Heather Esper

Taking a Multi-Dimensional View: Free WDI webinar series on assessing poverty impact

Many BoP ventures struggle to capture a complete picture of what is going on inside their organization.

This can be problematic for a number of reasons. It can create difficulty in demonstrating the positive socio-economic effects it promised to investors. This lack of visibility also limits a venture’s ability to better understand and address the needs of their stakeholders such as customers, producers, distributors as well as the broader community. But managers can, in fact, capture this valuable information can by assessing the multidimensional changes in poverty their venture is influencing.

Key components in gaining such a holistic view of a venture’s influence on poverty include:

1. Speaking to a range of local stakeholders. This includes not only talking to stakeholders who interact with the venture such as customers or distributors, but also those that do not engage with the venture. The latter group includes people who live near the venture’s operations, as a venture can affect the quality of a public good such as the air or water in a community. Gaining a range of perspectives of a particular company’s effects on poverty can bring to light new opportunities to improve its value proposition for stakeholders. Additionally, speaking to local stakeholders can increase a venture’s transparency to their investors. Indeed, Nicholas van Praag who was an advisor on the 2011 World Development Report said:

“What is missing from the many evaluation reports in the inboxes of humanitarian agencies and donors are independent and systematic assessments based on feedback from beneficiaries themselves. Capturing their views would complement and give context to conventional data-driven assessments. It would ensure that people in need of humanitarian assistance and protection are better served, and that the resources intended to help them are better used. What is more, it would increase the credibility, and thus attractiveness to potential donors, of those humanitarian agencies that can show they are doing what their beneficiaries need them to do.”

2. Capturing the positive and negative. Both positive and negative changes resulting from a venture on their stakeholders as well as in the local physical and cultural environment are important to capture. Many leaders in the development field are beginning to recognize the importance of failure and mitigating it early including Howard White of 3ie who wrote:

“The word failure appears 27 times in the report [the Inter-American Development Bank’s 2013 Development Effectiveness Overview report] compared to just 22 times for the word success. This doesn’t mean that IADB is in any way a failing institution. Quite the opposite.”

3. Moving beyond income metrics. As David Roodman, formerly with the Center for Global Development and now senior economic advisor with the Gates Foundation, has said: “…poverty does not just mean low income, it also means volatile income.” For that reason it is important to capture other economic changes such as income stability and changes in assets in addition to changes in income. It is also important to capture non-economic metrics. Shahzad Ansari et al highlight this point in their Journal of Management Studies article:

“While increase in income can enhance outcomes, especially at lower income levels, it need not be seen as the ultimate yardstick of development or wellbeing. And, if it leads to social disruption, income growth may reduce rather than enhance wellbeing.”

Such an example is found in a March 2014 National Bureau of Economic Research working paper which reports that “using individual level data on domestic violence we find evidence that increased property rights for women did increase the incidence of wife beating in India.” The paper concludes that increasing property rights, an economic asset, resulted in a negative change in women’s relationships with their husbands at home. If the program hadn’t captured non-economic metrics such as domestic violence, researchers wouldn’t have known about the negative outcome and wouldn’t be able to manage it. Thus it is important to assess changes in individual’s physical health, mental health, knowledge, skills, and aspirations as well as changes in an individual’s role in his or her family and in the community; and also how the enterprise affects the quality of the physical and cultural environment in addition to economic metrics.

These are some of the themes we have been exploring in recent series of free webinars, entitled Assessing Multidimensional Poverty Impacts: Techniques that are Easy-to-Implement and Customizable. For more information on the value of capturing multidimensional changes in poverty, please see a recording of our webinar with guest speaker Julie Peachey, director of Social Performance Management at Grameen Foundation, below.

If you are interested in learning more about qualitative and quantitative methods to assess multidimensional impacts please join us live for the remaining two interactive webinars in the series. We will discuss techniques designed for many business sectors and geographies that have been successfully tested and executed by the William Davidson Institute at the University of Michigan (WDI) using The Base of the Pyramid Impact Assessment Framework (BoP IAF). The framework, developed by Ted London, was featured in the Harvard Business Review. The second webinar, set for 11 am EDT on June 17 will focus on qualitative methods and include guest speaker Kat Harrison director of research and social impact from SolarAid’s SunnyMoney. Our third and final third webinar, scheduled for 10am EDT, July 18 will focus on quantitative methods and include a Jean-Christophe Laugée, social innovation and ecosystem director of Danone. More information and to register for these webinars click here.

Heather Esper is the program manager of Impact Assessment at the William Davidson Institute at the University of Michigan (WDI).

Impact Assessment
impact measurement, poverty alleviation, William Davidson Institute