Impact Measurement in an Emerging Social Sector: Four Novel Approaches

Abstract

This paper explores the formalization of social impact measurement (SIM) in contexts where there are little or no expectations for it. Drawing on a combination of institutional and organizational-level theories, we assess the complex relationship between nine potential antecedents of SIM and its formalization, across 152 social entrepreneurs in Chile's nascent social sector. Using configurational comparative methods (fsQCA), we discover and map four novel approaches to social impact measurement, revealing a much more diverse and counterintuitive reality. We also find that factors assumed to be central to formalization in mature sectors, in nascent settings play a peripheral role at best. By offering a multi-level explanation of what matters and when for SIM in a nascent social sector, this paper offers empirical evidence on how to better capture and report SIM and expands the theoretical understanding of SIM as a governance and accountability mechanism in social entrepreneurship.

No Simple Way to Say Goodbye! Untangling the Heterogeneity of Social Venture Founder Exit Intention

“…Dees (2003) argued that “social entrepreneurs implement innovative programs, organizational structures, or resource strategies that increase their chances of achieving deep, broad, lasting, and cost-effective social impact.” In their pursuit to solve intractable social problems, the tangible result through which founders might be able to gauge the success of their firm’s social mission is through the impact footprint and its scale (Austin et al, 2006). However, measuring social impact performance through generalized quantitative metrics has remained challenging for SVs (Muñoz et al, 2022; Rawhouser et al, 2019). Simultaneously, scholars also observe that “implicit in every social mission is a statement of the scale of the problem the organization intends to address, and the nature of the intervention required to address it” (Ebrahim & Rangan, 2014, p. 125).…”

“…But performance in SVs encompasses both the firm’s financial health and social impact footprint (Hertel et al, 2022). Whereas financial metrics can be tracked objectively, impact measurement is customized, subjective, and complex in SVs (Muñoz et al, 2022; Rawhouser et al, 2019; Wry & Haugh, 2018). Also, social entrepreneurs focused on creating long-term, sustained changes cannot afford to ignore stakeholder relationships and community engagement (Bacq et al, 2022).…”