Corporate Social Investment. Measuring its impact and efficiency
Around the world organisations working in the social development and impact investing sector are grappling with massive disruption. NGOs are facing an increasingly uncertain future as the sector is becoming more crowded and competitive against a background of shrinking budgets. While global challenges like the climate crisis and shifting political environments are placing additional pressure on the sector.
Within this context Next Generation launched its annual research report titled Disruption with Impact. This report helps social development, impact investing and CSI practitioners get to grips with the disruption and provides guidelines on how organisations need to adapt to keep pace with the disruption by reflecting on what has happened in the last year, what this means for the sector and what changes we can expect in the next year.
“There is growing awareness of the complexity, interconnectedness and systemic nature of development. This realisation that society, the economy and the environment are interconnected and interdependent means that development practices cannot be segregated or siloed any longer,” said Reana Rossouw, the founder of Next Generation and the creator of Investment Impact Index.
This report has been compiled over the last year and looks at research and trends from around the world and the long-lasting impact of those on the development and humanitarian sector. It draws on examples from across the globe and in particular the African continent and celebrates organisations and individuals who have developed cutting-edge solutions to local challenges.
“This report is a useful and practical tool for practitioners,” says Rossouw, “it puts a lot of emphasis on providing strategic guidance to social and impact investors that will see them through the next decade as the world unites behind the development agenda of the Sustainable Development Goals.”
The last few years have seen the sector challenged by shifting priorities and challenges while greater emphasis continues to be placed on creating and delivering value. This has revealed that many organisations and practitioners are not equipped to meet the rising demand for services and the accompany need for high quality data and evidence that funders are demanding.
But despite these concerns this new context has created new opportunities for organisations to identify new priorities, take their work to scale, establish new alliances to have a greater impact while also offering a return on investment to funders and investors. As a result a new social compact is emerging that sees all players contributing to a shared vision where people, governments and the private sector live in harmony with each other and the planet.
The report is an extensive one that takes a careful look at how new structures, new players, new vocabulary and new definitions are creating a new framework with a greater emphasis on best practice and enhanced programme design that is more inclusive and takes into account the vastly different expectations.
The report also delves into how major global trends like the fourth industrial revolution and the Sustainable Development Goals are impacting on the sector and how this is impacting on the use of technology and the emergence of new financial instruments.
“Past responses to changing circumstances and acknowledged problems in humanitarian assistance tended to be piecemeal and uneven, tweaking the current system rather than challenging the underlying structures and assumptions on which it operates. Given the challenges the system faces, incremental reform may no longer be enough,” said Rossouw.
The report takes an in-depth look at how innovation has become a strategy to remain relevant and competitive and unpacks how innovation is being seen in the emergence of new structures and eco-systems, effective technological solutions, new processes and procedures as well as in how impact is being measured and evaluated.
“Our research identified four drivers that we believe will shape the future of our sector: The impact economy, impact ecosystem, impact technology, and impact management and measurement. These drivers are going to bring substantial changes and what sets this report apart is that we are offering guidance for how to weather the storm of disruption,” she explained.
“The humanitarian faces an uncertain future and this requires the sector to adapt faster, respond quicker and innovate at greater scale. I hope that this report goes some way to helping practitioners to make sense of the disruption they are facing and how to harness the power of social innovation to weather the storm,” she concluded.
The full report can be downloaded at https://nextgeneration.co.za/resources/research-reports/