SOCAP Europe – Getting Out Rulers and Levels: Monitoring and Evaluation & Implications for Urban Investment, Part 3

With writing, research and editorial assistance from Valerie Stahl, Summer 2011 Smart Cities Advisors intern

Image Courtesy of SOCAP Europe, 2011

Picking up from the last post, this monitoring and evaluation topic was an example of one of SOCAP’s great hallmarks – the participatory and interactive process of “figuring it out.” The conclusions and suggestions for how to knit these knotty challenges together came from investees and investors, as well as intermediaries and every other manner of participant.

All together now. Ultimately, the answer is in how you put it all together. If measures are seen as an add-on process rather than an integral part of operations, then of course the challenges may be difficult to surmount. Weaving evaluation into operations, however, means that processes and systems may have to be re- and pre-engineered to capture key information.

Maintaining staff and partner engagement also requires investing in team (with a capital T), regularly communicating the significance of the evaluation process, and rewarding the contributions that advance the organization’s capacity to collect the right kinds of information and report them effectively. Despite award and competition saturation, transparency and impact reporting in social enterprise – with categories determined by organization size – would be an ideal theme for an award.

Trust is a big part of this as well. Everyone knows that building effective partnerships and relationships with funders demands a level of professionalism, communication and transparency, but everyone also knows how rarely actual performance lives up to expectations (and how often donors make decisions based on their own non-transparent political considerations rather than data and evidence).

However, when M&E evolves to the point at which funding decisions may be contingent on achievement of specific goals, this can test the inherent trust that drives organizational relationships. Clearly, any system, especially processes that are as yet mostly untested, still has to be checked with dialogue, flexibility and judgment.

Finally, there is broad agreement that organizations with similar missions should attempt to work together and involve beneficiaries and stakeholders more so that the entire sector can benefit from learning about how to value what really matters, how to elude the dangers of over-exuberance and how to stay transparent in external communications.

The political economy of transparency in social enterprise and impact investment is evolving and will drive the institutionalization of the impact investment space. The progress in the quality of the conversations and the number of organizations participating in them at SOCAP Europe was encouraging.

When you compare the impact investment world with the extensive analytics available in the mainstream financial markets, even for private equity and venture capital investments, and even for measuring social and environmental impact, it’s clear that more transparency and institutionalization are on the way – and a good thing for this evolving “asset class” – despite uncertainty about the extent of M&E necessary for responsible investment.

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