Limits of Impact Measurement: Consequentialism

by Kate Ruff

The focus on outcomes leads quickly to consequentialism. Consequentialism is a theory of ethics that holds that something is good (morally right) if it produces a good outcome.

Deontology, by contrast, is a theory of ethics that centers roles and moral duty. The focus is not on outcomes. Something is good if the behaviors are good.

These different theories of ethics play out in the different ways that people understand and define social enterprise and social economy enterprises. 

For some, the key defining feature of a social enterprise are the outcomes the enterprise achieves or strives to achieve. An organization is “social” if it generates impact. This is a consequentialist view.  Under this view, impact measurement is central to an organization’s social enterprise-ness.

For others, especially those in the cooperative movement, the key defining feature of a social enterprise is its democratic processes, and if the organization is for-profit, the equitable distribution of profits (e.g. consumer co-ops). It is less about what the enterprise does and more about how it operates. Under this view, it is more important to measure process than outcomes. 

These two philosophies are sometimes combined. Many advocates of cooperatives believe that those organizations that operate in good ways (deontology), are more likely to create lasting impact (consequentialism).

Sometimes, but not with enough consistency to be definitive, the term social enterprise is used for the consequentialist view and the term social economy enterprise is used for the deontological view. 

The relative merits of consequentialism and deontology have been debated at least since the Greek philosophers. We are not going to resolve the debate here and now in the context of impact measurement for social purpose organizations. The key point is that both views find support from a large number of philosophers. Both are reasonable (as in well-reasoned) views even if they are not your personal view. 

The Common Foundations outlines five essential practices. Before embarking on those, we invite organizations to reflect on whether impact measurement is right for you. If your organization has a deontological view of social economy enterprise, focused on democratic processes and equitable distribution of profit more than outcomes achieved, impact measurement may not be the right measurement for your purposes. You may need other ways to measure and document the behaviors of your organization and how it operates.  And if you are someone that has great resources for measuring things like democratic processes, please be in touch!

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