Facing Challenges, Building the Field: Improving the Measurement of the Social Impact of Market-Based Approaches

As new market-based approaches to addressing pressing social issues and the Sustainable Development Goals are tested and assessed, the range of actors along the capital chain--investors, enterprises, intermediaries, networks, and others--are all seeking clearer and better answers to understanding the nature of the social impact generated by these approaches. Many of these actors recognize the complexity of the questions involved, such as who defines social impact, what types of social impact are valued most, or even how much social impact is necessary or sufficient. It is also evident that, in practice, the responses to these and other questions have so far been insufficient or at least incomplete. Against this backdrop, there is increasing demand for qualified evaluators who can operate effectively within the domains of social impact investing, social enterprise, and innovation and entrepreneurship more generally. While these areas share much in common with program interventions in the public and nonprofit spheres, their market-based character means that evaluators face certain challenges specific to these domains. At the level of individual projects and investments, it is important that evaluators recognize and address such challenges directly. At the same time, it is necessary to build the field as a whole by strengthening the skills, strategies, networks, platforms, guidance, and tools that evaluators can utilize. Together, these two lines of action can help equip evaluators to meet the demands that these new domains will inevitably impose upon them.