Almost every conversation we have regarding employee volunteer programs involves a vigorous discussion of metrics. Business managers want to determine the value of hours contributed to the community via employee volunteers. Non-profits are trying to assess whether or not it is worth the trouble organizing massive employee volunteer events for corporations. Stakeholders question whether business should be distracted by activities that seem to offer little to no bottom line impact.

Realized Worth recently connected to a company that offer answers to these questions through a flexible and robust online solution: True Impact. We are pleased to have had the opportunity to interview Farron Levy, the Founder and CEO of True Impact. He is also an associate staff member of the Boston College Center for Corporate Citizenship (an academic institution we are big fans of here at Realized Worth). Farron has a Masters of Public Policy from Harvard University.

RW: Can you tell us a bit about True Impact, and why you started the company?

F.L.: True Impact (www.true-impact.com) provides web-based software, and consulting services, to help organizations measure the social, financial, and environmental return on investment (ROI) of their programs and activities. Typically applied to community investment, environmental, human resource, or other corporate citizenship initiatives, True Impact’s “triple bottom line” evaluations have been adopted by clients at Allstate, Deloitte, Home Depot, PNC Bank, and Verizon – and their nonprofit partners – to:

Prove Value – by quantifying financial, social, and environmental impacts (to build support among internal and external audiences)
Guide Strategic Investment & Budgeting – by producing ROI scorecards that reveal which (existing or prospective) programs offer the biggest social and/or business “bang for the buck”
Maximize Returns – by illuminating opportunities to improve triple-bottom-line outcomes

As for why I started the company, well, it’s incredibly motivating. First, if you care about social or environmental causes, it’s hard not to be excited about harnessing the private-sector’s resources and self-interest to drive positive change. After all, what company wouldn’t want to structure their community involvement, environmental, or HR practices to maximize positive social and environmental impacts, while increasing sales or productivity, or reducing operating costs and risk? We provide companies the tools to help identify and take advantage of those win-win opportunities.

RW: True Impact helps with metric development. But what kind of metrics are people looking for and why? Are corporate social responsibility (CSR) managers looking for the same kind of metrics as are ‘C’ suite level executives? And what kind of metrics matter most to stakeholders, specifically customers?

F.L.: Most volunteer programs we see track things like dollars invested, number of employees participating, number of total hours donated by volunteers, number of nonprofits or beneficiaries served by those volunteers, and the amount of PR (e.g., impressions) and employee satisfaction (from volunteer surveys) that result. These measures are interesting, but they don’t tell you much about the social or business value being created. That’s because this metrics capture only inputs and outcomes.

So, when people look to quantify the social and business value of a program, they’re really asking about outcomes. On the business side, that means how much a program drives things like skill development, recruitment, retention, or sales. On the social side, that means how much has the social issue you care about improved as a result of your program, in terms of resulting change in a social condition, socio-economic ripple effects, or market value generated.

It’s these outcome measures that C-level executives tend to most appreciate.

As for other stakeholders, that may be a larger conversation.

RW: Many CSR managers that we talk to are looking for metrics similar to financial ratios – a simple mathematical equation. You use the phrase ‘good enough’ metrics. What do you mean by that, and what makes metrics ‘good enough’?

F.L.: The issue often is not what is being measured, but the quality or precision of the available data. In some cases, collecting “perfect” data – that is, gold-standard statistically significant findings that result from controlled longitudinal studies – requires more time and resources than is practical for an organization to invest. Alternatively, companies might do pilot testing or sampling to get a sufficiently – if not perfectly – precise result.

RW: You’ve mentioned before that sustainability and CSR are not presently integrated into the mainstream of corporate culture and decision-making. You’ve suggested that a solution would be greater cross-functional interaction so, “CSR managers can tap and guide the expertise within their companies to identify and operationalize opportunities.” How does True Impact help create that cross-functional interaction?

F.L.: Our web-based tools, and our consulting approach, both use a simple “map and measure” approaches to triple-bottom-line ROI evaluations. The first part, mapping, involves assessing how the program being analyzed is likely to affect each of the company’s stakeholders, and how these impacts can in turn, affect functions such as sales, recruiting, retention, productivity, risk, and cost of capital. Once a company begins adopting such an approach to ROI evaluation – i.e., systematically assessing the ripple effects of their programs – it becomes obvious how interacting with, say, the sales, recruiting, or government affairs departments is probably the best way to assess the potential sales, recruiting, and regulatory impacts of your programs.

RW: What is the real ROI for companies using employee volunteer programs (EVP)s? There is a saying, “we measure what matters.” If you aren’t (or feel you cannot or should not) measure your EVP outcomes, then what is the actual return on the investment? Can there be an ROI if no one knows what it is?

F.L.: There is no single ROI for EVPs. Impacts differ from company to company, based on industry, geography, type of program, and any number of other variables. What generates significant value for one EVP – say, new business leads for volunteers from an accounting firm – may have no such sales benefits for volunteers in the same geography, performing the same function, from an airplane manufacturer.

Companies that don’t measure their EVP outcomes may still be enjoying positive social and/or business ROI – but they almost certainly will not be maximizing those benefits, simply because they will have no idea which volunteer activities are performing well and which aren’t, and therefore no way to promote continuous improvement (i.e., identify and promote best practices).

RW: Many companies hold out the social return on investment (SROI) as the most important part of the EVP. Is this a valid approach? Doesn’t a strong focus on SROI to the exclusion of measuring the ROI make the EVP look like philanthropy? Without tying CSR to the business outcomes, what distinguishes CSR from philanthropy?

F.L.: In general, we believe that if a CSR program can be shown to have significant business value in addition to its social value, it’s more likely to be sustainable and supported by the company over the long term. And this maximizes the long-term social benefit created.

But however a company prioritizes the social and business benefits – whether favoring one over the other, or balancing the two equally – is an individual company decision. When we do our measurement work, we find out what these priorities are and simply help build a metrics framework that supports these priorities.

Regarding the terms CSR and philanthropy – I think there has been a lot of blurring of definitions, and try not to get too dogmatic about it. But in general, I tend to look at philanthropy as resources donated to advance specific social interests; while CSR as a larger umbrella that covers philanthropy and community impacts, as well as impacts on the environment, employees, and other stakeholders. Both can be strategic (i.e., designed to maximize both social and business benefits), or not.

RW: We are writing a series on trust; Trust: Why Business Lost It, And How To Win It Back . So, I have to ask your opinion. How do metrics help/hurt the creation of trust among customers towards a companies CSR program?

F.L.: Measurement, broadly speaking, is the primary tool for communicating to customers about a company’s CSR program. That is, reporting on how much your company is spending on certain CSR programs, the magnitude of goods or services delivered as a result of these investments, and the ultimate social and business outcomes are all content that gets communicated to key stakeholders. And in general, the more transparent a company is about these impacts, the more trust they will generate with customers.

RW: Thanks so much for your time and insights Farron.