New European Standard on Impact Measurement: a great step for venture philanthropy

Pieter Oostlander

Pieter Oostlander

As a social funder, foundation, social enterprise or NGO you must have been faced with the dilemma of how to measure or present the impact of what you do. For venture philanthropists, impact measurement and management are key components of our work. Current measurement practice is a jungle of methodologies and approaches, where you can easily get lost. When your organization has various funders, each demanding their own reporting, impact measurement can be a real headache. If that is the case, the recent agreement on a European Standard on Impact Measurement will go a long way in helping you.

The European Venture Philanthropy Association (EVPA)is closely involved in the EU’s Social Business Initiative (SBI). The initiative aims to stimulate the development of social businesses within Europe and to facilitate their access to funding. The European Commission estimates the social economy as being 10 per cent of the European economies´ GDP and consisting of more than 11 million workers, 4.5 per cent of the active EU population, so you can imagine what is at stake here!

Within the SBI a consultative expert group on social business, set up in 2011, called GECES, has been looking at impact measurement, recognizing the risk and inconvenience of multiple standards throughout Europe. A subgroup within GECES has gone through a process of talking to practitioners and others in the field to gauge the needs and come up with a workable standard that will improve the measurement process and simplify the choices made by practitioners. The impact measurement standard is designed to be applicable across Europe and should make it easier for our sector to illustrate our socioeconomic value.

For all those sceptical about a standard that is imposed by the EU, it is worth saying that the standard is not meant to be a regulation or a law ; it is a practical tool to shape future directions for funding of social enterprise. In fact the European Commission recognizes that the standard may evolve as time progresses and as practices evolve.

From EVPA’s point of view it is fantastic to see that the standard is informed by our Practical Guide to Measuring and Managing Impact; a publicly available resource, launched in the spring of 2013, that distils best practice in impact measurement into five simple steps. Impact measurement is a fundamental part of the venture philanthropy and social investment model and has been a focal point for our research and knowledge-building in the past years.

Similar to EVPA’s Practical Guide, the EU Standard is compatible with many types of methodologies and frameworks. It is really a series of commonsense steps to implement impact measurement for an organization seeking to achieve social impact. It integrates our opinion that it is too early to impose standardized outcomes and indicators, and that the maturing of impact measurement should be a facilitated bottom-up process rather than a top-down prescriptive one.

Practically, using the EU Standard will require you to define your own social objectives, how to achieve them, and which outcomes and indicators to measure progress against. It also recommends involving stakeholders to verify and value the resulting impact so it can be monitored and reported.

What else? Under the SBI, there are funds earmarked to grow the social sector. Social businesses may be faced with the format and asked to use the measurement standard when applying for funds from the European Commission’s EaSI (the EU fund aimed at promoting increased access to finance for social enterprises). Or social investors that want to apply for a European label for funds investing in social sector organizations (called EuSEF ) may be asked to use the standard.

The focus for GECES will now shift to the gradual implementation of the standard in Europe in the form of guidance notes. In the meantime, if you are interested in starting to work with the standard, EVPA’s Practical Guide is a good place to start. Visit our website to download the Guide, or have a look at the webinar that we held on it.

Plans for the future are to create for each social sector – for example healthcare, social housing, education – publicly available libraries and catalogues of standardized outcomes and associated indicators that funders and social enterprises can use when deciding what to measure.

The consensus and decision on the EU Standard is a great step in the right direction for the development of our sector. I certainly look forward to the next step of rolling it out.

Pieter Oostlander is the chairman of EVPA and the founding partner of Shærpa.

Tagged in: EVPA Impact measurement

Comments (0)

Leave a Reply

Your email address will not be published. Required fields are marked *