By Sarab Kochhar—Measuring social performance is important for an organization and its stakeholders to understand and recognize the positive social change they collectively create. Social impact is the net effect of an activity on the well‐being of individuals, families, communities, and the environment. This, in turn, affects an organization’s license to operate, improve the business, or support product and service innovation. Measuring social impact helps organizations understand this dynamic.
Are organizations making a difference? Are they investing their resources in worthy causes? If yes, then what’s the nature of the impact? Who is being affected, and how efficiently is that impact being delivered?
Complex problems, programs, and tools
It is often very difficult to answer these questions, and the pressure to provide data and indicators highlights many problems:
- Practitioners often resort to using metrics and tools that provide no meaningful or actionable information.
- One of the key challenges in measuring social impact is the need for better clarity on mission. Missions are often expressed in a way that makes measuring social impact difficult.
- Organizations often use anecdotes as measures of success or for reporting purposes.
- Desired data is often difficult to capture fairly and objectively.
- Quantitative indicators sometimes fail to capture important qualitative aspects of a social impact program.
Practitioners need effective social impact measurement tools to generate value for stakeholders, mobilize greater capital, and increase transparency and accountability. However, there are so many diverse tools, methodologies, scores, and algorithms that it is difficult to choose among them.
Adding to the complexity is that evaluation can be short- or long-term, ranging from monthly or yearly. Moreover, impact measurement terminology is often defined differently by different organizations. Here are some of the most commonly used terms:
- Input: The resources used in delivery of the intervention.
- Activity: How those those resources are used.
- Output: How the activity touches the intended beneficiaries.
- Outcome: The change arising in the lives of beneficiaries and others.
- Impact: The extent to which social change arises from the intervention.
A structure for social impact measurement
There are several principal techniques used to evaluate social impact programs:
- Impact evaluation assesses a program for causality, identifying program outcomes by comparison with measures of what would have happened without the program.
- Performance monitoring provides information about the extent to which program objectives are being accomplished.
- Process evaluation assesses how a program operates and the procedures and processes it follows.
- Social return on investment looks at the impact on stakeholders, and identifies ways to improve performance and enhance investments.
Epstein & Yuthas (2014) addressed the question of measuring and improving social impacts through interviews with measurement experts at more than 50 leading foundations, nonprofits, and social enterprises. They summarized their findings in a five-step “Social Impact Creation Cycle” that provides a structure for describing the creation, measurement, and improvement of social impacts for the organizations.
Their research also outlines an impact measurement roadmap that starts with defining the impacts as outcomes of the organization’s activities. It then outlines the measures that would be used, and maps clear metrics to each measure. As the last step, a performance measurement system is developed to gather, evaluate, and communicate results.
The social impact measurement approaches presented in this article can act as a starting point for exploring different approaches and in developing conversations about tools and techniques. With careful efforts at defining, measuring, and improving social impacts, organizations can move from measuring outputs and outcomes to achieving objectives and measuring real social impact.
Thanks to next billion for the image.
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