Measuring the Effectiveness of your Social Enterprise

3 min read

When you design a social innovation programme you often consider what kind of output you are planning and what kinds of outcomes you expect. However, whether the output effectively produces the right outcomes that promote positive social change is another analysis on its own. Essentially, effectiveness is how well you achieve a specific outcome, given the output that you are providing. 

Take the example of a volunteer maths program where low-income students who are failing at maths are offered a place in an out-of-schools program run by volunteer maths teachers. Suppose the aim of the program is to help students achieve a certain minimum level of maths proficiency, as measured by a target exam result. 

The outcome metric of the venture is: ‘How many students went on to achieve a B grade or higher in Maths?’

The output metric of the venture is: ‘How many students enrolled in the out-of-school workshops?’

Effectiveness is represented by a ratio of the outcome to the output. In this case, if 100 failing students enrol, and 50% of them go on to achieve a B grade or higher, then the effectiveness of this program is ‘50 students in every 100 that enroll in the program achieve a B grade or higher in Maths’. Having this kind of statistic available and offering it at opportune moments can really help a venture market itself to funders. These figures are particularly useful for a venture to be able to offer the funder comparisons between their programme and other programs on the market to highlight the value that theirs has. Highlighting the value of your venture’s programme in comparison to other options in the market allows funders to see how your social impact is unique as well as how it can provide a sustainable return on investment for the funders themselves.

When you calculate the effectiveness of your programme it is important to be aware of selection bias. Selection bias occurs when the participants that are chosen for an intervention do not accurately represent the target population to which solution is being extended to. If we take the example of the maths programme, you would need to ensure that the group of students that you selected to measure programme effectiveness on is not biassed by containing a majority of participants already performing highly well in maths. You need to ask yourselves the following questions:

How were the students selected?

Were they the top performing students in the school, the lowest performing, or a mix?

Were they a group who signed up voluntarily (i.e. who self selected)?

Making a ‘faux pas’ in this selection will surely skew your results. It’s important to be explicit and deliberate about these selection effects, as they impact effectiveness. Once you have figured out how to best measure the effectiveness of your social impact you can use those results to woo funders.

Quick tip on Effectiveness:

Above we discussed how to measure the effectiveness of the impact that your social enterprise has on society, however there is another measure of effectiveness that the funders are also interested in and that is whether you manage your finances effectively. Funders are always impressed to find out about the cost effectiveness of a venture. Take the maths programme as an example, if a year-long workshop of 100 students improves the maths abilities of 50 students at the cost of $1000 you can then quantify your cost effectiveness accordingly. You can say to funders the following “Every $1000 invested in us helps 50 failing students achieve a B grade or higher in Maths”. You can pair this statement with a comparison of how cost effective a similar programme is to demonstrate to potential funders that your programme is well researched and financially sustainable.

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