Social and community investment and development programmes have become critically important for companies worldwide. As a result of the increasing demand for robust corporate governance and an illustration of the “licence to operate”, growing consumer awareness, as well as a growing global awareness of the divide between rich (corporates) and poor (communities), companies and grantmakers are investing billions into corporate social community development programmes.
In South Africa, CSI investment from corporates has grown from R2 billion in 2003 to R8 billion in 2013. Community investment programmes include a range of focus areas/investment portfolios, from healthcare to education, housing development to food security, and early childhood development to youth development programmes. The main objectives of corporate social community investment and development are (or at least should be) for companies to implement programmes that have positive, sustainable and measurable benefits for communities as well as for the company itself, thus creating shared value such as prospering societies and sustainable livelihoods. We look at some of the elements of a successful corporate social community investment and development programme.
Communities, as the beneficiaries of CSI investments and grants, are complex “ecosystems”. When planning and implementing community development programmes, funders and investors need to consider a full spectrum of needs and issues and their interrelatedness, so that intended impacts can be maximised and unintended impacts minimised. Needs and issues should be contextualised within that community’s specific circumstances and solutions should be relevant, flexible, have measurable social impacts and lead to long-term sustainable solutions for the chosen community. Focusing on only one specific issue or area without considering interrelated aspects and institutional arrangements such as social, economic or environmental impact or interrelated areas – such as education, health, sanitation and water – will have repercussions causing more problems than were resolved.
- Building a school to address the need for primary education should consider what other services and resources will be required in that community in order for the school to be operational, staffed and effectively governed and managed in the short, medium and long term. This knowledge needs to be included in the programme design and funding needs to be made available for all aspects to ensure the long-term sustainability of the school.If all of these aspects are not addressed, the school may become an empty shell and community members may feel disillusioned about future development programmes in their area.
- If the intention is to improve food security in a community by planting vegetable gardens, due consideration should be given to future water needs, especially in areas where access to water is limited. The programme will not succeed unless basic water needs are addressed and provision is made to continue watering the garden so that existing and limited water resources does not become more constrained, resulting in increased poverty and no improvement in food security.
Currently, many companies do not yet understand this interrelatedness of issues and lack the capacity to plan, implement, manage, measure and report on community development programmes. As a result, unsuccessful development models are replicated and the real beneficiaries of their programmes, i.e. the communities, are not engaged, committed to and supported by programmes.
Going forward, companies need to capacitate themselves to implement community investment programmes following best practice change management models. These models, for example, provide frameworks for community and stakeholder engagement that allow for positive participation in programmes, which in turn leads to more successful and sustainable programmes, as community members’ individual and collective capabilities improve. “In bypassing the beneficiary as a source of information and experience, we deprive ourselves of insights into how we might do better – insights that are uniquely grounded in the day to-day experiences of the very people the programmes are created for.”
The results of the global recession are still persisting and many community development initiatives have been subjected to budget cuts, programme cuts, reduction of focus areas and strategic redesign. Funders have engaged more in non-cash or in-kind contributions and have increased the number of internally run and employee volunteer programmes. More players, such as social entrepreneurs and for-profit companies have entered the development market, while NGOs had to either down-scale or close completely. This has resulted in more competition amongst development organisations for investment and donor funds.
The programmes that are therefore more accountable and are able to illustrate the highest value and return for investors together with the most positive, least negative and longest lasting social impacts are those that will succeed. In other words, organisations seeking grants and investments for their programmes need to be able to illustrate their development effectiveness.
The need to illustrate a deep understanding of development models as well as the need to measure the social impact and return of investment from community investment programmes has become more critical than ever before. If companies have the knowledge and expertise to measure the real impact that their development programmes have on community investment and development, they will be able to implement more effective development models. Conversely, if they have better development models, their impacts will also be more measurable. In order to understand and measure impacts more effectively, it is worthwhile to understand the key features of successful development models and the dimensions of measurement.
Successful development models recognise and incorporate key aspects of accountability, responsibility and governance, while ensuring that benefits are clear and quantitative and qualitative outcomes are measured. These models are also able to illustrate how the real needs of beneficiaries, intermediaries and investors are addressed.
Successful development models therefore demand:
- The definition of a clear business case for change, illustrating how success is defined in terms of what will change, how it will change and why it will change.
- The engagement of the right stakeholders within the company and community to reveal the real issues and not just applying existing programmes or preconceived ideas of what communities may need to be sustainable.
- The co-creation and mutual understanding of development frameworks, development needs, development priorities, development contexts and desired outcomes.
- A deep understanding of systemic and interconnected social, environmental and economic systems within the programme target areas.
- The building of trust and strengthening of relationships and partnerships to leverage resources which will aid in accelerated and sustainable change.
- The creation of collaborative partnerships with community stakeholders, other development organisations and investors to create shared value and impact and prevent silo-type development.
- The deep analysis and creation of frameworks to identify and manage potential risks and opportunities.
- The incorporation of accountability and transparency standards as well as the relevant reporting requirements.
- The adoption of relevant and applicable assurance standards.
- Systematic processes for tracking, monitoring and evaluation of inputs, including for example cash, in-kind support and donations of time, assets and products/services.
- The funding and support for organisational capacity-building of intermediaries and communities.
- The development of scalable and replicable programmes.
- The development and inclusion of relevant metrics that clearly illustrates the value of programme interventions, and goes beyond measuring outputs and outcomes to quantifying and qualifying real impacts.
- The development and inclusion of policies, processes, procedures as well as knowledge- and information-management systems to capture and share data, compare outcomes and results, develop benchmarks, and prove successes.
- The inclusion in budgets of all aspects of development, up and down the development value chain, to ensure that funders support the delivery of robust impact measurement.
Multidimensional and multifaceted impact assessments
The real social impact of a development programme will crystallise only once a robust development model has been adopted. Only then will a comprehensive impact assessment process show achievement of real success of the programme development model. This will ultimately enable companies to determine how well their community investment programmes performed. It is critical that impacts are measured on that which is desirable and undesirable and that the focus is not only on the positive and intended impacts, but also on the negative and unintended consequences of development programmes.
All programmes are different, and therefore the impact assessment framework adopted needs to include all possible dimensions and facets that ensure that what is assessed is relevant, important, contextualised, meaningful and comparable. Current practices show that development organisations typically only monitor that funds received are being spent, only evaluate and consider quantitative outcomes, and only report on the value of inputs and number of beneficiaries, i.e. quantitative results.
The example provided in the diagram below shows that planning and defining the indicators of an impact assessment is multidimensional and multifaceted and it requires research, knowledge, expertise and experience within the development context.
What to do with impact assessments
Once impact data has been collected, it needs to be analysed, understood and interpreted. The results need to be packaged to suit the requirements of different stakeholders, each of which has different information needs:
- Investors would use impact data to make programme decisions across investment and development portfolios and to gauge progress, change and benefits to society.
- Funders would use impact data to make funding decisions within investment and development portfolios (decisions would include aspects such as project expansion, replication, up-scaling or project termination).
- Development organisations would use impact data to design future programmes that address the most critical community needs, focus on the most important development areas, and adapt successful interventions to suit all development needs.
- All stakeholders across the value chain (funders, investors, intermediaries and beneficiaries) would require reassurance about the effectiveness, efficiency and relevance of investment and development decisions.
While investment by companies in social community development programmes is increasing, the way in which return is delivered is also increasing.
Development organisations and practitioners are experiencing higher levels of competition in the market as well as a changing investment environment. It has therefore become more critical than ever for development organisations to prove the effectiveness of their development models. Among other things, they are required to gain deeper knowledge of change, develop new skills, gather and analyse more complex data. Those organisations that are therefore able to adopt more robust development models, combined with better impact assessment tools, are more likely to prove the effectiveness of their development programmes and therefore more likely to attract future investment.
Next Generation has developed the Investment Impact Index™ (III™) to assist donors and funders to understand, determine and confirm the impact and return on investment of their community/social development programmes. Over the past three years we have assisted more than 30 companies to determine the value/benefit/change as a result of their development programmes – but more importantly, to leverage and increase not only the benefit, value and impact but also to realign current programmes for increased impact in the future. Our cost benefit analysis clearly indicates both efficiency and effectiveness of programmes but also provide deep, meaningful and insightful lessons for future strategies. Numerous case studies, presentations and articles are available on the evidence of impact and return on investment.