This document discusses measuring social impact and the responsibilities of various stakeholders in developing social impact measurement. It addresses why social impact is measured, for whom, and different evaluation methods. It raises questions about measuring impacts that are not easily quantifiable, long-term impacts, and attributing impacts. The document also discusses the responsibilities of methods designers to clarify where social impact measurement is relevant, learn from other experiences, and create a fair, open-source system. Finally, it addresses the responsibilities of public authorities to choose social policies and funding systems, regulate social investment markets, and promote a level playing field.

1. Nicole Alix
The Mont-Blanc Meetings –
International Forum of the Social and Solidarity Economy Entrepreneurs
Social impact as a driver or as a base for
payment?
The experts’and the public
authorities’responsabilities
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Measuring social impact: why and for whom?
OECD LEED 24 April 2014 Stockholm

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Measuring social impact: why and for whom?
OECD LEED 24 April 2014 Stockholm
1: Data based decisions: reporting,
rating GIIN, GIIRS, IRIS)+materiality IFRS
2: Portfolio approach, capital risk
approach, ROI
3: Quantitative/qualitative data,
random methods
4: Definition by social impacts => labels
/status; norms/legal frameworks;
5: New asset class?, private equity, venture capital,
credit
6: Metrics/evaluation, theory of change
Context
‘‘NEW ‘FINANCINGNEW ‘FINANCING
Social impactSocial impact
investmentinvestment
Venture philanthropy,,Venture philanthropy,,
 impact investors,impact investors,
 Social impact bondsSocial impact bonds
Asset managers,Asset managers,
 Banks, cooperative banks,Banks, cooperative banks,
 Microfinance institutionsMicrofinance institutions
SOCIAL ENTREPRISESSOCIAL ENTREPRISES
Social and solidaritySocial and solidarity
economy (groups of persons),economy (groups of persons),
 Profit-with-purposeProfit-with-purpose
companiescompanies
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EVALUATIONEVALUATION
METHODSMETHODS
 Auditors,Auditors,
BBusiness schools,usiness schools,
 World bank, USAID..World bank, USAID..
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3.  No contradiction between « social » and « market » scaling up,
on the contrary: new wave of impact investors.
 Social enterprises (small, scarce money) should learn from
business, especially from ‘entrepreneur-led companies/venture
capital’ tandems, taking on growth risks in order to confront more
social problems;
 They will progress through defining social impact objectives in
accordance with ‘impact investors’ (impact =/= outcome).
 The sum of these impacts will be beneficial for society and will
finance social investments when public funding become rarer.
 Impact investing « social risk » = a cost/normal return which has to
be refunded by public resources or philanthropy. Higher performance
higher return for the investor.
 Social impact to be measured, according to data: distance, time
Main assumptions
Measuring social impact: why and for whom?
OECD LEED 24 April 2014 Stockholm
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4.  From social impact as a driver for evaluation to
 Social impact-based allocation of public resources for:
• Social enterprises (those which have a « positive and
measurable » social impact)
• Social impact investors (those which take risks in social
investments, accepting some costs = loss compared to « normal »
return on investment)
new public/private partnerships = from procurement to impact
contracting, for services or for investments.
Investing/payment decisions will be taken according to data,
in a impact investment market (experts, asset managers).
New orientation and decision-making for allocation of
resources
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Measuring social impact: why and for whom?
OECD LEED 24 April 2014 Stockholm

5.  What kind of measurement/allocation of resources for :
• not measurable (non tangible, personal…), non market = no prices =
prices have to be invented and audited by experts
• innovations, where methods > results (ex ante measurement?).
• long term investments in social infrastructures having greater capital
requirements (hospitals, …) or social transformations (education…)
• intrinsically interwoven effects and collaborative economy: how to
determine « one effectone cause »; avoid payment for
« competing claims for effects » or for neglected causes?
 What about enterprises with negative social impacts? Should they
contribute to the ‘eco-system’? Towards a ‘social impact market’ to
exchange positive and negative impacts (see carbon market )?
Questions (1): About tools/methods
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Measuring social impact: why and for whom?
OECD LEED 24 April 2014 Stockholm

6.  When is a market (‘duties and rights to impact’) a better
regulation than taxes or laws and norms?
 Could general interest be the sum of « social impacts »
contracted with private investors? what about long term?
 If social impact is higher and rewarded, who should
benefit: the social enterprise, the public budget or the
investor? If the investor who takes the risk gets the return,
can he speculate on social performance?
 What are the respective objectives of the ‘industry’,
cooperative banks and microfinance ? Do they use the
same ‘impact measurement’ method? What about costs?
Questions (2): About « Social impact markets »
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Measuring social impact: why and for whom?
OECD LEED 24 April 2014 Stockholm

7. The methods designers’ responsability (1)
 Clarify in what fields social impact measurement
could be relevant as a driver/ as a payment :
• Do not mislead in assuming that every social field can
be based on a allocation of resources for social impact.
• Focus on social transformation: reporting and rating
lead to champions and conformation; adverse selection
=> exclusions. Human experience = unpredictability.
• Create a reliable/sustainable system: Theory of
change? Actors’ capacity to produce data? No data
rather than false data, specially for « reading stake-
holders »? Is « materiality » like in IFRS relevant?
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Measuring social impact: why and for whom?
OECD LEED 24 April 2014 Stockholm

8. The methods designers’ responsability (2):
 Learn from other experiences:
• Social responsability investment and private equity: too
many criteria are a brake; costs.
• Hospital funding schemes according to the nature of the
activity: psychiatry=/=surgery=/=elderly.
• Carbon market, market in rights to pollute.
 Favour a fair and open source system/market of data:
• For positive AND negative social impacts enterprises
• Think about the way people use the tools and their costs
• Decentralised, bottom-up open source system/data sellers
and auditors; ‘intelligent sensors’?
8Measuring social impact: why and for whom?
OECD LEED 24 April 2014 Stockholm

9. The public authorities’responsability (1)
 Choose their social policies, how to:
• Select funding systems: no single system (procurements,
subsidies, grants…; bank credits), for operating account and for
investment.
• Implement: laws, norms, taxes or market? Control or self-
regulation? Ask for an evaluation of carbon market?
• Guarantee social cohesion, long term and social transformation:
− Promote general interest beyond investors’ private interests
− Select activities and actors (empowerment, not/for profit)
− Finance economy in the long run: services of general interest
• Promote diversity:
− Tests before generalizing, evaluate the evaluation
− Promote « counter-cyclical » alternatives, decentralised and open
data solutions=> expert group, social and economists?
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Measuring social impact: why and for whom?
OECD LEED 24 April 2014 Stockholm

10.  Regulate the social investment market where relevant:
• Determinate a maximum of compensation for « social impact »investor?
The surplus coming from social performance to be reinvested in the
social eco-system?
• Asset Class? Costs, intermediaries, calibration of the risk (EIOPA)
 Organize a level playing field: ‘comply or explain’?
• Promote proximity financial actors/asset class managers
• Social/non social entreprises: compensation of positive externalities
which cost to investors = taxes on negative externalities which benefit to
investors
• Prevent ghettos for social impact/speculation and intermediaries on the
« social impact» market (cf carbon market)
The public authorities’responsability (2)
Measuring social impact: why and for whom?
OECD LEED 24 April 2014 Stockholm
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11. Alix N., Baudet A., 2013, « Impact investing: a factor of transformation of the
social sector in Europe », 4th International CIRIEC Conference, Antwerp,
www.ciriec-ua-conference.org
nalix@confrontations.org
www.rencontres-montblanc.coop
Thank you for your attention