Applying Weighted Indices in Sustainable Funding Decisions within the Social Economy – The Case of Jamaica

• In Event: Donations and Sustainable Funding

Abstract

There is urgency to develop and present tools which can support objective decision-making within societies where there are high levels of distrust. The objective of the paper is to, through an applied process, evidenced by empirical work; advance such a tool to be used in the Jamaican context.
There has been an increase in efforts to develop indices and scales to measure various aspects of performance of Social Enterprises over the past 20 years (Arena et.al, 2015; Fioramanti and Kononykhina, 2015). This trend has become popular among other third sector actors such as NGOs ho have begun to look at issues such as Financial Vulnerability (Tevel et.al, 2015) and Stakeholder Culture and Salience (Chen, 2015). What has been apparent however is that many of the cases are in developed countries such as Italy (Arena et.al, 2015) and Germany (Helmig et.al, 2015) or use existing datasets in order to develop panel data to examine corruption and NGO sustainability in Post-Communist countries (Epperly and Lee, 2015). When it did look at a developing country, qualitative methods, in the form of Focus Group Discussions was the means of collecting the data (Panda, 2016).
A total of 163 third sector organisations were examined in the Kingston Metropolitan Area (KMA). A composite index was developed for social organizations based on four (4) categories: 1) Organizations’ Mission; 2) Social Value Creation; 3) Economic Value Creation; 4) Organizations’ Capacity.
The average index score was reported to be 1.3 with the most frequently observed score being 1.4. A total of 66 institutions (40.5 per cent) reported a score above the average index level. The minimum score for the index was reported to be -0.3. The index provides an objective and quantitative measure of the capacity development of social organisations, which can be adopted and used by many developing countries (Knife 2016). It provides as a baseline, which funding agencies can use to guide the offering support to social organization. The index also provides a baseline measure for targeted intervention through its sub-indices. Finally the index gives meaningful insight to policy makers and International Donor Partners about organizational capacity to absorb resources effectively, and therefore their social value creation and SROI. It also presents an empirically objective way of determining funding allocation in a context of public perception of high levels of corruption in how these decisions are arrived at.
Keywords: Third Sector, Social Economy, Social Enterprises, Weighted Index, Developing Countries.

Authors

• Edward Dixon, University of London

• Kadamawe Knife, The University of the West Indies

• Michael Marshall, Glasgow Caledonian University