According to the popular management consultant Peter Drucker, “you can’t manage what you can’t measure” and this holds true, even for organisations inherently making the world better.

Why measure and report your social impact?

Measuring the social impact of your organisation can be a really difficult but rewarding exercise when reported. Measuring and reporting your social impact can help: 

• Prove performance and authenticity as well as promote your organisation
• Provide proof of return on investment for impact investors
• Attract more impact investment from interested parties and for crowdfunding
• Understand gaps and improve enterprise value offering
• Establish authority

What is social impact measurement?

Social impact measurement is assessing the performance of your social enterprise as it contributes to a social issue. Measuring your social impact is an important way to efficiently prove and scale your impact. However, impact measurement can be complicated as it entails understanding how the said social change occurred and attributing such change to your organisation’s operations.

1. Measuring your social impact starts with having a clear theory of change

A theory of change is mapping out long term goals and the conditions that need to be put in place or met by your organisation to achieve these goals and make the desired change. It will help you understand the problem, inputs, process, outcome, performance and impact of your organisation.

2. Select Key Performance Indicators (KPIs) for your social enterprise

These KPIs are important in collecting impact data, measuring and reporting the social impact of your organisation vis-à-vis the desired social change.

Typically, the need to measure the impact of a social enterprise arises from both external forces (investors and stakeholders) and internal forces (management team). For internal use, such as learning and improving operations, fundraising or marketing, an organisation could easily deploy organisation-specific key performance indicators and collect data from direct beneficiaries. However, more standardised impact measurement performance indicators are required by impact investors to understand their return on investment across various investment portfolios.

To standardise key performance metrics across different impact categories, the Global Impact Investing Network (GIIN) developed an Impact Reporting and Investment Standard (IRIS). IRIS provides a catalogue of standardised social, environmental and financial impact indicators based on different impact categories or sustainable development goals, for investors and enterprises to measure their impact. 

3. Gather baseline data relating to select Key Performance Indicators

It is important to have a benchmark against which your organisation’s social impact will be reported. Measuring impact is different from simply stating outcomes of your operations. How can you authoritatively report that unemployment reduced in Sydney as a result of your SME support program if you did not have a baseline data of unemployment in the previous year?

4. Plan your data collection

The mode of data collection will depend on factors such as the type of organisation, the capacity of the organisation, assessing data collection tools and the need for the impact measurement report.

Quick questions to ask your team include;

• What do you need the impact report for? This will determine how thorough the process needs to be as well as the sample size.
• What data do we need to assess our social impact?
• What resources do we have? This can help determine the mode of deployment. Do we use online forms across our social media platforms, run a door-to-door survey or physical focus groups?

5. Optimise your team for data collection

While it is easier to bring in a data collection specialist, this is more resource-intensive. You can train your existing operational staff to pilot, deploy and collect impact data along service delivery lines. Some impact data such as number of users, number of cases solved or children under 5 placed in quality shelters are easily collected by your field officers.

6. Manage and analyse your data

Impact data with geographic coordinates can easily be managed on geographic information systems and maps created from these. However, more common impact data management tools include excel spreadsheets and Google Sheets.

7. Make inference from your data

Social impact measurement offers the organisation insight into its performance and areas that can be improved upon. Investors also use raw social impact data to assess a social enterprise on standardised platforms such as the GIIRS Impact Rating Platform. The GIIRS is an impact rating and analytics platform that assesses social enterprises based on their pre-defined IRIS metrics.

8. Report your social impact

A social enterprise can share impact data with team members, investors, stakeholders and the general public  by compiling an annual report, sending out newsletters or simply quoting impact data in discussions.

Tips and things to remember

1. Social change is complex to achieve. Therefore, measuring social impact requires a cross-disciplinary and interconnected systems approach.
2. Most organisations have a secondary social benefit that is subtle and more difficult to measure.
3. It is important to track data sources and uphold the integrity of your impact data.
4. Impact assessment is clearer when you can superimpose various data sets.

Measuring and reporting your impact as a social enterprise is what helps you to move forward. It can secure you more funding, show you areas in which to improve and the raw data can show others how important your work is. It can be a big undertaking, of course, but the benefits far outweigh the time and energy you will put in.