Preface

All organizations have social impacts: some are positive and some negative. Measuring and Improving Social Impacts is about how you can learn to make decisions that will improve the positive social impact of companies, foundations, nonprofits, and impact investors. In our work with organizations that are interested in impact, we’ve taken on a variety of roles—sometimes we’ve served as consultants and advisors, and sometimes we’ve served as researchers attempting to better understand organizational challenges and to develop or evaluate solutions. As professors, we also have our roles in the academy, researching and writing in addition to teaching and working with students, many of whom share their work experiences with us.

We began our careers focusing on two sets of issues: performance management and ethics. We were trained in performance measurement practices and have applied them broadly in both for-profit and nonprofit organizations. Whether the focus of the organization is on improving the financial bottom line or on improving society, similar issues arise. Organizations want clear answers to questions such as: What are we trying to accomplish? What do we need to do to accomplish these goals? How do we define success? How can we measure success? How will we know when we have succeeded? and How can we do better over time?

What we have seen is that too often, in both for-profit and nonprofit organizations alike, the answers were not clearly understood. In many cases, the questions weren’t even clearly articulated. We have focused our work on helping organizations explore these questions to better define, measure, and improve performance.

Throughout our careers we have also focused on the ethical dimensions of organizations. We’re concerned with questions such as How can various types of organizations use their resources to address social ills? In our work on corporate social responsibility and sustainability, we help organizations develop ways to manage social, environmental, and financial performance simultaneously. We show businesses how they can improve their social impacts while also looking out for shareholder needs.

Marc has authored or coauthored twenty books, and both Marc and Kristi have published extensively in the areas of corporate social responsibility and sustainability, nonprofit governance and performance measurement, and improving organizational social and financial performance. We have worked in Africa, Asia, and South America with organizations specializing in microfinance, microentrepreneurship, global health, and education for the poor. This international work has allowed us to collaborate with the best for-profit and nonprofit organizations in the world in dozens of countries over many years. All of this work has contributed to the ideas integrated into this volume.

Building on our previous work, we embarked on an enormous additional task for this book. We wanted to understand the views and approaches of the world’s leading experts in impact measurement and to better understand how they address the difficult problem of measuring and improving their impact. This project took us to places like New York, Seattle, San Francisco, London, and Mumbai. We talked with small and large foundations, nonprofits, and companies as well as impact investors and high-net-worth individuals.

The result—this book—is about all aspects of social impacts. All organizations have impacts, positive and negative, intended and unintended. Companies can produce products that improve or damage society—or both. Nonprofits can create jobs for some and displace jobs for others. Or they can provide services that have only minor impacts relative to the resources used to create them. Organizations can easily make the mistake of operating in the dark—lacking clarity about the impacts they create or lacking the rigor to produce the impacts they desire. These organizations can benefit from developing better measurement systems that can help them succeed in their missions and improve their impacts.

In retrospect, it seems like we have been preparing to write this book our entire careers. We did not know it when we began the project, but this book has turned out to encompass the work we have been doing for decades. In researching and writing it, we learned a great deal about the importance, processes, and mechanics of deciding what impacts really matter, and then measuring and improving those impacts. Whether this is your first time thinking about impacts or you have years of experience working in the field, you’ll learn new things as well.

We are grateful to the more than one hundred leaders whom we interviewed for this project. We especially want to thank Praveen Aggarwal, Sabina Alkire, Anish Andheria, Steve Aos, Doug Balfour, Clara Barby, Steve Beck, Dan Berelowitz, Jeff Bernson, Paul Bernstein, David Bonbright, Amit Bouri, Jeff Bradach, Paul Brest, Arjav Chakravarti, Leni Chaudhuri, Cindy Chen, Michael Chertok, Neelam Chhiber, David Colby, Carmen Correa, Claire Coulier, Monisha Diwan, Poornima Dore, Toby Eccles, John Elkington, Jed Emerson, Richard Fahey, Mike Feinberg, CJ Fonzi, Matthew Forti, Cynthia Gair, Russ Hall, Laura Hattendorf, Lucy Heller, Anne Heyman, Jeremy Hockenstein, Kai Hopkins, Bart Houlahan, Alex Jacobs, Hannah Jones, Tie Kim, Sean Knierim, Tris Lumley, Steven Lydenberg, Anna Martin, Steven McCormick, Carol McLaughlin, Sunil Mehta, Zarina Mehta, Hari Memon, Eve Meyer, Sumit Mitra, Laurie Mook, Will Morgan, Jodi Nelson, Rohini Nilekani, Sara Olsen, Sally Osberg, Paresh Parasnis, Alexander Pope, Kevin Rafter, Mike Rea, Larry Reed, Gabriel Rhoads, Katherina Rosqueta, Deval Sanghavi, Zarina Screwvala, Vidya Shah, Durreen Shahnaz, Devi Shetty, Paul Simon, Rishi Singh, Lynne Smitham, Sean Sokhi, Padmini Somani, Divya Srinath, James Stacey, Nalini Tarakeshwar, Ben Thornley, Pearl Tiwari, Brian Trelstad, Melinda Tuan, Fay Twersky, Steve Viederman, Sunil Wadhwani, Havovi Wadia, Brian Walsh, Michael Weinstein, Peter White, Allen Wilcox, Peter York, and their colleagues for their time in sharing with us their individual and organizational experiences in measuring and improving social impact. We cannot thank them enough for sharing their work with us as well as their important concerns and contributions for improving social impacts. We would also like to thank the Rice University Shell Center for Sustainability. The Center’s generous funding supported our field research and many other aspects of this project.

This book has taken more hours than we want to count. But it could not have been completed without the assistance of others. Hannah Sijia Chen is a bright and diligent researcher who was at the center of this project. Not only her great research support but her work in the management of all of the information from both the published research and the field and interview notes was critical. We are extremely appreciative. We are also grateful for the substantial and excellent administrative support provided by Tatianna Aker at Rice University. Samuel Ireland, Tim Hutchinson, and Maria DeWitt also provided assistance and contributed innovative ideas to the project.

In addition to the experts in organizations and our assistants at the universities that were so critical to our work, we want to thank all of the colleagues who have been so helpful in forming ideas and providing important feedback as we were developing this project; these include Klaus Brinkmann, Cindy Cooper, Srikant Datar, Jesse Dillard, Linda Firth, Francisco Montgomery, Scott Sonenshein, and Sally Widener.

Organizations interviewed for this book include:

Absolute Return for Kids (ARK)

Acumen Fund

Ambuja Cement Foundation

Arghyam

B Lab

Bill & Melinda Gates Foundation

BRAC

Bridge International Academies

Bridges Ventures

Bridgespan Group

Center for High Impact Philanthropy

Chevron Corporation

Children’s Investment Fund Foundation

Dasra

Developing World Markets

Digital Divide Data

Earth Capital Partners

EdelGive Foundation

Edna McConnell Clark Foundation

Escuela Nueva

Geneva Global

Godrej Group

Gordon and Betty Moore Foundation

Home Depot

Industree Crafts

International Centre for Social Franchising

James Irvine Foundation

John D. and Catherine T. MacArthur Foundation

KaBOOM!

Karisimbi Business Partners

Keystone Accountability

Kiawah Trust

KL Felicitas Foundation

Legacy Venture

Liquidnet For Good

Magic Bus

Markets for Good

Mercy Corps

MSCI, Inc.

Mulago Foundation

Narayana Hrudayalaya Hospital

Narotam Sekhsaria Foundation

New Philanthropy Capital

Nike

Nissan

Omidyar Network

Oxford Poverty & Human Development Initiative

Pacific Community Ventures

PATH

Pershing Square Charitable Foundation

Plan International

Pratham

Procter & Gamble

Robert Wood Johnson Foundation

Roberts Enterprise Development Fund/REDF

Robin Hood Foundation

Rockefeller Foundation

Shujog

Sinapi Aba Trust

Sir Dorabji Tata Trust

Skoll Foundation

Social Finance

SpringHill Equity Partners

Swades Foundation

VillageReach

Washington State Institute for Public Policy

William and Flora Hewlett Foundation

We want to thank Neal Maillet and the terrific team at Berrett-Koehler Publishers, whose efforts greatly improved this book. We also are appreciative of the extremely helpful comments of the external reviewers of the book: Kendra Armer, Kathy Scheiern, and Mal Warwick. They all made important contributions to the project.

This book is dedicated to our families. We thank Marc’s family: Joanne Epstein, the Firestone family (Simcha, Debbie, Emily, Noah, and Maya), and the Zivley family (Scott, Judy, Amanda, and Katie). We also thank Kristi’s family: Kiley, Jackson, and Michaela. Without their patience, support, and humor this book couldn’t have been completed.

Marc J. Epstein
Houston, Texas

Kristi Yuthas
Portland, Oregon

September 2013