Progress report from work of GECES Sub-group on Social Impact Measurement – 6 June 2013 Rapporteur: Lisa Hehenberger Research Director, European Venture Philanthropy Association

Agenda 1.Needs of the European Commission in terms of impact measurement 2.Approach of sub-group 3.Concerns in seeking standard approach 4.Emergent principles (common ground) 5.Initial indicative form of outputs 6.Next steps

1. Needs of the European Commission in terms of impact measurement Programme for Social Change and Innovation (PSCI). €90m will be invested in social enterprises that aim to achieve “measurable social impact”. European Social Entrepreneurship Funds (EuSEFs). Additional criteria may be needed for fund managers to decide whether to invest in social enterprise + monitor and report investments. Mandate (end of 2013): to develop approach for measuring social impact of social enterprises’ activity – for EuSEF more detailed rules as appropriate.

2. Approach of sub-group

3. Concerns in seeking standard approach No single methodology can provide a satisfactory answer in all cases: 1.Variety of social outcomes sought is too great 2.Quantitative indicators alone cannot capture all relevant detail 3.Proportionality must be maintained: small SEs must not be overburdened with measurement for little real gain 4.There is a need for a trade-off between comparability and relevance of measurement 5.Social impact measurement is continuing quickly to change and develop, so any solution needs to be capable of movement and improvement Therefore, top-down solution is likely to be counter- productive. An appropriate solution should reflect the needs of the SE and the funders supporting it.

4. Emergent principles (common ground) (1/2) Main purpose of impact measurement is to enable social enterprises and their funders to deliver greater social impact. 1.SE in charge of identifying its objectives; stakeholders; mission-relevant outcomes; theory of change. 2.SE should select its own preferred, and mission/outcome-relevant indicators. These may come from a preferred list of options. 3.SEs should demonstrate they have gone through a series of procedural steps for developing and validating their measurements. 4.Continuous learning (to improve outcomes and measurement itself) is essential.

4. Emergent principles (common ground) (2/2) Identifying social impact sought Stakeholder analysis Theory of Change Measuring and reporting inputs, outputs, outcomes Assessing and verifying impact achieved Learning: improving impacts and refining process Convergence on main steps in process:

Social impact measurement “methodology” for EuSEF and PSCI Process steps with minimum characteristics Possibility to include proportionality explored What information should be reported by SEs and EuSEFs for these purposes Communicating elements of process – statement of what constitutes good standards 8 Guidance and examples Likely to cover: Relevant databases of indicators developed by various bodies within and across member states Specific examples of measurement protocols emerging within social investors and investment funds Formats for presenting measurement to key stakeholders 5. Initial indicative form of outputs

6. Next steps Further develop and clarify process of measurement with reflections on: Minimum standards Defining characteristics of good measurement Reflection at fund level