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Can business principles, such as impact measurement, help us create the change we need?

May 23, 2013

An unfortunate trend of applying business principles to giving, described as ‘philanthrocapitalism’, is starting to take a hold. Part of this is a focus on data and measuring the impact (outcomes) of projects. The Measuring and Evaluating Outcomes in Practice annual conference today, organised by New Philanthropy Capital, is focused entirely on how to measure impact to attract funding.

philanthrocapitalismThe problem with this is that the ‘outcome’ most worth fighting for, with the longest-term impact, is also the hardest to measure – and that’s social change. The independent, grassroots groups creating the change we need are also less likely to have the resources needed to measure outcomes in the way some funders expect. Another point worth remembering is that you can never fully measure the impact of social change and campaigning work. For example, the campaign to stop the Newbury bypass failed to stop the road being built, but after that other road schemes were fought and one after the other were cancelled. There’s no question that the Newbury bypass campaign’s high media profile, mobilisation of the public and development and testing of strategies played a big part in the success of the campaigns that followed.

Focusing on measurable outcomes can discourage groups from addressing wide-reaching systemic issues and encourages them to play safe rather than engaging in the innovating and risk-taking that’s needed to create long-term change. Cathy Pharoah writes:

Yes, there is an easier way to produce results-based performance. It means tackling problems that are solvable, focusing on outcomes that are achievable and outputs or indicators that can be measured.

But the sector’s role has always been to address precisely those issues that society has found difficult to resolve – issues that require inputs at individual, community, and political levels… where attitudinal or behavioural change involves improvisation, trial and error, and where the best outcome might be three steps forward, two steps back.

The focus on data can also mean concerning yourself with quantity over quality. Training 100 health workers in Pakistan might look great on paper, but if they don’t actually go on to do the work, because no one is willing to fund the salaries, it’s hardly an achievement.  If you’ve supplied food to 200 people, but neglected to spend the time and resources to reach people most isolated and marginalised by society, have you really achieved more than a group who did, but as a consequence only fed 150? Is providing intensive therapy to 10 deeply traumatised asylum seekers less worthy of support than helping more – but less traumatised – people?

Philanthrocapitalism also tends to involve huge sums of money, from corporations and wealthy individuals, which can reduce organisations’ independence and ability to challenge the corporate sector. For example, Save the Children have recently partnered with GlaxoSmithKline, which is surprising considering their earlier criticism of the company for pricing their drugs out of reach of people who need them most. It will be interesting to see how that relationship evolves as they work together to develop new products and expand across Africa. There will likely be more partnerships like this as traditional sources of funding continues to dry up.

We all want to know we are having an impact, and it’s important we reflect, learn and evolve, but let’s not become short-sighted and overlook important factors such as inclusivity, innovation, solid ethics and social change, by turning it all into a numbers game.

For more info on philanthrocapitalism, Michael Edwards provides a great critique in the article Philanthrocapitalism: After the Goldrush and in his book Just Another Emperor.

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