Seen to be doing good. How does a donor measure social returns?

And we have a new class of donors - those who may not be in a position to establish a foundation at this stage, but who are nevertheless making substantial donations to charity - often in the tens of thousands every year.

All these donors have a number of characteristics in common.

• They are people who are used to the concept of doing business globally. For this reason, their idea of community is global and all-encompassing. They don’t see their community as part of the world: they see the world as their community. These are donors who wish to be active both inside and outside Australia, they wish their giving to encompass a wide realm.
   
• These are business people and they understand the language of business (and they are often bewildered by the language of the not-for-profit sector). In general they are well-informed, sophisticated and confident. They are much less inclined to rely solely on external advice, and far more likely to actively investigate problems, projects and potential solutions. In some cases they will wish to apply their own business skills to assist the organisation or project they are donating to.
   
• These donors don’t assume that good intentions are sufficient assurance of doing good. They don’t want to rely on the recipient to know the best way in which to use the money. They want to be provided with measurable outcomes for their donation.

Other factors are also influencing the way donors behave: increased scrutiny of charities and calls for their accountability, our increasingly fast-paced lifestyles, and the abundance of choice in our lives.

We are geared to demand more knowledge, more input, and more choice. Not only corporations and foundations, but even individual donors giving comparatively small amounts want to know what happens as a result of their donation. This is why programs which sponsor children, or buy a goat for a village, are so popular - people see what has happened as a result of their donation and they feel informed enough to make a decision about whether they want to donate in that way again.

Measuring change

For philanthropy, there are some inherent difficulties in this trend.

We are dealing with people, behaviours, environmental and social issues, not just numbers. How do we measure not just the number of people who attended a program, but the long-term behavioural or attitudinal changes which resulted? And although we are dealing with issues which require long-term societal change, we live in a society where we want everything NOW. Instant gratification is available in so many arenas that we have become a society focused on the short term.

We want the problem solved in one year, three years, five years. Few donors are willing to give funding over a ten-year period, or to wait 25 years to know whether their donation is making a difference. How do we deal with our need to measure when faced with projects which require 20-plus years to effect real and lasting change?

What we need is to develop new frameworks and new standards to measure social returns. We need to educate donors that these things do take time. It’s about managing expectations - both around timing and the type of outcomes that they envisage. We need to remind “funders” that some of the shorter-term benefits of a program may just be achieving goals on the way to a much longer-term outcome. And we need to measure the wider impact on the community - that which may be a less direct impact, far removed from the time span or direct users of the program itself.

For instance, with a program whose aim is to keep students at school, the numbers will certainly have to be reported: how many students stay during and after the program as opposed to before. But we also need to report on the behavioural and attitude change. You can evaluate the fact that they are staying in school, but how do you evaluate the factors which have made them want to stay? More importantly, how can we work out whether by staying at school they have actually benefited? And what has the effect been, not just on those students, but on the entire community? This is what we mean by social returns.

Frameworks for evaluation

Those working in the environment arena, such as the Australian Conservation Foundation, deal with outcomes that are very long term and difficult to measure. They break their programs into individual, measurable steps, so that instead of reporting a large amorphous outcome, they are reporting on where they are up to within the context of a larger long-term objective. A donor may be asked to fund one stage of a project, in the full understanding that it is one brick in the wall and that all stages will need to be completed before the full outcomes are known. This incremental measuring also means that we can see how long-term these projects truly are.

There have been steps taken towards a new framework for evaluation which takes both long-termism and intangible outcomes into account. While in the US recently I attended a session, presented by Melanie Moore Kubo from See Change Evaluation and Judith Rosenberg from a social change organisation called TEAMS, about a new model for evaluation of community change. They have developed a model and framework based on slowly developing Neighbourhood Action Teams - giving skills, confidence and support to empower local community participants to take action, to generate and control capital for both themselves and for the benefit of their communities.