Bringing Metrics to the Forefront
During the FLII conference, one major gap that I noticed missing from the agenda as well as the general conversation was space for an open dialogue surrounding impact metrics. At Pomona Impact, my main focus is to develop a set of social impact metrics that we can use to evaluate the social and or environmental impact of our portfolio companies. These metrics are being co-created along with our entrepreneurs so that they reflect the story that the companies want to tell about the impact their business is having through the products or services they are offering their clients.
So, as one can imagine, it was incredibly difficult for me to be at the FLII conference where everyone was talking about the emergence of social entrepreneurship and impact investment without even touching on the basics of how we as a community are going to be measuring our impact. While the argument can, and has been, made that Central America is so new to the concept of social enterprise and impact investment that talking about metrics at this early stage would be too presumptuous, I would argue the opposite for several reasons.
Creating a debate and sharing information and resources surrounding the collection of social impact data is key to starting an ecosystem in Central America that is transparent and accountable to the social mission of this sector. How can anyone, either social entrepreneur or impact investor, say with any confidence that their work is creating an impact if they don’t have data to back up their claims? While the impact sector in Central America is new and fragile, there are countless models of data collection methods that can, and should, be shared and tested here. Acumen’s Lean Data model is making inroads in the data collection world with the argument that data collection shouldn’t be an arduous and expensive task; rather, it should complement the work already being done by the entrepreneur and be used to reinforce and showcase the impact that the enterprise is creating.
The Progress Out of Poverty index created by the Grameen Foundation is an excellent, short survey that can be used by entrepreneurs/organizations to gauge whether or not their product or service is really reaching those in the most need. For impact investors, companies like Toniic have created an impact metrics guide to help investors navigate tracking the social impact of their portfolio companies.
Even data collection tools have seen major improvements especially when it comes to collecting data in the field – TaroWorks is an interesting new software model that allows data to be collected and analyzed through mobile technology. The B Lab has developed software called B Analytics, which can not only organize and analyze data but can also help a company or organization compare its performance with similar players in the same sector. Early stage companies could benefit immensely from knowing what options are out there that are low-cost in terms of time, money, and staff requirements.
While I agree that the impact sector in Central America is still quite nascent, I believe there is a huge opportunity here and now to start sharing the newest methods for data collection. From the conferences and discussions I have had, there is and might never be one right answer for collecting impact metrics. There are however, a plethora of paths and choices available and having a discussion as to the pros and cons of each can help the sector start off on the right track for data collection.
If we don’t start the discussion early, we could fall into the same trap that international NGOs have in terms of collecting massive amounts of data that is simply never used and that is a drainage on resources for both the organization as well as its stakeholders. Even better, we should start figuring out ways now on how everyone, both private and public sector, can collaborate to gather data in a way that reduces the burden on both the stakeholder and the data collector. The discussion surrounding the creation and collection of impact metrics can and should be an exciting space for everyone in the sector to dive into in order to generate new thoughts and ideas to improve upon the methods already in place.