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.

At long last we are releasing socialmarkets into the wild!

This is a beta release, covering much but not nearly all the functionality we want to build into the site.

As always, our focus is on SROI (Social Return on Investment) but in this release, we are particularly focused on how crowdsourcing figures in to the calculation of SROI.

We are capturing our user’s opinions on which social projects deliver the greatest social returns.  The more user input we get, the better our result will be - so please visit us and add yours!

Here are the highlights of what you can do on the beta site:

• Find links to some basic research on SROI
• Find out about some nonprofits, including the outcomes used to measure their success
• Use our Rate-O-Matic to rate how valuable you think nonprofit outcomes are
• See how other users have rated nonprofit outcomes
• Vote up or down the SROI of individual nonprofits
• Donate to nonprofit projects you want to support
• See how your nonprofit “investment portfolio” compares to those on our Leaderboard

We are allowing access to the site in stages.  Anyone can tour the site, but an invite code is required for full access.  Here on the blog we are announcing the first public invite code: BLOG.

Please visit us at http://beta.socialmarkets.org and use the code BLOG to register.

We would be grateful for any input you have, from your opinion on social outcomes, to the value of our approach and its execution on the site.

There is a short survey at http://bit.ly/7wvBE, and you can always send us a note at info@socialmarkets.org.

We hope to hear from you!

Using impact metrics to understand the social sector can take many forms, as seen in these current efforts:

performance measurement: evaluating non-profit effectiveness by measuring their outcomes.

outcomes taxonomy: creating a master list of non-profit outcomes to be used as a sector-wide standard for comparison.

social capital: broadening the definition of capital to capture environmental and other social values.

socialmarkets depends on all these trends, and also pushes them a little further into unknown territory.  This is especially true for the social capital model, like when we mix up ‘regular’ dollars (e.g. a donation to a charity) and social dollars (e.g. the SROI a donation produces).

The name socialmarkets itself goes a long way towards explaining what we do: applying the market model to the social sector.  We believe there are potential benefits to applying economic market principles to the non-profit sector, which is after all, itself an economy.

We do not believe that markets and non-profits are a match made in heaven, and our goal is not to force one onto the other.  Rather, our goal is to explore the boundaries of where the market and social sectors can come together constructively, and where they can’t.

This exploration includes stretching some of the classical market vocabulary.  Take ‘currency‘, for example.  Currency is the very foundation of modern economies, offering a neat method of assigning value to things, and of facilitating their exchange.  Dollars, euros, rubles and the like comprise the hard currencies that make traditional economies go around.

socialmarkets suggests an economy based on the soft currency of SROI (Social Return on Investment.)  Social currency is no good for shopping at the mall, but is excellent for capturing and communicating the social value of non-profit work.

Currency actually flows quite naturally in socialmarkets, but price does not - even though the two terms seem closely related.  We capture the value that non-profits add to society, in the form of social currency - which is not quite the same as coming up with a price.  This distinction illustrates how social markets don’t always mesh neatly with traditional ones.

Traditional economic markets depend on a neat line between profit-maximizing producers and penny-pinching consumers, to guide the market’s invisible hand towards a compromise called ‘price’.

Social markets are more complicated.  The line between the producers and consumers of social capital are fuzzy, and the currency that flows between them is more nuanced than plain dollars.

We are so used to traditional ‘prices’ that we forget how fickle they actually are.  From real estate on a global scale, to a cup of coffee on our own corner, prices often move along surprising trajectories.  There is an entire field of economics devoted to studying (and ironically, rationalizing) the irrational behaviour of prices.

This helps remind us that the price of any thing is just a snapshot of how people value that thing… which suggests a useful definition for social return of any given outcome: a snapshot of how valuable people believe the outcome to be.

When we have more experience with social markets we should be able to make better sense of how price - and other economic jargon - translates into the social economy.  For starters, we can recognize that the boundaries between social and economic currency aren’t all that well-defined in the first place.

When looking at the impact of a non-profit project, we typically talk about outputs and outcomes.  The difference between the two is a matter of scale: outputs are relatively short-term and small-scope; outcomes are longer-term and larger-scope.  Outputs, over time, help pave the way for outcomes.

Impact metrics like SROI (Social Return on Investment) are easier to manage with impacts that are easily quantified.  Outputs are more likely than outcomes to be expressed in neat countable units, which makes them an appealing starting point for calculating SROI.

Consider the large and growing number of environmental groups focusing on climate change.  Their energy conservation efforts can legitimately claim “a healthy and sustainable planet” as an outcome.  Such an outcome is clearly and immensely valuable, but challenging to nail down to a dollar figure.

Now consider a short-term output of those same conservation efforts: reduced CO₂ (carbon dioxide) emissions.  This is an easy result to quantify.  Even better for socialmarkets, it’s easy to monetize: financial markets have been pricing CO₂ for years now.

According to the ECX exchange, CO₂ is currently trading at roughly €14 per metric ton.  An output that saves 100 metric tons of CO₂ emissions has a related market value of around €1400, which is a good starting point for calculating SROI.

I say starting point, because the SROI of a project is rarely is simple as the market value of one particular output.  There can be many outputs, with many related outcomes.  In any case, there are questions to complicate even the simplest of impact metrics:

• How do we allocate the SROI of one outcome across many contributing agencies?
• Should we discount the SROI of an outcome over the time it takes to produce it?
• How does SROI account for the risk associated with a project falling short of its stated goals?
• Is the impact of not producing a negative output, e.g. a ton of CO₂, the same as producing a positive output, e.g. a gallon of fresh water?

We are a long way from having good answers to these questions, but countable outputs (like tons of CO₂) is one promising shortcut.  Here are some other volume-based outputs we find intriguing, especially if we can find a reasonable estimate of the corresponding social benefit per unit:

• Number of nutritious meals served at a soup kitchen
• Number of students obtaining a higher level of education
• Increase in fish population from a river clean-up

Because the fungibility of such data is good for SROI calculations, we are including projects with outputs like this in the set of listings for our beta release.  They should make an interesting testbed for examining if and how easily quantified outputs translate into better calculations of SROI.