It’s not rocket science, it’s harder — Part 2

The frame: Place, ecosystems, and evaluating what matters

Getting serious about financing impact, innovation and transformation at scale will require us to speak the truth about what the work requires and calibrate expectations in ways that reflect an understanding of the complex contexts in which our work takes place. Complex means interconnected, intersectional, messy. What will it take, how long will it take, and what impacts are reasonable and appropriate given the investment?

Most complex problems require complex solutions and execution that recognizes the dynamic relationship among all of the parts of the problem. Often, to solve these problems, we focus on changing the public and private systems that shape the lives of the people we’re trying to help. In fact, systems change is a route to scale. My colleague, Stacy Holland, summarized this interconnectedness well when she said, “The stuff that we care about can’t change until the partners in the ecosystem change….no one talks about how relational the work is and that all (of the players) have to see value in making changes.”

So, both peripheral and long-sighted vision are required: peripheral vision that allow us to deeply understand the ecosystems that we’re working in and build strategies framed by them; and, long-sighted vision that brings clarity about what we’re ultimately trying to achieve. And, yes, we need honest talk about the journey to impact and scale.

Ecosystem framing

This is the meta framework since the glue that is needed to ground, finance and execute work at scale is really community ecosystems. By definition, an ecosystem includes all of the living things in a given area, interacting with each other. Investors and funders are part of the ecosystem in this framing and not above it. Through ecosystem framing: 1) roles can be named and redefined in the ecosystem around desired actions that need to be achieved; 2) financial analyses, financial roles and financial levers can be better understood and defined around social impact goals; and, 3) common language across sectors and all members of an ecosystem can be more easily established. Opportunity Zones provide a good case for why ecosystem framing is critical. We know that employment, the primary designed objective of this new tax incentive, is not the complete answer to lifting people out of poverty and revitalizing distressed communities. In fact, jobs that do not provide a living wage or quality of life, low rates of educational attainment, racial and gender inequalities, and other socioeconomic factors collide and are linked in ways that significantly limit the effectiveness of a mono-solution approach.

Two very different examples of ecosystem framing include:

Philadelphia Council for College and Career Success (The Council). With a focus on improving outcomes for youth ages 14 to 24, between 2008 and 2016, The Council regularly employed community-level engagement, bottom up processes to problem definition, data collection, and the development and execution of a contextualized long-term strategy to successfully increase high school graduation and post-secondary enrollment rates in Philadelphia.

Big Issue Invest. Wanting to better understand the environment and landscape in which the social entrepreneurs that they invest in are working, Big Issue Invest is developing a mosaic data base that captures a variety of community descriptors that will allow them to improve their understanding of community context, thus be more strategic in their investment decisions.

In both of these examples, practitioners asked and are asking:

· what data do we need to better understand community context and the ecosystems in which we are working?

· what community engagement approaches would best support knowledge building and exchange of information?

· how do we use these bottom-up, localized approaches to defining appropriate financing strategies that would ensure attention to context and ecosystems?

· what systems need to be created or tweaked to allow for better data aggregation and ecosystem analysis?

Evaluating what matters

No matter the scale of effort, evaluating impact can sometimes lead instead of follow form. We focus on what outcomes trigger payments and exits with the belief that these agreements lead to more rigorous deals and grants. This may be true, but, there’s another truth. While much has been done to provide a set of standardized metrics for social impact work, pitch culture and the power dynamic that occurs when people who need money are presenting to those who have money is getting in the way of honest dialogue about measuring what matters and when to measure what matters. The larger question is, if we right size expectations and lay the groundwork for more honest dialogue about implementation realities, time lines, and reasonable outcomes early on, might we make better informed investment decisions? And, might that lead to capital that is more patient and better designed to fit the problems we’re trying to solve? In addition, would better exchange around impact and different evaluation practices allow for improved learning concerning implementation and scale? The best information that we have regarding outcomes and impact is often from the field — from practitioners who have on-the-ground experience, knowledge, and perspective that investors and philanthropists typically do not possess.

Beyond measures, we need alternative practices to identify and evaluate impact that is grounded in practice and that focuses on learning, scale and sustainability (of effort and impact) as goals. This intention seems, in part, the goal of the work of the Impact Measurement Project which is attempting to create a more granular framework for understanding the value added of an investment within a portfolio with the input of practitioners on the ground. Another, yet different example of using ground level feedback, can be found in the work of the Jefferson Education Exchange. The Exchange is focused on developing real time and surveyed feedback systems from K-12 educators to evaluate education technology products to improve procurement decision making. According to Bart Epstein of the Jefferson Education Exchange, $13 billion dollars is spent annually by K-12 education systems in the US on education technology so we’re talking about large amounts of capital that can be saved and invested differently by school districts with better information about technological quality, usability and appropriateness.

But, again, alongside the development of impact measures, we need to lay the foundation for better conversations about outcomes and implementation. In the social sector, we have proven that various evaluation methodologies can help us understand progress over time even if truly understanding impact continues to elude us. In fact, the involved and protracted process of negotiating Pay-for-Success and outcomes-based funding deals that link payments to critical outcomes have the potential of providing space and time for more involved and authentic conversations about impact. And, theory of change methodology can be a useful collaborative approach to identifying reasonable short, intermediate and long-term outcomes, gaining clarity about the implementation pathway, and designing complex evaluations. Evaluating what matters is another area where we can point to some promising approaches and practices that can be applied more broadly and that can be used as solid points of departure rather than despairing that we’ll never be able to evaluate impact in completely objective ways.

Messy work requires stamina, curiosity, nuanced thinking, and hope. Yes, hope — we must believe that change is possible. Hope is foundational. But, informed mental and operational frames are also foundational and they are especially useful in the midst of messy. With ecosystems as the meta framework, anchoring the way that we understand the complexity of and plan with communities, plus evaluation methodologies that support our planning and doing, we can: be more intentional; be more inclusive; be more equitable; see new solutions; be more strategic; thus, be more impactful in the ways that we direct and design capital.

Click here for Part 3 — The money: Designing & directing capital.