What Impact? A Framework for Measuring the Scale & Scope of Social Performance

Alnoor  Ebrahim; V. Kasturi  Rangan

Article | California Management Review | Spring 2014

What Impact? A Framework for Measuring the Scale & Scope of Social Performance

Abstract

Organizations with social missions, such as nonprofits and social enterprises, are under growing pressure to demonstrate their impacts on pressing societal problems such as global poverty. This article draws on several cases to build a performance assessment framework premised on an organization's operational mission, scale, and scope. Not all organizations should measure their long-term impact, defined as lasting changes in the lives of people and their societies. Rather, some organizations would be better off measuring shorter-term outputs or individual outcomes. Funders such as foundations and impact investors are better positioned to measure systemic impacts.

Keywords: Nonprofit Organizations; Performance Evaluation;

Format: Print

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Citation:

Ebrahim, Alnoor, and V. Kasturi Rangan. "What Impact? A Framework for Measuring the Scale & Scope of Social Performance." California Management Review 56, no. 3 (Spring 2014): 118–141.

Gilead had come up with an innovative drug for Hepatitis C, which affected 180 million people worldwide. The drug was priced at $1,000 a pill for the US market. Gilead had to decide how to price and market the pill in developing countries that bore the brunt of the disease. The company had earned accolades for its work in HIV/AIDS, where its innovative medicines now accounted for 60% of all patients on Anti-Retroviral (ARV) medicines. Much of this was accomplished through generic licensing, which brought a $10,000/year treatment regimen down to $100! Should the company replicate that strategy for Hepatitis C? If so, how would its US Healthcare customers, who were paying $84,000 per patient, react? On the other hand, Gilead had to balance the interests of its shareholders, who paid $11 billion for an acquisition that led to the new Hepatitis C drug.

A case on scaling social impact for nonprofits. Founded in 1995, KaBOOM! quickly became a nationally recognized nonprofit in building playgrounds with strong corporate partnerships and volunteer-organizing capabilities. Over the years, KaBOOM! developed new programs, including a new web platform to enable individuals and communities to do build-it-yourself playgrounds which increased KaBOOM!'s total annual number of playgrounds built by as much as a factor of 10. The case explores how KaBOOM! evaluated its goals and determined a strategy to achieve the scale required to meet its social mission and vision of every child having a place to play.

With a breakthrough cure for Hepatitis C listing in the U.S. at $1,000/pill, Gilead must now solve the issue of making it available to patients across the world, much as it did for its blockbuster HIV/AIDS antiretrovirals. For Erik Musalem, the new general manager of Gilead Mexico, the challenge was complicated by operating in a middle-income country, where Gilead’s terms for more vulnerable nations did not apply. For all practical purposes, Musalem had only one customer for his company’s Hep C medicine: Mexico’s public health system and the National Pricing Commission that set prices annually for the entire sector. With no lack of priorities competing for the finite resources of the public health sector, Musalem’s charge was to devise the strategy that in the long run would maximize access to the cure in Mexico while protecting the financial strength of Gilead Sciences, Inc.

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What Impact? A Framework for Measuring the Scale & Scope of Social Performance

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