Social impact is a positive change on people and the planet better understood through a well-designed theory of change designed to improve the outcome. Social impact has been historically been around in the form of philanthropy for many decades. In 1972 Bill Drayton, the father of social enterprise started a new movement that gave rise to a new social impact approach. There is a social impact revolution is taking place and COVID-19 now has accelerated this trend by putting pressure on businesses, impact investors, and philanthropy.
THEORY OF SOCIAL IMPACT
In a world facing Climate Change, Social Inequality, Injustice, and Illnesses that threaten our physical and mental health. We can count on human development initiatives working across the country or even the world to bring solutions to the table. But…in 2020 we still face.. [fires, protests, health issues, gender inequality, -- problems we were still facing in 2020. So, what are we doing wrong? Honestly, We don’t know the impact of our activities. To see the real change, we must learn the positive and negative impact we have on people and the planet. Because only through effective Impact Management organization can scale what IS working and correct what is NOT working. At Sopact, we are on the path to accelerating the world’s transition to be more sustainable and equitable. Don’t let anything come in the way, let us be your partner in social good.
SOCIAL IMPACT REVOLUTION
Listen to Forbes's video describing a shift in the way investments are made, policies are penned, funds are endowed, and careers are chosen. This movement, which has been dubbed the Impact Revolution as following Forbes video notes, advances a vision of doing well while doing measurable good.
TYPES OF SOCIAL IMPACT
- Improving youth outcome measured based on a holistic evaluation
- Improving a profitable coffee supply chain financial and social outcomes
- Increasing gender equality through financial inclusion
Persistently lower wages for a worker without healthcare insurance
Increased pollution in city or ocean
Persistent social isolation due to mental illness
Long term refugees
- Direct impacts occur through direct interaction with a product or service. An organization is training people with disabilities (PWD) to find employment; the direct impact would be the number of training provided, employment (new jobs) where PWD was placed.
The indirect impact is best described as being created by an organization due to their access to their products or services. While the organization may not have directly generated the impact, it was made possible through its outputs. These impacts are produced through impact chaining with partners. For example, in the above example (DIRECT IMPACT), when PWD is placed, additional family members of 4 can get financial support, a workplace, where they work, can get further sensitivity towards disable, or improving financial status within a family.
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SOCIAL IMPACT THEMES
Another popular and most popular classification is designed by UN Sustainable Development Goals. There are 17 globally accepted goals that could be considered as Social Impact Themes.
- GOAL 1: No Poverty
- GOAL 2: Zero Hunger
- GOAL 3: Good Health and Well-being
- GOAL 4: Quality Education
- GOAL 5: Gender Equality
- GOAL 6: Clean Water and Sanitation
- GOAL 7: Affordable and Clean Energy
- GOAL 8: Decent Work and Economic Growth
- GOAL 9: Industry, Innovation and Infrastructure
- GOAL 10: Reduced Inequality
- GOAL 11: Sustainable Cities and Communities
- GOAL 12: Responsible Consumption and Production
- GOAL 13: Climate Action
- GOAL 14: Life Below Water
- GOAL 15: Life on Land
- GOAL 16: Peace and Justice Strong Institutions
- GOAL 17: Partnerships to achieve the Goal
SOCIAL IMPACT EXAMPLES
- Employment vs unemployment
- Livelihood vs wealth
- Education and training vs Digital Divide
- Skills, knowledge, and competences vs Low-skilled labors
- Health and physical wellbeing vs Obesity and Chronic Disease
- Wellbeing vs continuously depressed or mental health
- Privacy, safety, and security vs Insecurity, unsafe
- Social inclusion vs. social isolation
- Connected, social ties, and networks, social mixing vs. professionally isolated
- Social interaction and communication: families, communities, etc. vs. social isolation
- Living, accommodation vs. homelessness
- Equality, equity, and equal opportunities vs. discrimination
- Citizen participation, democracy vs. Autoratariasm
- Sufficiency vs. lack of political and regulatory frameworks.
SOCIAL IMPACT ASSESSMENT
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SOCIAL IMPACT INVESTING
The financial ecosystem is broken, public services fail to deliver and improve the quality of life, and poverty and inequality subsist in the developing markets. Today businesses are using their capabilities to optimize their positive impact on people and the planet alongside their financial return.
On the other hand, investors and social investors use capital to optimize business impact by adding and creating value beyond what would otherwise be achieved.
The momentum is now and urgent to generate financial returns alongside measurable social and environmental impact to address global complex challenges.
Good Social Impact
Impact investments seek a financial return across the spectrum, from below-market-rate to risk-adjusted market-rate returns. Unlike philanthropy and non-profit, businesses and investors aim to generate both financial and social returns - ultimately delivering shared value.
As capital mobilized to pressing challenges in delivering social innovation and a growing adoption globally, the evidence is encouraging, bringing increased capital flows towards those Sustainable Development Goals or other globally accepted goals.
Financial returns, listening to stakeholders' voices, and a commitment to impact transparency and integrity give relevance and credibility that the impact ecosystem needs to thrive.