How to Measure Community Impact

By Jesse Hertstein

Congratulations. You’ve made the donation. You’ve built the school. Your CEO just delivered the cardboard check and was quoted in mainstream media.

So what?

Will this really make a difference? The nonprofit organization will tell you all about the number of children who can now attend school and have access to books and teachers. The mayor will proclaim that this is a true community asset.

But how do you measure the long-term impact to the community, and justify the benefit of this donation to your CEO beyond the press coverage and goodwill?

The LBG Measurement Model

Companies that invest heavily in local communities have struggled with this question. A group of 13 CSR leaders recently came together for a pilot program to test a model that would measure the broader aspects of community investment.

Led by the Association for Corporate Contribution Professionals (ACCP) in the U.S. and Corporate Citizenship, a sustainability consulting firm headquartered in the UK, the pilot study tested a measurement model developed by the London Benchmarking Group (LBG).

The LBG Measurement Model is an international standard for measuring corporate community investment, developed by Corporate Citizenship and its members, as well as the network of LBG members.

While the model has only been used on a limited basis in the U.S., it has gained traction with European multinationals. In fact, there is a large amount of benchmarking data that now exists to analyze corporate community investment and impact trends and case studies.

For example, last year’s LBG Annual Review showed a gradual decrease in reactive charitable gifts, with an increase in contributions defined as community investments.

Testing the waters

No model is perfect, especially when it is transposed from one region of the world to another. For example, pilot group members debated the value put on product donations, which can range from full retail value, to fair market value, to the cost of goods.

In a changing world where personal time and work time flow together, it was unclear whether many employee volunteer hours should be considered on or off the clock. And where some would value volunteer hours based on actual salaries, others would rather defer to a national average, such as the annual Independent Sector publication.

But the value of the LBG Measurement Model is in its simple, comprehensive approach to defining Inputs, Outputs and Impacts, both for the community and business. It forces CEOs, nonprofit leaders and CSR practitioners to look at the big picture as a logic model.

Building the encyclopedia

The model also introduces a way to articulate what LBG calls “Leverage.” This means the additional support that a company can inspire, simply by investing in a cause.

It’s the ripple effect that includes matching donations by charitable foundations, additional volunteer hours that might result from a new school or government policy changes or grants that are inspired by the project.

Perhaps the most important value offered by the LBG Measurement Model is the series of definitions developed to clarify terminology and practices related to capturing volunteer hours, determining motivations for giving, and tracking the different kinds of inputs that a corporation offers beyond just cash.

It’s easy to take a set of definitions and argue the finer points, but it’s not easy to be the first one to propose a starting point, and then work for years on thoughtful deliberation and gathering input to perfect your definitions through consensus and evidence-based research.

That’s what the LGB Measurement Model offers. It advances the discipline of corporate community investing using quality management improvement principles.

Through the Amway lens

Here’s how we were able to evaluate one of our flagship programs, the Amway One by One Campaign for Children, as we developed plans to celebrate our milestones and double our efforts in years ahead.

INPUTS

While we don’t track and put a value on every community input, Amway is actively investing money (donations), time and expertise (volunteering) and influence (advocacy) on issues for children in all 100 countries and territories where we do business. It has amounted to millions of dollars and hours, and putting our name on projects that challenge the status quo.

OUTPUTS

For the community, we counted hundreds of projects taking place every year for the past 10 years. We’ve reached a milestone of helping 10 million children worldwide, working with the best local nonprofit and government partners.

For the company, while we first look at benefit to children and last at how we benefit, it is increasingly clear that these investments are a net gain for us. We see benefit in the kind of people we attract as employees or Amway Business Owners (ABOs), who want to participate in these programs. We also receive recognition from third-parties that elevates the visibility of Amway and its offerings.

For the leverage we create, we see an amazing amount of volunteer hours and donations from Amway Business Owners, inspired by our own commitments. Many ABOs have initiated their own projects and even started their own foundations.

IMPACTS

For the long-term impact on the communities, specifically children, we see lives saved by nutrition interventions, future leaders being developed by education and mentoring programs, and the positive economic impact a child can make after they receive corrective facial surgery. We also see governments and populations increase their attention on an issue, whether special needs in the U.S., child abuse in Japan or migrant populations in China.

For the long-term impact on the company, we see skills developed by our executives serving on nonprofit boards and our scientists developing humanitarian solutions. We see a corporate culture that helps define our brand, and ensures the sustainability of our organization.

What’s Next

So, again, will your efforts really make a difference?

If we can begin speaking a common language, and measuring inputs, outputs and impacts, as well as leverage, using the LBG Model as a guide, we just may be able to answer in the affirmative – and prove it.

Jesse Hertstein is Amway Senior Corporate Citizenship Specialist, and author of the Amway One by One Campaign for Children blog, which provides thought leadership around grassroots cause activation and captures stories of successful partnerships around the world. He has traveled extensively documenting Amway CSR programs, and serves as a leader in his own community around issues of literacy. Image credit: Amway Corporation