Impossible to Describe, but Imperative to Measure

This week there was a lot of focus on the attention that investors are giving to the base of the pyramid. It’s an important concept, and one that indicates how funders are beginning to take in the bigger picture of what their dollars can do. What I found even more interesting, was the last article in the reading, ‘Measuring Social Value,’ by Geoff Mulgan and how messy but necessary the measurement of that can be.

In the article, Mulgan states that ‘The failure of the social and public sectors to measure the value they create does not stem from a paucity of intelligence or good intention. Rather is reflects four unavoidable complexities that bedevil the measurement of social value.’ He goes on to describe the lack of laws/regulations, the argument about social values, the unreliability of the numerical metrics, and the problem of accurately estimating the time it takes for these measurements. However, I would go on to argue that there is a fifth complexity missing from this discussion: the lack of a metrics to describe the impact that is at the core of social value.

Sure, you can have metrics that tell you whether your investment is sustainable, whether or not it raised the income for families, or even for an entire community. You can measure the literacy rates before and after an education initiative is implemented. But how do you measure the intrinsic impact of your investment?

This same issue often comes up in the arts. Funders want to know how their money has made a difference. For decades the answer has come from economic impact studies, how property value is raised once a cultural institution is in a community, how arts in education helps to lower drop-out rates, etc. It’s clear that they make positive and important contributions for a community. But the arts are important for other reasons too. For reasons that…are just so difficult to describe. And even more difficult to measure. Although WolfBrown has begun the attempt to try.

It is the same outside of the arts. How do you measure whether a social enterprise’s program has helped raise people’s ability to empathize? Or express themselves? Does it matter when an NGO’s initiative has given a community the greater capacity to build bonds between families living in it? Elements such as these can have just as significant of an impact on the lives of people that programs are intending to reach, so shouldn’t they be included when measuring social value?

These aspects are not easy to measure, or else that would have already been done. However, Mulgan states, ‘Indeed, the greatest contribution that funders can make is often not to measure value, but to forge the links between supply and demand that will later generate value.’ The simple discussion about the value of intrinsic impact is the beginning of that. This field of measurement may not be hammered out to perfection yet, but for funders to bring it into the picture can help build crucial bridges towards a deeper understanding of social value. Sometimes the money a program brings to a community runs out, but the impression that program made lives on, so doesn’t that matter too?