Common Approach to impact measurement

Principal Investigator: Kate Ruff, Accounting
Co-PI: Erin Oldford (Memorial University)
Project Title: Flexible Approach to Impact Measurement: Pathfinder Pilot Research Project
Funder: SSHRC Partnership Development Grant
Partners: Ontario Trillium Foundation, Government of Canada, 10 Carden, Northpine Foundation, Common Approach to Impact Measurement (the nonprofit)

Principal Investigator: Kate Ruff, Accounting
Project Title: The Common Approach to Impact Measurement: Connecting the Standards
Funder: Employment and Social Development Canada, Investment Readiness Program
Partners: Common Approach to Impact Measurement (the nonprofit), Social Value Canada (SVC), Policy Wise, and the University of Toronto’s Center for Social Service Engineering

Principal Investigator: Kate Ruff, Accounting
Project Title: Bridge Funding—Common Approach to Impact Measurement
Funder: Ottawa Community Foundation

Long gone are the days when return-on-investment represented the only—or even the most prominent—consideration in the world of finance. Investors in today’s social innovation/social finance (SI/SF) ecosystem are likely to be just as interested in making the world a better place as they are in netting a good return, but determining the impact of a charity, non-profit, or social purpose business (referred to collectively as social purpose organizations or SPOs) is far more complicated than calculating an ROI. More complex still is the process of aggregating the impact measurements of diverse SPOs within a single portfolio in a way that makes sense to funders without imposing a data-collection burden on the SPOs that investors are seeking to support.

The problem is not that SPOs do not collect data, but rather that the data they collect to help them fulfill their distinct objectives, serve their particular communities, and demonstrate accountability are specific to their unique endeavors. This tailored data does not always fit within the standardized metrics investors require to compare performance across the different enterprises within their portfolios. Conversely, the uniform data that investors desire is often meaningless to SPOs’ operations and beneficiaries.

Data collection is a good thing: it keeps SPOs accountable, inspires innovation, and informs sound investment decisions. At the same time, it’s a time-consuming process, and there are limits to how much data an organization can reasonably be expected to collect. Typically, the needs of funders have determined data collection efforts, resulting in standardized data of limited value to SPOs themselves. This practice has persisted even though financial accounting has long recognized not only that flexibility is good, but that total uniformity is harmful.

Associate Professor of Accounting Kate Ruff is working to change data collection around impact measurement by discovering the middle ground between the flexibility that SPOs require and the uniformity that investors desire. She has already completed two desktop studies of Common Approach, a community-driven initiative that is redefining the field of impact measurement by empowering SPOs to collect the data that matters most to them while packaging that data in a way that is meaningful for funders. In both cases, the findings indicated that Common Approach could have facilitated successful aggregation of dissimilar impact measures.

Now, with a new Partnership Development Grant from the Social Sciences and Humanities Research Council of Canada, she will be facilitating the implementation of Common Approach in real-world SPOs. Working in partnership with 10 Carden Shared Space (10C), a 200-member strong social entrepreneurship hub based in Guelph-Wellington, she will study what happens when twenty of the enterprises within the 10C network employ the Common Approach framework for their actual data collection and reporting purposes. To assess how useful that data is for investors, Kate has partnered with Erin Oldford (Memorial), who will oversee a student social investment team tasked with measuring the impact of this portfolio of SPOs.

An immediate outcome of this project will be improved impact measurement for the twenty SPOs participating in the study. In terms of broader impact, the partnership supported by this award will pave the way for a massive transformation of how impact is measured within the SI/SF sector.