A SOCAP Guest Post By Alan Pierce
In the world of impact investing and social entrepreneurship, non-financial returns or outcomes must be measured. And yet a key philosophical and increasingly pragmatic question remains: How can we track such factors systematically and effectively?
At SOCAP16 there were a handful of sessions focused on impact measurement, and one specifically focused on the role of social impact analysts. Building Out the Social Impact Analyst Profession brought a packed room together to listen to four panelists and facilitator Sara Olsen (founder of SVT Group) as they delved into the “how” of impact analysis, and why analysts with this focus are necessary for the continued growth of social entrepreneurship and impact investing.
The age demographics in the room told me that, like myself, many Millennials were interested in this session for its relevance to our early career ambitions.
No matter your role in the social capital markets, to achieve sustainable social change we must advance our capacity to define, measure, interpret, and report whether we are indeed achieving positive impact.
How Impact Analysts Catalyze Change
At the outset of the panel Matt Barry, VP of Strategic Assessment at Gary Community Investments, described how the field of impact accounting is evolving.
Established professionals have had to learn the art of impact analysis, to integrate it into their current understanding and responsibilities. Now, recent graduates with specific academic training in impact measurement and evaluation have emerged in the job market to complement teams of more traditional, financially-oriented analysts.
Part of this emergence has been a response by business schools and other training centers to the burgeoning fields of impact investing and social entrepreneurship. Both investors and entrepreneurs now need professionals capable of accounting for social and environmental returns (in an accurate and relevant manner) in the context of a financial ecosystem. This is what an impact analyst can be hired to do.
Panelist Sara Olsen offers a deeper, more nuanced discussion of this profession in her article The Next Frontier in Social Impact Measurement Isn’t Measurement at All, published in the Stanford Social Innovation Review.
Donors, investors, and entrepreneurs need impact measures for different reasons, and the push to standardize measurement to improve comparability eliminates variation, which also reduces context and therefore relevance.
Olsen makes the case that, although there should be common principles for good measurement, there should be flexibility for an organization to measure impact in a way that is meaningful and appropriate for their intended outcomes. While this results in complex impact reports, it provides more useful measures upon which an analyst can interpret, compare and recommend various approaches to a challenge.
How to Become an Impact Analyst
Many audience questions, particularly from earnest young professionals, focused on how to break into this nascent field.
Some of the more obvious attributes for impact analysts include a basic understanding of capital markets and an ability to conduct data analysis with ease. Other characteristics involve a proficient knowledge of theory of change frameworks, organizational development and even a knack for visual communication in order to facilitate compelling dissemination of findings.
Mary Jo Cook, President and CEO of Pacific Community Ventures, further emphasized that she hires analysts who demonstrably believe in her mission because with that values alignment likely comes a deeper, more nuanced perspective and a more profound commitment to working towards that mission.
Cook also offered one of the most salient pieces of advice to those young professionals coming from a social background, “Make sure you speak the language of finance even if you’re not a finance person.” Whether this means taking some online courses or obtaining a certificate, the ability to present an impact accounting report that is accessible and meaningful to financial stakeholders is a prerequisite for such a position.
Success as an impact analyst requires an increasingly diverse list of attributes. While a broad skill set is valuable, Michael Harnar, PhD, of Pointed Arrows Consulting, encouraged young professionals to develop refined, specialized knowledge in a focused area. A combination of broad skills and a specific area of expertise increase a candidate’s ability to distinguish themselves strongly as an impact analyst.
Resources
At the end of the very rich session one attendee asked if there was a place where resources related to, and discussed during the hour, could be accessed. Some of the resources suggested include:
- Social Value International: http://socialvalueint.org/
- M.A. in Social Impact: https://www.claremontlincoln.edu/programs/social-impact/
- Impact Convergence Conference: http://impactconvergence.org/
- Fundamentals of Sustainability Accounting Credential: http://fsa.sasb.org/
Alan Pierce holds a master’s degree in Social Entrepreneurship from Hult International Business School. While at Hult he co-led the development of a student-run accelerator for local social enterprise startups, and received a management consulting certification. Prior to pursuing this degree Alan worked for a number of nonprofits in the SF Bay Area. This included an institute conducting research on individual and social transformation, at which he published several academic papers.