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04 Apr. 2019 | Comments (0)
The Conference Board has released a new report, Toward Standardized Social Outcomes for Companies, that finds most company-supported nonprofit programs are effective, achieving their targeted goals on average 82 percent of the time. The research, conducted in partnership with the Impact Genome Project® and sponsored by Moody's, uses standardized metrics to measure social outcomes, enabling companies to more effectively report and benchmark the performance of their societal investments.
Spanning over 150 common outcomes, the IGP covers 11 social impact areas, including education, health, arts and culture, economic development and sustainability. Social impact measurement continues to challenge funders, nonprofits and governments, as organizations seek to better understand and report their impacts on society. By calculating common, standardized metrics about social outcomes—specifically, the cost per outcome (CPO) and efficacy rate of social programs—the IGP provides funders and nonprofits comparable information about the performance of societal investments. The IGP is used by governments, corporations and foundations to benchmark social impact, design more effective interventions and learn what works.
The report—based on a pilot program of the initiative – provides a summary of 16 companies that participated in the IGP and whose funding contributed to nearly 650 nonprofit programs. The report examined the CPO and efficacy rates of 14 specific social outcomes, providing insights into the effectiveness of corporate societal investments, including cash and non-cash grants, and other social impact-focused initiatives. CPO and efficacy rates of outcomes are calculated upon completion of a full calendar year cycle of a program or initiative. The report also features three case studies, including Moody’s, The Albertsons Companies Foundation, and The Allstate Foundation.
Key findings include:
Most nonprofit programs supported by companies in the pilot benchmark are effective All 14 social outcomes returned an efficacy rate of over 60 percent, meaning that most participants in the programs achieved the targeted outcome. Eleven outcomes returned efficacy rates of over 80 percent, demonstrating strong success. When planning their social investments, companies can use the efficacy rates of social outcomes to understand which outcomes are contributing most meaningfully to their overall social impact goals.
Knowing the CPO helps companies understand the total cost of ownership of achieving social impact The broad range of CPOs outlined in the research reveals that some outcomes are more costly than others. Several factors contribute to the CPO, including, for example, the time required to achieve an outcome or the intensity of the programming. There is a risk that such high costs could be perceived negatively and result in funders shying away from supporting programs or interventions that target them. However, the knowledge should instead help companies understand the total cost of ownership of achieving social impact, allowing them to manage the expectations of both their nonprofit partners, by being clearer about funding patterns and priorities, and of their company leaders, by reporting early the number of social outcomes that can be attained through societal investments. Knowing where high costs exist—especially if they exist in short-term, lower intensity programs—could also be an opportunity for companies to have strategic conversations with nonprofit partners in the pursuit of greater efficiency.
Education is the social impact area in which companies pursued the broadest array of social outcomes Companies have shown interest in investing in a range of different levels of education, as they seek to spark interest in topic areas such as STEM (science, technology, education, and math) and develop the next generation of talent. Combined, these investments account for the largest portion of most corporate philanthropy budgets. By having a better understanding of the education outcomes they are funding, and the cost and efficacy of those outcomes, companies can pinpoint specific areas that require additional resources or support to achieve overall social impact goals.
Companies might not be funding the social outcomes they think they are Companies often choose nonprofit programs based on those programs’ perceived alignment with the company’s key focus areas. Upon closer review, nonprofits may be delivering outcomes in a different social impact area than expected. While this may result in ending certain nonprofit partnerships, it can also provide opportunities to sharpen a partnership’s focus. Companies often choose to collaborate with their nonprofit partners to develop new programs more aligned with corporate focus areas and expand the nonprofit’s program offerings and funding opportunities. For example, a company that invests in an arts education program in the pursuit of education outcomes might instead be contributing to outcomes in arts that deliver social impact in education. Companies should understand which social outcomes their societal investments are targeting to ensure their funding priorities are being met.
Companies seek data-driven social impact measurement tools to match their corporate data cultures Across all three case studies in this report, companies were very clear about the importance of making data-driven decisions for societal investments. Often, this approach reflected the companies’ approach to business. Whether a company is in the financial sector, like Moody’s and Allstate, or in the retail sector like Albertsons Companies, data is integral to its business and that spills into their social impact pursuits.