The Social Investing Rating Tool

I, like many in my field, have long thought the social service sector needs better metrics for evaluating agencies’ effectiveness. There are many standardized metrics in business to determine the profitability of a corporate venture. The common goal of profit maximization in most for-profit enterprises makes it easy to evaluate companies within sectors and across the economy. In social services the missions are vastly different and it is difficult to determine what common metric makes sense. How do you compare a food pantry and foster care program?

The Washington Post reported today that an organization called the Working Group for Effective Social Investing “…is developing a rating system that they hope will radically alter the way donors evaluate whether a charity is worth their money.” The idea is to develop a set of common metrics to evaluate social service agencies based on the social good they create. The effort has certainly attracted some high profile agency insiders, including the CEO of the United Way of America.
I’m supportive of the concept of this initiative, dubbed The Social Investing Rating Tool, but will reserve judgment until seeing what their approach will be to determining what it means to create social good, or how they will even define it. There are a lot of questions to be answered as the industry moves forward toward evaluating what value it adds in the world. It is an important question to answer. But the social scientific complexities of evaluating proper outcomes measurements are significant, and I worry that with such large organizations and big philanthropic initiatives behind The Social Investing Rating Tool initiative, that the group will have to be very careful to create a fair measurement standard that doesn’t favor any particular type of cause or agency.