IMPACT FIRST

WHY YOU NEED TO MEASURE RESULTS AND HOW TO DO IT

Preface
Social Enterprise NL wants a new economy that is circular, inclusive
and free of poverty. Social entrepreneurs are leaders in the field of
economic models and can prove that such an economy is feasible.
At the heart of this new business model is the so-called ‘everybody
profits principle’: profit that is not at the expense of others or the
environment, but one that has a positive impact and social value.

Social enterprise is inspiring, but there are also critics who are
sceptical whether it can exist in a free market where low costs are
important. In other words, is social enterprise realistic?

It is therefore vital to measure the impact of each social enterprise.

You need to know what impact your social enterprise has on the
world and be able to back this up with objective information to prove
your claims. This is an intrinsic part of social entrepreneurship.

Impact measurement is a relatively young science which evokes

all sorts of questions and is shrouded in mystery. What does it
cost? Do all values have to be translated into euros? How do you
get started in concrete terms? And on top of that, entrepreneurs
believe that they already know best. Inspiring? Definitely. But (still)
not convincing enough.

Measuring impact is the spearhead when developing an ‘impact

first’ social enterprise sector. Social Enterprise NL wants to show
that social entrepreneurship is valid and, more importantly, feasible.
The best way of doing that is through concrete examples and by
creating best practice. In other words: by just doing it!

i
Together with impact consultancy Avance and three leading social
enterprises, we have started a project that will be an example for all
members of Social Enterprise NL and many other companies. We
believe that ultimately every organisation should know where it
stands in terms of impact - in the positive and less positive sense
of the word.

Mark Hillen,
Co-founder and director of Social Enterprise NL

ii
Colophon
Written by:
Edith Kroese, Avance
[email protected]
www.avance-impact.nl

At the request of:

Social Enterprise NL
www.social-enterprise.nl

Editor:
Bureau Lazarus

Design:
Wouter Ebben
www.wouterebben.nl

©2015 Social Enterprise NL and Avance

This text is protected by copyright and is the
intellectual property of Social Enterprise NL
and Avance.

This project and this publication was made

possible by the Anton Jurgens Fund
www.antonjurgensfonds.nl

For questions or comments about this publication

please contact us at
[email protected]

iii
Table of contents
1. Introduction………………………………………………….. 2
2. Why measure impact? ……………………………………….. 4
Three good reasons to measure your impact………………4
The new normal…………………………………………….5
3. So, measuring is great - but what is impact exactly?………... 6
Theory of Change………………………………………….. 7
4. An insight into your impact in five steps……………………. 9
1. Determine your specific goal and scoping………………9
2. Impact mapping………………………………………… 12
3. Data collection…………………………………………...14
4. Sense-making and conclusions………………………….16
5. Reporting & communication…………………………… 19
5. Mind benders.………………………………………………… 24
5.1 How to keep cost and effort within limits?…………….24
Experience…………………………………………… 24
5.2 How to deal with attribution issues.…………………... 29
It is my impact! Right?………………………………..29
5.3 Can impact always be translated into money?………... 31
Why convert into money?……………………………34
Why not convert into money?………………………..35
Our advice…………………………………………….36
5.4 Leading towards impact. How do you do that?.……….37
5.5 The bigger they are, the harder they fall………………. 39
6. Want to know more?…………..……………………………... 41
About Social Enterprise NL..……………………………… 44
About Avance……………………………………………… 44

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1. Introduction
All social entrepreneurs should measure their impact. In our
preface, we say that this is both useful and feasible. To convince
you of this, we will answer the following questions:

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We hope that after reading this publication you will decide to take
the first step in measuring your impact.

A sustainable example from a polluting industry

Taxi Electric took the Amsterdam taxi market by storm.
A fleet of 35 fully-electric cars fuelled by green energy
offers a sustainable alternative for the environmentally
conscious taxi user. The result is less air pollution. But
Taxi Electric also offers job seekers over the age of 50
the opportunity to retrain and become taxi drivers.

Questions asked during the impact study included:

how much less CO2, particulates and nitrogen are
emitted by an electric taxi compared to a normal taxi?
How does this influence the well-being of Amsterdam
residents? How many people have actually gone from

2
welfare benefits to paid jobs and what are the social
and economic consequences? Taxi Electric wants to
use the research to see how it can increase its impact
further and continue building a new model for the
taxi market.

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2. Why measure impact?
Three good reasons to measure your impact

Ruud Zandvliet, one of the founders of Taxi Electric, sees measuring

impact as an essential part of social entrepreneurship. “I want to
know what we achieve so that I also know in which area we can
improve,” he says. Good impact measurement helps management
to create impact and to maximize it.

The second major reason It doesn’t matter why you

for measuring impact is to measure impact, whether
validate your claims to all
it’s for CSR policies within
stakeholders: investors,
customers, government a company or for a
and media. With data on charity organisation. The
impact you can convince approach and reasoning
people, reinforce your behind measuring remain
brand and stand out the same. It is necessary for
from your competitors.
both, because not doing
Furthermore, you can
manage risks and will it would be the same as a
be able to answer tricky commercial company that
questions from the press. does not know how much
Scepticism and negative profit it makes.
publicity can cause
considerable damage to
your company image. - Dr. Karen Maas
Erasmus University Rotterdam

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Finally, measuring impact contributes to employee motivation
because they really see that there is an impact – that what they
are doing really benefits the world. When in contact with external
people, well-informed employees will be even better ambassadors
for their company or organisation.

The new normal

Validation of your impact claims should be as normal as doing
your financial accounts – when it comes to it, social enterprises are
in fact all about ‘impact first’!

Measuring impact is still far from common practice. In a survey of

Social Enterprise NL members, 50 percent of companies indicate
they measure ‘something’. But only one-third can name what
method they use for this.

Unique development opportunities in a company

Bakkerscafé Brood op de Plank (Baker’s café bread
on the shelf) is located in the centre of the Bottendaal
district in Nijmegen. It’s a cosy lunchroom with
delicious, freshly baked organic bread. What makes
the café special is that it is run by people with physical,
mental and/or psychological disabilities. They work
together in the bakery and lunchroom and are offered
guidance and personal development.

From experience, the company knows that working

at Brood op de Plank has a positive impact on

5
employees. It has seen people grow both as employees
and as individuals. But how do you measure this
development? And what is the best way to show this
to potential customers and other stakeholders? With
these and other questions in mind, Brood op de Plank
started its impact trajectory.

6
3. So, measuring is good -
but what is impact exactly?
Impact is the change that can be attributed to your company, both
positive and negative, planned and unplanned.

As a social entrepreneur you want your business to make a

contribution to solving social problems and to have a positive
impact on people, the environment and society: creating social
value.

Sharing is caring
On average, cars aren’t in use for about 23 hours a day.
Still there are new cars rolling out of the factory every
day. What a waste! Why can’t we make better use of
the cars that are already there? With this in mind,
SnappCar, a peer-to-peer car sharing platform, was
launched. Individuals may rent their own cars to each
other easily and well- insured through SnappCar. There
are now more than 75,000 people using their handy
app. It improves the social and financial position of
people. After all, car sharing connects people to each
other, and because they also earn something with it or
save money, their financial position is strengthened.
As a result, SnappCar doesn’t only want to have a
positive impact on the environment, but also on
people. SnappCar wants to be a catalyst for the sharing-
economy, where private ownership is becoming less

7
 important.
But what effect does this way of sharing really have
on the environment and on the social and financial
position of people?

Theory of Change
The activities of a company lead to outputs, in other words, the
direct results of the activities. When the right activities have been
chosen, these outputs lead to positive effects for individuals and
perhaps to an impact on society in general.

So the business model

of a social enterprise is
supported by a theory
of change: a model that
describes the change
pursued by the company and
how this change is realised.
This model includes the
original business links
between activities, outputs
and impacts.

Taxi Electric started from

Figure 1. The Theory of Change the conviction that electric
vehicles reduce CO2

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emissions and particulate dust, something that is observable and
controllable. But the fact that sharing a car through a peer-to-peer
network also creates social bonds in a neighbourhood is a new
development, one that is less evident.

Many social entrepreneurs start their business based on a feeling

and a belief that ‘this is the way it must be done’. The theory of
change is not always explicitly documented in the business plan.
Therefore side effects are not explicitly mentioned. For example,
being a taxi driver is a hard job and can have a negative effect on
a driver’s health. Just like baking bread requires energy and thus
creates CO2 emissions.

In an impact trajectory, you need to take a closer look at the

established theory of change - to look at the intended results,
material side effects and how these relate to each other. It is not just
a ‘fill in the blanks’ exercise but a participatory process that you
need to go through with different people from inside and outside
your company to include all points of view.

Impact measurement supports your theory of change and

determines what your role has been in that change. As a company
with a social objective, you are in fact often a link in a larger process.

To determine what your contribution has been, you should not just
collect information on the ultimate results, but also on the whole
process of creating social value. In other words, what you have
done, the quantity and quality of the services and products you

9
provide, what your stakeholders are doing and what results you
want to achieve. Determining your contribution to the results (also
called attribution) is not always easy. Which is why, in section 5.2,
we will discuss how you can best do this.

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4. An insight into your impact
in five steps
The process for measuring your impact can be summarised in the
following five steps:

Figure 2. Process to measure your impact

1. Determine your specific goal and scope

Start by determining your goals. What will the trajectory produce
and who will be interested in the results? Are these results important
for marketing, your relationship with investors or municipalities?
It is important to carefully define your goals because this will guide
you in the choices you make during the process.

For the lunchroom Brood op de Plank, an analysis of

environmental effects makes little sense: it would take
a lot of effort and provides no valuable information.
Using less energy and biodegradable packaging are
normal choices for a social entrepreneur. Money
spent on measuring the effects of those choices is not
a sensible use of resources. The company’s proposition
is to give its employees the opportunity to develop,
so this is where time and money is spent during the
impact study.

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12
Next, you need to determine the scope of the measurement. This is
a definition of your analysis: you will not measure all the effects on
stakeholders, but make an initial selection based on the goals you
want to reach. An important criteria for this choice is the extent
to which the expected results are material, meaning that they are
important and significant for those involved in your organisation.
A good integrated impact measurement includes all the major
intended positive results, but also all the side effects. Therefore you
can work with the so-called 20/80 rule: 20 percent of your effort
gives 80 percent of the maximum result. Electric taxis, for example,
produce less noise. That’s great for residents, but it is not material
because measuring the effect of less noise on the local community
isn’t relevant for your company.
Once you have a picture of the desired scope of your impact
measurement, you need to look again at the time and money
available for measurement. Does the budget allow you to carry out
the planned impact study? If not, you have to be more selective
with the sort of results that you will include in your measurement.

The European Union recently developed a standard

for measuring impact of social enterprises. This
contains some important guidelines. The fact that this
standard has been developed at European level makes
it clear that impact measurement is important.
The social reporting standard of the EU indicates what
questions need to be answered by the impact report
and what information it should deliver:

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 1. The problem that needs to be solved (which social
problem is your company trying to address?)
2. The scale of the problem (how big is the problem
and who will have to deal with it?)
3. The organisation’s contribution to solving the
expected impact (how do you reach these results
and what kind of impact do you expect? This is
specified in the impact folder)
4. The social impact you reached (what has been
achieved, the actual impact)
5. Plan and perspectives (what are you going to do
with the impact information, what will you use
it for?)
6. Organisation (description of your social
enterprise)
7. Finance (how much money is spent and earned
to achieve this impact?)

2. Impact mapping
From the chosen scope you can develop a theory of change
and identify your activities and outputs. How do causal
connections lead from activities to outputs, and how do
these outputs lead to practical results? It is very important to
identify potential side effects at this stage – results that were
not set as targets at the beginning of your process, but that
still occurred. These results could be positive or negative.

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Indicating potential impact is quite difficult. Therefore it is
always a good idea to get sufficient people involved in the
process during this phase, so that every perspective of your
business model becomes clear. If possible those involved
should represent all interested parties, such as employees,
investors, customers and governments.

Figure 3. Abstract theory of change of Bakkerscafé Brood op de Plank

Eve Walraven (Brood op de Plank): Mapping our

potential impact created lots of discussion, but
ultimately proved to be a very valuable exercise. The
involvement of employees and clients at this stage
was very important; they did indeed see different
things than we did. Because of our discussions, our
proposition became sharper and now we know exactly
where we want to make a difference.

15
The next step is to make results, outputs and activities
measurable by formulating indicators. Indicators provide,
as the word implies, an indication of what you are trying to
investigate. For example, a concrete example of an indicator
for ‘health’ is how often someone visits a doctor. For ‘social
cohesion’ you can look at the number of contacts between
people in a neighbourhood or you can ask the users of a
shared car for their experience of their contacts.

At the end of the second step, your impact map is complete.

The results, outputs, activities and related indicators have
been mapped. The planned targets that were taken from
your previously developed theory of change are included, as
are the unforeseen results. This is still preparatory work for
the impact measurement; you will now check how you can
validate the assumptions and which unforeseen results have
occurred.

3. Data collection
In this third step you primarily investigate which information
is already available, either within the company or externally.
That way you know which indicators need additional
research. Additional research may mean looking further in
your own records, literature research, conducting surveys
or doing interviews.
It is often necessary to have different, complementary ways
of collecting data to get a good insight into the changes.

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 Figure 4. Impact on the radar

To get data for indicators that can’t be found in the

company system, you need to develop instruments such
as questionnaires and interview guides. This takes time
and money. It also demands an understanding of how
indicators can be translated into simple questions that can
be answered by stakeholders. Therefore we recommend that
measurement tools are developed in such a way that they
can be used more often and form a part of your business
operations. In this way you can get regular updates on your
impact information without spending too much extra time
and money.

Every new employee at Brood op de Plank is asked

a set of questions about their home situation, their

17
 network, their level of independence and their work
history.
The results of these interviews are an important
basis for coaching and workplace counselling. The
aggregated results also provide input for the design
of appropriate processes and types of workplaces. The
baseline and follow-up measurements are the basis for
reporting to stakeholders about changes in employees’
situation, their progress on the labour market and
their personal development.

Do it yourself or outsource?
You can do data collection yourself but you can also outsource
it. The advantage of dealing with it yourself is that during the
collection process you learn a lot about the impact that is being
achieved. You are forced to speak to your customers, which is often
very instructive for employees. However, take note: it can be time
consuming.

In some situations an external view is important because if you

collect and process data yourself, there might be an issue with
credibility for certain stakeholders. Because, in the end, you have a
direct interest in the results. Therefore an objective, external view
provides additional credibility.

4. Sense-making and conclusions

As soon as data is available, you will find out how well you performed
on the various indicators. By analysing these scores, it becomes

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clear what the achieved results and outputs are. When you follow
the logic of your theory of change (and the links between achieved
outputs, results and activities are combined with information on
scores), you will have an initial insight into the results of your work.

This logic won’t be the complete picture. You must also take into
account factors that reduce your impact, for example:

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others (displacement).

While doing research at Brood op de Plank the issue

of attribution became clear in an unusual way. As
part of the study, employees with disabilities were
asked how their lives had changed while working at
Brood op Plank. They were also asked to what extent
Brood op de Plank had influenced these changes.
Several respondents reacted indignantly to the second
question. “Influenced by Brood op de Plank”? Surely I
was responsible for the changes myself?!”

Your impact may be lower if you take these factors into account,
but it will also be more realistic. After all, you have specifically

19
measured what impact is directly the result of your business.
When it is not possible to do an exact calculation or when estimates
are unsubstantiated, you can only share your analysis and say
whether it has had a positive or negative effect on your impact.
And explain why it’s not possible or doesn’t make sense to calculate
this any more precisely.

The findings speak for themselves, these companies

have impact!
SnappCar could prove that by sharing cars, people also
met each other outside the rental periods and therefore
its business encourages social cohesion. In addition,
car sharers ultimately drove fewer kilometres so fewer
cars need to be produced. This creates significant
savings in CO2 emissions.
Electric Taxi could actually prove how much CO2
reduction it was responsible for and could demonstrate
that society benefits financially when these drivers
get back to work. But it is equally important that the
company finds out why customers choose Electric
Taxi, what its activities are doing to the taxi industry
and how its drivers experience their work.
Bakkerscafé Brood op de Plank can present evidence
for what it already knew: the company supports its
employees in their personal development and future
prospects. In addition, the benefits for the government
are quantified in euros and the café knows the role it
plays in the neighbourhood.

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5. Reporting & communication

So now you have a good idea of your impact. But what’s next? What
will you communicate, and how? Here are three tips:

1. Tune into your audience

If you want to communicate successfully, content and form must
resonate with the target group. One message and one form of
reporting your impact will not work with all your stakeholders.
You need different types of media and content, targeted on specific
audiences.

Philanthropic research1 shows that small donors are

less likely to give money if they are flooded with impact
data. This undermines the emotion that motivates
their giving. A focused message with relatively
little information but using an attractive layout and
‘emotion’ works best for this group. Large institutional
donors on the other hand will donate more if they are
comprehensively informed.

So investors and governments will be interested in a fully

substantiated impact report but customers won’t be. They will have
to be informed in another less-detailed way about your impact, for
example via your website. Consider using attractive infographics or
case studies. Look at how SnappCar used visualisation to portray
the proposition of its company (figure 5).

1
The Effect of Effectiveness: Donor Response to Aid Effectiveness in a Direct Mail
21
Fundraising Experiment - Wood & Karlan, Yale Economic Growth Center, 2014
2. Justification
Regardless of the method
you choose to communicate
your impact, you will always
have to describe how you
carried out the research and
what the limitations were. An
explanation of the process
contributes to confidence in
the impact that you claim Figure 5. Snappcar, social impact in 2014
to have achieved. Everyone
will understand that you had background information.
to make choices. A good, And that is important because
transparent explanation also although in the past people
ensures that you can react simply believed organisations
adequately to critical questions were ‘doing good’, nowadays
and requests for additional there is an increasing demand
for evidence.

3. Don’t over claim.

One of the quality requirements
regarding impact studies is the
need to avoid exaggeration or
over-claiming. Inform about
your impact, including all its
shortcomings, that is what
people will value.
Figure 6. Table of time and participation to
communicate evidence.

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23
Brood op de Plank has not yet completed its impact
measurement. A baseline of the employees’ situation
before they started working at the café has not yet been
created. However, the employees’ current situation
was registered. And a realistic assumption of the
impact of working at the café could be made through
interviews with former employees and staff that had
been working at Brood op de Plank for a number of
years.
In 2015, this research group was asked to answer the
same questionnaire for a second time to confirm these
assumptions.

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5. Mind benders
We want to inspire everyone to measure impact, but we don’t
want to make it look easier than it is. This section therefore has
a more in-depth nature: we describe some common issues such
as the dilemmas that entrepreneurs encounter during impact
measurement. Here we also draw from the experience of Tony’s
Chocolonely who have been involved with impact measurement
for quite some time.

5.1 HOW DO YOU KEEP COST AND EFFORT WITHIN LIMITS?

Experience
Brood op de Plank, SnappCar and Taxi Electric set high standards
for themselves. They chose to include all material results at once.
During an average period of about eight months these entrepreneurs
worked on their theory of change, did an extensive literature review,
collected additional personal data through surveys and interviews.
They also processed their conclusions to create a detailed and
complete impact report.

The director from each company was available for about five or six
impact sessions, supported by an experienced employee who did a
lot of the necessary operational work. Avance’s role in the process
started as a facilitator and advisor, but the work was evenly shared
throughout the trajectory. The preparation of questionnaires and
interview guidelines called for specific expertise.

25
 Each trajectory had its own complexity. The
environmental calculations for Taxi Electric were
challenging because the sources used frequently
contradicted each other on emissions and
environmental damage caused by batteries. This called
for thorough research.

For SnappCar it soon became clear that existing

studies were not sufficiently relevant to their form of
car sharing and the company had to send out its own
survey to as many active participants as possible.

When it came to Brood op de Plank much time was

needed to match data collection tools with existing
methods for reporting on employment programmes.

Eight months sounds like a long time. Perhaps it was even possible
to implement the impact studies in a shorter period, but experience
shows that some decisions simply take time - especially if you want
to involve more employees in the process. Bearing in mind too that
work on the impact survey had to be done alongside employees’
normal work tasks. But researching everything as integrally and
simultaneously as these three companies did is not necessary per
se. You can also start small and expand gradually.

How do you make sure that measuring impact does not cost too
much time and money? After all, it should be feasible even if you
don’t have much time or money available. Here are our three most

26
important tips:
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Just get started!

Of course we recommend comprehensive fail-proof scientific
research, but that is rarely cost effective for an entrepreneur. So, it’s
good just to start somewhere. Take a second look at your original
theory of change and think about the previously discussed 20/80
principle. Start with your main outputs and results and check if
they are really measurable and achievable.

Build up your system gradually

You could, for example, choose an additional theme every year,
focusing on the priorities at that moment. This does not mean
that starting small means that the scope remains small or that you
will use incomplete information. Once you have added a topic
(or a stakeholder), develop your system further so that eventually
you will be able to tell the whole story of your impact. And don’t
forget: where possible, integrate data collection into your existing
processes.

Tony’s Chocolonely started tracking its impact in

2013. The first step was to gather information from
the cooperatives that it works with in Ghana and
Ivory Coast. Tony’s asked them about the quality of
the submitted cocoa and the financial health of their
organisation, with the aim of determining whether

27
collaboration with Tony’s actually led to more stability.
Collecting data turned out to be affordable and yielded
interesting information. Now, Tony’s collects this data
annually.

Tony’s priorities, however, lie with the farmers and

a slave-free environment at the bottom of the chain.
To gain better insight into its situation, in 2014 Tony’s
decided to carry out a baseline survey of farmers who
are members of the supplying cooperatives. Avance
conducted interviews with the farmers at their homes
to assess their socio-economic situation and that of
their families.

This study was costly, but important for Tony’s

Chocolonely to justify and manage its impact. A
follow-up study is planned in 2017 to measure how
Tony’s farmers are doing. The results will be compared
with those from the baseline.

Measuring another type of impact, consumer

awareness, was planned for the second half of 2015.

28
The growth of your impact measurement depends on how big or
small you start and what you want to get more insight on. A po-
tential pathway to growth is shown in figure 7.

Figure 7. Building your impact system

Use what’s already available

In a number of areas, it is probably possible to find data in exist-
ing research. There is then no need to research this yourself and
you can use what is already available.

As well as complete research, there is also a lot of relevant data

available. Using this information in a smart way saves time and
money. For example, the Central Bureau of Statistics has data on
the average time it takes an unemployed person over the age of 50
to find a job and figures on unemployment benefits.

Searching for this existing evidence base is important, but also

time-consuming. You could also consider doing it with colleagues
from other businesses. For example, there are many companies

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(like Brood op de Plank) that employ people with disabilities.
You could look at existing literature together and use each other’s
work. But do keep a critical eye on how applicable and relevant
data is for your specific situation.

During literature research for Taxi Electric, it turned

out that the results of studies on the emissions released
when producing electric cars vary considerably.
The background of the research source was often a
good indicator of whether the emissions would be
registered as high or low. Studies with a link to the
automotive industry often portrayed the emissions
level very negatively while studies from environmental
organisations did the opposite. Therefore verifying
the sources used in the impact study for Taxi Electric
was particularly important.

If you are still concerned about the cost of impact measurement,

external financing could offer a solution. Impact financiers and/
or funds are often also interested in the impact of initiatives they
support. Universities are regularly looking for research opportu-
nities. Being the subject of a study gives you a cheap way to get an
impact measurement. What can be nicer than working with other
social enterprises that are contributing to the new economy?

30
5.2 HOW TO DEAL WITH ATTRIBUTION ISSUES?

It’s my Impact! Right?

Measuring impact is about the results of your company’s activi-
ties. Or in other words, to determine what would not have hap-
pened without your business. This is sometimes difficult because
there are so many factors at play. This is the attribution question.

For SnappCar’s impact study, driving behaviour was

analysed. Did the number of kilometres people drive
since participating in SnappCar increase, decrease or
stay the same? Many people’s behaviour has changed
since joining SnappCar: many of them drive less and
a small group drive more.

To understand this, it is important to realise that this

change may not only be attributed to SnappCar. There
are many reasons why people change their behaviour.
Perhaps they became more environmentally aware, or
started a new job. The attribution was made as explicit
as possible within the survey by asking users directly
whether SnappCar has influenced their driving habits.

If you want a pure measurement of attribution, you need a control

group. Research into the change that your company is responsible
for can best be done by comparing results with a random sample
from a comparable group of people with whom your company is
not involved.
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Control groups are difficult to organise because you have to create
two identical groups to which people are randomly assigned.
Imagine a group of customers that do not use Taxi Electric. And
imagine that from this group you have to choose a sample to ask
questions about electric cars.

Not an easy task.

To set up such research you need sufficient knowledge of research

design (such as setting up samples) and data collection tools (such
as surveys) as well as funding. Or, where possible, you must be
able to hire in expertise.

But what can you do if working with control groups is not feasible
or desirable?

Our advice is not to let this keep you from looking for existing
benchmarks and put them alongside the group that you have
reached. For example, there are trend studies available that can
tell you what an average person thinks about electric cars. In this
way it becomes plausible to claim that a significant portion of the
results really are due to your company’ activities.

32
 If you only look at the income of the farmers who
supply cocoa, we don’t learn much. Compared to
Dutch standards they earn very little. It is therefore
necessary to look at their income in a certain context.
Thus, the baseline survey for Tony’s has made a
comparison with the poverty line set by the UNDP
and the World Bank. In this way, the farmers’ income
could be compared to an internationally accepted
standard.

5.3 CAN IMPACT ALWAYS BE TRANSLATED INTO MONEY?

This section is about translating social and environmental impact
into monetary terms. This is called monetising. There is much dis-
cussion about this issue and about the methods you can use to do
it.

Some results are logically expressed in money. For example, in

trajectories that focus on employment you take account of benefit
savings and healthcare costs.

DOEN Foundation, Start Foundation and GAK (an

institution that gives subsidies to Dutch welfare and
labour projects) invest in retraining unemployed
people over the age of 50 to become taxi drivers. There
is a cost attached to this. The return comes when these
drivers start to work for Taxi Electric: they don’t need

33
34
 welfare benefits anymore and start paying income
taxes. This calculation is of course very interesting for
Taxi Electric and was part of the impact study. The
amount saved on benefits is over 40 percent higher
than the amount invested in the training programme.
So it turns out that investment in training results in
a significant net saving for society because of benefit
savings.

Why convert into money?

Everyone knows the value of a euro. So it could be useful to
communicate about your impact in a language that is familiar to
investors or funding bodies. It’s also a way to make so-called soft
results, such as breaking social isolation, tangible.

It’s also easier to compare results when universal measurements

such as money are used. In this way assessments of investments or
comparison with other programmes or activities can be validated.
It gives the investor or subsidising party the ability to weigh up
options and decide where the greatest impact is created for each
invested euro.

There are different ways of converting results into cash. For example,
you could look at costs savings (how much would you otherwise
have to spend to obtain the same effect) or ask people how much
something is worth to them (in euros).

35
Why not convert into money?
In many cases it’s not relevant to convert soft results into euros.
It adds nothing extra and blurs the result because of the many
assumptions you have to make to get to a calculation.

For example, if a target

group says that having
friends is extremely
important, there is no
added advantage in
converting this into a
monetary value, and
the process for doing so
would be subjective and
complex. Together with
your target group, you
would have to determine
how much money friendship is worth, and then determine how
many friends are new in order to make a calculation.

This could distract people from discussing actual impact and

may also raise questions about the way value is assigned. If you
are not using exactly the same valuation as projects that you want
to be compared with, then there is no point in making monetary
conversions.

Taxi Electric chooses not to convert the reduction of

CO2, particulates and nitrogen emissions into money.

36
 Instead the company has related the amount of its
reduced emissions - compared to regular taxis - to
the air pollution problem in Dutch cities and to the
number of trees needed to restore emission levels.
Besides the environmental benefits in the form
of decreased emissions, a significant indirect
environmental benefit is expected through more
environmentally aware drivers and customers.
Through their contact with Taxi Electric they have
started thinking more positively about electric driving,
became more aware of environmental issues and have
in part already changed their behaviour in favour of
the environment.

Our advice
Only convert results into money if it’s possible to do so without too
many assumptions. For other results, find out how important the
impact is for your target group by asking them and by putting the
information into context (as in the earlier example of Taxi Electric).
Present an honest story about what you have accomplished without
too many complicated calculations. In this way all interested parties
can form their own opinion.

5.4 MANAGING IMPACT, HOW DO YOU DO THAT?

“Impact? Let me put you through to our impact manager ...”
Managing your company for impact sounds tricky. Nevertheless,
you know more than you think after measuring impact. You know
where you have made a difference, how you achieved impact and

37
which activities led to these results. By turning these ‘smaller’
buttons (your activities), the impact of your theory is automatically
taken to a higher level.

The most important thing is that managers and employees think

and make decisions based on the information from research which
shows what does and does not work. And that the impact achieved
is included in the assessment of people and departments: everybody
needs to be involved and held accountable.

This means that running the company to achieve impact must be a

shared responsibility for everyone. Everyone needs to do their bit,
in line with his or her responsibilities, expertise and function.

It may help to choose clear themes and goals to strengthen the

results of impact measurement. Every year, select two or three key
areas where you want to improve impact and communicate these
clearly within your company.

An impact dashboard next to your financial dashboard can help

present and monitor data easily. This dashboard should contain
the most important indicators that give you an insight into your
activities and outputs and the results you want them to achieve.
Below is an example of how Tony’s Chocolonely organised this.

38
 Every year the manager at Tony’s gather information
they need for the dashboard (which Tony’s calls
the road map). The dashboard and the underlying
information are then verified by an external party
(Avance). This external party visits the company,
checks the data and conducts interviews to find out if
the information is well presented and how fat Tony’s is
in achieving impact. During an annual review session,
progress on the impact roadmap is discussed with the
organisation and conclusions made on what Tony’s
can be proud of and what still needs to be improved.

The most important thing is that you make sure that achieving
impact is put clearly on the company’s radar. Set your priorities for
the coming year and communicate these clearly at all levels.

Figure 9. Building your impact system

39
5.5 The bigger they are, the harder they fall
Communicating impact can feel like a risk. Sending a message
implies that you are ready to receive a reaction. What if people
go away with certain conclusions or what if the media start
asking critical questions about things that you have not yet
researched? How can you tell your story without adding the
entire context?

You could think that it’s wiser to remain silent. However,

we don’t think this is a good idea because with your impact
story, you can stand out from others. Not communicating
your impact also carries risks. Here are a number of things to
consider:

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impact, you stand out in a positive way. Moreover, good impact
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be better. Publishing your impact gives a signal to politicians:
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40
approved’ labels has fallen. Customers can’t see the wood for
the trees and wonder what a company with such a stamp of
approval really does differently. Instead, they want to see the
impact, in other words the actual results achieved by your
company. Communicating impact is a new way of making
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Tony’s Chocolonely is a company that really

cares about open and honest communication. It
communicates honestly about the percentage of the
selling price of a chocolate bar that goes to the farmer.
In the eyes of the critical consumer, that percentage is
small. That’s hard to take, but in the end, Tony’s sees
this criticism as an opportunity to explain that the
market is organised in this way. In other words, every
link in the chain wants a part of the revenue – and
prices at the top of the chain are higher than those
at the bottom. Tony’s is actually trying to change the
existing system by gradually paying more to farmers.
Increasing consumer awareness by providing them
with information is therefore an important goal for
Tony’s.

41
6. Learn more?
If you have read this far then you are probably really interested
in measuring impact and are considering taking the next step:
getting started with measuring your own impact. By becoming a
member of Social Enterprise NL you can participate in the clinics
organised with Avance, these are a good place to start.

If you would like to read more, here are our Top 10 suggestions.

1. European Venture Philanthropy Association:

A practical guide to measuring and managing impact.
http://www.evpa.eu.com/publication/a-practical-guide-to-
measuring-and-managing-impact/
This guide from the European Venture Philanthropy Association
is in principle written for social lenders and shows how they
can measure the impact of their investments. But it is also a
good introduction to the theory of measuring impact for social
enterprises with many examples and practical guidelines.

2. World Business Council for Sustainable Development: Guide

for measuring impact for businesses
http://www.wbcsd.org/impact.aspx
This guide gives a good description of why businesses should
want to measure impact. It provides a general framework and
description of various relevant methods for measuring impact.

3. Global Impact Investing Network: Measuring impact http://

www.thegiin.org/cgi-bin/iowa/resources/research/625.html

42
4. The European Union: A standard developed specially for
social enterprises measuring impact http://ec.europa.eu/
internal_market/social_business/docs/expert-group/social_
impact/140605-sub-group-report_en.pdf

5. Social Return on Investment

SROI is a methodology for calculating the social return on social
investment. http://www.socialvalueuk.org/resources/sroi-guide/

6. PwC sustainable business modelling

Suitable for larger mainstream organisations:
http://www.pwc.com/gx/en/services/sustainability/publications/
total-impact-measurement-management/total.html

7. Sinzer, a Dutch software platform that can be used to capture

and analyse your impact data. http://www.sinzer.org/

8. Global Value Exchange

The Global Value Exchange is a database of indicators including
their monetary value. http://www.globalvaluexchange.org/

9. IRIS is a comprehensive database with indicators that are

accepted by investors. https://iris.thegiin.org/metrics

10. The international network of Social Return on Investment, a

method where your impact translates into money. http://www.
thesroinetwork.org

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About Social Enterprise NL About Avance
Social Enterprise NL is Avance was founded in 2002
the national platform that and specialises in measuring
represents, connects and social, environmental and
supports social enterprises. economic impact. Among our
The aim is to strengthen the clients are investors, NGOs,
sector of social enterprises government agencies and
in the Netherlands and to companies that really want
increase the social impact of to make a difference. Impact
these companies. Learn more measurement is just a means,
or join the organisation: impact maximising is the goal!
www.social-enterprise.nl Find out more:
www. avance-impact.nl

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