Definitions matter. Differing terminology challenges most discussions around impact measurement. Each of the many sectors with a stake in social good—governments, nonprofits, funders, social entrepreneurs, impact investors, philanthropists, multi-lateral organizations—bring their own argot to the table.
From impact investing to theory of change, this is your guide to concepts, nomenclature, certifications and associations in the valuation, measurement and social good space.
Attribution Factor. PSV’s term for what percent of the outcome is attributable to the program being valued. Also see: Counterfactual and Disbursement.
Benchmark Data. Data that is used to compare a program to other offerings. This could be similar interventions in different places, or to the population at large.
Co-operative. An autonomous association of persons united voluntarily to meet their common economic, social and cultural needs and aspirations through a jointly owned and democratically controlled enterprise.
Civic Engagement. There are many ways in which people participate in civic, community and political life and, by doing so, express their engaged citizenship. From volunteering to voting, from community organizing to political advocacy, the defining characteristic of active civic engagement is the commitment to participate and contribute to the improvement of one’s community, neighborhood and nation. Source: Philanthropy for Active Civic Engagement, www.pacefunders.org.
Civic Infrastructure. Just as bricks and mortar infrastructure is important to maintain public buildings, roads, and bridges, so is civic infrastructure essential to the provision of public services. The National Civic League defines civic infrastructure as “formal and informal processes and networks through which communities make decisions and attempt to solve problems. The quality of a community’s civic infrastructure determines that community’s health–economic, civic, and social. It is the base upon which a healthy community is constructed. Like a community’s physical infrastructure, if the civic infrastructure has deteriorated, it must be renovated and maintained on an ongoing basis.” Source: National Civic League, www.nationalcivicleague.org.
Civil Society. That sphere of voluntary associations and informal networks in which individuals and groups engage in activities of public consequence. It is distinguished from the public activities of government because it is voluntary, and from the private activities of markets because it seeks common ground and public goods. It is often described as the “third sector.”
Counterfactual. PSV’s term for what would likely have happened even if the activity, program or initiative being valued had not taken place. Maybe students would have improved without the intervention. Also see: Attribution Factor and Disbursement.
Disability Adjusted Life Year (DALY). A measure of disease burden, expressed as the number of years lost due to ill health, disability or early death. Developed in the 1990s as a way of comparing the overall health and life expectancy of people in different countries, the DALY “extends the concept of potential years of life lost due to premature death . . . to include equivalent years of healthy life lost by virtue of being in states of poor health or disability.” Source: Wikipedia: The Free Encyclopedia. See also: Quality Adjusted Life Year (QALY).
Displacement. A component included in PSV’s calculations, displacement assesses how much of the outcome displaced other outcomes. Example: Our valuation of ArtsQuest revealed a reduction in crime in the neighborhoods surrounding SteelStacks and Banana Factory. However, had crime during the same period just migrated to neighboring towns, then the reduced crime might have simply been displaced and benefit valued accordingly. See also: Attribution Factor and Counterfactual.
Environmental Justice. “Equal protection from environmental hazards for individuals, groups, or communities regardless of race, ethnicity, or economic status. This applies to the development, implementation, and enforcement of environmental laws, regulations, and policies, and implies that no population of people should be forced to shoulder a disproportionate share of negative environmental impacts of pollution or environmental hazard due to a lack of political or economic strength levels.” Source: U.S. Environmental Protection Agency, www.epa.gov.
Environmental, Social and Governance Investing (ESG). ESG originated as a risk management function, taking a closer look at how a company is run to gauge the sustainability of the business. Example: A company in a growing industry sector with excellent product offerings could be an unsustainable company if it has poor labor practices and pollutes surrounding bodies of water. See also: Impact Investing; Socially Responsible Investing.
Impact Investing. “Investments that intentionally target specific social objectives along with a financial return and measure the achievement of both.” Source: Group of 8 Taskforce report. See also: Environmental, Social and Governance Investing; Socially Responsible Investing.
Impacts. Outcomes adjusted for the effects that would have happened anyway (baseline), for percent of the effects caused by the intervention (attribution) and for unintended or negative results (displacement).
Inputs. Resources devoted to a program or project to implement it, such as personnel, financial capital and equipment.
Integrated Reporting. Blends reports about social impact, financial or economic effect and environmental effect.
Metropolitan Statistical Areas (MSAs). Areas designated by the Office of Management and Budget that have “at least one urbanized area of 50,000 or more population, plus adjacent territory that has a high degree of social and economic integration with the core as measured by commuting ties.” MSAs capture the network of suburbs that rise up around a city or town rather than considering them separately. Market size, as determined by MSA ranking, is part of PSV’s algorithm for valuing intellectual capital or intangibles.
Outcomes. Things that are different because of an organization, program, activity or intervention. These changes may be positive and negative, unintended and intended.
Outputs. Things the program produces such as number of participants.
Pay for Success. Funding model that links payments to results.
ProSocial. Voluntary behavior intended to help others or society as a whole.
ProSocial Activation. Defined by PSV as using the reach and distribution channels of owned media and/or sports and entertainment sponsorships to bring attention to causes, community priorities, etc.
ProSocial ROI. Value divided by total investment. PSV expresses it as follows: For every $1 invested in TBD Organization, Program, Initiative or Partnership, $TBD in social capital is created.
Quality Adjusted Life Year (QALY). Measures a person’s ability to carry out the activities of daily life free from pain and mental disturbance. See also: Disability Adjusted Life Year (DALY).
Social Capital. Social capital is the “stocks of trust, norms and networks that people can draw upon to solve common problems,” (Robert Putnam). It is the currency created by organizations, programs, partnerships and initiatives that enriches the well-being of people and planet. Unlike personal property which enriches individuals, social capital delivers a common good and serves the public interest.
Core networks of civic engagement, such as neighborhood associations, sports clubs, arts centers and cooperatives, are forms of social capital and the denser these networks, the more likely that members of a community will cooperate for mutual benefit.
PSV measures and values social capital under the broad categories of human capital, natural capital, community capital, civic capital and intellectual capital.
Social Enterprise. An organization driven as much by its social mission as it is by commercial goals. Depending on the country in which the entity exists and legal forms available, social enterprises can be structured as a cooperative, a mutual organization, a benefit corporation or a charity.
Unlike a socially responsible business, which aims to minimize its negative impact on society, a social enterprise is in business to maximize the amount of social good it creates. And while purpose is increasingly embedded into mainstream businesses and brands, the commitment to such objectives by commercial enterprises is based on the notion that it will ultimately make the enterprise more financially valuable. Social enterprises differ in that their commitment to the common good is central to the mission of the business.
Socially Responsible Investing (SRI). The first SRI programs in the U.S. were established in the late 1800s by religious groups which did not want to invest in weapons, alcohol, tobacco, slavery, gambling and pornography. This exclusionary approach—which brings values as a third dimension, alongside risk and return, as a lens through which to screen opportunities—is what is typically meant by SRI. See also: Environmental, Social, Governance Investing; Impact Investing.
Sport for Social Development. A method of bringing about social change through the use of sports. Sport refers to the physical activity and development is any sort of social capital—such as health, community and economic benefits. For example, Figure Skating in Harlem is a program that delivers girls-only, multi-year engagement, combining sessions on the ice with after-school tutoring and leadership training. The program is free, provided participants maintain a minimum grade average.
Stakeholders. People and groups who will or may be affected by the activity being valued, whether positive or negative, or who would affect the outcome themselves.
Theory of Change. A blueprint defining the progression and relationships between inputs, activities, outputs, outcomes and impact. This is created by working backward from the desired impact to identify necessary preconditions.
Workplace Giving. Providing employees with an opportunity to make financial donations directly from their paycheck. “The data on American workplace giving is imprecise, but the best estimate puts the aggregate figure at roughly $5 billion, a considerable sum, if a small proportion of the nearly $300 billion that American individuals give annually.” Source: The Urban Institute’s Past, Present and Future of Workplace Giving in the United States, www.urban.org.