Effective social investment: proving impact

By Anna Bowden

Governments and other forward-thinking funders are increasingly looking to fund outcomes, rather than outputs. But many organisations with fresh ideas don’t have frameworks in place to prove that what they’re doing works – which can create ‘mission confusion’ and make it more difficult to secure critical funding.

Blacktown Youth Services Association (BYSA) in Western Sydney does great work with local young people. The team heard from the community over and over again that their services and programs had changed countless lives over the past 30 years. But because BYSA wasn’t yet measuring its outcomes, it couldn’t prove to funders that their unique approach was working. The organisation was really struggling to access funds, and at risk of closing its doors.

In the journey of funding social impact, different players – government, philanthropy, private and impact investment – have slightly different roles to play. But they all need to work together to create meaningful change.

In BYSA’s case, Sefa helped build the organisation’s foundations and capability, removing some of the risk that might prevent philanthropy from stepping in. Vincent Fairfax Family Foundation (VFFF) and Paul Ramsay Foundation (PRF) saw the organisation’s potential and granted it multi year funding – giving it the time, flexibility and environment it needs to understand and prove its outcomes to other, more traditional funders in the future.

Measuring outcomes focuses on what matters

When we talk about outcomes at Sefa, we refer to the change we want to see in people’s lives. This change is why people choose to do really hard work at purpose-driven organisations every day. It’s where their passion and motivation come from – it’s their ‘why’.

Identifying and measuring outcomes gives organisations a collective focus that helps them steer their efforts in the right direction. It galvanizes the entire team around a core mission.

At Sefa, we take a practical measurement approach. We help organisations like BYSA put a simple measurement framework in place that helps them understand the outcomes they’re trying to deliver and how to track them. Many organisations are currently collecting volumes of data instead of focusing on what really matters. By targeting only three or four key outcomes and setting metrics for these, we eliminate confusion and give people and the organisation a clear focus. Impact measurement leads to impact management.

Increasingly many funders, including government, are starting to shift towards paying for outcomes rather than outputs. This is a great step forward, because it means funders can step off the input controls determining how organisations deliver their services, or the number of computers in classrooms, or beds in healthcare settings – as long as organisations can prove that what they’re doing is working.

When organisations like BYSA, with new or disruptive ideas, can prove that they can see real, measurable outcomes they remove a lot of the risk for funders.

Seeding new ideas

Forward thinking and innovative philanthropic organisations like VFFF and PRF are creating new opportunities for small community-based organisations like BYSA. By underwriting organisations at a stage that government and traditional funders deem too risky, philanthropy opens the door for new ideas to flourish and create change.

BYSA’s model is founded on the idea that young people should be involved in and lead program development. This game-changing idea felt new and uncertain to several funders.  But thanks to these philanthropist’s willingness to take a risk, BYSA can stabilise its operations, measure outcomes in a way that speaks to funders and the people it supports, and prove how it is delivering results.  

But most importantly, it can continue to change the lives of young people in the community.