It is said “you can not manage what you can not measure”. That is also true when we are talking about entrepreneurship, impact and the triple bottom line.
Impact is the difference you make. By focusing on your impact, you can make more of a difference through your work. This means planning what impact you want to have and how best to achieve it, collecting information about your impact, assessing what impact you’re having, communicating this information and learning from it.
We call this cycle of activities impact practice. This includes the tasks of measuring, monitoring and evaluating impact.
Organizations need to identify their key impacts and their causes and consequences. After this, they need to identify who are their targets and create their theory of change diagram. Doing so will help them understand what outcomes will contribute either to getting closer to their desired goals true or away from unwanted risks.
For years, social impact measurement has been used only by the sectors of international cooperation and development, public policy, and social philanthropy. The terms «evaluation and monitoring» were used for measuring the impact of a program/project on a target population. The purpose of evaluation and monitoring was to justify grants and donations and ensure that the objectives set by donors were being reached.
A paradigm shift occurred with the emergence of a new model based on the social economy and the fourth sector (triple bottom line companies). The priority for social enterprises is not only generating an economic profit. Instead they also try to reach social impact objectives.
Aside from using the results of impact measurement internally, it is also a great way to demonstrate accountability and transparency to clients and stakeholders. Communicating your impact can also be a great differentiator from your competitors while generating more trust and connection with your customers.
What Is Social Impact?
Social impact refers to an impact not only on the target population but on the society in general. It is related to long-term outcomes, it can be positive or negative and it might produce a desired as well as undesired effects.
Impact measurement can help you in various aspects including project management and communication. It can be useful for evaluating the efficacy and efficiency of a project or a program, facilitating the coherence of objectives, demonstrating and communicating about the project, justifying a donation/grant, elaborating reports, motivating employees and investors, having a common language, or for helping in the selection of investors.
In this sense impact measurement is a learning process. It is also considered as a priority for investors because it allows them to track the progress of a project and ensure its results.
Here are some of the key terms:
Impact: broad or longer-term effects of a project or organisation’s work. This can include effects on people who are direct users of a project or organisation’s work, effects on those who are not direct users, or effects on a wider field such as government policy.
Outcomes: the changes, benefits, learning or other effects that happen as a result of a project or organisation’s work. Outcomes can be positive or negative, expected or unexpected.
Outcome indicators: things you can measure to show whether your desired outcomes have happened. They can be qualitative or quantitative.
Outputs: products, services or facilities that result from an organisation's or project's activities.
Output indicators: things you can measure to show whether, and to what extent, your planned outputs have happened.
Activities: the work and actions undertaken to create outputs.
Processes: internal processes are the things which keep your organisation running well. These include things like staff training and development, monitoring and evaluation, and fundraising.
Inputs: resources put into a project to carry out an activity. Inputs may be human, material or financial.
Monitoring: the routine, systematic collection and recording of data about a project, mainly for the purpose of checking its progress against its plans.
Evaluation: using monitoring and other data you collect to make judgements about your project or organisation.