Lesa Ukman is a legend in the sponsorship industry, basically inventing the global standard for the way that that brands can measure impact. She’s now training her sights on how to measure good: her venture ProSocial Valuation is one of the most innovative in thinking I’ve seen in how corporations and governments can accurately track the positive social impact they create.
Bracingly honest, instinctively warm and infectiously funny, she is someone I respect and admire deeply for her work, conviction and passion for the topic. I caught up with her to find out more.
Afdhel Aziz: Lesa, welcome. Please tell us a little about ProSocial Valuation Service and why you decided to start it after such a long and distinguished role in the sponsorship industry?
Lesa Ukman: I started the ProSocial Valuation Service (PSV) for the same reason I started IEG—to support and grow an industry by introducing credible, actionable and scalable insights and analytics. Only this time the focus is philanthropy rather than sponsorship.
PSV leverages the power of big data and primary research to value social capital—any public good that benefits people and planet—with the same rigor used to measure financial ROI. While not traded on a commercial marketplace so there are no “prices” for these goods, such social capital is the currency that shapes the well-being of individuals, neighborhoods and nations.
So, there are parallels between my work with PSV and IEG. But now instead of looking at ROI through the lens of corporations and rightsholders, my colleagues and I are measuring the value created for civil society.
Today, with record numbers of people and communities in crisis, the need to get an accurate read on philanthropic investments is critical. PSV enables funding to be reallocated to the organizations doing the most good most efficiently rather than to those with the best marketers, fundraisers and connections.
Aziz: I couldn’t agree more. So how does the Pro Social Valuation model work?
Ukman: Combining the power of big data with the specificity of evidence-based primary research in which there is a proven correlation between a given intervention and a specific impact, PSV measures outcomes (not mere outputs). Accounting for positive, negative and independently occurring outcomes, PSV mathematically translates each unit of social capital into a dollar value, not to commercialize the public interest but because money is a universally understood currency for conveying value. Values are based on direct outcomes rather than just savings or income to the public purse or individuals.
Our algorithm also accounts for the six Intangibles that drive scale and Velocity, a preassigned value based on a weighted index of population and soft power — the ability to persuade by attraction and persuasion rather than by coercion or force.
We divide the social capital by the budget to reveal both effectiveness and efficiency and enable funders to compare programs to each other. Example, 1:3 indicates an investment of $1 delivers $3 of social capital. We are also building a normative database that enables users to compare returns to the universe of similar initiatives.
PSV has been used to value organizations and programs in areas as diverse as arts, education, homelessness, community development, clean water, legal aid and social inclusion.
Aziz: What kinds of partners have you been working with?
Ukman: Our clients are more diverse than we anticipated. It turns out all kinds of organizations create social capital but get no credit for it because it’s not measured. Broadly though our clients fall into three categories: the first is Funders, which includes foundations, trusts, governments, impact investors, etc. They use PSV to compare ROI across portfolios or sectors. Clients in this category also use PSV to respond to increasing pressure to be more data driven.
The second category is Nonprofits, NGOs and social enterprises which use PSV to drive revenue from commercial partners and philanthropic donors, secure support of governments, improve performance, and demonstrate value to stakeholders. PSV’s ability to make the value of purpose explicit drives substantial and sustainable revenue growth for clients even in this down economy.
The third category is Corporations. These clients want to get credit for the good they are doing. We identify and value benefits across the enterprise such as in-store fundraising, use of owned media for advocacy and employee volunteerism. While ESG reports are the logical place to tell this story, the “S” is left out of these. Often a product of CSR departments, ESG reports are more like compliance reports. So, we’ve started filling this gap.
Our mathematical grounding, use of outcome-based primary research and complete transparency—we are explicit about what is valued, the value assigned and the research supporting the calculations—resonates equally with C-suite executives, foundations and trusts, strategic philanthropists, brands, governments, volunteers and impact investors as well as nonprofits, NGOs and social enterprises.
Our clients include American Bar Association’s Free Legal Answers, Bethlehem’s ArtsQuest, Homeless World Cup, Levitt Pavilions and Miami’s New World Symphony.
Aziz: Thank you for sharing that. So what do you think brands get wrong about measuring the value of sponsorship?
Ukman: They over-value what’s easy to count—impressions, reach, attendance, awareness—and ignore what matters—such as shifts in attitudes and behavior.
Aziz: Finally, what advice do you have to brands on how to properly measure the value of purpose?
Ukman: First, stop thinking of these reports as exercises in compliance. Second, look across the enterprise because purpose should be embedded in the DNA of a company and not relegated to one department. Also, don’t just include what’s easy to count such as the number of employee hours donated and amount raised for charity.
And purpose is a driver of profits and as such it’s worthwhile to invest in third-party specialized measurement. Measure and communicate in terms that employees, customers and stakeholders understand, care about and will act on. Keep it short and leave out the puffery.