One System for Everyone?

The readings this week have focused on how to measure the impact of social innovations. While everyone agrees on the importance of metrics, no one seems to be able to say exactly what those metrics should be. Several conferences have been held in the last few years focusing on the measurement debate, referring to the need of measurement as everything from the elephant in the room to the next frontier of social enterprise. Social enterprises span a broad range of companies whose own goals and definitions of impact are very different. How can a universal system of measurement be applicable to this variety of organizations? At the Microfinance Impact and Innovation Conference this year, Jody Rasch, Senior VP of Data Governance Group spoke about the development of social performance ratings for microfinance groups. The presentation included several slides about standardized metrics and how to measure social impact and performance. Perhaps when dealing with one category of social enterprise, such as microfinance, specific metrics and tools for measurement can be successful. Yet, can these same systems of measurement be applied to other ventures? Many investors now require more rigorous metrics in order for ventures to be considered, and even governments and foundations are using metrics as a criteria for consideration. Will these new standards force social enterprises to be more diligent in their assessment of their impact? Or will new obstacles be created that limit the ability of smaller, more local organizations to compete for funding and investments? Larger businesses have more resources to put toward data collection and intricate systems of measurement and analysis. Larger businesses also tend to have further reaching impact, therefore their numbers may be more impressive. Smaller and newer ventures could be overlooked because they do not have the same impressive numbers either because they have less capacity to collect data or because their local initiatives do not intend to reach as many people as a global initiative.