I was talking with a foundation CEO last week about why she really "cared" about measuring impact. I got a common response "we need to know our dollars are being spent...we need accountability." But then it hit me. The real problem is, that's a curiosity...but what's the hard business driver? Bottom line is: curiosity doesn't change markets; business drivers do.

The fact that this is a for-profit business requires us to truly appreciate, and identify, the business reasons why corporations, foundations, governments and nonprofits need to measure impact. On the surface, everyone who stewards public funds--be it a government, foundation or nonprofit--will acknowledge that measuring the results of their work is elemental. And conferences, academic seminars, trade journals like Stanford Social Innovation Review, websites and the media will continue to reinforce the need for better accountability and performance. But again, these forces merely create the context for organizations to measure, not the demand. Demand--true market demand for a product, service or solution--must draw on more fundamental motives.

At the end of the day, and despite altruistic expectations to the contrary, the primary motive for measurement is money. How it's raised. How it's allocated. How it's accounted for. How it's managed. And how it's invested. This translates into 3 primary business drivers:

1. accountability - was the money well spent
2. reporting - what results were created
3. benchmarking - how do results compare to others

Put in this context, measurement becomes a very real business requirement--both for those investing public dollars as well as those raising public dollars. And when you blend the power of measurement with the necessity of money, some fascinating possibilities emerge: fundraising based on performance, not just relationships; total transparency about investment returns; resource allocation with the analytic power of Wall Street's best investors; benchmarking social programs to find the most effective theories of change; and ultimately, more efficient solutions to today's intractable public problems.

JAS