THOUGHTS—What is impact measurement and management?

2 October 2020


8 minutes

impact measurement and management

Social responsibility is becoming the new normal in businesses. Organisations are increasingly looking for opportunities to create social and environmental impact. And like other goals in business, impact goals in themselves are just part of the picture. Measurement and management are required to ensure you’re on track and delivering your intended impact.

Analysing, measuring and communicating your organisation’s impact is important for your stakeholders including customers, your local community, your employees, investors and your industry. Communicated well, it’s a key WORD in your marketing arsenal, helping you attract and retain customers and funders who want to change the world like you.

What is impact measurement?

Social impact relates to the long-term positive changes, for individuals, communities, and society as a whole, that result from activities or services provided by organisations. These organisations can be not-for-profit, social enterprise, government or traditional businesses. Impact measurement is the process of understanding how much social impact your organisation creates.

Measuring your impact should show the outcome based on your output, basically how have your organisation’s actions made an impact. It involves measuring the difference between the outcome and what the outcome would’ve been if not for your organisation’s program or activity. It can be difficult to measure as sometimes there are many other contributing factors and it’s hard to identify how exactly your organisation created an impact. The right tools and process can help.

Organisations measure both qualitative and quantitative information. Many like to measure impact using frameworks like Theory of Change and logic models. These frameworks measure impact by mapping out the links between inputs, activities, outcomes and outputs.

Logic model impact measurement and management

Figure 1 – Logic model 

What is impact management?

Impact management is the ongoing practice of analysing, measuring, reporting, comparing and improving your impact. To measure your impact at just one point in time fails to show how your impact grows and changes over time. Developing a system to measure your impact at regular intervals (e.g. annually) means you can better communicate to your stakeholders the impact trajectory you’re on and make modifications to meet your goals.

Why do we need to measure impact?

If you’re a for-purpose business or organisation then your priority is the ‘why’ of your existence and the reason for your being. So it’s paramount for your organisation to have evidence that you are achieving your goals. When impact measurement is carried out effectively, it will not only put you in a better position to attract investors or government support, it will also support your key performance indicators and your organisation’s overall performance. Many for-purpose businesses also use their impact as a key differentiating selling point making it vital to measure and clearly communicate your impact to your customers and all your stakeholders.

One thing to keep in mind is to ensure that you’re measuring the right thing and to make the measuring process work for your organisation’s needs. As impact measurement is being adopted across industries, it is no longer an option, but a priority and we’re here to help.

How should we measure impact?

As a small business ourselves, we understand that there are a myriad of challenges that organisations face when measuring their social impact. However, we’ve realised that one of the biggest challenges is defining what ‘social impact’ means to your customers.

Defining ‘social impact’ is trickier that it seems as it is used differently across and within the industry. For example, the Centre for Social Impact defines ‘social impact’ as the net effect of an activity on a community and the wellbeing of individuals and families. While Dr Peter Frumkin, the founder of the Centre for Social Impact Strategy (CSIS) based at UPenn, defines social impact as any effort to solve complex social problems and create public value in the process.

There are a multitude of different ways to think about your organisation’s social impact and how it can benefit your customers. Here are a few ways you could measure your impact:

  • What are the long-term economic, social or environmental changes your organisation would like to contribute to?
  • What are the key barriers and opportunities toward achieving social impact?
  • What are the positive and negative impacts of your activities?
  • What are elements of your activities that you need to communicate and in what form (e.g. reporting, social content, video.)?

When defining what ‘social impact’ is for CSIS, Dr Frumkin detailed how his organisation prioritised efforts and the people behind these efforts who are seeking to create public value in ways that are innovative, financially sustainable, and scalable. By clearly defining your organisation’s social impact and how it can benefit your community, it will help you then develop the actions needed to meet and measure this goal.

What tools can I use to measure impact?

There are quite a few different tools for impact measurement. They are differentiated by what they are specifically intended to measure and to which interest group the result of the measurement will be directed. However, their sole purpose is to help organisations organise and analyse data so they can tweak and improve internal processes alongside program outcomes. There are a multitude of tools to pick from such as:

  • SDG Action Manager which marries the best practices of B Lab’s B Impact Assessment and the UN Global Compact.
  • Social Return on Investment (SROI) which assigns an economic value to identified social impacts and helps understand and manage the impacts of an organisation.
  •, SoPact and ROOY which are all digital tools that make navigating through data and creating your impact strategy that much easier.