The PATRIZIA Foundation was established in 1999 with the aim of offering children a better future. Since then, the foundation has supported over 250,000 children at 20 PATRIZIA KinderHaus facilities worldwide. The first KinderHaus facility opened 20 years ago in Peramiho, Tanzania. In the meantime, it has been joined by three further facilities, all now fully operating in the immediate vicinity. The commitment of the PATRIZIA Foundation to the region is thus visible for all to see. But what actual impact has this had? And how do you even measure the effects or impact of social engagement? An interview with Christian Grünhaus, scientific director of the Competence Center for Non-Profit Organizations and Social Entrepreneurship at the Vienna University of Economics and Business (WU).
Could you explain your connection with the PATRIZIA Foundation?
We were approached by the PATRIZIA Foundation with a request to gauge the impact of its activities. The foundation has been working on a large number of projects, in many countries, for more than 20 years, so this would require solid groundwork in the form of an impact model, with logical connections between activities and impacts. To develop this model, we embarked upon a collaborative process, ultimately involving internal stakeholders and support processes. Based on this, we put in place impact measurement tools, which have now been used for the first time in Tanzania. Because the foundation has been working in the country for some time now, it was possible to capture both short- and long-term effects. Our project team has just got back from an on-site assessment.
Why did the PATRIZIA Foundation bring you on board?
Running a foundation is a good thing to do, but it’s not an end in itself. Foundation work should be about making things better. And it’s precisely this impact that we try to measure. So on the one hand, the results of our studies offer tangible proof of the impact of engagement in Tanzania, and on the other they provide a benchmark for assessing similar projects at the foundation.
How do you measure the impact of a non-profit organization (NPO)?
NPOs typically showcase their engagement by pointing to achievements. Until now, that’s also been the case with the PATRIZIA Foundation: it was made possible for so and so many children to go to school, this many children received hospital treatment, or a safe home was offered to so and so many children. But focusing on output doesn’t quite go far enough. To gauge impact or actual outcomes, you need to capture a much broader spectrum of factors.
And what exactly would they be?
Let’s take an example: care work. What is the impact of care provision? It’s much more than the people who are being looked after in purely numerical terms. By providing people with care, the health of the people who require care improves, but similarly, their quality of life improves, as does their life expectancy. And that’s just looking at the direct recipients of care. The work carried out by care providers also has impacts on family members who care for others. Their quality of life also improves; they’re no longer tied down and they’re in a better position to go back to work again. In turn, for employers this means they can continue counting on their employees. So there are a variety of impacts, in lots of completely different areas.
How do you try to capture those impacts?
We’ve developed a matrix to systematically understand effects. The first thing we always ask ourselves is, what are the possible impacts – be they on an economic, environmental, cultural, social or political level. Then we ask where they manifest themselves – for the individual, for the organisation or within society. And then last but not least, we examine when impacts happen. This can be short-, medium- or long-term.
What does that look like for the projects the PATRIZIA Foundation is involved in in Tanzania?
The starting point for any impact assessment is always an impact model, which is first worked out in hypothetical terms before being tested empirically. To put it in simple terms, we make a distinction between output and outcome. For example for things that come under output, we look at how many children attended school or received treatment in a hospital. The outcome category is about measuring or estimating impact. Does completing schooling open the door to vocational training? Does that result in a rise in family income? Do families from the local area look to this development as a kind of role model? These are just some of the questions we ask to assess impact.
We mostly gather this data by interviewing people and drawing on local information. We pool the results and use the impact model to pinpoint correlations. This shows which of the anticipated impacts manifest themselves and to what extent. If an impact analysis is expected to be carried out more than once, we create a research methodology for monitoring impact. This allows us to establish a basis for the PATRIZIA Foundation to capture its impact as an organisation once a year, based on standardised questionnaires, and make comparisons over time.
Why are impact evaluations important for NPOs?
Sustainability has become a tremendously important issue for companies, and that also applies to their social engagement. They want to demonstrate the value they create for society, beyond financial gains. Non-profit organisations have been looking into different ways to show the value they add to society for a much longer time. Unlike the world of business, which revolves around financial gains, the returns on their investments are not reflected from the outset in dollars or euros. Instead, their returns are reflected in different types of currencies – such as social harmony, prosperity or educational opportunities. Or to put it another way: you calculate social returns, in terms of invested capital in the non-profit sector. Consistently focusing on impact makes it possible to highlight which endeavours are effective and where it makes sense and would be necessary to do things differently.
What’s the benefit of an impact analysis?
Making the impact that the foundation has visible, and capturing ‘social currencies’, enhances its required legitimacy as a non-profit organisation. It demonstrates the successes it aims to achieve. This makes it easier to approach new investors. Also, not only does it make sponsors and donors feel good, but it also provides them with hard facts, which they can use to explain their social engagement. Ultimately, this allows management to steer engagement according to impact and deploy resources where they will be the most effective. So in a nutshell, making impact visible allows you to ensure it’s a win-win situation for everyone involved.
Dr. Christian Grünhaus
Christian Grünhaus has been scientific director of the Competence Center for Non-Profit Organizations and Social Entrepreneurship at the Vienna University of Economics and Business (WU) since 2013. After studying business administration and commercial sciences, he worked on a variety of research projects with a focus on NPOs. In 2003, he embarked on research at the interdisciplinary Institute for Non-Profit Sector Research, with a particular focus on applied research. He later went on to head up the institute, for which he assumed management in 2010, before becoming director of the NPO Competence Center at Vienna University of Economics and Business in early 2011.
In recent years, he has spearheaded numerous applied research projects and evaluations with a focus on impact analysis and impact measurement. His current research and interests revolve around the financing and governance of NPOs, as well as the (economic) evaluation of organisations, projects and programmes that place focus on adding value for society. Methods of social impact measurement play an important role in this, particularly SROI analysis. Grünhaus, under his former name Schober, and his colleagues have published two comprehensive works on SROI analysis.