socially marketing

The momentum behind measuring social impact has been on a roll for a while now, which used to seem an unquestionably good thing.

But after seeing The Daily Beast’s take on impact measurement called “Celebrity Impact Rankings“, I have questions.

On the face of it, I should like this article.  It’s a quantitative analysis that measures in real dollars the social return on investment for 50 charitable causes.

But the investment is the appointment of a celebrity spokesperson, and the return is the raised awareness that spokesperson brings to the charity.

How is ‘raised awareness‘ quantified?  Arguably, it isn’t.  What is calculated is the number of times the celebrity and charity get mentioned together, and a dollar value for each mention.

The results of the (self-proclaimed) “most exhaustive study ever on the effects of celebrity on charities” offered few surprises:

Justin Timberlake (for Shriners Hospital) and Madonna (for Raising Malawi) offered exceptional returns; while those of Paris Hilton (for Sarlight Foundation) and Hillary Duff (for Kids with a Cause) were just sad.

socialmarkets aspires to be open to all SROI comers, so my problem isn’t with a celebrity having impact - it’s with her weight.

Crowdsourcing is nothing if not inclusive, so Mr. Timberlake is entitled to his voice in impact measurement.  However, the $9.3 million payout attached to his single voice warps the very fabric of crowdsourcing’s space-time.

I think the bigger problem with this ’study’ is that it measures nothing BUT money (actually I don’t buy the $$-per-article model of the study, so I’m not sure it even measures that, but for the sake of argument…)

Even in a multiple-bottom-line world, money is almost always worthy of measurement.  But aside from the balance sheet entry, what is the real impact of a charity’s $9 million windfall, if there is no info on what that charity will accomplish with it?

I feel confident that I can distinguish between good and bad impact analysis, in the form of strategy or tactics… but I wonder if the same is true for the innumerable other visitors to The Daily Beast’s (usually) smart, entertaining site?

I always knew that measuring impact was hard… apparently defining it can be too.

A few days ago I participated in a conference with the ambitious title Brain Trust for Online Capacity Mapping and Resource Matching for Nonprofits, Philanthropies, and Communities.

There were about 40-50 participants, hosted by my friend Deborah Elizabeth Finn (aka The CyberYenta, for her uncanny knack for nonprofit professional match-making )

Offcially, the conference took place in Boston, but its locale was hard to pin down since most participants (including myself, and even some presenters) were attending remotely.

There were a few things about this hybrid physical-web attendance I found interesting, but before going into the conference format, a quick summary of content: three organizations presenting innovative web-based resources for the nonprofit community and its supporters:

1. Social Actions: gathers and disseminates an open database of actions that anyone, anywhere, can take right now to make a difference [ link:http://socialactions.com/ ]
2. NPO Connect:  facilitates skill transfer between professionals in the non-profit sector by allowing professionals to connect with one another through a web-based platform [ link: http://mnn.npoconnect.org/ ]
3. Massachusetts Nonprofit Database:  Compiles a multi-dimensional database of nonprofits in Massachusetts, which can serve as a model for other states [ link: http://massnonprofits.clinc.us/Default.aspx ]

Attending via the web is definitely not the same as being there, but it’s not quite as simple as saying it’s the next best thing.

Advantages included live simultanous chat, real-time surfing to related sites, and the myriad conveniences afforded by being in your own office or home - including the option of not wearing pants (for the record, I did.)  There were some technical hiccups, but once underway it was a pretty seamless experience, and I was glad I was “there”.

I’m always intrigued by the economics of things, so my final thought is on the total costs of provding both audio and video access: zero.

In this case, the conference call audio was hosted by FreeConferenceCall [link: http://www.freeconferencecall.com ] and video by dimdim [link: http://www.dimdim.com/ ] - two of many free remote meeting services.

I don’t know if the business model of these “free” hosting services is good, ethical, or most importantly, sustainable (see Free Conference Call’s explanation/defense here: http://www.freeconference.com/blockingfaq_press.aspx ) - but I do know that it’s a useful tool for a sector that can use all the free help it can get.

When pondering these conferences’ ROI - social or otherwise - an I at or near zero makes for some impressive Rs.

There are lots of folks who aren’t excited about social capital in general, but even within the socap community, social currency can be a hard sell.  I think some of this resistance would go away with a better understanding what “currency” is.

In its most basic form, currency is simply a mechanism for capturing value.  So in theory, if you accept that the social sector creates value, it’s not a far stretch to accept a currency that captures it.

Currency is tightly associated with money, because that is the implementation we are most familiar with.  However, the SROI socialmarkets promotes is only one of many variations on the currency theme.

The city of Ithaca, New York (my home as an undergrad) has been using their own currency for years now.  That currency is denominated in HOURS, based on the value of one hour of work, and used to supplement or even replace dollars by hundreds of local businesses and thousands of local residents.  HOURS is that community’s own creation, and they are rightfully proud of it.

Like any currency that is not directly backed by a “hard” commodity such as gold (including, since 1971, the U.S. dollar) HOURS and SROI are really just collective acts of faith.  There is nothing tangible behind these currencies or the economies they empower, which helps explain why dollar bills are inscribed with “In God We Trust” and HOURS bills with “In Ithaca We Trust”.  SROI bills don’t exist (yet), but the inscription I would recommend for them is “In Us We Trust”.

SROI is as real as we want to make it.  We may never be able to accurately capture the social benefit of reducing greenhouse gases, immunizing children or feeding the hungry… but carbon credits, health care savings and calorie counts are valid and accessible pieces of their respective puzzles.

Happily, SROI is more nuanced than the relatively small set of credible outcomes data currently available.  If value is ultimately what we collectively think it is, then capturing our collective thoughts is the ultimate path to SROI.  The most significant outcome of the socialmarkets experiment would be to make that happen - to provide a platform from which our collective wisdom can define social currency.

Our initial denomination of SROI is dollars, but this is mostly a matter of convenience.  Money is a great simplifier.  It helps make SROI more comprehensible even while it vastly underestimates its complexity.  We will iteratively incorporate more and more of that complexity, and even if we can’t always be correct, we can be consistent.

There is currency in social capital, and working as a community, we can make it flow.

I have trouble just keeping up with the nonprofit and philanthropy blogs I already follow, let alone the new kids on the block. But when I heard about a blog called Philanthropic Crap, I admit I was intrigued.

The first post I read there was a review of Michael Edwards’ paper called Just Another Emporer (link here) which apparently “tears social entrepreneurship a new asshole.” (sassy language may not be the high road to getting attention, but it is effective

Expressed in less colourful terms, this paper does indeed call to task the social entrepreneurship model, incarnated here under the somewhat unappetizing label Philanthrocapitalism.

We here at socialmarkets believe strongly in transparency, and relatedly, in presenting a fair and balanced perspective on the social capital markets we champion. Mr. Edwards paper is intelligently presented, and at well over 100 pages, certainly well-considered. So if you’re looking for a counter to some of the arguments we present here, it’s a good place to go.

Listen to both sides of the story, and see where you land…

A recent post thread at Tactical Philanthropy on the topic of measuring nonprofit effectiveness caught my attention. It discusses the issues related to recent (and possibly over-enthusiastic) efforts to apply scientific measurement techniques to help evaluate the work of nonprofits. I could not resisting throwing in my $0.02, which is reproduced below (and can also be found in the originating post here):

It seems to me a recurring theme of the ‘metrics mania’ debate is that it involves both art and science. If the ‘art’ position is that non-profit value defies objective analysis, and the ’science’ is that non-profit worth can be reduced to equations of input and output, I expect I’m somewhere in the middle.

This is surprising, since in the interest of full disclosure, I should say that I am co-founder of socialmarkets.org, where donors “invest” in nonprofit projects based on their SROI (Social Return On Investment.) This sounds like pretty hard science, but there is actually quite a lot of room for art to soften the edges.

The stock market analogy already seen in this thread is spot on. Apple’s stock price is influenced rather than defined by the financial science that slices and dices its cash flows. The beauty of a market is the marvelous job it does boiling down a large, complex set of valuation inputs into a single output called “price”. This number is useful on both an absolute scale and relative to other offerings in the market.

In a testament to the wisdom (or lunacy) of crowds, Apple’s stock price reflects the collective opinion of financial analysts, status-conscious teens and everyone in between. The potential to harness the same power to “price” The Red Cross or your local community foundation seems both possible and useful to me.

There are plenty of donors looking for a “best-bang-for-the-buck” (i.e. maximum SROI) approach to non-profit investment, and right now there is not much useful data out there for them. The success of sites like Charity Navigator are a testament to the need for metrics, but they only tell potential donors about what nonprofits spend, rather than what they accomplish. Surely we can do better than that.

Those with a less scientific approach may not find metrics like SROI as compelling, but still potentially useful. Consider Albert Ruesga’s story of the high-risk, low-return homelessness project that he presents as an argument against metrics. This is where the difference between the sectors becomes significant.

For starters, unlike the for-profit model, there are often donors willing to invest in hard-luck nonprofit cases - as they ultimately did in Mr. Ruesga’s example. More importantly, since nonprofit metrics is still a new field, we can - and should - redefine the notion of return to more accurately capture the total social value being added. That seems to be the most constructive cross-product of art and science in this space: a more artistic approach to the science of metrics.