Last week, our Director of Learning and Influence Genevieve Maitland Hudson blogged about our breaking up with beneficiary level data – but how do we go about sharing the right data responsibly within the social investment sector? Following on from the launch of our 2018-19 Impact Report, our Research Manager Kirsten Mulcahy makes the case in part one of our new data-driven blog series.
Data collection in the social impact investment sector is a confusing medley of frameworks, metrics, growing data burdens, and data gathering failures. It would be a lot simpler if we shared the data collection responsibility. And better still if we each focused on collecting data to support more effective decision-making in our distinct market roles. Here’s how we can do that.
Within the social impact investing world there are many actors, operating at varying degrees of separation from the main return objectives. While we are all interested in both financial and social impact returns, only one of us (the charity or social enterprise) is engaging directly with the customer - on whom so much social impact data is centred. As a result, specific roles, responsibilities, and areas of control can get blurred, especially where impact data is concerned.
So, what if each sector actor focused on collecting and using data to help inform decisions where they had the direct responsibility for actionable change? In such a case, I think we would start to see (i) a more realistic identification of data needs, (ii) improved efficiencies in data collection processes, (iii) more purposeful data analysis, and ultimately (iv) an improved ability to use, own and action data in different ways.
Let’s explore how this could work in practice:
- Investors: These actors would consider solving problems at a system-level. Data here is aggregate and focused on the market/sector dynamics; it considers social economy capital flows; provides in-depth assessments of different pricing options; looks to describe market competition and crowding in of new players; helps to inform catalytic investment and funding opportunities; and seeks to design new system solutions based on past and future trends, needs and innovations.
- Fund managers: Social investment financial intermediaries, like Social Investment Business (SIB), manage financing and support to improve the resilience and social performance of charities and social enterprises. We make decisions relating to organisations. Data should then include what good organisational performance looks like per business model, sector, stage; how organisations contribute positively to their local communities as economic players and deliverers of social products and services; and evidence should help support investment committees to best allocate funding and support across applicant organisations.
- Investees (direct service providers): Charities and social enterprises are interacting with customers every day; they are seeking to have a positive and enduring impact on individuals. Their data should then be focused on the customer. For example, customer feedback data to understand how products and services could be changed to better meet customer (or beneficiary) needs. Impact data should look to describe how individuals might experience changes in social outcomes related to the products and services accessed. And most importantly, the purpose behind data on these ‘impact metrics’ is set by the charities and social enterprises. So that they are better informed on how to adapt in support of (ongoing) improved social outcomes for their communities.
By distinguishing and segmenting data to align to the unique responsibilities of specific market actors, we could empower improved data ownership and use throughout the sector. And it would also challenge the current (distorted) data and reporting power dynamics between funders, intermediaries and investees.
A shared data collection responsibility relies on openness and collaboration, but it also requires strong data ethics, curiosity and ongoing scepticism by which to hold each other to account. This will only work if we can build trust among sector actors to share data openly and transparently: Investors will still want to know (and use) customer level impact data, and social enterprises would still want to be guided by fund manager data on organisational resilience - all playing a part in a broader sector collaborative.
We at SIB want to get better at using data and analysis to inform our design, delivery and decision-making. Our aim as an organisation is to put the resources we have to the best possible use in effectively supporting organisations who engage in diverse activities and create impact in different ways. And we believe we will be stronger in doing this if we share data responsibilities across our sector partners, in a way that best supports each actor’s ability to own and action data-led decisions. You can read more about this in our 2018-19 Impact Report.
>> Our 2018-19 Impact Report is available to read here.>>