Program Evaluation & Analysis

Once you have developed your community investment program, how do you know it’s working? Will local people be better off as a result of your effort – or will it become another case study in the long history of well-intentioned failures that litter the textbooks on economic development? And how will you determine whether these activities meet generally accepted standards for similar programs around the world?

For the past 50 years, major development institutions – private foundations, charities, and multilateral organizations– have experimented with and refined a range of methodologies to evaluate and improve community-level initiatives. This body of knowledge is extensive, technical and complex. From time to time, it has also undergone important paradigm shifts that significantly impact institutional priorities and investment strategies – for example, “integrated rural development” has shifted to “sustainable development” over the past ten years or so.

Oil and gas companies are just beginning to realize that their programs will often be judged by the same standards as other development efforts – and that they succeed or fail for the same reasons. Yet with rare exceptions, they do not have the specialized knowledge and technical expertise to evaluate their programs in order to meet the expectations of development professionals who will decide whether they are a trustworthy partner for international organizations and financial institutions.

The Terra Group specializes in developing practical approaches to evaluating community projects and investment portfolios. The first step lies in identifying appropriate benchmarks and collecting baseline data before your project begins. In theory, such data might be assembled as part of your environmental impact assessment – if socioeconomic studies are correctly designed and include extensive community participation. Not only will the data help identify high priority needs and investment opportunities, it will be necessary in your later evaluation of whether or not your community investments are having a measurable positive impact.

Each project in the community investment portfolio should have a clearly established set of critical success factors (sustainability, replicability, equity, greatest benefit to greatest number, etc.) before it is approved. These factors will be among the measures used to evaluate projects after completion along with adherence to schedule, cost, etc.

More informal monitoring of community projects should involve local beneficiaries and subject matter experts, as well as company representatives. A practical effort should be made to address issues before they become problems (a contractor is delayed, the project is not meeting its objectives due to low participation, etc.)

Finally, every company (or business unit, if applicable) should periodically (every three to five years) evaluate its entire community investment portfolio to assure that its funds are being allocated consistent with stakeholder expectations, projects are having the maximum benefit to recipients, a development niche is being filled, etc. This effort should be led by independent subject matter experts and should involve a representative sample of project beneficiaries, local NGOs (if appropriate) and internal stakeholders.

TG has recently developed project monitoring and evaluation tools for these clients:

Chevron (Angola, Benin, Ghana, Mexico, Nigeria, Togo)

EnCana Corporation (Ecuador)

Occidental Oil and Gas Corporation (Worldwide)