Impact investment needs to be measured to be sustainable
The South African corporate sector invests millions each year to support community development and social programmes. Many corporates, however, often lack the tools to measure and report on the impact of these initiatives.
Often organisations report on the actions taken, input and investment rather than the outcomes. Along with this, every organisation has its own success metrics and some of these are challenging as they do not measure true impact.
“It is vital that organisations track the ongoing impact of their social investments,” says Bridgit Evans, Director of the SAB Foundation. “By doing this, it means that social issues can be accurately identified and addressed.”
“It also makes it possible for other organisations to benchmark their performance, share best practice and collectively enhance their impact,” she continues. “In a country with such high unemployment, and so much investment going into entrepreneurship, gathering and sharing data really needs to become the norm.”
“To effectively measure the impact of our entrepreneurship programmes, each year we release an impact report that summarises the achievements of each of the entities that we support,” explains Evans. “Drawing on information gathered from participants of our key programmes, we outline progress that they have made, as well as areas for improvement.Through this, we aim to promote transparent reporting while also ensuring that our efforts remain relevant.”
Since inception, more than R425 million in grant funding, business development support and interest-free loans has been invested in entrepreneurs by the foundation. A total of 2 843 rural micro-enterprises, 173 social innovators and 996 entrepreneurs have been supported, with 94% of these businesses still in operation.
“Interestingly, responses from our annual surveys have indicated that each entrepreneur lives with between one and eight people who are financially dependent on the income that their businesses brings in every month,” says Evans. “As such, we conservatively estimate that, if each of the 9 036 people employed by our entrepreneurs supports four people, a total of 36 144 people have indirectly been supported.”
“The COVID-19 pandemic was devastating for many entrepreneurs. We decided that it was our duty to protect the investments we had already made into so many entrepreneurs and social innovators,” says Evans. “In 2020 we made R20 million in relief funding available to 90 entrepreneurs and provided useful information, hosted webinars and assisted with supportive mentors. The most heartwarming takeaway from this process was how innovative our entrepreneurs were and how quickly they pivoted and adapted.”
“As we look back at the past two years, we are humbled by the resilience shown by our entrepreneurs and continue to support them to ensure that they achieve their goals,” says Evans. “Through the ongoing mentorship and business support services offered through our programmes, we hope to continue to equip businesses and individuals to grow and be confident about their future.”
“It is our genuine hope that many more companies and organisations that work with entrepreneurs start measuring their impact. By learning from each other, we can fast track our progress towards successful interventions, accelerate job creation and, by extension, bring about an improvement to the overall quality of life for all South Africans,” says Evans.
“We remain open to supporting any organisation that wants to start measuring its impact in this space and will make all of our tools available to them. We will also host a series of webinars through the course of this year, to assist businesses to understand impact measurement.” concludes Evans.
To access the latest SAB Foundation impact report, visit: www.sabfoundation.co.za/resources
Executive summary of SAB Foundation impact report 2020
Since 2010, the SAB Foundation has provided support and funding for entrepreneurs and micro enterprise owners who want to grow their business and achieve a new level of success. This serves as a stepping-stone for South African innovators and the social empowerment of impoverished communities. To determine the effectiveness of its efforts, the foundation has made reporting mandatory for all entrepreneurs for five years, and annually assesses the impact of its programmes based on income generation, job creation, skills development and a number of other criteria.
Below are some key achievements from the SAB Foundation programmes:
The annual turnover of its entrepreneurs increased by 74% from R324 million to R565 million.
R58 million has been invested in social innovation to solve social issues in the housing, healthcare, education, energy, community safety, recycling and agricultural sectors.
A total of 5 808 new jobs have been created, of which 2 410 are permanent.
61% of participants are women and 81% of participants are people living in rural areas.
A total of 123 entrepreneurs have been supported through its Disability Empowerment Programmes. 97 of these are entrepreneurs living with a disability and 22 are businesses that are improving the quality of life for persons living with a disability.
Through the set-up of innovative farming practices in rural areas such as Keiskammahoek, Jozini and Thohoyandou, 1 460 entrepreneurs have been supported.
There was an average overall increase of 22% in business knowledge and skills among its Tholoana Enterprise Programme entrepreneurs.
COVID-19 Relief Funding Impact
The SAB Foundation followed up the funding process by tracking the impact of COVID-19 on businesses. One year after the entrepreneurs received the relief funding, they were asked to complete a survey reporting on their results.
“The percentage of businesses that were negatively impacted by the lockdowns was 84%. 91% saw a decrease in turnover and 54% had to decrease the number of people they employed,” reports Evans. “However, it was encouraging that 14% of businesses were able to respond to the pandemic by providing services such as medications, personal protective equipment and community patrollers.”
According to Evans, in addition to the funding provided, 57% of businesses were able to access other relief funding through TERS, UIF and the IDC. “Despite the effects of the pandemic and subsequent lockdowns, we were very pleased to see that all of the businesses that we invested in had survived twelve months later. In addition, 85% entrepreneurs said that they would not have survived without the relief funds,” she added.