Jason Saul, the founder and chief executive officer of U.S.-based Mission Measurement, is one of the world's leading experts on measuring social impact. He has advised global corporations such as Starbucks and nonprofit charities like the Easter Seals on how to measure their performance and improve their impact on the communities they serve. Here, he lends his insight into how charities can create a greater social value proposition.
How do you define a social value proposition?
I think about a social value proposition as basically what impact or what outcomes a charity has to offer. Again there's a difference between activities and outcomes. An activity is like holding a conference; an outcome is changing people's behaviour or status in some way. So I look at a social value proposition as what outcomes can this charity produce, what do they have to offer?
What are some of the indicators that a charity is making an impact?
The indicator that I recommend every charity to look at is the efficacy rate, meaning how many people are getting a positive outcome. So forget all the number of people reached, number of meetings held, number of pamphlets distributed, all we care about is how many outcomes do you produce. How many kids got a positive outcome, and at what cost? So charities should start to adopt a simpler language and stop worrying about all the mind-numbing detail of every administrative statistic. What really matters is: Are we producing outcomes and at what cost?
What how can charities build or create a greater social value proposition?
I talk about this in my book, The End of Fundraising. I talk about this shift between basically begging for charity or selling your impact. I encourage charities to start selling their impact, figuring out what outcomes they produce and finding the people who value those outcomes and are willing to pay. It's a different relationship than waiting for the leftover table scraps, whatever people have in their pocket. It's sort of a more mature form of engagement. I think the way charities can build a greater social value proposition is to create higher-value outcomes. I'll give you an example: Giving a coat to a homeless person is a really nice thing to do, but it doesn't really produce an outcome. Maybe the outcome is the homeless person is less cold for a few hours. The real outcome is how do we eradicate homelessness? That's a higher value outcome. One of the challenges I have for charities is to aim for bigger outcomes. What that means is that a), you need to expand your programming or b), you need a partner. If this small charity that gives coats to homeless people partners with a homeless shelter who partners with a soup kitchen as one entity, now I can buy that outcome more efficiently. It's very inefficient to have all these charities doing bits and pieces and fragments of an outcome because we can't really solve anything.
What are the biggest challenges that charitable organizations face in building a greater social value proposition?
A lot of charities are wedded to their one particular activity, so they are more allegiant to the activity than they are to the outcome. They are stuck in programming that may not be producing outcomes, just because we've always done it. When I first came back to Chicago I met with this arts organization who said, 'We're trying to help young artists sustain themselves economically and become business people.' I said, 'What are you doing [to raise] money?' 'Well, we put out this newspaper about the arts.' I said how many young artists read that newspaper? 'Nobody really reads it any more, we just do it because we've always done it.' You're outcome is to help young artists be financially self-sufficient, so why would you spend $300,000 on a newspaper? One of the big impediments that charities face is that they are not outcomes-driven. They don't know what their outcomes are, they don't know how to measure them and they don't know how to speak about them to donors, so they resort to begging for handouts, talking about how great their programs are. In a market where people rely on outcomes, we need to change that discussion.
What advice would you give charities, particularly smaller ones, to improve their work?
I always say that we need to engage our stakeholders, we need to change our frame of mind from our need to sell to the customers' need to buy. Our need to sell is, let me tell you how amazing Free The Children is. Nobody cares, to be honest with you. What they want to know is, what outcomes are you going to produce for my kid, what are you going to do in my district, what outcomes are you going produce for my company? We need to change the frame from my need to sell to focusing on the customer's need to buy.
Data and analytics are used in many walks of life to measure performance. How can they create greater social value for charitable organizations?
This is the only sector in the economy that measures only after we invest. No one buys a stock and then analyzes their financial performance. What we're doing is sort of silly. What we do in the non-profit sector is we give money to charities and then measure and see what happens. So the emergence of predictive data and analytics is going to be the most transformational factor in the social sector in next 10 years. It's not just measuring afterward but predicting the outcomes of charities and government programs before we fund them so we can make better decisions.
You've talked previously about the X-factor behind a brand. As a charity, how do you create that X-factor?
Frankly, I think charities are the X-factor. When you look at big corporate brands, all the big brand names in the world are pretty boring, they're all pretty much the same. What's the real difference between McDonald's, Wendy's, Tim Hortons, Burger King? They're on every corner, they all pretty much have the same food and the same price. The average grocery store has 150 kinds of salad dressing. What makes Newman's Own dressing gravitate off the shelf and into someone's grocery cart? It's because it has an X-Factor, a social value proposition. I know that when I buy that, something good happens in the world, giving money to charity. Big companies and brands are looking for a social value proposition. Frankly I think charities are the X-factor and I think the opportunity for them is to find a way to associate with brands that enhance the value proposition of those brands.
What are the most effective drivers for charitable organizations?
Impact is really a function of three things. It's a function of dosage, frequency and duration. I'll give you an example. If I meet with you for an hour and tell you how important it is to care about something in Africa, I'm probably going to have no impact on your life, you might say that's interesting and go back to your work and forget it. But if I meet with you every day for an hour and we discuss it and we don't just do it every day for an hour but we do it for a year, every day for an hour, you have a much bigger impact. So assuming the program quality is good and relevant, dosage, frequency and duration are really essential. If I go back to the example of a homeless person, if you just give them a coat once it's a really minimal impact, but if you're working with them on a continuous basis you're more likely to product an outcome.