How do you measure community benefit? This new framework could help

A comprehensive framework to help projects define, design, and measure public benefits and allow developers and policymakers to “go beyond good intentions”, has been developed by Impact Investment Group.

The Net Community Benefit Methodology (NCBM) embeds impact into the planning process and helps identify the results that help communities in need.

It is particularly relevant in the context of place-based programs that use incentives such as tax breaks, faster permitting times or zoning regulations to promote investment in communities, to ensure the public benefit is commensurate with the public investment and that intent matches results. 

Dr Erin Castellas, chief impact officer at IIG, told Pro Bono News being more deliberate and making benefits explicit at the start could help reduce the risk of negative unintended consequences.

“You see that sometimes in any of these interventions, even with the best of intentions, you still get negative outcomes. And that’s because it hasn’t been as explicit in thinking through impact risk management or it hasn’t been clear about who is actually going to benefit and how,” Castellas said.

“I think that being more deliberate and explicit about what we’re trying to achieve and using the people in the community to tell us what’s important as well as the data, gives us a clearer starting point and framework to start making those determinations.”

She said the new methodology, which came from a desire within the real estate team to demonstrate how they were creating benefit for the community and link it to better commercial outcomes, helped to fill a gap.

The team had noticed that permitting and planning applications specified what the net community benefit was in any property development. Where there was a measurable net benefit, assessors were able to grant policy concessions.

But what IIG found was that in Australia, and around the world, there was no clear articulation of how community benefit was defined, particularly around where there was a public incentive or investment. 

“So there was this real opportunity,” Castellas said.

“If you think about opportunity zones in the United States or some of the enterprise precincts in Australia, where the government is already giving concessions or incentives around tax treatment for example, the question is how do we know that there’s enough public benefit to justify that public investment.” 

To answer the question, the team looked at major developments to see what else had been done in the net community benefit space and found that everything from office space was being considered a community benefit. 

“So it wasn’t really very clear. It just highlighted the problem more than anything,” Castellas said.

They turned to frameworks such as the United Nations-Habitat’s City Prosperity Initiative (CPI), the Sustainable Development Goals (SDGs), Green Building Council of Australia’s Green Star, Bioregional’s One Planet Living, the Social Determinants of Health (SDOH) and even Maslow’s Hierarchy of Needs.

By mapping these frameworks together and plotting the different dimensions of benefit the frameworks articulated, they found the CPI, which had six dimensions (productivity, quality of life, environmental sustainability, infrastructure development, equity and social inclusion, and urban governance and legislation), was a very close midpoint.

“And so the six dimensions of that framework were kind of high level groupings across every other framework we looked at,” Castellas said.

“We thought okay, if we call the City Prosperity Initiative the midpoint, can we start articulating where you would have data or indicators to baseline how a community is doing across those different dimensions.”

The next component is to ask the community what they think is important and then overlay that on to what the data says, building both into a feasibility model.

“Then you can ask… which of these things are the priority to the community, where we have the greatest opportunity to deliver benefit to the community but also make it stack up in our model,” Castellas said. 

The last step is to close the loop by doing an impact evaluation to understand what actually took place.

While the methodology was designed to create more public community benefit in property development, the findings can be extended across sectors and asset classes.

“I think the way we thought about this methodology is it starts in our property team. But we can see how it applies to our renewable energy team for example,” Castellas said.

“This kind of framework gives us almost the prompt to start looking at what are the different dimensions where we could explore where value can be created and understand what the baseline is and where the gaps are.”

Castellas said the framework has been well received, both in Australia and globally.

“I don’t think we’ve had anyone who one, didn’t get it, and two wasn’t excited by it and saw the value and opportunity,” she said. 

“What we’re seeing with this kind of framework is you can still get a win-win if you link to public values and are more explicit about the social and more comprehensive benefits that can take place. And I think people really understand that proposition and are very excited to see there’s a clear way forward on how to do that.”