The last five years have redefined normalcy for most of us. In the corporate social responsibility (CSR) world, funders are more concerned than ever about overburdening their nonprofit partners with reporting requirements. Many are taking a fresh look at how best to align their CSR efforts with their corporate purpose. And almost all programs are exploring what it takes to realize truly meaningful change in different locations and for different beneficiaries.
As CSR leaders navigate this new terrain, staying grounded in core measurement principles will be especially important. Whether you’re looking back at 2024 or preparing for 2025, there’s no need to reinvent the wheel.
We believe that by working with your nonprofits to track four simple metrics, you can prove the results of your various initiatives and improve the net impact you and your nonprofits can create. Below, we lay out those metrics and how to use them.
Have questions on how to apply these metrics to your program? We’re here to help. Schedule a free consultation with one of our social impact experts to explore how these metrics can be applied to your CSR team’s efforts.
4 KPIs to Measure and Maximize CSR Impact
Metric 1: Move from Tracking Outputs to Tracking Outcomes
People often confuse outcomes with outputs. Outputs are the products or services a program delivers and to whom–for example, the number of students mentored, the pounds of food delivered to hungry families, or number of homeless persons receiving shelter.
Outcomes are the results, with the most important defining the effect on peoples’ lives and wellbeing. Examples of these ultimate or “end” outcomes include the number of students who improve educational performance or get into college, the number of families who gain improved food security, or the number of homeless people who improve their health or safety.
To transition from outputs to end outcomes, try asking, “And then what?”
Output: 100 youths attended a nutrition class your nonprofit partner gave. And then what?
The students learned about cooking and growing food. That’s an (interim) outcome, one you’re proud to support, but it doesn’t get at your ultimate goal for investing in this program. So ask yourself again, And then what?
They started eating more fruits and vegetables at home. Again, this is a worthy interim outcome, but it’s not your overall reason for investing in this program. So ask again: And then what?
Their health improved. That is the ultimate or end outcome behind your support for this program: improved health in this segment of the community.
Why CSR Leaders Should Care about Tracking OutcomesThroughout the 2020's, CSR leaders have stepped, first during the pandemic and more recently with natural disasters--to provide incredible amounts of support to their employees and communities. But why should they bother going beyond the tracking of inputs and outputs, like dollars donated, volunteer hours recorded, and charities supported? Tracking outcomes allows you to create a more authentic (accurate and accountable), more human-centric (instead of process-centric), and more effective narrative to strengthen your relationships with existing and potential employees, customers, business partners, communities you serve, and other stakeholders that are key to the health of your business. You can develop simple value statements that define your organization's CSR impact like, “our employee volunteering and company giving in partnership with nonprofit xyz helped place three unemployed veterans into living wage jobs." Keep reading or check out this blog post to learn more about the importance of impact reporting and measuring outcomes. |
Metric 2: Look at the Social Return on Investment (SROI) of Your Programs
In the private sector, calculating financial return on investment (ROI) -- i.e., how much money you will earn for each dollar invested -- is a standardized way for comparing the value of one investment against another, to find the best option. The charitable sector offers a similar approach, only instead of calculating the monetary returns for each dollar invested, you calculate the value to society (social impact). Social return on investment (SROI) measures the number of outcomes achieved for each dollar invested:
Outcome ÷ Cost = SROI
However, since this formula often produces small numbers–for example, 0.01 kids enrolled in college per dollar invested–that can be difficult to explain or relate to, we suggest multiplying the SROI by $10,000 to generate more user friendly results:
(Outcome ÷ Cost) x $10,000 = SROI per $10,000 spent
For example, let’s say you invested $1 million in a program that housed 250 people. Using this formula, you would come up with the figure of 2.5 people housed for each $10,000.
How to Calculate SROI
This process will allow you to compare the SROI of different outcomes more easily. However, context matters! Make sure the programs you’re comparing are defining their outcomes in the same way. If not, programs that have easier-to-achieve or superficial outcomes will register higher SROI values and seem like better investments than they are. Sometimes, simply grouping programs into high, moderate, or low-impact categories and comparing their SROIs is enough to adjust for such discrepancies.
How to Use SROI
Metric 3: Confirm That Your Investment Strategy Aligns with Your Goals
Look at your investment goals according to where, who, and what: the location(s), population(s), and cause area(s) you wish to serve.
Three Types of Corporate + Community Alignment
One approach to evaluating how well your investments align with your goals is to calculate how much you are investing or how many successful outcomes you are achieving by focus area. If the values don’t support your priorities (for example, if you have a signature commitment to improve food security, but only a minority of donations are supporting programs in that space), then consider reallocating your investments to better reflect your priorities.
Metric 4: Track Data Quality
Evaluate whether the data you receive from each nonprofit partner is based on objective data. It’s great if they have direct measures, such as formal program evaluations or comprehensive tracking regimes. But limited resources often make that impractical. In those cases, they can use estimates based on objective data such as representative samples, previous results, or third-party studies of comparable programs.
If a partner is providing evidence-based data, you’re good to go. If the evidence is speculative, such as logical assumptions based on experience, then that’s better than nothing. But you’ll want that to be clearly acknowledged so readers can properly contextualize the information (i.e., not think it’s more precise than it is). And you’ll want to work with the partner to improve data quality. Helping nonprofits improve and sustain data quality is part of the measurement journey.
So, consider tracking data quality as a performance indicator. First, categorize your data sources, then calculate the percentage of programs using high-quality data. You can use this information not only to make investment decisions but also to identify the next steps in your relationship with individual nonprofit partners. You can also make increasing data quality over time a measure of success.
Three Levels of Data Quality
Ready to Jumpstart Your CSR Impact Reporting?
The 4 KPIs are the framework True Impact uses with dozens of leading CSR programs to prove–and then improve–their results. While interest in impact measurement remains high, we know there can be apprehension in how to do impact measurement best–making sure you get the results you need without burdening your nonprofits.
To help, here are two free resources to dive right in.
- Check out this toolkit we produced with ACCP, which offers a wealth of information for CSR professionals like you: Measuring Corporate Social Impact: Recommendations for Better Partnerships and Reporting
- Want a guided overview of impact measurement best practices tailored to your company and CSR program? Schedule a free consultation with one of our social impact experts. You can think of it as office hours but for CSR leaders!
