Practical impact 101: What is it and why is it important?
In this article we will explore some fundamentals about impact, why it’s important and how to get started measuring your own impact.
What is impact?
At its most simple, social impact is the positive change we want to create for our beneficiaries. This includes the effect or influence that our organisation has on the individuals, society, or the environment, as well as communities of interest or communities of geography.
Typical examples of impact include improving access to education or healthcare, reducing poverty, increasing employment opportunities, addressing environmental issues, promoting social justice and equality. Changes can be objective (also called absolute or quantitative) such as improved health outcomes or income, or subjective (relative or qualitative) such as changes to confidence, beliefs, or behaviours.
The goal of measuring social impact is to determine the extent to which an action or initiative has made a difference.
Why is impact measurement important for charities and social enterprises?
Impact measurement is a useful approach that can help charities to communicate their impact, engage with beneficiaries and funders, inform public policy, and build a sustainable organisation by supporting evidence-based decision making, accountability and a focus on using limited resources to best effect.
More specifically using insights gained from your own impact measurement can help your charity or social enterprise to improve:
- Communication and engagement with proof, data, and stories. This can help you with fundraising, service provision, partnership development and influencing public policy.
- Recruitment and retention of staff. If you can communicate the value of your organisation to employees and potential employees, you can begin to position yourself as an employer of choice 1. Employers of choice1 have lower recruitment costs, lower staff churn, and higher levels of staff engagement.
- Accountability. Many small charities rely on support from small donors and stakeholders. When you are able to measure and demonstrate your impact, you can show donors that their contributions are making a difference.
- By identifying areas for improvement. With data you can learn what works and make evidence-based decisions about where to invest your limited resources.
- By maintaining focus on and develop your strategy. Monitoring needs and outcome data can identify areas for growth and expansion and align new activities with your vision and mission.
A quick note on negative impact
The focus of social impact measurement is on positive change, but an understanding of negative impact may also be useful for practitioners.
Reducing negative impacts is a primary focus of social businesses. These are businesses that seek to engage in profitable enterprise while reducing or eliminating the damage of commerce to consumers, workers, society, and the wider environment.
Take note that social businesses are not the same as social enterprises2 . Social businesses strive to act more ethically and reduce their negative impact, but social enterprises primarily trade in the furtherance of a social or environmental purpose.
How to start measuring your impact
If you’re looking to measure the impact of your charity or social enterprise, here are a few simple steps you can take to get you started:
- Consider what is important for your organisation to measure This can sometimes be what is materially or substantively important. A good place to start is the charitable objectives in your governing documentation, some strategic objectives in a business plan or strategy for your organisation, or the criteria set out in your funding agreement. You can also ask your beneficiaries, use your own intuition, or formally map or model the impact you want to create. These are the impact themes that will guide your impact measurement.
- Think about collecting proof What data or information do you need to be able to answer those “How do I know?” questions? What data do you need to be able to prove you are training people, increasing their health, decreasing their isolation and so forth? Specific information, or data, can indicate something is happening. These are sometimes called indicators, metrics, or key measures. Consider how to capture information and when you should collect data. Ideally you should collect information more than once. The job of demonstrating a change is much easier if you have more than one set of information such as data from the beginning of your project and data from the end of your project.
- Analyse your findings
Once you have collected your data, you need to analyse it to determine the impact of your activities. A good start is to:
- Organise, perhaps in tables, on a map, in a chart or infographic
- Reflect, make time to think about what the data is telling you. This can be difficult in a small charity with few staff and fewer resources, but it is an investment that is worth making
- Theorise and gain insight. This is the beginning of impact management. Take your insight and consider what can you change about your project or organisation to be more effective and increase your social impact.
- Take action This is a vital step in impact reporting that is often overlooked, or only partially explored. Most charities and social enterprises use impact messages to raise additional funding or satisfy obligations to existing funders. As we’ve discussed earlier in this blog you could also share data and stories that demonstrate the value of your work with the public, beneficiaries, or policy makers; refine your strategy, or change something about how you do your work.
Sign up for the Benefact Group’s webinar. This free to attend webinar will cover how to capture and quantify the social or environmental impact you contribute to, and how to use impact as a form of performance management to improve your organisation.
1 The Chartered Institute of Professional Development, CIPD, https://pmjobs.cipd.co.uk/article/how-to-position-your-organisation-as-an-employer-of-choice
2All About Social Enterprise, SE UK, https://www.socialenterprise.org.uk/all-about-social-enterprise/
DSC Associate and Director/Consultant at Red Ochre.
Robert has over 20 years of experience in the charity sector and first-hand experience of the benefits effective impact measurement can deliver.