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Measurement and Evaluation in Irish Social Entrepreneurial Enterprises (March 2011)

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Measurement and Evaluation in Irish Social Entrepreneurial Enterprises (March 2011)
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    Introduction The Initiative on Social Entrepreneurship was established in January 2009 as a result of a philanthropic donation given to theCentre for Nonprofit Management and the School of Business, Trinity College Dublin by the Iris O‟Brien Foundation . The aim of theInitiative is to create an intellectual hub for the research and teaching of social entrepreneurship in Ireland. The Initiat ive‟s actions include research, teaching and dialogue in all areas of social entrepreneurship and the nonprofit landscape nationally andinternationally. This document presents a “snapshot” of findings from a mapping study which was carried out by the Initiative on Social Entrepreneurship during February/March 2010. The purpose of the mapping study was to examine more closely the natureof social entrepreneurial enterprises in Ireland, and gain a better understanding of their structures, activities and entrepreneurialbehaviours as distinct organisational structures on the Social Economy Continuum.This survey was aimed at those organisations that see themselves as a business with primarily social aims and objectives. Asthere is no definitive list of social entrepreneurial enterprises in Ireland, a number of sources were used to generate a sample for this research. Organisations were able to self-identify themselves as social entrepreneurial enterprises to complete the survey.The survey questionnaire was developed using Zoomerang online survey software and was launched on 25th February 2010 andremained active until 11th March 2010. The valid sample of responding organisations in the survey numbered 194 individuals/enterprises. Responses were received from those who played a variety of roles within the organisations, such as, Managers andCEOs, Directors, Chairperson/Committee Members and Owner/Founders. Background The necessity to measure the impact of the work of third sector organisations has been discussed for many years. In recent timessuch organisations have had to compete more for resources and legitimacy and as a result the measurement of their social impacthas become much more important for managers (Nicholls 2005). Social enterprises, as a subset of the sector, can be understoodas organisations or businesses that are driven primarily by social and/or environmental motives and engage in trading to pursuethese objectives (Social Enterprise Task Force 2010). They look towards self-sufficiency via generation of income (Nicholls 2005)therefore it could be said that the issue of measurement for social enterprises is of particular importance. Snapshot No. 3 Mapping Social Entrepreneurship in Ireland:Measurement and Evaluation in Irish Social Entrepreneurial Enterprises (March 2011)Geraldine Prizeman and Dr Denise Crossan  2 The importance of measurement of social impact for organisations has been highlighted by the New Economics Foundation (2004);these include more effective planning and a better understanding of the work of the organisation. Measurement of the social impactof social enterprise has been the topic of much debate (for example, Cunningham and Ricks 2004; Nicholls 2005; Ashoka 1 2006).While many models have been suggested, for example, social auditing balanced scorecard, family of measures and SROI 2  (Nicholls 2005) there is no consensus on a single model that works best at measuring the social, environmental and economicimpact of entrepreneurial enterprises. Ashoka say that the measurement of effectiveness provides a tool for them to better understand the changes that social entrepreneurs are making in their societies. For them, this information is valuable both as ameans of communication with their partners and as a tool for the discussion on institutional practices, however, they acknowledgethat “ determining impact is not easy ” (Ashoka 2006) . In 1997 Ashoka designed a system to measure its impact around the world asa tool for both external communication and internal reflection. While this system has proved useful Ashoka are aware of itslimitations; the system is self-reporting, is based on internal processes only and some irregularities have emerged over the sixyears of the programme (Ashoka 2006). Others (for example, Cunningham and Ricks 2004) have highlighted the opposition of individual „high‟ donors to the concept of  performance measurement. Their research highlighted five key reasons why these kinds of donors were averse to measurement;they just did not see the need for it, they did not have time to check out performance reports, they lacked confidence in themeasurements used, they did not necessarily want nonprofit organisations to waste limited resources on measurement and theylooked to institutional funders to engage in measurement on their behalf (Cunningham and Ricks 2004). Research Findings The section above provides a very brief overview of the issues around measurement of social impact in order to set the context for  the remainder of this „Snapshot‟ which presents data on measurement and evaluation of social impact by Irish social entrepreneurial enterprises. These findings are based on data from a mapping study which was carried out by the Initiative onSocial Entrepreneurship during February/March 2010. As stated earlier, the purpose of the mapping study was to examine moreclosely the nature of social entrepreneurial enterprises in Ireland, and gain a better understanding of their structures, activities andentrepreneurial behaviours. Types of Measurement  Almost three quarters (73.7%: N=143) of the individuals/ enterprises who took part in the survey indicated that they measure theimpact their organisation has in meeting its social aims and objectives. Looking at the kinds of measurement systems that wereemployed we see that almost two thirds (62.9%) employed internal evaluations and almost one third (29.9%) used their financialstatements as a form of measurement of social impact. Other measures employed included social auditing (13.9%), quality awardsor marks (11.9%), benchmarking (8.2%), social return on investment (6.2%), external evaluation (4.6%) and finally, research(2.6%). There appears to be an over reliance on internal evaluation techniques which Ashoka (2006) highlighted as a limitation intheir measurement system. 1    Ashoka is the global association of the world‟s leading social entrepreneurs   2   Social Return on Investment (2004) New Economics Foundation (NEF).  3 Table 1: Types of Measurement Employed by EnterprisesType of Measurement N % Evaluation (Internal) 122 62.9Financial Statements 58 29.9Social Auditing 27 13.9Quality Awards or Marks 23 11.9Benchmarking 16 8.2Social Return on Investment 12 6.2Evaluation (External) 9 4.6Research and Other Statistics 5 2.6 Further examination of the number of evaluation methods employed by individuals/enterprises indicates that 40 per cent of them(N=55) used one method only, with the majority of these (87%) using internal evaluations only. Almost one third (30.1%) indicatedthat they used two methods while a further 29.4 per cent employed three or more methods.Looking at the sub sample of those individuals/enterprises that undertook internal evaluations (N=122) we find that for 38.5 per centof them that was their only form of measurement. Almost one third (31.1%) used internal evaluations plus one other method while asimilar percentage (30.4%) used three evaluation methods. On further exploration financial statements emerged as the mostpopular measurement tool (65.3%) for those individuals/enterprises that conducted internal evaluations as well as other evaluationtools. Table 2: Types of other measurement employed by enterpriseswho carry out internal evaluations (N=75)Type of Measurement N % Financial Statements 49 65.3Social Auditing 22 29.3Quality Awards or Marks 20 26.7Benchmarking 14 18.7Social Return on Investment 9 12.0Evaluation (External) 7 9.3Research and Other Statistics 4 5.3 Profile of Individuals/Enterprises This section provides a profile of those individuals/enterprises who indicated that they measure the social impact of their organisations (N= 143). Almost three quarters (72%) of the enterprises that measured social impact were established more thanfive years ago and all of them had a local remit. Almost two thirds (65%) had a CHY number  3 indicating their formalised status. Allof these individuals/enterprises indicated that their business and social mission, aims and objectives were one and the same. 3   The Revenue Commissioners currently grant Charity (CHY) numbers which allow nonprofit organisations exemption from certain taxes but thisdoes not infer legal status.    4 These individuals/enterprises were more likely to benchmark their organisation against other nonprofit organisations (65.5%) andpublic sector organisations (12.9%). Looking at the number of networks that these individuals/enterprises were involved with wefind that over half (52.5%) belonged to between two and five networks. Funding and Resourcing Nearly half (46%) were involved in the provision of some public service with 15.8 per cent indicating that their activities were 100per cent related to State provision. Examination of funding sources for these individuals/enterprises indicates that almost threequarters (72%) were in receipt of some State funding and 60.9 per cent displayed high funding vulnerability. In the past year (2009)over one third (36.5%) of individuals/enterprises had generated over 30 per cent of  their organisation‟s income with 13.9 per cent indicating that they had not generated any income in 2009. A small percentage of enterprises (5.2%) did not employ any paid (full-time, part-time or scheme) staff while 11.2 per cent statedthat they had 50 plus paid staff. Just over four in ten (40.3%) indicated that they had five or less paid staff indicating that in generalenterprises are small organisations, reflecting research previously carried out on the sector (Donoghue et al  . 2006; Prizeman andMcGee 2009). Almost one third (29.9%) of the individuals/enterprises indicated that they did not have volunteers in their organisation. Almost one third (32.1%) of those enterprises who had volunteers (N=127) indicated that volunteers were involved inthe day-to-day operations of the organisation while a small proportion (14.7%) used volunteers solely in the development of strategy. Summary and Conclusions This snapshot has briefly outlines the importance of measurement and evaluation for the strategic development of entrepreneurialenterprises. It also, for the first time, presents data on evaluation from a sample of Irish social entrepreneurial enterprises who tookpart in a study in March 2010. It appears that these individuals/enterprises are willing to engage in measuring the impact of their organisation but have an over reliance on using internal methods which, according to some, is not an ideal situation. Surprisinglymany individuals/enterprises used only one method of evaluation which is not useful in enabling a comprehensive evaluation of how an organisation is meeting its aims and objectives.Enterprises that carry out evaluations of any kind appear to be older and to focus on a local remit. Most are in receipt of some formof State funding and many are involved in some public service provision. Generally speaking these organisations are small andthose that have volunteers are more likely to use them in day-to-day operations.Based on data presented in this snapshot a number of key questions that require further investigation have emerged, namely;What are the perceptions held by enterprises on the issue of measurement of impact? Is it viewed as a necessary evilrequired by funders or as a development tool for their organisation?Where does the responsibility for measurement lie? Is it up to funders (particularly the State) to insist on evidence of theimpact of the enterprise? Are managers responsible for outlining the impact of their enterprises? Or is measurement of impact an organisational strategy that needs to be understood and appreciated by funders and enterprises? What are the forms of „internal‟ evaluation that are undertaken by Irish Enterprises? What are the appropriate forms of measurement in an Irish context?  5 References  Ashoka (2006). Measuring Effectiveness: a six year summary of methodology and findings. USA. ArlingtonCunningham, Katie and Ricks, Marc (2004) . „Why Measure?‟   Stanford Social Innovation Review  . Summer 2004. Volume 2 No. 1pp44-51Donoghue, Freda, Prizeman, Geraldine, O'Regan, Andrew and Noël, Virginie (2006). The Hidden Landscape: First Forays intoMapping Nonprofit Organisations in Ireland  . Dublin: Centre for Nonprofit Management, Trinity College Dublin Nicholls, A (2005) ‘  Measuring Impact in social Entrepreneurship: New Accountabilities to Stakeholders and Investors?‟ Working Paper: Skoll Centre for Social Entrepreneurship , Said Business School: University of Oxford Prizeman, Geraldine and McGee, Siobhan (2009).   Charitable Fundraising in an Economic Downturn: The First Annual Report onIncome and Fundraising Activity in Irish Charities . Dublin: The Centre for Nonprofit Management in partnership with Irish CharitiesTax Research Ltd and The Ireland Funds. (April 2009) Social Enterprise Task Force (2010). Adding Value Delivering Change: The Role of Social Enterprise in National Recovery. Report of the Social Enterprise Task Force (An Initiative of Clann Credo and Dublin Employment Pact):Dublin

Guy Bourdin

Mar 12, 2018
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