties hence catalysing the interest of the private sector and other stakeholders.

In order for this transformation to take place I think that the key is information, information and information. Only with a wide and in depth information available about needs and past performance of NGOs will the market become more efficient and effective both in its use of resources and in the social impact it will achieve. Only through the use of this information will organizations be able to make more rational decisions and initiatives.