New impact management reporting guideline brings social investors and NPOs closer

Social impact initiative Nation Builder has launched a standardised impact management reporting guideline for South Africa’s social impact sector in a bid to help non-profit organisations (NPOs) and social investors align better and measure the impact of their efforts and investments more effectively.

By helping social investors and NPOs to start from the same point of departure, they will be better able to identify where the greatest impact is being achieved with the available resources, said Nation Builder executive trustee Keri-Leigh Paschal.

“At a time when funding has slowed and social needs have increased dramatically, it’s never been more important for NPOs and social investors to be able to quantify their social impact. Stakeholders want more efficiency, consistency, value and quality in terms of the social impact insights that are available to them, which has shown a collective need for well-informed decision-making,” said Paschal.

The guideline is the result of an 18-month collaboration between nearly 100 social investors and non-profit organisations (NPOs) in the Nation Builder community to create a shared solution that meets the requirements of all parties.

Impact reporting provides a detailed account of the social ‘return on investment’ achieved – or the impact that was made on people or the planet – with the resources that were invested. This enables stakeholders to assess the performance of the programme against its objectives, use insights to improve the outcomes and make informed decisions for the future of the initiative.

Currently, the lack of standardised measurements make it almost impossible to compare and determine which approaches accomplish the best results. This makes it difficult to develop effective strategies based on quantifiable data, and hinders a national view on where support is needed most.

The guideline will help standardise much of the reporting that social investors need, even while some reporting to social investors necessarily remains funder-specific.

Paschal said the development of the guidelines had allowed for a greater understanding between NPOs and investors of each other’s environment, and their contexts, challenges, constraints, priorities and mandates.

“This sort of deep collaboration, which requires robust discussions and an increased understanding of what all parties are looking to achieve, shows a maturing within the social development sector. When donors and NPOs understand they are aiming for the same end goal, and that each partner brings something of value to the table, they can align their requirements and expectations on how to achieve the desired social impact,” she said.

Apart from the impact management reporting guideline, which will be freely available, Nation Builder will also launch an impact management reporting masterclass series in May 2021. These masterclasses will take participants on a deep dive into the various aspects of impact reporting.

“Our aim with these products is to ensure that every investment in the form of time or resources helps achieve long-term, sustainable change in the lives of those who need it the most. It is vital that every NPO and investor has access to the guidelines, as we will only achieve greater understanding of impact if we work together as a collective by reporting in the same manner,” said Paschal.

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