In October our Chief Executive, Alix Zwane, spoke at the World Economic Forum’s ‘Young Global Leaders’ event in Tokyo. This blog looks at the importance of measuring social impact – a key theme from the speech that she delivered.
Boda-boda motorcycle taxis are the social and commercial lifeblood of major cities across East Africa, transporting people of all ages from destination to destination at relatively low cost. When it comes to navigating the region’s bustling urban centres, their convenience and popularity is unparalleled. But there is a truth that cannot be ignored: their safety record is desperately poor.
Let’s take the example of Uganda. At the main hospital in Kampala, 60% of the surgical budget is spent treating motorcycle-related injuries, and as few as 1% of passengers and 30% of drivers in the city wear helmets. As practical and enabling as boda-boda can be for those who use them, in the absence of adequate training and safety provision their usage can come at a fatal cost. It is against this backdrop that a group of entrepreneurs saw the opportunity to bring a new, safety-first business to the streets of Kampala.
Think of SafeBoda as a Ugandan Uber – a community of professional motorcycle taxi drivers carrying helmets both for the driver and the passenger, who are fully trained and who can be booked via a mobile app. It’s an innovation with immense potential to reduce road traffic accidents and mortality rates, and that’s why we’re investing £160,000 in SafeBoda’s pilot phase, as they seek to pressure test the scheme’s impact in a real world context.
Examples of entrepreneurial initiatives with such transformative potential receiving the funding they need to get off the ground are too few and far between. For years we have talked about ‘impact investing’, attracting and deploying large amounts of capital under this banner. Yet all too frequently, this is not accompanied by a meaningful commitment to measuring the true social impact of the projects that receive funding. In other words, we fail too often to ask the question: what tangible difference are our investments making to the lives of the world’s poorest people?
Historically, investors from all walks of life have relied on anecdotes or assumptions in place of robust measurement – presuming, for instance, that an investment in a sector such as healthcare or education must necessarily have social value, or counting the number of people a programme serves and extrapolating some measure of benefit from that. Greater attention also tends to be given to commercial rates of return, pushing investors up from serving those at the bottom of the pyramid, where both the risks and the potential rewards may be greatest, towards the emerging middle class.
If we want to maximise the social value of our funds, we need a new approach.
We need to target investment towards enterprises with strong evidence – or a commitment to gathering evidence through pilot-testing – of real health and welfare gains for the poorest in our world. This means investing seriously in measuring these gains, just as we would expect to see audited financials to back up claims about cash flow. Financial health and stability is a crucial consideration for any investor, but the mission shouldn’t stop at profit-counting. Measuring and understanding an initiative’s social value needs to be given parity with the concurrent focus on rates of return – and this measurement should be scientific, rigorous and intentional.
It is also important to remember that, in many cases, innovations are just setting out on their quest to build the evidence base to demonstrate their impact. SafeBoda is a prime example. We must be sure not to neglect this space before an entrepreneur is ready for a larger investment – when risk is high and the promise of social value is far more enticing than the potential for financial returns. Taking smart risks is crucial to helping entrepreneurs in fragile contexts to make a difference.
At the Global Innovation Fund, this is our mission. We want to maximise the social value of our investments by finding entrepreneurs like SafeBoda and becoming their early partners, helping them to build their evidence base and to take their innovation to scale. Deals like this don’t just come to us – we have to go out and find the social innovators who can make this happen, and assess their potential based on a hard-headed measure of their existing – or potential – social impact.
We want to find and support the SafeBodas of the world and help them to flourish.
All of us working in this space are driven by a passion for making social change happen, and the potential for local entrepreneurs, backed by venture-style funders seeking big social returns, to support change, growth, and development in fragile places around the world is incredibly exciting. Our challenge as a sector is to make sure that rigorous evidence and testing of social impact, and not just financial rates of return, drive decisions about whether – and where – to focus our efforts and resources.
– Alix Zwane