Why does this dimension matter?
The demographic and geographic characteristics of people who experience impact, or the environmental characteristics of the planet, help us to understand whether they view an outcome as important (positively or negatively) and how underserved they are in relation to it. When we consider an effect, we assess how well-served the person experiencing it is based on whether they are already experiencing – or have the opportunity to experience – the outcome that the effect relates to.
EXAMPLE: A farmer in Nigeria may develop skills or receive a salary that enables her to have financial security. With these skills, she is well-served in relation to the outcome of financial security. A high-income professional in rural Missouri may be underserved in relation to social connection.
How do we identify who is affected?
We recognise that we are all actors in wider systems and that the effects that one actor experiences when they engage with an enterprise often generate material effects for other actors with whom they have a relationship. We also recognise that the material effects of relationships between actors are often institutionalised in:
- Organisational forms,
EXAMPLE: A market institutionalises the relationship of actors buying and selling from one another
- or, widespread social or cultural norms
EXAMPLE: Families living together
- or, government policy
EXAMPLE: Individuals not stealing from one another because they will be punished by law if discovered.
To the extent possible, when we describe impact we describe any material effects on relevant systems, being specific about which actors and relationships in a system we are referring to.
What information do we need?
To understand who is affected by interaction with an enterprise, we collect geographic and demographic data directly from people affected, or from experts in the outcomes we seek for the planet (such as scientists).
In this section, we bring the dimensions to life through examples of how of a number of enterprises work to deliver employment outcomes for young people with different needs in different geographies. The examples are drawn from specific organisations but illustrate useful approaches for any enterprise or investor – big, small, for-profit or non-profit – managing impact across the five dimensions.
Meet Career Connect, one of ten providers selected in 2011 to deliver a programme to help young people aged 14-24 who were NEET (not in education, employment or training) or at risk of becoming so, as part of the UK Government’s £30m Youth Unemployment Innovation Fund. The contract was structured on a 100% payment-by-results basis and financed with a social impact bond. It was the biggest of the 10 programmes commissioned by the Innovation Fund, targeting 4,000 beneficiaries. All programmes were commissioned to work with ‘risk-of-NEET’ young people, but the commissioner did not define which risk of NEET indicators to use so providers were free to develop their own.
To understand (who) is experiencing the effects, Career Connect developed risk-of-NEET indicators to assess the level and type of need of each participant. The government commissioning department had stipulated a focus on three groups considered to have a higher-than-average propensity to become NEET, based on local government data (young offenders, those in or leaving care, and those with learning difficulties), but did not prescribe precise definitions. Career Connect Mental Toughness assessment – which highlighted the lack of resilience of the participants relative to the overall population – proved to be an additionally helpful way of assessing individual needs, helping to inform what kind of intervention was needed for each young person.
How does this help us to manage our impact?
We use this information to understand and improve how much of an effect is experienced by certain groups of people or the planet, or seek to understand whether the effects delivered are likely better or worse than what those people or the planet would experience anyway.
To ensure each young person received depth of effect, the programme was iterated and tailored to what was learned about what effects were delivered most effectively for which participants. Far fewer people gained employment than expected which was, in part, a reflection of the provider’s better-than-expected success in re-engaging the participants who were 16-years-old or younger with education. In other words, more of the young people than expected stayed in school, making it impossible for them to achieve employment within the time period of the contract.
To understand how much of the effect has been delivered in pursuit of the outcome (what) of employment, each effect achieved is verified and paid for against a rate card of multiple different effects, like improved attendance or qualifications achieved, where the price is relative to how strong the proxy is for whether the effect will lead to long-term, stable employment. The payments also rise incrementally in relation to the depth of the effect achieved. For example, starting full-time employment is the most valuable outcome. The programme ran from April 2012 to April 2015, with effects tracked to September 2015 through a text messaging and telephone follow-up service.
To try to make sure that the important positive effects experienced were likely better (contribution) than those that would otherwise have occurred, Career Connect closely tracked the risk-of-NEET indicators of its participants and compared the results with peer groups with matching demographics. This helped ensure it was avoiding ‘cherry-picking’, like deliberately relaxing eligibility criteria to make it easier to achieve the desired effects with less underserved young people (who). Although the comparison with a control group showed very positive results, Career Connect did not claim this entire contribution, as it was hard to establish a fully accurate control group because risk-of-NEET indicators are not classified in a standard way nationally.
Big Society Capital’s Outcomes Matrix
A tool to help us articulate and measure the outcomes (WHAT) sought by specific beneficiary groups (WHO).
CAIT’s Climate Data Explorer
A free and open source for comprehensive and comparable climate and emissions data by different gases, countries and other indicators.
FHI360: Vulnerability assessment methodologies
This overview of the different methods used to measure vulnerability helps us to select the most appropriate tool for understanding which people or planet (WHO) we affect.
A collection of data and infographics at the national level regarding economy, education, energy, environment, health, infrastructure and work (WHAT), plus population, demographics and society (WHO).
Progress out of Poverty Index
This poverty measurement tool uses surveys to estimate the likely income of households (WHO).
World Development Indicators (WDI)
A database of demographic and economic data at regional, national and global level (WHO and WHAT).
Bringing impact management to life
Impact Management Case Study in Off-Grid EnergyOctober 18, 2017
This case study brings the full impact management process to life from the perspective of Acumen Fund; an investment manager who has made a number of investments in off-grid energy. While impact management is still a work in progress for Acumen, the case study aims to highlight the value of collecting data across all of the dimensions of impact and illustrate how this data is used to re-set goals and improve performance.Read More
The Impact Management GlossaryJuly 10, 2017
When it comes to assessing and managing impact, many terms mean different things to different people, or different words are used to mean the same thing. The glossary is a collaborative effort to reduce possible confusion by showing what different terms mean when they are defined for or by a certain community of practice.Read More
Investor’s Perspective: Constructing a portfolio on the efficient impact-financial frontierOctober 4, 2017
Root Capital has been working with the Impact Management Project to provide guidance for individual funds within a single asset class, who are looking to build a portfolio on the efficient frontier of both financial and impact performance.Read More
Perspective from the Australian marketSeptember 28, 2017
Based on a series of webinars, this downloadable document summarises insights from the sessions, showing how the Australian perspective has informed the global convention.Read More
How do we know if impact has occurred?September 27, 2017
Collecting evidence of impact is an important step towards figuring out which material positive and negative effects are occurring, before making decisions to improve the experience of people and planet.Read More
Investor’s Perspective: Incorporating impact goals into traditional asset allocationAugust 29, 2017
Over the last six months, UBS has been working with the Impact Management Project on a series of model portfolios that illustrate different combinations of impact and financial goals. These portfolios, along with insights gained along the way, are showcased here, in the hope that we can contribute to the ongoing discussion about how best to incorporate impact considerations into asset allocation.Read More