Impact Value Case Study: Transcend IT

Transcend IT connects people to career opportunities and addresses barriers to employment in the IT field.

They offer mentorship and custom training to help participants advance in their careers, and to combat the field’s race and gender disparities.

We used evidence-based analysis to measure Transcend IT’s impact and determine the social return on investment in their programs. The result of our research and accounting:

For every $1 spent on Transcend IT’s training programs, there is a $6.58 social return on investment.

Our Impact Value Summary illustrates how their work creates value for not only program participants, but also their dependents, society, and taxpayers:

Transcend IT Impact Value Summary data visualization by Ecotone Analytics.

This analysis will be refined in the future as Transcend IT develops a longer track record, serves more individuals, and continues to develop their data collection processes.

Transcend IT is positioned to support people experiencing barriers to employment and to address disparities, while providing access to career opportunities that have the potential to transform a participant’s life.

Ready to measure the value of your social impact? Contact us.

Impact Value Case Study: Face It TOGETHER

Face It TOGETHER offers coaching for people with addiction and their loved ones.

They partnered with us to understand the impact of their programs, and to use evidence-based analysis to measure the value of that impact.

The result of our research and accounting:

For every $1 spent on coaching people with addiction, there is a $12.40 return on investment.

We also mapped the organization’s impact value to show how recovery coaching benefits not just the individual, but their loved ones, their employer, taxpayers, and society as a whole.

Now, Face It TOGETHER can use this impact value map to encourage investment in their programs:

Face It TOGETHER Impact Value Summary data visualization by Ecotone Analytics.

“Understanding social return on investment is just one of the many ways we define and measure our impact overall. Knowing the SROI on every dollar spent on peer coaching demonstrates our credibility and keeps us true to our values as an organization. Face It TOGETHER not only improves the wellness of our members, but also brings value to communities.” – Kristen Goettsch, Face It TOGETHER Senior Evaluation Scientist

Face It TOGETHER sees this work as just the first step. We’ll continue working with them to measure and analyze their impact over time.

Visit Face It TOGETHER’s website to read the full report on their impact and social return on investment.

Going Deeper with Impact Measurement

impact measurement

Corporations and startup enterprises face increasing pressure to report on their social and environmental impacts — and many know that it’s good for their reputation too, not to mention the right thing to do. However, much of today’s impact reporting focuses on documenting the past, not predicting and managing risk for the future.

Most reporting falls under “environmental, social, and governance” (ESG) evaluation, using checklist-style standards to evaluate companies’ behavior. Another common evaluation is the B Labs assessment for what are known as “benefit corporations.” These approaches essentially require businesses to operate with a 2010s standard of decency — having women and people of color in leadership positions, being aware of how their supply chain affects workers and the environment.

These are truly important innovations in contemporary business, but what about the businesses who want to go beyond avoiding negative impact, and have an intentionally positive contribution to society and/or the environment?

At Ecotone, our goal is to measure those businesses’ positive contributions by:

  • Quantifying and projecting the potential value of an organization’s impact
  • Identifying the people and entities to whom the benefits accrue — whether that is society at large, a local government, or families and individuals
  • Assessing risk in the potential for unintended impacts

What does this look like in practice? Here’s an example of how we communicate an organization’s impact value, with info design by our partner Background Stories: 

impact value summary ecotone analytics
Impact Value Summary from our work with Better Futures Minnesota

We predict that once organizations have quantified and summarized their potential impact value, they will be able to communicate it as they seek funding, customers, and key partnerships.

Interested in learning more about how this works, and how it could work for your business? Contact Ecotone’s Ted Carling at ted@ecotone-partners.com.

Further reading:

The Investor’s Impact Matrix from the Impact Management Project: http://www.impactmanagementproject.com/investor-impact-matrix/

This framework is designed to help investors measure their portfolios’ effects on people and planet. It categorizes enterprises by whether they:

  • Avoid harm (also known as negative screening)
  • Benefit stakeholders (the typical ESG reporting approach)
  • Contribute to solutions

The Cost of Confidence: Finding Evidence of Impact for Social Enterprises

seven levels of evidence pyramid

If you’re planning to launch a new social enterprise, or scaling a successful venture, you may be asked by investors and funders to demonstrate impact. But with product development and customer acquisition to worry about, you may not have the time or experience to track down the latest rigorously peer-reviewed study that proves your value proposition will work. How can you be informed by evidence of impact while building something innovative and new?

The 7 Levels of Evidence

It starts with an understanding of what “evidence” means. Evidence is defined as “the available body of facts or information indicating whether a belief or proposition is true or valid.” Research and evaluation use a simple framework to rank the rigor of studies, corresponding to higher and higher levels of causality, or proof of impact.

The seven common levels of evidence are understood as:

  • Expert Opinion
  • Evidence from Single Study
  • Systematic Review/Lit Review of Similar Studies
  • Case-Control or Cohort Study
  • Quasi-Experimental (using a similar matched population as the control group)
  • Randomized Controlled Trials (known as the “gold standard” of evidence)
  • Meta-Analysis (weighted averages of many similar randomized controlled trials)

As you move up the ladder, there is usually a greater quality of evidence of causality and greater confidence in the key findings, due to greater scientific rigor and larger sample sizes.

The Cost of Confidence

Higher levels of evidence also tend to be associated with higher costs. Conducting a randomized controlled trial or extensive study can be expensive and time-consuming. That’s why it’s important to determine which level of evidence makes sense for your social enterprise, your budget, and where you are in the funding journey.

For a new idea, you probably don’t need to be 95% confident in your predicted outcome. If you can project your impact assumptions with a lower level of evidence, you can begin to shop your idea sooner and see the direct results. If you’re waiting for the highest level of evidence of impact, you might end up taking months or even years to launch your program, while spending significant money on research.

We’re calling this idea “the cost of confidence.” Getting to 95% confidence in an intervention might cost twice as much as getting to 70% confidence. That cost is often a barrier to new ideas launching, particularly in pay-for-success-type programs where the taxpayer funding may require a higher level of confidence of causality. The burden of proof ends up taking too much time and money, and the program never gets off the ground.

The Right Level of Evidence at the Right Time

To address that problem, we advocate for using the levels of evidence “out front” to indicate where you’ve found sources, and what that indicates as a research baseline.

When considering the cost of confidence, meta-analysis could be the best benchmark for many social enterprises. Looking at meta-analyses of multiple studies not only results in a higher level of confidence — because it shows that results can be repeated under different circumstances — but it also tends to be quicker and less expensive. It bypasses the extensive costs of putting together a randomized controlled trial or other rigorous study, and offers strong evidence that an intervention will work.

There are more and more clearinghouses or sources of meta-analytic studies that are being used to inform public policy and grantmaking. These are a great place to start for social entrepreneurs.

Even if a meta-analysis is used for evidence up front, a randomized controlled trial may still be needed to show evidence of impact after launch. The level of evidence required often depends on the stage of the enterprise: Funders’ expectations and investments may increase as higher levels of evidence are possible. However, simply getting off the ground and attracting initial funding shouldn’t require a prohibitive cost of confidence.

As evaluation and data become more central to investments, public funding, and other decision-making, we think it’s important for social entrepreneurs to have a basic understanding of the cost of confidence and levels of impact evidence.

Further reading

Get the basics:

Evidence Based Practice Toolkit, Winona State University: http://libguides.winona.edu/c.php?g=11614&p=61584

Dig deeper:

More insights about the cost of confidence and the right time to evaluate impact in “Ten Reasons Not to Measure Impact — and What to Do Instead,” Mary Kay Gugerty & Dean Karlan, Stanford Social Innovation Review: https://ssir.org/articles/entry/ten_reasons_not_to_measure_impact_and_what_to_do_instead

Using Stakeholder Theory to Understand Impact and Strategy

impact social enterprise stakeholders

The concept of stakeholders has become common across sectors as a contrast to the traditional, profit-driven “shareholder” view of organizations. Considering your stakeholders allows you to think more broadly and critically about impact and social responsibility.

More specifically, you can’t measure the outcomes of your work without understanding who that work affects. Accounting for impact requires identifying stakeholders.

You can start to pinpoint your organization’s stakeholders with a simple mapping exercise. First, draw a hub-and-spoke diagram with your organization at the center. Then think about the people and systems closest to the center, the ones most directly affected by what your organization does. Those probably include customers and/or beneficiaries of your programs, as well as employees and partners. Think about your organization’s mission: Who are the people you serve?

Now take a step further out from the center. How does your work impact the local communities where you operate, and which people and systems are directly affected? How does your work impact the environment, both locally (through your direct physical footprint) and globally (through choices such as your use of fossil fuels and where you source materials)? Be as specific as you can, and remember to consider unintended and indirect consequences of your operations.

Whether or not you’ve drawn out your hub-and-spoke map, you likely have thought about many of these stakeholders and how your organization affects them. The next step is deciding how your awareness of stakeholders will inform your business model — in other words, going from “Who are they?” to “How does this affect our strategy?”

For this next step beyond the hub-and-spoke map, you can create what is known as a materiality matrix. This matrix can help you determine how your stakeholders’ needs and wants intersect with your business goals and activities. On the matrix, you will map out issues and challenges that are relevant to you as well as your stakeholders. One axis of the matrix represents the importance to your organization. The other axis represents importance to your stakeholders. You can map out economic, social, and environmental issues on these axes, and identify areas that are of greatest importance to both you and your stakeholders.

Now imagine a regression line drawn through the issues you’ve mapped — where do the stakeholder and organizational goals line up? Are your priorities aligned with your stakeholders? Do you need to change your strategy, or can you safely set aside some of your stakeholders’ priorities as being outside the scope of your organization? Part of the goal of social enterprise is to align these priorities — to create shared value for a business as well as the environment and the communities where it operates.

Of course, you’ll want to test your assumptions about stakeholders through research: talking directly with people affected by your work; finding government and other data about stakeholder groups; and looking for previous studies that are relevant to your programs.

How do you think about your stakeholders? If you’ve used a hub-and-spoke stakeholder map and/or a materiality matrix to think about stakeholders, did anything surprise you or change your strategic approach?

Further reading

Get the basics:

Dig deeper: