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23 Apr. 2019 | Comments (0)
This case study is taken from Toward Standardized Social Outcomes for Companies, which was published in collaboration with the Impact Genome Project and generously supported by Moody's. The report is available to download free from The Conference Board.
For most Americans, Moody’s is synonymous with best-in-class credit ratings, research, and analysis contributing to global capital markets. Moody’s Corporation is the parent company of Moody’s Investors Service, which provides credit ratings and research covering debt instruments and securities, and Moody’s Analytics which offers leading software and advisory services in financial risk management. Its corporate social responsibility (CSR) efforts build on the company’s data-driven approach to business and recognize that “knowledge fuels opportunity.”
- Employs approximately 13,100 people and maintains a presence in 42 countries
- Corporate social responsibility goal: “Open the door to a better future”
- Focus areas:
- Empowering people with financial knowledge
- Activating an environmentally sustainable future
- Helping young people reach their potential
- Sharing our passion and purpose with the world
The company's continued progress in these areas is made possible by the passion and purpose of its people, as well as its corporate assets.
The social impact challenge
Vice President, Corporate Social Responsibility, Jennifer Stula Rivera, notes that measurement of social impact has been a part of the grantmaking conversation at Moody’s for several years. Moody’s had previously evaluated and benchmarked its evaluation processes and best practices against other financial services organizations, but the data focused on output metrics (e.g., the number of students served) or anecdotal evidence—not standardized, rigorous, or comparable outcomes that indicated behavioral change and a concrete understanding of social impact.
"At Moody’s, we appreciate the value that standardized, rigorous, and comparable data adds to making better decisions—in our analysis and in assessing the success of our nonprofit partnerships. The Impact Genome Project strengthens our ability to drive social impact and connects directly to our leadership contributing to transparent and integrated financial markets." Arlene Isaacs-Lowe Global Head of Corporate Social Responsibility, Moody's Corporation, and President, Moody’s Foundation.
Using the Impact Genome Project
In 2017, Moody’s reinvented its CSR approach to mirror the company’s global footprint, be authentic to its culture, and align with its businesses. The company engaged Mission Measurement and the Impact Genome Project (IGP) to assess the Moody’s Foundation’s grant portfolio for alignment with its focus areas. Nonprofit partners were introduced to the IGP tool as part of this approach before it became a requirement in 2018 for support from the foundation.
The portfolio analysis revealed interesting information. For example, Moody’s had supported the Hetrick-Martin Institute (HMI), an LGBTQ (lesbian, gay, bisexual, transgender and questioning) youth program for a decade. Although Moody’s believed deeply in the organization’s mission, the IGP indicated that the program was not aligned with Moody’s sharpened efforts to help prepare young people for successful careers in finance, technology and economics.
Rather than ceasing to fund the organization, this insight led Moody’s and HMI to constructively discuss the organization’s goals, strategies, and long-term sustainability. That conversation sparked HMI to create Queer Coders, a program focused on technology education for LGBTQ youth. The launch of this program not only aligned with the company’s CSR focus of “helping young people reach their potential,” it also addressed a gap in the nonprofit organization’s strategy to provide these young people with skills that improved their educational and job prospects.
IGP’s portfolio analysis helped Moody’s understand whether its funding was achieving its expected/targeted primary social outcomes. But in some cases, the analysis did not sufficiently hone in on targeted impact areas. For example, Moody’s wanted confirmation on whether the funding provided to its nonprofit partnerships encouraged pathways to careers in finance, technology and economics and not more widely focused STEM outcomes—reflecting the company’s rigorous and thoughtful approach to measurement and evaluation. Similarly, the company’s focus on “Empowering people with financial knowledge” is informed by research that small and growing businesses are significant contributors to job growth and GDP for all economies. However, before entrepreneurs can even get the funding they need, they have to acquire the tools and know-how to navigate the financial world—which are provided by initiatives in this area. The company’s efforts are more targeted than broad financial literacy or economic empowerment.
In attempting to dig deeper into its outcomes, Moody’s raised the question about whether the IGP needed to develop a level of secondary outcomes that offered a more specialized understanding of the company’s impact than the primary outcomes in the project. Ultimately, the company and the IGP decided to settle on primary outcomes in its final reporting to allow effective comparisons across social impact areas but included secondary outcomes and additional measures for their own comparability within the portfolio. Furthermore, as Moody’s continues to refine the reporting framework to evaluate its social investments, it will also layer qualitative analyses on these outcomes to achieve a more nuanced understanding and reporting of its impact.
Moody’s intends to use the IGP not only to develop a set of key performance indicators that will allow it to report year-over-year outcomes of its CSR program but also to improve the capacity of its nonprofit partners and help them attract new funders. This is happening in two different ways:
- First, the IGP is helping nonprofits better understand their outcomes and identifying where they could enhance their offerings or services. The Queer Coders program is a perfect example. Its introduction has helped HMI become more appealing to funders, especially those that support technology education, helping improve HMI’s long-term sustainability and organizational capacity.
- Second, the IGP is helping nonprofits report efficiently through a standardized process will free up resources to focus on delivering outcomes through programming.
In addition, Moody’s hopes that the IGP will encourage nonprofits to uncover and eliminate duplication by helping to promote collaboration. Rivera says, “Our participation in the Impact Genome Project is not just about measurement and evaluating how far our dollars are going. It’s actually about the difference systemic change could make in the nonprofit industry.”