Evaluating the Enterprise: Do you know your impact?

As social entrepreneurs, we may assume that when our participants’ lives get better, it’s because WE helped them. This could be the case. But it could instead be the case that they’re getting help from somewhere else, or that they just happen to be very motivated and would have done well without our help. This is where research becomes important: research helps us determine whether we’re actually having an impact in people’s lives in the way we think and hope we do.

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While the importance of social entrepreneurship has been globally acknowledged, there is little emphasis on research in this field. Social enterprises all set out to generate social impact through innovative business models. But if we do not study this impact, how is it possible to know that a social enterprise is truly making a difference? Without impact analyses, we are uncertain of the change we are creating in the lives of people being served. The success of the people we serve should be the focus of social entrepreneurship. Therefore, if we are uncertain that our program is helping…why are we continuing with it? It is this uncertainty that should generate a desire to evaluate.

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Impact analyses force the social entrepreneur to take a non-biased look at their organization, and to face the humbling question: does our social enterprise generate the impact we predict? Evaluations are essential to ensure that programs are creating the greatest impact possible in the most cost-effective manner. The difficult part is, if upon analysis, whether some projects do not deliver the return on social impact that they once speculated. If this news arrives long after an enterprise has been established, not only could it diminish a once positive reputation, but also, it potentially could lead to drastic changes to an enterprise’s structure.

What LEO can do is change people’s understanding of the importance of research & the role that research plays in the broader society & how it can make a difference.

The Wilson Sheehan Lab for Economic Opportuntities or LEO’s advice to social entrepreneurs is to evaluate early and evaluate often! It is much easier to integrate research into the design of a new enterprise than to backtrack and build research into an already established enterprise.  Additionally, entrepreneurs can know from initial phases whether or not their program will have positive results, and modification will come at a much lower cost during early project stages. By conducting an impact analysis from the start, an organization will be able to capture all of its history in metrics.

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For established enterprises, consider incorporating an evaluation into the current program, or into a scale-up. Ideally, an impact analysis will tell a social enterprise what is working, and ways in which to improve. It is important to remember the overall mission of social entrepreneurship: to generate high social impact.  The true impact of the enterprise will remain uncertain until high quality evidence is created through rigorous program evaluation. Therefore, in order to understand if we are generating the greatest social impact, social entrepreneurs should embrace this uncertainty and in turn seek evaluation.

At LEO we believe our role is to bring academic rigour to the role of evaluation & to use the tools we have in academic research to figure out what works & what doesn’t.

LEO works with social service agencies across the country to design and execute research studies. Within Saint Joseph County (Indiana), we partner with Reading For Life (RFL), a juvenile diversion program designed for non-violent offenders. A unique and innovative alternative to prosecution in the court system, RFL allows low-status juveniles to study works of literature in small groups led by trained volunteer mentors. With the research team’s guidance, RFL designed an intake procedure that functioned to randomly assign individuals either to participate in the RFL program, or to receive the usual diversion program of logged community service hours. Upon analysis, LEO found a significant decrease in recidivism for those who complete the RFL program as compared to those in the usual diversion program. RFL and LEO are now working to scale up the program and evaluation to counties across the US. The evidence of program effectiveness from this study will be helpful for expanding RFL to new county judicial systems.

Screen Shot 2015-11-11 at 11.50.42 AMAn impact evaluation makes it possible to explain exactly how much of an effect your program has on the people you set out to serve, which is crucial when attempting to bring an enterprise to scale. Whether you are pitching to an impact investor, marketing to new customers, or reaching out to more stakeholders, presenting statistics specific to your impact will tell a much more meaningful story.

The Wilson Sheehan Lab for Economic Opportunities (LEO) is a research center in the Department of Economics at the University of Notre Dame. LEO matches top researchers with passionate leaders in social service agencies to conduct impact evaluations that identify the innovative, effective, and scalable programs and policies that help people move permanently out of poverty.  LEO’s vision is to improve the lives of the poor through evidence-based research and policy.  To learn more, please visit the LEO website and follow on social media (facebook.com/LEOatND; @LEOatND).

For those in Boston later this month for the Shamrock Series, LEO is participating in an academic panel, Combining Research and Practice to Serve the Poor, on November 20 at 3pm at the Boston Marriott Copley Place. This event is free and open to the public; all are welcome! 

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Elisabeth O’Toole is a Notre Dame alumni who studied International Economics & Development, and Spanish. Elisabeth has spent time volunteering and conducting research in Nicaragua and Guatemala. Passionate about international development and social enterprise, she is pursuing a career within this field. She is currently a research associate at Wilson Sheehan Lab for Economic Opportunities.

 

 

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