Imagine a world in which all groups of citizens coming together to realize some public benefit measure and communicate the consequences of their work. Imagine further that all those groups have adopted a common reporting system that enables their individual reports to be compared and aggregated, thus creating powerful descriptions of the relative and collective impact of citizen association for public benefit.
Imagine, too, that this common measuring and reporting carries across to all forms of public-private partnership and corporate social responsibility. This is the world envisioned by ACCESS.
ACCESS can be seen as a fresh effort to answer the simple questions that have hobbled the citizen non-profit sector for half a century: What is the real impact of civil society organizations (CSOs)? Do they make a significant difference to the lives of the poor?
It aims to do this by building the world’s first global reporting standard for CSOs. The ultimate goal is to increase significantly the quality and quantity of social investment for sustainable development by and for the world’s poor.
The quantity of social investment
I want to look at the quantity part of this equation for a minute. While the state sector can tax and the commercial sector can trade, the civil society sector’s funds come from three distinct and not always easily expandable sources: fees and other commercial revenues, public sector payments (mostly for contracted services but sometimes as entitlements), and grants and donations.
Grants and donations are particularly important for the poor of the developing world, but far more is needed. Leaving aside for the moment questions about the efficiency of the international aid system, it is estimated that an additional $70 billion per year will be needed to meet the UN Millennium Development Goals. It seems very unlikely that any significant portion of this ‘new money’ will come from governments.
ACCESS represents one small step towards creating the conditions in which more funds will start to become available to groups in the developing world. The underlying premise is that measuring and reporting the effects of social investment can act as a catalyst both to increase investment and to improve the way it’s done. ACCESS Reporting offers a global standard both for social investors and for the CSOs they support.
Widespread adoption of a common reporting standard should, however, be seen as a necessary but not sufficient condition for a massive scaling up of social investment. Widespread public education will certainly be necessary too.
Increased interest in measurement
Interest in measuring impact is undoubtedly growing in the non-profit world. A 2003 report surveying the ‘field of measuring philanthropic impact’ speaks of a ‘stampede to measure outcomes’, much of it driven by business actors entering the philanthropic arena for the first time. This impetus towards accountability and improved measurement is driven partly by the need to attract private support. The challenge here is to build trust and credibility with the public at large. It is also driven partly by the need to counter national government claims that local non-profits reflect ‘foreign interests’ and that they are accountable to no one but themselves. To counter this argument, CSOs need to broaden and demonstrate their public support and develop new mechanisms that throw light on what they do and how they do it.
Two more technical factors favour a more widespread adoption of measurement in the non-profit world. The first is the web, which makes it possible for social investors in any corner of the world to connect directly with social entrepreneurs in any other corner of the world. There are a growing number of innovative ventures that are utilizing the web to create new social investment marketplaces.
The second is the development of new metrics in the commercial and public sectors to capture complex and often intangible non-financial aspects of performance. These are being widely applied both to individual organizations, notably large corporations, and to the fast-growing area of public-private partnerships. They could usefully be adapted and applied in the non-profit domain too.
With indigenous philanthropy increasing in the developing world, people living and working outside their homelands increasingly investing in communities ‘back home’, and corporations increasingly understanding the ‘business case’ for taking on a wider societal responsibility, together with this growing emphasis on measuring and reporting, the conditions seem promising for a real increase in social investment to support citizen organizations in the developing world.
A global reporting standard
ACCESS Reporting aims to be the world’s first global reporting standard for non-profit, public-benefit organizations seeking social investment. Its principal purpose is to provide reporting organizations with access to new and better forms of social investment.
ACCESS Reporting will not operate its own social investment marketplace. Rather, it will be marketed to foundations, philanthropy advisers, social investment matchmakers/transactional services and new philanthropy marketplaces. It will thus enable rather than compete with existing philanthropic service providers. It will grow in value for all stakeholders – reporting organizations, social investors, governments, researchers, media and society at large – with each reporting organization and social investment vehicle that adopts it. It will work in parallel with mass media campaigns to spread the news of expanding opportunities to invest in the solutions to our greatest societal problems.
ACCESS Reporting will enable the performance of individual organizations to be tracked, compared (ie rated) and aggregated, yielding several different kinds of benefit:
- Individual social investors, organized philanthropic institutions and social investment marketplaces will be able to rely on credible information about the past performance and plausible predictions about the future performance of the organizations they might want to invest in. This will involve capturing key factors that have power to predict performance, such as governance, track record, commitment, entrepreneurial quality, organization structure and systems, resource base, strategy and sustainability.
- Reporting organizations will be able to benchmark themselves against others. This will highlight the factors determining performance and make it easier and quicker to identify, adopt and spread good practices.
- Everyone will be able to see overall progress against a particular problem – such as HIV, homelessness or underemployment – by juxtaposing data aggregated from a set of reporting organizations against empirical-analytical descriptions of the problem.
The main design features of ACCESS Reporting are:
Graduated reporting It will allow for a range of reporting levels linked to the size and level of development of organizations. Newer, smaller and more informal CSOs will provide a more basic level of information than larger and more established ones.
Graduated external verification This will range from no external checks to peer review and historic funding track record for smaller, less-developed organizations, through to professional audit and assurance for larger, more developed organizations seeking larger amounts of funding.
Competency-based analysis It will draw on historical information in order to describe the organization’s underlying competencies that will define current and future likely performance.
Flexibility in prioritizing rating aspects Investors will be able to set ratings based on their own priorities. For example, an investor that believes that policy impact is particularly important can boost the value of policy impact data relative to other data.
ACCESS Reporting is evolving through a participatory piloting process. With field-driven partners like the Inter-American Foundation (Latin America), the Nelson Mandela Foundation (Africa) and the Give Foundation (India) (see p00), it is assured that ACCESS Reporting will emerge from the ‘bottom up’ rather than the ‘top down’.
Picking winners or realizing potential?
While investing in stocks is essentially about picking winners, investing in public benefit organizations is about realizing society’s potential to solve longstanding problems such as poverty, disease and social exclusion. One could say it is about ‘picking potential winners’ and working out how to help ensure that they do in fact win. It must be ‘developmental’ in a way that commercial investing is typically not, but venture capital often is. It should bring analysis, finance and capacity-related elements together in a flexible package of support for investees.
By enabling any organization to benchmark themselves against similar organizations, ACCESS Reporting will help CSOs and potential investors identify what the ‘package of support’ should include in each case. In this way it will help CSOs build capacity, improve performance and, most importantly, gain access to new sources of support.
In order to ensure that ACCESS Reporting will benefit worthy groups everywhere, a separate training and technical support programme called ACCESS Learning will be established. It will prepare groups to use ACCESS Reporting and enable those that already have the capacity to adopt it efficiently.
David Bonbright is Director, NGO Enhancement Programmes, at the Aga Khan Foundation. He can be contacted at David.bonbright@Akdn.ch
1 In autumn 2000, 189 heads of state signed the Millennium Development Declaration, which set out a series of quantifiable development goals to be achieved by 2015. These goals include halving the number of people living in extreme poverty; halving the number of people without safe access to safe, clean drinking water; and providing universal primary education to every child in the world regardless of gender.
2 The Global Leaders of Tomorrow Benchmarking Philanthropy Task Force Report: Philanthropy Measures Up (2003). See http://www.shannon-brown.com/GLT/report.html. See Alliance Extra at http://www.allavida.org/alliance for Jason Scott’s article ‘Building a philanthropic marketplace: obstacles and opportunities’.
3 For a thoughtful elaboration of these issues, see the speech entitled ‘An overview of some of the factors driving the development of self-regulation frameworks for the NGO community across the world’, by Kumi Naidoo, General Secretary and CEO of CIVICUS, at http://www.ngorc.org.pk/html/kumi.htm
4 In the developed world, the child sponsorship agencies provide an interesting case study. In order to respond to high levels of media scrutiny, particularly in the US, child sponsorship organizations have developed a set of operating standards and are now launching a third-party certification scheme to provide independent audit.
5 A well-known leader in this area is the Global Reporting Initiative (http://www.globalreporting.org), which promotes guidelines for sustainability reporting by corporations. The field of sustainability reporting has now evolved to the point where the leading technical resource body in this arena, AccountAbility, an ACCESS sponsor, has launched an ‘assurance standard’ to ‘assess, attest to, and strengthen the credibility and quality of corporations doing sustainability reporting’ (http://www.accountability.org.uk).