Meaningful Measurement the Key to Success

How do program directors really measure a social return on their investment, and how do they go about using measurement to improve outcomes, asks Calum Scott, the Program Impact Director for Opportunity International Australia.

Having a significant positive impact on the lives of clients by helping them work their way out of poverty is the holy grail of socially focused microfinance supporters, like Opportunity International Australia. But how do program directors really measure a social return on their investment, and how do they go about using measurement to improve outcomes?

Demonstrating positive impacts to external stakeholders requires submitting programs to increased levels of scrutiny, and that this was as it should be.

It is no surprise that measuring outcomes allows for better relationships with partners, investors and donors, as our very existence relies on our being able to show that we make every dollar we raise work hard,” he said. “What is less clear is how best to measure the impact of our programs, which is of course essential for continuous improvement.

And we are certainly not the only ones concerned with this important issue. Even Bill Gates, who usually addresses development themes like polio, HIV and water sanitation in his Annual Letter, this year focused on the theme of impact management, saying ‘you can achieve amazing progress if you set a clear goal and find a measure that will drive progress toward that goal’, and that’s exactly what we are trying to do.

Crucial to success in measurement is the so-called ‘feedback loop’, in which key indicators are fed into strategy and operations, allowing development and refinement of products and services on an on-going basis. But these key indicators really have to be ‘key’, and identifying the right ones can be a challenge.

Opportunity International Australia used to undertake client surveys of up to 300 questions, but had found that the more complex the studies became, the less useable the data was. As an organisation, we are all about empowering the local decision makers to make policy decisions, but the complexity of the data collected made it unworkable.

By simplifying the key indicators and making data collection simple, practical and day-to-day, we have achieved significant buy-in from our staff on the ground and as a result we are able to understand the real impact our programs are having and the changes that might improve them.

Poverty is not the same everywhere and program providers shouldn’t take for granted how their programs really impact lives, or even if they do.

What we are really trying to understand is our ‘social return on investment’ – how effective are our programs in creating the change we want to see? Through rigorous analysis, akin to the cost/benefit analysis that profit-driven organisations do, we are using real results to improve our programs. And that’s where meaningful measurement is so important.

About the author: Calum Scott was a speaker at the recent Centre for Social Impact Conference on Measuring Social Outcomes. Opportunity International Australia exists to provide people living in poverty with the opportunity to transform their lives through community development programs and loans as small as $100 to help them grow their own small business. www.opportunity.org.au