Can Social Innovation Enhance Corporate Community Investment?

Since the 1980s and the advent of ‘austerity’ economics, the social sector has increasingly borrowed lessons from the corporate sector to advance important social causes. The massive uptake by charities of social entrepreneurship and ‘impact measurement’ have forever changed non-profit management. Today, though, as major societal challenges become everybody’s business, we’re seeing the reversal of this trend: companies are learning from the social sector.

In a recent presentation to the Conference Board of Canada’s Corporate Community Investment Council (CCIC), Junxion made the case that the fields of corporate community investment (CCI) and social innovation (SI) are beginning to converge. CCI offices across Canada are increasingly being called upon to tackle more volatile and complex problems. ‘Typical’ CCI often looks a lot like traditional philanthropy—funding local projects through community grants and generating good stories with good optics, benefiting both communities and the sponsor. This type of CCI is still valuable and worthwhile.

Yet if companies are to avoid very real reputational risks, or accusations of being ‘out of touch,’ then they must go beyond the ‘typical’ and acknowledge—and contribute to solving—big societal challenges like Reconciliation, #metoo, #timesup, climate change, and other ‘wicked’ problems.

How should companies respond to these ‘wicked’ problems?

If you are not at all familiar with the Cynefin framework of problems, take a two minute diversion and read about the essential differences between simple, complicated, and complex problems. Approaches to engaging with and solving simple or complicated problems are necessarily different from approaches to solving complex problems. The latter are inherently dynamic, changing all the time—as in the case of major societal problems. The challenge for CCI practitioners isn’t just community engagement, or team capacity, but the complexity of these meaningful issues.

Confronting complex problems requires a markedly different approach to what’s ‘typical’ in CCI.

Perhaps not surprisingly, survey data from the Conference Board of Canada, which polled over 100 of the largest CCI teams in the country, showed a desire for a more strategic approach. As much as ever, companies want to make impacts commensurate with communities’ needs while still bringing tangible benefits back to the company. CCI teams want their investments in grants and programs to be meaningful and impactful; they want the stories and data coming from program evaluations to be meaningful as well. However, many survey respondents were not confident that the metrics they use allow them to demonstrate progress toward their community investment goals.

We understand that a majority of those Canadian corporate foundations that invest in impact evaluation use frameworks like the London Benchmarking Group (LBG) or other comparable tools and systems for evaluating impact. The LBG toolset is robust and well implemented, but it may not help teams follow the moving target of choosing the program opportunities that are as relevant and meaningful as possible in the face of a complex issue.

Kathleen Sutcliffe, Bloomberg Distinguished Professor at Johns Hopkins University, argues persuasively that accuracy is less important than interpretation—improving the ability to make sense of what is going on in the community or issue area may be a much stronger predictor of success than increasing the marginal accuracy of the data provided by grantees. This is especially the case when the issue is dynamic, changing, and complex.

The difference between trying to evaluate complicated and complex problems is like the difference between waterfall and agile software development, or the difference between writing a formal business plan and taking a Lean Startup approach. A model of evaluation that assumes that success metrics will stay static (and relevant) over a project’s lifetime, and that may assume evaluation is primarily to serve funders’ needs to show their impact, will relegate funders to staying in the ‘safe zone’ of uncomplicated issues, and preclude them from engaging more meaningfully with community partners.

Here’s where social innovation comes in….

At the ‘Junxion’ (or the overlap in a Venn diagram) of two complementary modes of problem solving—creativity, and critical thinking—is Developmental Evaluation. It’s made for developing adaptive strategies to addressing complex problems. It’s an approach that is common in social innovation work aimed at changing the nature of the systems (social, political, economic, ecological) that produce some of the thorniest societal challenges we’re currently facing. Wealth inequality and chronic poverty in rural communities are not the failure of the free market; they’re the side effects of the market working as designed—so only a system-level approach will help.

The Federal Government of Canada is on board with this. They are in the process of developing a national social innovation and social strategy to take on these “grand challenges.” Minister Jean-Yves Duclos made an address at the 10th annual Social Finance Forum at Toronto’s MaRS Discovery District:

“[We] seek a made-in-Canada approach that will help build on the existing ecosystem of supports for those entrepreneurs and organizations on the “demand side” of social finance….

The bottom line is very simple: we are looking for more creative solutions to our tough social problems. By working together, and working differently, we can create a win-win situation – one where we help our economy and our most vulnerable, including Indigenous people, youth at risk, women fleeing violence, socially isolated seniors, and the homeless.”

There is a big opportunity here for CCI teams to leverage the impact of their investments by engaging the growing clusters of organizations, skills and resources making sustained commitments to achieving impact on a national scale. The literature, and community of practice, around social innovation (and specifically, evaluation of it) provides a wealth of new ideas and approaches for CCI practitioners.

Getting to Green: The Greenest City Community Grants Program

Funders’ flexibility and agility are essential for effective community collaboration.

Junxion researched and wrote a process evaluation of the Greenest City Community Grants Program—a groundbreaking collaboration between the City of Vancouver and Vancouver Foundation. Each side contributed equal shares into a $2 million grant fund that was disbursed to local non-profits and citizen groups who wanted to pursue ‘green’ projects around the city. The full case study is available on the Vancouver Foundation website and offers a variety of tips and insights for others considering a similar institutional collaboration between a municipality and a granting foundation.

It’s a good example of a developmental approach to a ‘wicked problem’ (urban sustainability) where the City and Foundation need a constituency of active, engaged citizens to unlock the potential for lasting impact. The ‘green’ metrics identified in the grant application only captured a fraction of the tremendous and lasting impact that grew from this innovative project. The funder’s willingness to be adaptive and flexible to the needs of the project were critical to the project’s success. Across the whole Community Grants program, the funders invested in convening several forums where grantees (mid-stream through their projects) could connect with each other to share insights, network, and learn and adapt their approaches. Most grantees cited these networking events as a highlight of the program.

In any granting program, making the extra time to interpret evaluation results together as they emerge will improve the success of ongoing projects, the quality of future applications, the CCI team’s understanding of the issues, and deepen the CCI team’s relationships and credibility in the community.

Evolving Education: The Cases of the ACT Foundation and RECODE

We’ve said before that defining strategic scope too narrowly can risk implying other problems aren’t ‘on the radar.’ But how wide can the net be cast and still successfully engage all potential partners?

In 2013, we helped to launch the ACT Foundation, with the grand mission to reshape funding and delivery of education in the United States. The Foundation established a network of researchers, another network of industry associations that were keen to see career-long learning opportunities for their sectors, an accelerator program for related startup ventures, and more.

In short, the Foundation tried to solve for the whole system right from the start, spreading their significant, but nonetheless limited resources, too thin. Their vision was big and bold, but ultimately, like-minded allies didn’t see ways to contribute to the ACT Foundation’s mission. The lesson to be learned from the ACT Foundation case is to “go slow to go fast.”

In contrast, RECODE, a program of the J.W. McConnell Family Foundation is doing just that. By patiently introducing allies in Canada’s post-secondary institutions, convening them around inspiring questions of mutual interest, and creating space for leaders to share insights and lessons from their own experiences, RECODE is helping universities to deploy their assets and expertise towards the task of building ‘community infrastructure.’

Confronting Climate Change: The Case of Nordea Bank

Be bold in naming the problem—especially when you can’t see the answers.

Nordea is Scandinavia’s largest financial institution, and has for many years engaged community members in work around financial literacy, a useful community contribution for a bank to make. However, these excerpts from the community section of Nordea Bank’s CSR report, which we helped to write and edit, are perhaps less typical:

“Climate change is one of the biggest challenges facing humanity today. Doing nothing incurs high costs and increases the likelihood of hitting the ‘tipping point’, after which the consequences will be unpredictable, irreversible and severe….

Markets are not a sufficient mechanism to value non-financial goods. Financial markets, investments and related services have structural shortcomings that may have the unintended consequence of distorting or externalising significant social and environmental costs.”

Boldly naming problems implicitly invites collaboration from people who may not be natural allies. Nordea’s clear commitment to social and environmental goals—starting from the CEO—makes it easy for their CCI programs to align around related themes, and demonstrate how their investments are meaningful in a larger story.

In terms of their public facing communications, it is certainly helpful for them to have metrics that give a sense of quantitative scale to stories about their investments in building community resilience through supporting entrepreneurship, a sustainability ambassadors program, and education for young people, but we believe it is their credible, meaningful, and direct definition of the problem that gives the anecdotes weight, connecting them to a meaningful bigger story.

It’s Time to ‘Shift Your Thinking’ about CCI Evaluation

“Any approach to measuring social impact that doesn’t include a transfer of power to stakeholders is just marketing.” — Jeremy Nicholls, CEO, Social Value International

In order to achieve impacts greater than the current average for community investment in Canada, CCI teams will need to build their capacity for evaluation—but not in the ways they know. The future of CCI evaluation is user focused: stakeholders are deeply involved at every step, strategy is more collaborative, and the focus will be more on making sense of, and sharing insights about, the complex nature of the problems we’re trying to tackle, than about equipping CCI teams and partners with a better spreadsheet. Empowering stakeholders through evaluation is imperative. Institutions are quite good at acquiring power, but it takes more work to give it away to the people that need it most.

To achieve more meaningful results from evaluation per dollar invested, CCI leaders should follow these practices, which are drawn from the Social Innovation community of practice:

  • Take a bold stand in naming the problem, the related long term vision and values, and the principles to which the company can be held to account by its community.
  • Invest in the CCI team’s capacity to understand ‘wicked problems,’ and strategies to address them, and connect them with local and national communities of practice for social innovation. Start with your local university and your CCI partners.
  • Commit resources to engage ‘users’ of evaluation knowledge at every step—partners, stakeholders, beneficiaries, expert advisors—in the design of CCI programs and their evaluation.
  • Focus on users, values, and effectiveness principles before choosing specific metrics frameworks and reporting standards. Start by asking, ‘How will evaluation data be used?’
  • Be flexible and adaptive in support for CCI partners.
  • Mobilize the knowledge and insights that result from your evaluations, so they reach the people who need them.

Our communities are facing serious challenges—problems big enough that we must all be engaged in finding solutions. That includes Canada’s biggest companies. But not all solutions will be market-based. Liberating resources and capacity to focus on ‘wicked’ problems, and accelerating solutions as they emerge is an essential role for CCI teams today.


Garth Yule is Managing Director for Vancouver, and Mike Rowlands is President & CEO at Junxion. Please be in touch with either of them to learn more about how we support Canada’s leading socially responsible companies to be the brands that will change the world.

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