1 Impact is in the Eye of the Beholder:
Conceptualising ‘Impact’ at the Local Level of a Dutch Cooperative Bank
Roosmarijn van de Velde S1420321
MSc Public Administration: Public Management and Leadership Leiden University
18770 words (excluding bibliography and appendices) Dr. Natascha van der Zwan
2 Table of contents
1. Introduction ... 5
1.1 Introduction ... 5
1.2 Relevance ... 9
1.3 Overview of the thesis ... 10
2. Theoretical framework ... 13
2.1 Introduction ... 13
2.2 Impact Investing (II) and Venture Philanthropy (VP) ... 13
2.2.1 The emergence of II and VP ... 13
2.2.2 Ambiguity in definitions of II and VP... 14
2.2.2 Boundary blurring in practice ... 15
2.3 The academic body of II and VP ... 17
2.3.1 The early phases of research ... 17
2.3.2 Themes, origins and disciplines of the current academic field ... 17
2.3.3 Methods used to study II and VP ... 19
2.3.4 Focussing on impact in both II and VP ... 20
2.4 The academic research on Impact ... 21
2.4.1 Definitions of Impact ... 21
2.4.2 Methods of measuring impact ... 22
2.4.3 The academic call to define and measure impact ... 25
2.4.4 Critiques of defining & measuring impact ... 27
2.5 Critiques to II and VP as a whole... 28
2.6 Democratisation of Finance ... 30
2.7 Conclusion and theory-informed expectations ... 30
3. Methodological framework ... 34 3.1 Introduction ... 34 3.2 Research design ... 34 3.3 Case selection ... 34 3.4 Data collection ... 38 3.4.1 Getting access ... 38
3 3.4.2 Interviewees ... 38 3.4.3 Informed consent ... 39 3.4.4 Interview technique... 39 3.4.5 Interview questions ... 40 3.5 Data analysis ... 41
3.5.1 Summarising and pinpointing the first patterns ... 41
3.5.2 Coding ... 42
3.6 Triangulation through documents ... 43
3.7 Reflecting on validity and reliability ... 45
3.7.1 Reliability ... 45
3.7.2 Validity ... 45
4. Empirical findings & Analysis ... 48
4.1 Introduction – Impact: important but undefined ... 48
4.2 Theme 1: The tailored approach ... 49
4.2.1 The tailored approach ... 49
4.2.2 Analysis Theme 1: the tailored approach ... 50
4.3 Theme 2: Change ... 51
4.3.2 Change: A movement, systemic or fundamental ... 52
4.3.3 Change: Growing - exponential ... 53
4.3.4 Analysis Theme 2: Change ... 54
4.3.1 Change: Long term ... 54
4.3.5 Change: A note concerning innovation. ... 55
4.4 Theme 3: Goals and measuring impact ... 55
4.4.1 Theme 3a: Setting and achieving goals ... 55
4.4.2 Theme 3b: Measuring (and quantifying) impact... 56
4.4.3 Analysis Theme 3: Defining, measuring and quantifying. ... 59
4.5 Analysis of the aggregate and conclusion ... 60
5. Conclusion ... 62
5 1. Introduction
1.1 Introduction
In recent years, especially after the global financial crisis, the social finance market has grown significantly (Langley, 2020, p. 131). The term social finance concerns the financial market of those investors that go about their activities aiming for positive social effects (ibid.).
Part of this market are Impact Investing (II) and Venture Philanthropy (VP). II refers to the use of capital investments to tackle social or environmental challenges, with the expectation of financial returns on investments (Quinn & Munir, 2017). VP focuses on the maximisation of the social and/or environmental impact without expecting financial returns on investments (Porter and Kramer 1999; Defourny et al. 2013). II and VP distinguish themselves from socially responsible investment (SRI), which is focussed on avoiding investments in practices that harm society, such as tobacco-production or weapon trade (Quinn & Munir, 2017). Where SRI aims to minimise harm, II and VP go a step further and invest in actively bettering society and/or the environment. Also, in both II and VP, a central role is reserved for co-creation and investor engagement (Ashta, 2012; Gordon, 2014; Wu, 2018). Placed on a spectrum, investments can vary from finance first (i.e. SRI), to impact first (i.e. II) to impact only (i.e. VP) (Chiapello & Godefroy, 2017).
This spectrum view of social finance, of course, begs the question ‘What is impact?’. The academic field that aims to answer this question is growing, but still calls for an accepted and unambiguous conceptualisation (Liket, 2014). This research aims to contribute to that academic body which aims to conceptualise impact. As such, the research question (RQ) guiding this thesis is:
‘How is ‘impact’ conceptualised by members of the workgroup Maatschappelijke Agenda of the Rabobank Leiden Katwijk?’
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Informed by current theory, I will conduct single case study research, based on
interviews and aided by the Grounded Theory method for coding and analysis. The case study I selected is the Rabobank Leiden Katwijk, specifically its Members Council’s workgroup Maatschappelijke Agenda (MA). The Rabobank is a cooperation with 89 local banks, adhering to core principles of cooperative banks: solidarity in the context of a local community (Andrikopoulos, 2019).
The bank is the Netherlands’ second largest bank and Europe’s eighteenth’s biggest
bank (S&P, 2018). Currently, the Rabobank has 8,8 million Dutch customers and 0,7 million international costumers. Over its 89 local banks the Rabobank has 1,9 million members (“Rabobank, Annual Report 2019”, 2020). Being a cooperation, the bank does not have
shareholders; it has members instead. Members are costumers that, through voluntary opt-in, have chosen to be actively involved in the banks governance, policies and expenditures.
One of those 89 locals banks is the Rabobank Leiden-Katwijk, located in the west of the Netherlands, between The Hague and Amsterdam. The local bank operates in the Leiden agglomeration, which encompasses the municipalities Leiden (125.700 citizens), Katwijk (66.500 citizens), Leiderdorp (28.200 citizens) and Oegstgeest (24.200 citizens) (BeBright, 2018; “Rabobank, Annual Report 2019”, 2020). In the area, the Rabobank Leiden Katwijk has over 20.000 members (Leiden-Katwijk, n.d.). Those members are represented in the Members Council by 23 councilmembers. The Members Council of the Rabobank Leiden Katwijk has an advisory and co-deciding role in the policy and actions of the local bank, specifically concerning its economic and societal role (ibid.). Members of the council are ‘primi inter pares’, aiming to represent the body of members in its full diversity.
Of the profits of the Rabobank Leiden Katwijk a part is reserved as Cooperative Dividend, which is to be reinvested in society (“Maatschappelijk Jaarverslag 2019”, 2020). Members decide how the dividend is spent, usually towards locally engaged social projects.
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Over 2019 the Cooperative Dividend was € 1.020.301, of which €400.000 was reserved for the Maatschappelijke Agenda and €200.000 for the Wensenfonds. The Wensenfonds
(translated loosely to ‘Wishes Fund’) is allocated towards clubs and associations through voting by members (ibid.).
Through the Maatschappelijke Agenda members of the bank aims to achieve impact by allocating funding towards projects or organisations that better the local community.
Maatschappelijke Agenda (MA) translated to English should be interpreted as ‘social agenda’,
with a broad scope entailing both the local community, society at large and the environment. The MA is a programme at the discretion of the Members Council of the Rabobank Leiden Katwijk, existing since the end of 2018.
The MA is a platform for Councilmembers who want to achieve ‘maatschappelijke’ impact in the Leiden region (“Beleid MA November 2019”, 2019). The Maatschappelijke
Agenda (MA) programme is led by the Workgroup MA, which has nine members (six Council Members, two employees and the Director). In collaboration with local stakeholders the Members Council has set an agenda, revolving around four themes (ibid.). These themes are: vitality, sustainable housing, financial empowerment and local economy (ibid.).
By organising six ‘Maatschappelijke Café’s’ per year, the Members Council gives shape to the agenda. In these café’s project leaders can meet Councilmembers and the
community, and present their ideas (ibid.). In these events ideas for projects can grow through co-creation, some ideas were even ‘born’ at one of the café’s. The Councilmembers,
stakeholders and employees of the bank make up the community, who all offer network and expertise to projects.
If a project fits one of the themes, is considered innovative and is open to co-creation, in principle it is eligible for funding from the MA budget. If a project indeed applies for funding, the MA Workgroup decides whether this request is granted and to what extent.
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Projects can receive up to €20.000 in funding, this is a gift. In exceptional circumstances
projects can receive more than one round of funding. Since its start in 2018, 11 projects have received funding (ibid.). At least a handful of projects has been declined for funding.
As broad as the four themes are, the funded projects are all very different. Examples are a Social Impact Bond around local youth, an ambassadors network for sustainable housing in a certain neighbourhood, a Corporate Social Responsibility-platform for linking volunteer spots with companies and their employees, a campaign to improve eating patterns of youth and an initiative for collaboration in the hospitality sector of the region.
The Members Council takes pride in the MA being different from traditional funds in at least four ways (“Informerende sheets (..)”, 2019) :
1) in the MA there is a strong engagement between the Members Council and the investees.
2) invested-in projects are developed through co-creation and helped with more than money only (e.g. expertise, network, etc.)
3) risky projects are not excluded from funding, rather, innovative approaches are encouraged .
4) There are no red tape or use of standardised application forms.
Respecting these parameters, the Rabobank is responsible for the legal elements and the guarding of potential conflict of interest (“Terugkoppeling Werkgroep (..)”, 2019).
Although the term is probably unfamiliar to most in the Members Council, the Maatschappelijke Agenda is a case of Venture Philanthropy; it aims to maximise social and environmental impact through provided funding, has a high engagement between investor and investee, and furthers the projects and organisations through co-creation. The combination of bank and member participation with a focus on having impact on the local community, makes for a case which is exemplary for VP.
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Being in charge of the MA, the Workgroup MA are the interviewees in this research. The nine interviewees are or were all members of the MA workgroup, being current or former Council Members or employees of the bank. Together, these nine comprise the full group of people that are or were ever actively engaged with the MA workgroup. By finding out what the MA Workgroup members define as ‘impact’, I hope to provide an empirically grounded conceptualisation of impact to the academic field.
1.2 Relevance
With this research I aim to contribute to both the field of II and VP, specifically their subfields focussed on the definition of impact. To these academic fields, this study aims to contribute three things.
First, this is the first case study of VP in which the subjects under study do not identify themselves being part of VP. In current academic research case studies are bounty, but in all of them the actors are aware of where they are in the financial market and actively identify as conducting II or VP. In this case the financial angle and social aims are uniquely combined in the MA programme of the cooperative Rabobank. Whilst experts working at the bank might be knowledgeable about either II or VP, the subjects under study here are not. I used the early stage of development of both the MA programme and the academic field to my advantage. It gave near certainty that most interviewees are not informed by the developments in the social finance market, let alone are they (academic) experts in the fields of II or VP. In the
interviews this assumption was all but confirmed. One respondent turned out to have
knowledge of the Theory of Change, a well-known theory in II and VP. Still, this case study was an opportunity to study those practicing VP, without them being biased by the current debates in academics. This case study thus offers the debate on the concept of impact a very original and empirically grounded conceptualisation of impact.
Second, this case study forms a unique bridge between the II and VP and the
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expenditures is prototypical of what democratisation of finance stands for. In democratisation of finance ordinary citizens and households are provided with access to the financial market (Erturk et al., 2007, p. 554). The democratisation is opens up the market to elite and non-professional actors. In this case the Members Council are the non-non-professional volunteers that manage the investments made in the local community.
Third, this thesis is a step in the way from purely exploratory research, towards theory developing and testing. As pointed out by Wu (2018) and Agrawal and Hockerts (2019), in both academic fields of II and VP, research is gradually moving away from exploratory research. There is not yet an abundance of theories to be tested or confirmed, but sufficient theories and discussions exist for informing this case study. The questions in the interviews are inspired by the current academic debate and the answers can thus be related back to the academic field. Aided by the Grounded Theory method, this case study can offer theoretical inferences that are grounded in empirical evidence.
To Public Administration this research offers relevant insights as well. The field of Social Finance and its subfields II and VP are important to Public Administration, as they challenge the boundaries between the financial market and the public domain. First, II and VP are means for societally or sustainability-motivated organisations to acquire funding, beyond traditional subsidies. Second, II and VP can aid in the democratisation of finance, of which of the Maatschappelijke Agenda is an example. As Wu (2018) notes, Venture Philanthropy is the deliberate conflation of private and public interest, resulting from the cross-border movements between market and society (p.21).
1.3 Overview of the thesis
In the first chapter, I will delve into the academic field of social finance, specifically the subfields of Impact Investing and Venture Philanthropy. I address the practitioner field and the emergence and development of the academic fields studying II and VP. There, I review the common topics and methods of study and the academic disciplines from which
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scholars researching II and VP come. After this, I combine theory from Impact Investing and Venture Philanthropy, addressing their common denominator: the focus on impact. I examine the definitions of impact and the methods of measurement. Then, I review the discussion concerning the defining and measuring of impact, and critiques of the field as a whole. Lastly, I summarise the theoretical framework and formulate four expectations about the case study that I derived from the theory.
In the second chapter, I lay out the methodological framework. I adopt a qualitative single case study design. I will review the case selection process and elaborate on the case description that was presented in the introduction. Informed by theory, I conducted in-depth interviews with the nine (current and former) members of the MA workgroup. I coded and analysed the results of these interviews aided by Grounded Theory. I triangulated the results with documents of the MA programme. Both the single case study design and my
involvement in the MA programme can be expected to have certain effects on the reliability and validity of this research. I will reflect on the validity and reliability of this research, and the efforts I made to ensure them.
In the third chapter, I will present my empirical findings and analyse them. I will combine the description of the empirical findings and its analysis in one chapter. The empirical evidence results in three main components of impact. There are two features that respondents agree upon: 1) impact is situation dependent and 2) impact concerns the making of change. The third dimension is the subject of much debate and concerns the defining and measuring of impact. Both practices will be reviewed as interrelated subdimensions of impact, addressing the arguments and reasoning motivating both sides. All three dimensions of impact combined do not make an unequivocal conceptualisation of impact, but are relevant still. After explaining each dimension, I will review how the case fits into the academic debate – addressing how it complements the debate or how theory matches reality. In the final section
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of this chapter, I will review how the case study as a whole can be interpreted in the light of the theory. I will assess the formulated expectations based on the theory and I will summarise the insights that this research offers to the academic debate.
Last, I will conclude this thesis by summing up the findings and how they answer the research question: ‘How is ‘impact’ conceptualised by members of the workgroup
Maatschappelijke Agenda of the Rabobank Leiden Katwijk?’. In brief, what I found was that
amongst the respondents there was agreement that impact is best defined per case, so an unambiguous definition was not found. In addition, all respondents agree that ‘change’ is a central aspect of ‘impact’. Whilst theories like ‘Theory of Change’ seem to address this, they do not consider the aspect of ‘fundamentality’ – which is deemed highly important by the respondents. A point of much discussion in academics is whether or not, and if so how, impact should be measured. The respondents in this case study struggle with the same question and cannot solve it either. Finally, what stood out was that none of the respondents considered the possibility of negative impact whilst this is discussed at length in the academic debate.
13 2. Theoretical framework
2.1 Introduction
As stated, the social finance market has grown over the last years (Langley, 2020, p. 131). The label ‘social’ in social finance pertains the object that is financed, not the manner in which it is financed (ibid. Langley, 2020, p. 131). Part of the social finance field are Impact Investing (II) and Venture Philanthropy (VP) (Bishop & Green, 2010; Nicholls, Paton & Emerson, 2015). In brief, II is the investment for both impact and profit, and VP is the investment for nothing but impact, often in the form of grants.
In this chapter I will first provide an overview of the emergence and practice of II and VP. Second, I review the academic fields that study that study II and VP. I will address the development of the academic field and the themes, methods and disciplines that can be found therein. Third, I will then consider the academic debate on ‘impact’. I examine the variety of definitions of impact, and the debate on whether and how to measure it. Fourth, critiques of the fields of II and VP are added to the equation. Fifth, I will examine briefly the
democratisation of finance. Last, I will summarise the theoretical framework, and formulate four expectations about the case study based on the gathered theoretical knowledge.
2.2 Impact Investing (II) and Venture Philanthropy (VP) 2.2.1 The emergence of II and VP
The term Impact Investment was coined at the end of the zeroes, emerging from a series of meetings under the leadership of the Rockefeller Foundation (Nicholls et al.,, 2015, p.208). During those meetings in 2007 and 2008 in Bellagio, Italy, the aim was to lay out the social finance market and present “a new asset class” to investors (ibid.). Not much later, the JP Morgan 2010 Research Report ‘Impact Investing: an emerging asset class’ was published (O’Donohoe et al., 2010). There II was defined as “Investments intended to generate social
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Impact Investing sectors include microfinance, agriculture, green energy, education, healthcare, housing and water (Höchstädter & Scheck, 2015, p.458). A specific example is the revolutionary vaccine bond: where public and private investors supply the front-end research and development budget for vaccines for diseases such as HIV/AIDS (Jackson, 2013, p.96). In a major sector survey, the global total of value managed in II was indicated to be circa 502 billion US dollars in 2018 (GIIN, 2019).
As with II, the Rockefeller empire is ascribed a central role in the birth of VP. When John D. Rockefeller III coined the term Venture Philanthropy in 1969, it appertained to foundations taking on more adventurous funding tactics (John, 2006). Later, the term VP concerned an entrepreneurial and cross-sector way of going about philanthropy (OECD, 2014, p.38). In VP both financial and non-financial resources are employed to find and support those solutions to current challenges that achieve the greatest impact (ibid.). Financial tools are often in the form of grants, but hybrid financial methods also exist. Currently, VP can be defined as the venture capitalist approach to philanthropy (Pepin, 2005). Yet, whereas venture capital is often injected at the outset of an organisation, VP is practiced throughout all phases of an organisations existence (Grossman et al., 2013).
The invested-in sectors of VP are similar with II. They include healthcare,
sustainability, culture, education and medical research (EVPA, 2018). A solid global financial estimate is hard to make, but European VP practices were estimated to be worth a total €767 million in 2017 (ibid.). This gives an indication of the size of the market: although it has been growing over the years it is still small compared II and, of course, the traditional financial markets.
2.2.2 Ambiguity in definitions of II and VP
As both II and VP are relatively new practices, definitions of neither of them are settled. As described in the introduction, I define II and VP in the following way. II refers to
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the use of capital investments to tackle social or environmental challenges, with the expectation of financial returns on investments (Quinn & Munir, 2017). VP focuses on the maximisation of the social and/or environmental impact without expecting financial returns on investments (Porter and Kramer 1999; Defourny et al. 2013). I selected these definitions based on the literature reviews by Gordon (2014), Höchstädter and Scheck (2015), Clarkin and Cangioni (2016), Wu (2018) and Agrawal and Hockerts (2019), cross referenced for citations with the Social Science Citation Index and Google Scholar.
Yet, these definitions are thus II and VP are not uncontested – they are the subject of much debate in the academic fields. Despite scholarly efforts, both fields are still fragmented and suffer theoretical, terminological and definitional unclarity, find Agrawal & Hockerts (2019) for II and Gordon (2014) and Wu (2018) for VP. Whilst agreeing that II in its basis concerns profit-seeking investments that also intend making social or environmental impact (or both), academics have called for a (more) unambiguous definition of the term (Harji & Jackson, 2012a; Brandstetter and Lehner, 2015; Höchstädter & Scheck, 2015; Daggers and Nicholls, 2017; Lehner, Harrer & Quast, 2019). The same inconclusiveness is signalled in the field of VP (John, 2006; Gordon, 2014; Wu, 2018). In solidifying the definition of VP, the field still seems to struggle with its inherent paradox of uniting business and philanthropy (Dees, 2007).
2.2.2 Boundary blurring in practice
Whilst the academic field calls for less ambiguity, in practice terminological
distinctions are increasingly vague. II and VP are believed not to be dichotomous per se and are best understood placed on a spectrum. The European Venture Philanthropy Association (EVPA) visualised this spectrum view of the field, categorising investments based on the kind
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of funded organisation and the priorities of the funders (Boiardi & Gianoncelli, 2016). See figure 1.
Figure 1. (Boiardi & Gianoncelli, 2016).
Desegregating the categories even further, the EVPA published a newer version of the spectrum, in which category boundaries are blurred (“The Sector – The Impact Ecosystem” n.d.). See figure 2. Investments are not labelled by exclusive types or aims and organisations are assessed merely on their purpose and likelihood of financial self-sustainability. The result is a spectrum which does not present II and VP as mutually exclusive. This spectrum reflects the complexity of field and the hybrid forms therein.
17 2.3 The academic body of II and VP
2.3.1 The early phases of research
The early phases of the research fields are demarcated by conceptual studies and explorations of the ‘how-to’ and promises of the investment fields (Agrawal & Hockerts,
2019). For VP, this early phase starts around the 1990’s, with the influential paper by Letts, Ryan and Grossman (1997) which provided a blueprint for how philanthropy could model itself after the venture capital approach (Gordon, 2014). For II, this early phase research began a little before the term was coined in 2007. It began with Browns (2006)
conceptualisation of how equity investments could mainstream the social enterprise sector (Agrawal & Hockerts, 2019). In their comprehensive overview of the academic field of II, Agrawal and Hockerts (2019) identify this period as the starting point of studies concerning II. In this period, Pepin (2005) and Van Slyke and Newman (2006) are the first to study the “movement from philanthropy to venture philanthropy and how it could embrace markets”,
Agrawal and Hockerts (2019) find (p.11).
2.3.2 Themes, origins and disciplines of the current academic field
Since then, the academic fields studying II and VP have grown (Letts et al. 1997; Frumkin, 2003; Scott 2009; Buckland et al., 2013; Gordon, 2014; Langley, 2020), receiving attention from a wide variation of scholars. Currently, the academic fields studying II an VP is spread out in three ways: it is geographically dispersed, it is scattered amongst many
disciplines and it is topically fragmented (Gordon, 2014; Wu, 2018; Agrawal & Hockerts, 2019).
Geographically, literature on II and VP has emerged from, and has focussed on, many places globally. Whilst VP finds its origins in North America (van Slyke and Newman, 2006), Wu (2018) succinctly summarises how the research has spread to for example China (Jing & Gong, 2012), Australia (Scaife, 2008), India (Alam, 2010), Malaysia (Zakaria et al., 2013) and Europe (Buckland et al., 2013). The same goes for II research, which has outgrown its
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initial North American focus and now enjoys academic focus in, and contributions from a global populace (Clarkin & Cangioni, 2016). Next to North American research, scholars come from and/or focus on a variety of places in South Africa (Viviers, Ractliffe & Hand, 2011), Australia (Addis et al. 2013), Asia and Europe (Agrawal & Hockerts, 2019).
Scholars from a heterogenous group of disciplines form the current body of literature on II and VP. Literature on II has emerged from the academic corners of sociology (Chiapello & Godefroy, 2017; Quinn & Munir, 2017), public policy and administration (Wood &
Hagerman, 2010; Lehner & Nicholls, 2014), economic geography (Langley, 2020), non profit and voluntary management studies (Pepin, 2005; Van Slyke & Newman, 2006; Glänzel & Scheuerle, 2016), social responsibility (Roundy, Holzhauer & Dai, 2017), sustainability (Rizzi, Pellegrini & Battaglia, 2018), social entrepreneurship (Ormiston & Seymour, 2011; Moore, Westley & Brodhead, 2012; Tjornbo & Westley, 2012), strategic entrepreneurship (Brown, 2006; Short, Moss & Lumpkin, 2009; Castellas, Ormiston & Findlay, 2018), community investment (Bugg-Levine & Goldstein, 2009), business ethics (Scholtens, 2006; Höchstädter & Scheck, 2015; Scholtens, & Sievänen, 2013), wealth management and private equity (Choi, Gray & Carrol, 2008; Rath & Schuyt, 2014; Rajan, Koserwal & Keerthana, 2014; Cooper et al., 2016), and of course sustainable and social finance (Saltuk, Bouri & Leung, 2011; Jackson, 2013; Evans, 2013; Hebbt, 2013; Wood, Thornley & Grace, 2013; Liket, 2014; Spiess-Knafl & Aschari-Lincoln, 2015; Daggers & Nicholls, 2016; Tekula & Shah, 2016; Rizzello, Migliazza, Carè & Trotta 2016; Weber, 2016; Agrawal & Hockerts, 2019).
Similarly, those studying VP represent a wide variation of disciplines. Authors represent the academic fields of sociology (Frumkin, 2003), public policy and administration (Frumkin, 2006; Scott, 2009), political science (Grossman, Appleby & Reimers, 2013), social science (Bishop and Green, 2010), non profit and voluntary management studies (Pepin,
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2005; Van Slyke & Newman, 2006), social entrepreneurship (Letts, Ryan & Grossman,1997; John, 2006; Hehenberger & Alemany, 2017), entrepreneurial finance (Gordon, 2014),
business ethics (Laufer, 2003), social and sustainable finance (Brest & Born, 2013; Spiess-Knafl & Aschari-Lincoln, 2015; Onishi, 2016; Roundy, Holzhauer & Dai, 2017; Agrawal & Hockerts, 2019). What stands out is that neither the research on II nor on VP is dominated by academics from the (pure) financial economic field.
An incongruent patchwork of research foci make up the academic fields of II and VP (Gordon, 2014; Höchstädter & Scheck, 2015; Clarkin & Cangioni, 2016; Wu, 2018; Agrawal & Hockerts, 2019). Clarkin and Cangioni (2016) define three main features of the II literature:
1) the attention to metrics (e.g. impact measurement), 2) a wide variety of case studies (e.g. ‘best practices’),
3) a focus on the legal perspectives (e.g. philosophising the legal infrastructure that could advance the field).
For VP, Wu (2018) demarcates three questions that occupy the academic debate: 1) the application of financial market techniques to the social domain,
2) the commonalities and differences between VP and ‘TP’(Traditional Philanthropy),
3) whether the shift from ‘giving’ to ‘investing’ represents a true and fundamental change in mindset in the field.
The first points proposed, metrics (Clarkin & Cangioni, 2016) and the application of financial techniques to the social domain (Wu, 2018), play a central role in the critiques to II and VP.
2.3.3 Methods used to study II and VP
Being still developing fields, the academic debate has been dominated by research employing qualitative methods, predominantly based on case studies (Wu, 2018; Agrawal & Hockerts, 2019). In II, the field is moving from broad and exploratory studies to theory based studies (Agrawal & Hockerts, 2019). Since 2014 the first steps towards quantitative theory testing are taken (ibid.). An example is the study by Apostolakis, Kraanen and Van Dijk
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(2016), who apply the measurement scale of ‘willingness to pay’ (e.g. the maximum price a consumer is willing to pay) from the field of crowdfunding to the field of II. In VP, Wu (2018) asserts a similar move towards theory testing, beginning to demonstrate the effectivity of VP to social problem solving.
The case studies in the academic fields of II and VP are without exception studies of cases that self-identify as either II or VP, or both. The studies that do concern II and VP without operating under these labels, concern hypothetical-theoretical explorations and not empirical studies. An example is Alam (2010), who proposes a model for interpreting current Islamic philanthropy through the lens of Venture Philanthropy. This is the gap in the literature I aim to fill.
2.3.4 Focussing on impact in both II and VP
In this research I will depend on the academic knowledge concerning both II and VP, and will thus assess the academic field of both. I will do so for two reasons. The first is that, similar with the spectrum view in practice, the academic debate has far from concluded on a definitive distinction between the two. This can be seen in the boundary blurring work of authors like Chiapello and Godefroy (2017) and Langley (2020). According to Agrawal and Hockerts (2019), II and VP share at least three commonalities:
1) engagement with investees,
2) an emphasis on accountability of investees,
3) the aim to maximise social and/or environmental impact.
The only difference Agrawal and Hockerts (2019) attest, is in the aim for financial returns on investment, that II has and VP does not.
The second reason for me to employ knowledge from both fields is that a focus on the distinction it would be an impediment. The key issue in this research is not what differentiates the two fields but what unites them: the aim for impact. Since impact is the core of this
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Together they provide a solid academic context in which to make a conceptualisation of impact – and vice versa, this study aims to contribute to both fields.
In following sections I will thus examine sources from both academic fields
aggregated, and review the current knowledge and debate on ‘impact’. I will delve further into the predominant theories, views and concepts proposed by scholars that take part in the debate concerning ‘impact’.
2.4 The academic research on Impact 2.4.1 Definitions of Impact
Whilst the academic body concerning this subject is growing, a clear conceptualisation of impact is still lacking (Liket, 2014). Although achieving impact is accepted as a goal by the scholars in the academic fields, definitions of it vary in their structure and content, find
Höchstädter and Scheck (2015) in their literature reviews. Definitions of impact are
numerous; to paint an image of the field several definitional variations are listed – they vary in their scope, structure and the extent to which they are explicit.
Some definitions are more or less all-encompassing, such as the one offered by Maas: “Impact is defined as the portion of the total outcome that happened as a result of the activity
of an organisation, above and beyond what would have happened anyway” (Maas, 2009, p.7, adapted from Clark et al., 2004). This view differentiates outputs, outcomes and intentions from impact (Maas, 2009). ‘Impact’ relates to the users and other stakeholders, and ‘output’ and ‘outcome’ relate to those providing the service, product or activity (ibid.). Broad as it is, this way of defining impact does not tell anything about the content of impact.
Others prefer the tripartite definition by Brest and Born, who propose nonmonetary impact, enterprise impact and investment impact as the parameters that make up impact (2013). The first pertains the nonmonetary contributions that investors can make to an enterprise’s social value. The second, enterprise impact, is the social value of the goods and
22 services the enterprise provides (Brest & Born, 2013). The last concerns the obvious impact of the investment by an investor, to the social value of an enterprise (ibid.).
Sometimes, the meaning of impact is only implied. For example when the term ‘impact investing’ is defined as opposed to ‘regular’ investing, one could distil from this
difference a definition. Or impact is implied by means of creating a vast system of metrics and measurement methods, that in effect should aggregate to an immense definition (Hehenberger, Harling & Scholten, 2015). In Appendix I an example of such an impact measurement
dashboard is given.
2.4.2 Methods of measuring impact
Several methods to measure impact exist. Academics and approaches are gauged on different points of focus. The vary on aspects such as the level of analysis, topicality, quantitative vs. qualitative approach and the timing of measurement.
A quantitative and content focussed approach is the measurement method by the IRIS+, seen in the dashboard in Appendix I. This IRIS+ a dashboard by the GIIN (Global Impact Investing Network) is predominant in practice. The example dashboard is focused on the topic ‘Reducing Gender Inequities in Governance, Leadership, and Ownership’. Often, in these content-dependent measurement methods, the Sustainable Development Goals (SDG’s) provide guidance. The SDG’s are one of the ways investors can categorise investments and
can function as a source of inspiration for new ones. Often it is up to the user to select the metrics that fit the context and goal of measurement. Practitioner protagonists of the metrics and measurement of impact investing are McKinsey, JP Morgan, the GIIN and the earlier mentioned EVPA and Rockefeller foundation.
Placing the focus on the moment of measuring, Reeder and Colantonio (2013), make a ‘before’ and ‘after’ distinction. Applicable both in practice and academics, dependent on the
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activity, is done to predict social and economic results (Reeder & Colantonio, 2013, p.8). Conversely ex post measurement is done after the act, monitoring and managing against targeted objectives (ibid.).
Adopting a dual-level of analysis, Adcock and Collier (2001) propose two subtypes of impact: mission related impact and public good impact. The first is to be measured in relation to the goals that are specified by an actor (Adcock & Collier, 2001; Liket, 2014). The latter refers to a more abstract level, and measuring it is more heavily dependent on the judgement of those conducting the research (Adcock & Collier, 2001; Liket, 2014).
Using logic as the main method, the Theory of Change is one of the most prominent theories guiding both practice and academics. Although originating from the field of
evaluations (i.e. ex post measurement), Theory of Change models can be applied both ex ante and ex post (Jackson, 2013; Mayne, 2017). It concerns the making of a model that draws up the logic, causal linkages and outcomes of an endeavour (Jackson, 2013). It thus makes explicit the mechanism of how the investments should lead or have lead to the intended consequences. In the model, logic is used to make an estimation of the underlying causal pathways (from investment to impact) and as such also provides a roadmap for empirically testing the assumptions about these causal pathways. Figure 3 shows an example of a Theory of Change model as applied by the Rockefeller Foundation in the evaluation of the Impact Investing Initiative 2011-2012 (Jackson & Harji, 2012b).
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25 2.4.3 The academic call to define and measure impact
Although the use of the term impact has increased, authors such as Liket (2014), Adcock and Collier (2001), Clark et al. ( 2012), Sandberg et al. (2009), Höchstädter and Scheck (2015) consider the current conceptualisation unclear and call for a clearer definition. This call is congruent with the call for clarity concerning the overarching definitions of II and VP. In the academic realm, terminological clarity can facilitate precise discussions and the development of theories on impact (Höchstädter & Scheck, 2015, p.451). Sandberg et al. (2009) and Clark et al. (2012) argue a solid definition can facilitate both the growth of the market and the mainstream investors understanding of it. In research, the lack of clarity on what impact is (and what it is not) is considered a threat to measurement validity (Adcock & Collier, 2001; Liket, 2014).
In similar vein, there is an academic push towards the measurement of impact. Not necessarily preferring one measurement method over another, authors such as O’Donohoe et al. (2010) argue that in principle impact should be measured (p.454). Clarkin and Cangioni (2015) in their review literature from academics and practice and Höchstädter and Scheck (2015) in their academic review, identify this as a core topic in current debate. I list four main arguments which are presented in favour of impact measurement.
The first argument concerns ‘Impact Washing’ which is presented by authors such as Harji and Jackson (2012a) and Laufer (2003). They argue that a too loose determination and lack of measurement-methods may lead to ‘impact washing’ (Harji & Jackson 2012a, p. 41). In this research ‘impact washing’ will be used to signify all the sorts of ‘social washing’, ‘pink washing’, ‘greenwashing’ and related practices. They can be understood as the efforts of
companies or organisations to manipulate their reputations in such a way that malpractices are hidden, the true nature of problems is obscured and allegations can be deflected (Laufer, 2003). Even stronger, an image of ‘doing good’ is carefully established by PR departments
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and charitable acts are flaunted. All the while the actual and major efforts of companies or organisations can remain unchanged, sheltered from public inquiry (ibid.). This tactic can be used to expand or continue immoral activities or just to avoid having to actively improve those processes that could be improved upon from the social, environmental or moral eye. This is why definitions that do not go beyond the intention of impact may be risky, as they provide a convenient smokescreen for those that aim to keep the details of their actions undisclosed.
Second, Maas (2009) gives another reason why impact should be measured. She argues that beyond the intended consequences of investments, evaluation must be used to give insight into the unintended consequences (Maas, 2009). For myriad reasons, investments and programmes with all the best intentions might end up doing harm – maybe even more harm than good. Thus, it is useful to enhance ex post measurement by taking into account
unforeseen additional impact, both negative and positive. This appreciation of the unintended is contested by scholars such as Viviers et al. (2011), Addis et al. (2013) and Boerner (2012). Viviers et al. (2011) argue that impact is “only authentic when the social and/or
environmental benefits are intentional” (p. 214).
Third, the production of metricised data might have positive effects on the invested-in social organisations (Mulgan, 2015). In line with the reasoning of Theory of Change, making objectives explicit and monitoring them, should help to organisations work effectively and efficiently, Mulgan argues. What Mulgan praises as a ‘focus on what is scalable’ (p.61), is criticised by Langley (2020) as a competitive process that fundamentally transforms social organisations. This critique by Langley (2020) will be elaborated on shortly.
Fourth, Clarkin and Cangioni (2015) find that in the practitioner field, investees who aim for metrics and measurement are motivated by the attraction of funding. Providing a proof of success should unlock new financial potential, reason investees. This reasoning
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might well be right; the lack of investments with track record was identified as the foremost challenge in a GIIN-survey amongst 125 institutional investors (managing a combined budget of 46 billion USD in II) (Saltuk & El Idrissi 2014).
2.4.4 Critiques of defining & measuring impact
Despite the aforementioned advantages and motivations for defining and measuring impact, critical notes are in order. For several reasons the defining and measuring of impact is not unequivocal and actors should be mindful about the consequences of doing so.
In general, academics and practitioners alike should be wary of aiming for an airtight definition that fails to maintain connection with the complex reality. Rigid or catch-all definitions are vulnerable to beneficiaries reporting socially desirable outcomes and facilitate impact washing on the side of investors.
Underlying is the profound question that concerns the act of standardising impact in itself:
Even more fundamental is the clash of visions as to whether a more standardised and formalised impact investing sector is feasible and desirable. For although it would match the modus operandi of investment banks, many within what Scott (2013) terms the ‘radical debate within social, environmental and economic justice circles’ have
concerns that too much of society and economics is dominated by the interests of precisely such institutions. The choice of metrics can influence and be influenced by power structures. (Reeder & Colantonio, 2013, p.21)
De facto, Reeder and Colantonio (2013) argue that aiming to standardise and metricise impact is to ask of the social and environmental domain to adjust itself to the ways of economics. The critique is that this measurement-minded modus operandi is an essential instrument of the system that produces precisely those issues the social initiatives tackle. From that reasoning stems the question whether, if one aims to use capital to support the social and environmental domain, who should adapt to whom? Had it not better be the investor that crosses the bridge
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to other ways of doing, taking along their resources, than demanding of the beneficiaries to adhere to the economic principles and discourse?
Another cornerstone of defining practices and its repercussions is addressed in Theory of Performativity. Those theories are nascent from John Austin’s performative utterances, “in which to say something is to do something; or in which by saying something we are doing something” (Austin, 1962, p. 12).
Theories of performativity of economics pertain that ‘economics’ is not a process of
description of a self-contained existing ‘economy’ (MacKenzie & Millo 2003, p. 108). Rather, this process shapes and creates the economy through describing it (ibid.). By
extension, the valuation of what ‘good’ and ‘bad’ investments are, make up a mould in which
social and environmental challenges and their solutions should fit (Barman, 2015, p.11). In essence, whether challenges and solutions fit this ‘mould’ determines if they are ‘worthy’ of investment (Barman, 2015, p.11). In other words, the definition of what impact is, can be expected to result in actors gravitating towards that definition in their actions.
Taking performativity into account, one can still wish to define and measure impact. A balance can be struck by taking a look at Wittgenstein, whose work is closely related to that of Austin and might have even influenced him (Harris & Unnsteinsson, 2018). Wittgenstein, concerning language and meaning, stated that “the meaning of a word is its use in the language" (1953). Wittgenstein calls for a ‘don’t think, but look’-approach to understanding
meaning (1953). I aim to indeed do so; by using of the Grounded Theory approach I aim an empirically based conceptualisation of ‘impact’.
2.5 Critiques to II and VP as a whole
The fields of II and VP are subject to criticism, coming from academics and
practitioners alike. The previously discussed impact washing is one of those issues raised by concerned parties. Impact washing concerns the doing harm or minimal good, whilst giving the impression of doing good.
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Related to the impact washing critique, are concerns about the subjective and arbitrary nature of investments in VP and II (Brest & Born, 2013; Roundy et al., 2017). Whilst this subjectivity might not be conscious, it is inherent to impact investing (Brest & Born, 2013). Critical sounds concerning this subjectivity are also heard in the field of ‘regular’
philanthropy (De Goede et al, 2018). Translating this criticism to philanthrocapitalism, De Goede et al. bring to light another far-reaching consequence of II and VP; influence. The influence that investors have through their financing is sizeable and challenges the political equality of citizens (ibid.). They suggest that this is, de facto, ‘voting with your money’ (Christiano, 2012; De Goede et al., 2018).
Fundamental questions are posed by scholars like Edwards (2010), Barman (2016) and Trommel (2018). They pose the question whether the merging of philanthropy with the
principles of business, does not probe the very core principle of philanthropy? Where does this intermingling leave the social domain, if it is no longer distinguished by the actions with positive intentions and its aim towards beneficial consequences for the wellbeing of others, they ask (Barman, 2016, pp.7-8).
Just as fundamental is the critique by Chiapello (2015) and Langley (2020), a criticism that is in line with that of Reeder and Colantonio (2013). They argue the marketisation that social finance entails is transformative of social organisations and forces them to embrace social entrepreneurialism (Langley, 2020). Chiapello (2015) summarises:
Social entrepreneurship is based on the premise that what social activities are lacking to achieve real efficiency is genuine entrepreneurs who will manage their activities with the same verve and the same methods as entrepreneurs in the for-profit world. (p.26)
30 2.6 Democratisation of Finance
Whereas social finance pertains the object that is financed, democratisation of finance pertains the manner of financing. Academics in this field address the deepening and
broadening of access to the capital market by normal people and households with moderate income (Erturk et al., 2007, p. 554). Emphasis is on the normal, e.g. non-elite actors or investors.
It goes beyond “Privatized Keynesianism” (Crouch, 2009) of providing access to financial devices such as pension or mortgages. Instead, it appeals to the ideological
foundation of democratisation of finance by giving ‘normal’ citizen influence over the money of a bank. The exact structure of the Maatschappelijke Agenda will be elaborated on in the case description, but in terms of democratisation of finance it can be defined in the following way. The Maatschappelijke Agenda is a project in which the ‘Cooperative Dividend’ of the
Rabobank Leiden Katwijk is invested through a participatory community-based Members Council, whilst adhering to II and VP aims.
2.7 Conclusion and theory-informed expectations
In this chapter I have given an overview of the emergence of the field of II and VP, as a part of social finance. II and VP were defined, noting that these concepts are still contested in the academic debate. Establishing boundaries between the two, the venture capitalist approach to investing for good can be dichotomised in II as ‘impact first’ versus and VP as ‘impact only’. Yet, in line with the boundary blurring in both the academic and practitioner
field, I chose to focus on both fields and what unites them: the aim for impact (Agrawal & Hockerts, 2019).
Before moving to assess impact, I reviewed the academic bodies studying II and VP as a whole. For both fields, the early phases of research are demarcated by explorative research (Gordon, 2014; Agrawal & Hockerts, 2019). Currently, the fields are moving towards theory testing and development. I elaborated on the spread of both academic fields; geographically,
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discipline-wise and in topics of research. Noteworthy was that the academic fields are not dominated by financial economic academics. What also stands out is in both fields there is much debate concerning the whether and how of measuring and metricising impact (Clarkin & Cangioni, 2016; Wu, 2018). I also assessed the predominant methods of studying II and VP, finding a gap in the case study-rich field. The case studies in II and VP research concern cases which are fully aware of their practices falling under either the label II or VP, or both. In my case, I will investigate the concept of ‘impact’ as conceived by actors that are hardly knowledgeable about the (academic) fields of II and VP. This research fills the gap by studying the concept of ‘impact’ by those that practice VP, but are not aware of doing so.
After reviewing the academic fields of II and VP, this chapter zoomed in on precisely that: the conceptualisation of impact. Despite much efforts, what impact is, remains unclear in the current debate. This makes for a call from the academic field to an agreed upon clear conceptualisation of impact (Adcock & Collier, 2001; Sandberg et al., 2009; Clark et al., 2012; Liket, 2014; Höchstädter & Scheck, 2015).
A variation of ways to define and measure impact exists, from all-encompassing definitions (Maas, 2009) to intricate and detailed dashboards (IRIS+, see Appendix I). Another predominant measurement method of impact is the Theory of Change (Jackson, 2013; Mayne, 2017). Proponents of defining and measuring argue it develops the academic field (Mulgan, 2015), wards off impact washing (Laufer, 2003; Harji & Jackson, 2012a) and aids in the achieving of impact (Jackson, 2013). Additionally, Maas (2009) argues that the measurement of impact has the important function of giving insight into the unintended impact of invested-in projects. Opponents and critics argue defining and measuring impact is not a straight-forward endeavour. The reasoning is that it is adjacent with the very fundaments of social finance (Reeder & Colantonio, 2013). Additionally, the theory of performativity of
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economy proposes that the defining and measuring of impact can have a shaping effect on the economy (MacKenzie & Millo 2003, p. 108).
The aforementioned impact washing is one of the critiques to II and VP as a whole. Other criticism to the field concerns itself with the innate arbitrary nature of investments in II and VP (Brest & Born, 2013; Roundy, Holzhauer & Dai, 2017). Similar with opponents to measuring and defining, critics of the whole field such as Edwards (2010), Barman (2016) and Trommel (2018) worry about a hollowing out of philanthropy as a result of the venture capitalist approach.
Based on this theoretical framework, there are four expectations I have of the case study. First, as the academic debate struggling with the definition of impact, I do not expect the respondents will come up with an exhaustive conceptualisation of impact. Second, when asked to define impact – I expect interviewees to overemphasise the social and ‘soft’ aspects of impact. I do not expect technical formulations or metricised approaches. This expectation is based on the fact that the MA Workgroup are selected to be part of the Members Council due to their local involvement – not based on talent or expertise in (metricised) evaluations. Third, stemming from that local involvement, I expect the MA Workgroup members to feel responsible for achieving impact with the MA and the projects therein. I believe this might well translate to a focus on the accountability of the project leaders. Just as Councilmembers are held accountable by the community, they might want to hold project leaders accountable to the MA programme. According to Agrawal and Hockerts (2019), accountability is one of three defining factors shared by the practice of II and VP. Fourth, I expect the MA
Workgroup members to reflect on the role that they have in the Leiden community. I expect them to contemplate that the MA deeming a project fruitful for achieving social impact, will serve as a sort of ‘stamp of approval’. If this would occur, I would interpret this as a
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respondents acknowledging the shaping effect that they might have on their surroundings; they decide which projects are to be considered (possibly) impactful.
34 3. Methodological framework
3.1 Introduction
In this chapter I will explain the qualitative single case study approach, based on the method of Grounded Theory, and present the methods for data collection and analysis. These choices will be justified and I will reflect on the reliability and validity of this research design. At the end of this chapter it should be clear how I collected and analysed empirical evidence that are the building blocks for answering the RQ: ‘How is ‘impact’ conceptualised by
members of the workgroup Maatschappelijke Agenda of the Rabobank Leiden Katwijk?’ 3.2 Research design
In this thesis I aim to explore the meaning of impact in the context of social finance, specifically II and VP. I aim to contribute to academic debate conceptualising impact. Thus, to be of the most value to the field, a qualitative research design was selected. I chose a single-case study design of the MA of the Members Council of the Rabobank Leiden Katwijk in the Netherlands. A single case analysis allows to take into account many of the important variables within the case, such as the cooperative character of the bank. In keeping with a single case study design, I chose to conduct qualitative interviews. Existing theory served to guide the data collection and provided a basis for asking the right questions. I coded the interviews by use the Grounded Theory approach, aiming to develop theory firmly ‘grounded’ in the empirical data (Saldaña, 2015).
This way I ensured that this research would provide a valuable contribution to the field aiming to conceptualise impact. Thus, informed by the academic body of knowledge, I aim to contribute to the making of theory, rather than to test predefined hypothesis.
3.3 Case selection
Focussing on generating theory rather than testing it over multiple cases, I needed to collect data in much detail. Thus, selecting a case that I had deep and complete access to seemed most suitable.
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The MA of the Members Council of the Rabobank Leiden Katwijk fits well into Venture Philanthropy, even though it does not define itself as such. The cooperative character of the Rabobank creates a predisposition towards social finance, being locally rooted in solidarity with its surroundings.
A brief look into the Rabobanks history explains its local focus. At the end of the 19th century agricultural crisis wreaked havoc and farmers in the Netherlands suffered from poverty (Groeneveld, 2016; Mooij, 2018). As a response, the first cooperative agricultural banks (in Dutch: Boerenleenbanken) were founded, modelled after the Raiffeisen-system in Germany (Groeneveld, 2016). They offered credit to small farmers and tenants; the traditional urban financial institutions would not provide their services to them (ibid.). The cooperatives were managed in their own right, were bound to a certain geographical area and relied on solidarity between members – they were all accountable. Members owned the capital and reserves of the bank but rather than redistributing them, they were reserved for the future (ibid.). In 1898 two central cooperative organisations emerged: the Cooperative Central Raiffeisen Bank (CCRB) and Cooperative Central Agricultural Bank (Boerenleenbank) (CCB). Where members would elect the directory and supervisory board at the local level, the local banks elected those boards at the central level (ibid.). Surviving the crises of the 20’s and 30’s, these two organisations grew steadily over the decades. Government regulations
after the Second World War demanded Dutch families to have a bank account, an example of steep growth in customer numbers (Mooij, 2018). Along the way, the cooperative agricultural banks broadened their scope and were not exclusively focussed on the agricultural sector anymore (ibid.). In December 1972 the CCRB and CCB merged into the ‘Coöperatieve Centrale Raiffeisen-Boerenleenbank’, in short: Rabobank (ibid.).
Whilst a lot has changed since then, the core principles of cooperative banks still apply to the Rabobank today: solidarity in the context of a local community (Andrikopoulos, 2019).
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This close relation with the local community is maintained via the Members Council. The 20.000 members of the Rabobank Leiden Katwijk are represented in the local Members Council by 23 councilmembers (Leiden-Katwijk, n.d.). Councilmembers play an advising and co-deciding role in policies of the Rabobank Leiden Katwijk and safeguard the social and economic interests of the community in the banks plans (ibid.). They aid the bank in being firmly rooted locally, guided by the idea that the if the local area does well (economically) – the bank will do well. Together, the members of the council should make up a representative sample of the population of the local banks working area. As with most representative bodies, achieving this goal is a continuous but not yet truly successful endeavour.
Being a councilmember is voluntary and uncompensated, joining requires fulfilling the application and selection procedure. Part of this process is a review by the members selection committee and an informal interview with the Director. After consent of the whole Members Council, new members join. It is expected of councilmembers to volunteer in one or more of the council’s fora, such as the Maatschappelijke Agenda workgroup. Expressed interest in a
workgroup is cross-referenced with the existing members in a workgroup, as to ensure a diversity of perspectives and knowledge.
The cooperative governance gives great influence to the Members Council, especially regarding the MA. With the MA, Councilmembers aim to achieve social and environmental impact in the Leiden region (“Beleid MA November 2019”, 2019). The Maatschappelijke Agenda (MA) programme is led by the workgroup MA, which has nine members (six council members, two employees and the Director). The MA aims for impact on four themes: vitality, sustainable housing, financial empowerment and local economy (ibid.).
With the MA the Members Council aims to achieve impact on the four themes, through organising Maatschappelijke Café’s where through co-creation project plans are
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of funding, co-creation and investor-investee engagement is exemplary for Venture
Philanthropy (Gordon, 2014; Agrawal & Hockerts, 2019). Since its start in 2018, 11 projects have received funding and a handful of projects has been declined (“Beleid MA November 2019”, 2019). This estimation is due to the informal character of the MA, which makes that
some projects which never officially applied could be regarded as declined as well. Most projects received the full €20.000 in funding, apart from the ones that applied for less (ibid.).
The members of the MA Workgroup steer towards impact and decide whether projects are eligible for funding, thus making for excellent subjects of study in the scope of social finance, II and VP. The MA, unknowingly, is a textbook example of the democratisation of finance. The reason why this case is especially suitable for investigating impact, is partially because of this democratic foundation:
Cooperative financial institutions include organizations such as cooperative banks, credit unions and building societies. They are based on the principle of solidarity in the context of a local community. (…) Community members also elect the
management of cooperative financial institutions. If these financial institutions have, in tandem with profit from financial services, a fundamental orientation to solidarity among the members of the local community and to its economic development, they constitute mechanisms of social finance. (Andrikopoulos, 2019, pp. 4-5)
All the individual involved actors have their own idea about what impact is, and all their views are relevant and valuable in the decision making. Without having a detailed predefined idea of what impact is, the programme steers towards achieving it. The
Councilmembers themselves would never use the word ‘social finance’ to describe the MA, let alone jargon such as Impact Investing or Venture Philanthropy. Yet, its structure is the embodiment of using a venture capitalist approach to philanthropy (Pepin, 2005).
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In sum, the democratic and social premise of the MA, its investee engagement and its aim to achieve impact through venture philanthropy, make it an excellent case for researching impact.
3.4 Data collection 3.4.1 Getting access
As a member of the Members Council, I was confident this unlimited access would be provided. My thesis advisor and I discussed the idea and came to the conclusion that knowing the respondents would not have to impede an academically sound research. The possible implications of my membership, I will review this in the validity and reliability section.
The director of the Rabobank Leiden Katwijk promised full collaboration to the research, as well as all other MA workgroup members. The two workgroup members that are employed by the bank were so kind as to provide me with all documents since the
establishment of the MA programme. I was able to prevent the employees from being biased about what I was investigating before we went into the interviews and I was secured that their selection did not influence which sources I received. These documents would serve to
triangulate the interviews.
3.4.2 Interviewees
I interviewed all current members of the MA workgroup; amongst which are Council Members, employees of the bank and its director. Next to the current members, I interviewed one person that is not active in the MA any longer, which makes a total of nine interviews. Additionally I interviewed a person who holds a high position at the Rabobank Netherlands who provided more in-depth background and contextual information on the Rabobank as a cooperative bank. As this person is not intimately familiar with the MA, their views were not analysed in the same manner. They will be left out in further descriptions.
I will describe the body of respondents as an aggregated group, including the former member, the director and employees. The MA workgroup representatives consist out of six
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men and three women. Amongst them are entrepreneurs, university students and those
employed in the (semi)public sector. In age they vary from just under thirty to well over sixty and concerning education, all levels are present. Estimated is that members of the MA
workgroup earn above to far above average. As far as I know, at least two of the MA
workgroup members identify as non-heterosexual and all but one are white. As far as I know all respondents identify with the Dutch nationality. At least one of the respondents is
Christian. It is unknown whether any other respondents are religious. Although a diverse members council and thus workgroup is the aim, this is not fully achieved yet.
All persons involved with the MA were asked to participate in the interviews; they all agreed. This is important to note, as it means that the results are not skewed by a nonresponse bias (Bleich & Pekkanen, 2013). On the representativeness of the sample I will also reflect in the reliability and validity section.
3.4.3 Informed consent
Before the interviews I presented the respondents with the consent form, which explained the procedure of the interview. It stated that the interviews would be recorded, how this data and their personal information would be stored and who has access to the
information. I saved the interviews and transcripts on my laptop and made backups on a USB stick. Additionally, it explained that the interview would be anonymised and that they had the right to withdraw consent at any point. The consent form was signed by the respondents and at the start of the interview I asked whether they had any questions about it. There were no questions. I based the consent form on that of the School of Geosciences of the University of Edinburgh (2013). The consent form can be found in the Appendix III.
3.4.4 Interview technique
I chose to conduct the interviews in a semi-structured manner, starting off with a predetermined stet of questions but keeping plenty of room for follow-up questions.
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Especially when respondents referred to examples, I made an effort to find out what they meant precisely with those examples.
The interviews were all recorded via a dictaphone and in most cases also with the in-app video recordings. No interviews were conducted in person, all of them occurred either via phone or video call. For the videocalls I used either Zoom or Microsoft Teams, depending on the preference of the respondent. Given the circumstances of writing this thesis, there was no possibility to conduct them in a face-to-face setting.
The interviews lasted between 30 and 90 minutes. They were explicitly on the record and anonymised. During the interviews I hardly took any notes, apart from one or two things I wanted to come back to later in the interviews. Instead I focused myself on listening
attentively to the respondents and looking them ‘in the eye’ through the webcam.
3.4.5 Interview questions
For the interviews I drafted a set of questions, which were centred around the MA, its projects and impact. The questions were informed by current theories and designed like a funnel, moving from general to specific. From current theory I derived three elements that I incorporated in the questions:
1) Bases on Adcock and Collier’s (2001) mission-related impact and public value impact, I took care to distinguish between the MA as a whole and the individual projects in my questions.
2) Based on the ex ante and ex post distinction that is made in current theory, I incorporated questions that differed in a ex ante or ex post approach.
3) Testing the water concerning the measurement of impact, a topic of debate in academics, I asked respondents to describe how to report on the results of the MA. This indeed sparked the respondents to consider the measuring of impact and whether and how it should be done.
