Measuring Social Impact Proves Pivotal for First Animal Org to Quantify Social Worth

Measuring social impact is “essential” for sustainable not for profit organisations which want to stay ahead, according to the CEO of Lort Smith which is believed to be one of the first organisations which works with animals to formally assess its broader social impact. 

The organisation, which operates as the busiest not-for-profit animal hospital in Australia, has worked with consultants Ernst & Young (EY) to quantify the value of the social benefit it delivered to the Melbourne community in 2016 as being worth $10.1 million.

EY analysed Lort Smith’s work in 2016 using its Total Value Framework (TVF) methodology, which allows organisations to explicitly identify the different outcomes created for different stakeholders and place a financial value on them.

The report found the services analysed by EY were almost entirely funded through donations, meaning for every $1 donated, Lort Smith was able to return more than $3 worth of social impact.

Lort Smith CEO David Herman told Pro Bono News the process had proved pivotal for the organisation in rearticulating its core mission.

“We’re pretty sure that we are the first organisation that is associated with animals that has done this, pretty much worldwide,” Herman said.

“In actual fact the core of what we do is really embodied in social impact.

“To actually quantify our social impact was a great way to rearticulate who we are and what we do.”

Lort Smith provides veterinary care for more than 25,000 animals each year as well as a number of socially-focused programs such as pet therapy, short term accommodation for pets of people in crisis, the Mates for Inmates program through Dame Phyllis Frost Women’s Prison, discounts for the financially disadvantaged, and a bereavement support chaplain.

Herman said the organisation was founded in 1936 by Louisa Lort Smith, who identified “the social need of caring for animals”.

“In 1936 there were a number of animals that were associated with people’s livelihoods, they were mainly animals pulling carts, and if the animal couldn’t work then the person, which was predominately a man in those days, couldn’t earn a living. And so by keeping the animal healthy or by getting it healthier quicker, Louisa actually created an extraordinarily unique way of creating social impact through the care of animals, and that has been at the heart of our mission for the last 81 years,” he said.

“We’re not reinventing ourselves, and that’s the exciting thing about this, we’re just rearticulating the core vision that we’ve always had for 81 years.

“Our history of providing vet care and crisis support to Melbourne’s companion animals has always been coupled with an acute awareness of the positive affect we have on the people who care for those animals.

“This report is a strong endorsement of the organisation’s ongoing focus on governance, and confirms the positive impact our mission to nurture the human animal bond is having.”

Herman said he hoped the report would help position them as an “investible not for profit”.

“EY has identified that by offering financial assistance and delivering programs aimed at increasing well-being, Lort Smith is having a significant social impact on the Melbourne community over and above the important veterinary and animal adoption services we provide,” he said.

“We hear amazing stories every day, so we know the effect our work is having, but it’s always reassuring to have quantifiable evidence to back up the anecdotes.

“We are presenting ourselves, not just as a credible and innovative not for profit but an investible not for profit because we can demonstrate that we’ve got good sound financial governance, we’ve got excellent board governance, we’ve got a robust strategic plan, we’ve got a culture in our organisation that has always underpinned our mission, and now we’ve got a highly respected firm of consultants who are verifying that through the public support, we’re punching way above our weight.”

Herman said the analysis was particularly important in the wake of the recent Giving Australia report which showed concerns from would-be donors that their contribution would actually help those in need.

“It’s vitally important for us as an organisation that relies on donors and bequests that we are able to demonstrate we use their contributions effectively and with integrity,” he said.

“In the context of the recent Giving Australia report, certainly Australian donation habits were very much around wanting to understand impact, wanting to be comfortable that the charities were delivering on what they said they were going to do and the cost of what they were doing was quantifiable.

“The EY report really hits home for us and demonstrates that Lort Smith is really making that difference and should, we hope, give people who associate with us a great deal of confidence.”

Herman said the report was just phase one in a multi-layer project looking at social impact.

“For us phase one was empirical, it was taking those areas of our mission that we could easily quantify, that was our payment plan, the commitment to pet therapy, the support we provide for pet bereavement, emergency welfare accommodation,” he said.

“What we’re going to drill down to in phase two is, [for example] we know that EY has attributed x dollars to our pet therapy program, but we know that pet therapy provides extraordinary benefits to help with the rehabilitation and support a whole range of people. To put it in simple terms, if we could understand if pet therapy could help a patient leave hospital one day earlier that’s money for the government because that frees up a bed.

“If we can understand the true value of the human animal bond, we know that owning a pet and having a pet in your life scientifically provides with a healthier longer life, if we can quantify that in stage two, that is a whole unchartered territory for everyone.”

Herman said all not for profits should be considering how to measure their social impact.

“Without a doubt over the next couple of years, ASIC are going to be requiring not for profits to audit their social impact as another means of demonstrating their worthiness and their mission so we wanted to be early adopters,” he said.

“We wanted to be innovative.

“I would say it is going to happen and if you are a not for profit reporting to ASIC it is going to be obligatory over the next couple of years.”