ABSTRACT
Measurement is the only way to know whether an investment is making a social impact and to determine the significance of that impact. Organizations that have this information are better positioned to adjust their resources and activities to create the impacts they desire. Investors measure performance for many different reasons. Ultimately, the goal of social performance measurement is to improve the social impacts valued by organizations, beneficiaries, and investors. When investors' are trying to understand a problem using the best evidence that is available, investors can use basic data gathering and rough analytical procedure. If investors recognize that metrics are only proxies and use them along with investors’ trained judgment and situational knowledge, they can help bring the underlying reality into better focus than if investors didn't measure at all. Before investors start measuring anything, investors need to be clear in describing the constructs investors want the measures to represent.
