How do we measure impact?
How do we measure social impact?

A few weeks ago, someone asked me how social innovation has affected the economy and, more specifically, how that compares to technology innovation. Nothing obvious came to mind. After some serious thought and a thorough search of my favourite sites on social innovation, social metrics and SROI (social return on investment), I still hadn’t found any documentation that made any claims about it. This remains an important area of work to flesh out for those involved in the social innovation/social enterprise dialogue.

However, as of now, there exists no standard social measurement in Canada. Why not?

Social innovation, as we’re now defining it, has not been tracked long enough under an economic rubric — social innovation, in this sense, is not to be confused with the social economy, which has successfully measured the economic impact (more than $10 billion/annum) of “non-profits.” Nor is it to be confounded with Corporate Social Responsibility, which has its own way of tracking SROI.

That said, there are tools currently being used in the US and the UK, such as REDF’s SROI Collection in the States or SROI-UK. Not one, however, is considered the go-to, likely because no single index is relevant across the board.

For those interested in learning more about social metrics, the discussion is happening – we’re now seeing, seminars, panels or entire conferences, such as the Skoll Foundation’s Fifth Annual Conference of Social Entrepreneurs: Measuring Social Impact, dedicated to going deep with this topic.

We’re also discussing the subject at this year’s Social Entrepreneurship Summit, on November 17th at the MaRS Centre. Nigel Biggar, the Director of the Social Performance Measurement Centre at the Grameen Foundation will be presenting on what the Foundation is doing in terms of impact metrics.

So how did I respond to the initial inquiry? I’m hoping my answer may be a starting point for additional suggestions and commentary:

The concept of social innovation as we’re defining it now, has not really been around long enough to track mass economic trends across the board. The UK is much further ahead, but still not subscribing to a standard reporting system or return on investment framework for social innovation. The thinking has largely been discussed in terms of “blended value” (coined by Jed Emerson, Senior Fellow at the Generation Foundation), and not the economic impact of social innovation by itself, since that would slightly miss the mark of the purpose. The literature is pretty consistent in this sense, generally talking about a double impact. Moreover, I think that “traditional” innovations (such as medical, material and digital) that have been applied to mitigating social issues (such as health-related, poverty and education) have not been historically categorized and measured as “social innovations.” Finally, most of the measurements under the SROI label are measuring the impact of double/triple bottom line enterprises, which aren’t necessarily “innovations.”

Social innovation was built on many things, namely a robust social economy and community economic development, which focus on economic impact, but from a non-profit point of view, which again doesn’t necessarily consider the innovation. On the other hand, you have people like Bill Gates funding the application of traditional innovative models and products to the developing world, thereby creating new markets where big companies wouldn’t otherwise go.

The closest thing that I think we could consider is an argument like Richard Florida’s creative cities or the Tamarack Institute’s Vibrant Communities, which essentially argue that creativity, collaboration and innovation in the social sector as well as the business sector make for stronger, more resilient economies.

Another angle could be to look into sector-specific accomplishments, like the greening of businesses strengthening the economy while mitigating climate impacts.

There’s also a deductive argument one could make about social sector innovation, such as Malcolm Gladwell’s article about Million Dollar Murray: a homeless man whose “bill” if you were to tally all of the social services he used, came to more than one million dollars. Although this example is more reflective of activity in the social economy, it is definitely linked to social innovation. In other words, if there were an innovative model to mitigate poverty, what would be the cost savings to the economy?

Currently, there’s nothing obvious or standard (yet) around the economic impact of social innovation. While there is emerging literature on the financial return of social entrepreneurship, it’s just one corner of social innovation.

Hope this helps… The search continues every day…

SiG@MaRS, along with its partners, actively seeks to push this agenda forward hoping to achieve a standard that is inclusive, organic and intuitive.

Additional Resources:

Lisa Torjman

Lisa managed social innovation projects for the Social Innovation Generation (SiG@MaRS) program at MaRS. See more…