Social Impact Measurement
The 7th MIBAS Debate on CSR took place at the Guesthouse of the University of Hamburg on 5th October 2015. More than 80 students, professors, and guests attended the event. The focus of this debate was on the topic, ‘What does really help? Measuring the impact of social projects’. The invited guests shared their experiences during the moderated debate and afterwards engaged in a discussion with the audience. The MIBAS Debates team invited: Sonja Schäffler, representing Phineo, Fabian Hanneforth, working for abgeordnetenwatch.de, Laura Haverkamp from Ashoka Germany just as Sibylle Duncker presenting OTTO Group.
PHINEO is an independent, non-profit consulting company that, according to their mission statement, supports civic engagement for the purpose of common welfare. Against this background, they provide recommendations to social investors about non-profit organisations and projects that suit their philanthropic plans. Especially promising approaches are in addition awarded with the PHINEO impact label.
OTTO Group is, as it can be taken from their webpage, a globally active retail and retail related services group that is present in more than 20 countries with 123 major companies. Their activities are divided into three main business segments, namely multichannel retail, financial services, and services.
Ashoka is a global non-profit organization that identifies and invests in leading social entrepreneurs. Their focus also lies, besides the already mentioned support of social entrepreneurs, on the promotion of group entrepreneurship and on the sector of specific infrastructure building.
abgeordnetenwatch.de is a non-partisan internet platform that is independent in terms of institutions. They offer a service which allows citizens to publicly place question to members of the Bundestag.
For the reason that there are of course various ways for Social Impact Measurement to be understood and to be integrated within the organization, a little summary is given.
As Ms Schäffler explained, Phineo considers the idea of direct impact measurement to be difficult. Things such as contracts of labor that result from social projects can be represented in numbers, but other aspects such as the employment’s duration along with the consequent increased self-confidence are not easy to quantify. On that score, their focus shifted from the social impact’s measurement to its analysis.
In contrast to Ms Schäffler, Ms Haferkamp from Ashoka argued a Social Impact Measurement is however possible. In order to do so, she claimed that the bookkeeping needs to be reorganized. Instead of working with two accounting systems by clearly separating social issues from the common book keeping, the social impact needs to be quantified in a way that it can be integrated within the traditional controlling system. The idea of an annually failure report, as it is already practiced in the USA, hence popped up. The questions of if society was already poised for such honesty were raised, as well as if it was ready for the psychological impact that would come along with the resulting transparency and comparability. The approach was neglected.
Ms Duncker, adding the view of commercial enterprises, presented another way of dealing with the issue. She disclosed that the risks and consequences of OTTO Group’s business operations would reach their peak in their production process. Intending to counteract, two courses of action were consequently introduced. First, an internal tool that would help prioritize sustainable activities. Second, a social program for the improvement of the working conditions at their supplier’s factories. In doing so, OTTO Group concentrates on the negative effects of their business operations which are expressed in ‘Risikoarbeitsstunden’. The company thereby follows the trend of quantification which aims at rendering activities tangible as well as transparent. However, the consequences as well as risks resulting from their operations, cannot yet be monetarised.
Mr Hanneforth was the one who demanded companies to prepare impact reports just as his employer abgeordnetenwatch.de already publishes on an annual basis. Against the background of their implied quantitative and qualitative analysis, these reports shall be of help when it comes to giving account to stakeholders in terms of achievements as well as of failures. In order to set incentives for the continuous improvement of social impact measurement, Mr Hanneforth goes one step further and suggests the impact reports need to be audited. In this conjunction, the term ‚Wirkungsbrille‘ popped up. He further explained, that during everyday business, it is the project content that is quickly focused on. Testing petitions just as reviewing representatives would fall into this category. In doing so, the impact, for whichthe project initially aimed, can quickly be lost of sight. It was against this background that Mr Hanneforth suggested to take on the ‚Wirkungsbrille‘. Not only for the purpose of continuously reflecting oneself regarding the actual impact of one’s project, but also to deliberate if the achieved impact would fall in line with the aspired one.
During the following discussion, the social impact’s quantification was, besides others, critically discussed. In this conjunction, the audience remained sceptic regarding the economic approach to be the adequate when it comes to social impact.