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Build end-2-end social change  

Impact Measurement & Management Strategy 

A Guidebook for Impact Strategy practitioners!

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Time to Read: 23 min | Audience: C-Level Management | Last Updated: April 2018
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Introduction to Impact Management

The State of Impact

In 2018, the impact investing sector roughly doubled in size. The Sustainable Development Goals continue to emerge as a preferred framework for entrepreneurs, investors, governments and others.

Other emerging trends include the interest in Opportunity Zones as affordable housing investment opportunities. Place-based impact investing and Social Impact Incubators are are becoming popular too.

So, where and how do you start in this fluid sector?  You have come to the right place. 

What is Impact Strategy

Impact Strategy 

Designing a systematic impact strategy, and a sound social impact measurement framework, from the outset is a must. Any impact-focused organization benefits from having this clearly defined, especially the following organizations;

  • Funds of a fund
  • Social impact funds
  • High impact philanthropy
  • Development finance institutes
  • Social enterprises or social ventures
  • Accelerators/incubators

To begin creating or to refine an impact strategy, we recommend that you start with the Case Smart Impact Capital Toolkit.

Regardless of the impact segment that you represent, it is important to develop an investment strategy, target smart capital and interact with investors/funders. And our view is that to be successful in executing that funding journey, you must first have a well-defined impact management strategy, which includes developing an effective social impact measurement framework.

 

What Impact Management Strategy is NOT

Impact Portfolio Composition Is NOT a Strategy

It used to be that you collected aggregated portfolio composition or created a GIIRS rating, and made your investors happy.  Gone are the days where new impact investors buy that argument. 

As impact investment grows, investors want to understand what impact is actually created and the evidence of impact. They want to be sure impact washing  is not occurring. New impact class classifications are emerging which allow investors to differentiate between:

  • Avoiding negative impact
  • Benefiting people and planet
  • Contributing to systems change

Impact Measurement Is NOT Impact Management

Impact Management is a process of driving social change based on an evidence-based data gathering process, impact learning, and iterative impact improvement processes. Impact Management shouldn't be equated with impact measurement or monitoring & evaluation, which tends to assess specific programs or projects. 

Instead it is a methodology similar to businesses with a lean enterprise approach to social change. Impact Management must have the following fundamental success criteria:

  • TOC lead Impact Management Lifecycle: While most organizations have theory of change or a logic model as a starting point, they fundamentally do not connect outcomes of theory of change (TOC) or logic models with their key indicators, data strategy and reporting. This creates a massive disconnect between their actual mission & social change results. 
  • Smart Capital through Trustable Outcome from Funded Programs: An Impact Thesis must be well-aligned between Investors and Entrepreneurs (grantees, investees, development agencies etc). The fundamental breakdown in high impact philanthropy, impact investment and sustainable development is that often investors are different from social good entities working close to the beneficiaries and stakeholders.  However, often they simply do not speak the same impact language.  This is a primary hinderance to the systemic change sought by the investors
  • Impact Knowledge Graph:  There are hundreds of impact standards, frameworks and tools out there, such as well-known initiatives in impact investing like GIIN's IRIS, or in philanthropy the Impact Genome Project. So why are we not able to measure and manage im pact effectively?  What's hindering progress?

    Fundamental to social impact is context sensitivity.  If there are three healthcare programs for child immunization in northern India, Afghanistan or region of Africa, you cannot have common metrics to compare social impact.   In the next section, you will learn that Impact Knowledge Graph is a flexible approach that allows any mission-driven organization to start an impact journey with a structured approach to start their impact strategy,  helping the organization get closer to a data-driven journey. 

    Impact Knowledge Graph is NOT proprietary approach.  In fact, it flexibly uses all well known standards, frameworks and tools.
  • Quantifying or Benchmarking - You Are Not on the Right Path:  If you are an impact investor trying to rate or quantify investments, chances are that you are coming at it with a finance background and with good intentions, but do not have real, hands-on understanding of social impact.  Social impact is a process in which mission-driven organization understand their social impact using theory of change driven processes with lean data, and continue to improve their social impact!

Impact Knowledge Graph

Rapid, Flexible and Comprehensive

Fastest way to start an impact management journey

Social impact measurement doesn't have to be complex, expensive or time consuming.  Welcome to impact knowledge graph!

Impact Knowledge graph is a publicly available resource (designed with freemium Impact Cloud ) that allows you to search and modify your entire impact management strategy with structured knowledge and unique impact for each initiative or program. 

Impact knowledge graph helps you build your Impact management strategy through the following steps:

  1. Smart indicator alignment
  2. Impact data strategy
  3. Impact thesis alignment 

Benefits ofImpact Knowledge Graph:

  • Shareable:  Start from a large repository of impact knowledge graphs and a comprehensive global metrics catalog, and align with your custom metrics - saving months or years worth of effort of aligning your impact ecosystem.  Social impact practitioners can build a public or privately owned impact knowledge graph based on their domain expertise.
  • Helps build clear Impact Statement:  A well-structured impact statement that clearly identifies mission, timeline and medium and long term impact. Designed to clearly understand mission of a program or project.
  • Helps develop Theory Of Change, quickly: Wizard driven theory of change process that allows rapid development of impact mapping for a better understanding.
  • Ease of understanding through Impact Map: Smart Impact Map allows you to classify and connect impact maps based on short, medium, long, or any other kind of classification for a better understanding.
  • Risk, Assumption & Other: Add Impact Map specific risk, assumption and other statements.
  • impact knowledge graph

 

 

Smart Indicator Alignment

TOC Aligned Impact Search  Use intelligent global impact search engine to find any context sensitive metrics based on standards, area of impact, theory of change based on state of the art search engine.  

Toc driven_TOC_TOC

 

  • Align Sustainable Development Goals or Custom Goals:   Start with a Sustainable Development Goal (SDG) or Goals and quickly align with SDG Target(s). If not aligning with SDGs, define internal custom goals and targets.
  • Align with Sector specific Indicator Sets:  Align with a most flexible, comprehensive global impact metrics set in business, philanthropy, impact investments and international development programs.  This strategy is often useful when aligning entrepreneur's impact thesis with investors.
  • Enrich with custom metrics:  Refine global impact indicators to make it more specific or create custom indicator(s) to measure operational, finance and other internal social performance objectives.

Impact Data Strategy

This is where most get stuck!

Many organization may have developed a good theory of change and indicators, however, their ability to develop a system that allows them to collect the right kind of data based on activities, outputs and outcomes remains limited.  This data is typically collected in different kinds of data collection systems.  While certain data collection systems are suitable to collect those results, how do we improve data collection for better results and higher integrity?  

Good Impact Data Strategy Provides:

  • Robust alignment with data sources, whether this involves data collected on paper, excel/google spreadsheets, in custom databases, using salesforce or finance systems, or other online and offline survey tools.
  • Collect results in languages where partner(s) reside.
  • Build robust reporting formats and data validation to save data cleaning time for each partner.
  • Rapidly test results from existing data.
  • Identify data gaps.
  • Develop surveys or outcome management strategies.

Impact Thesis Alignment

Align with Impact Investors

Raising impact capital is a daunting task for most enterprises, especially those who mostly rely on good pitch decks but have no real evidence of impact. How can they convince impact investors that the social initiatives should be funded? This is an often overlooked process, but every entrepreneur can align their impact thesis with investors in following way. 

Remember:

  • Align your indicators with known frameworks like the Sustainable Development Goals and Targets
  • Align with Standard Indicators preferred by potential investors
  • Improvise indicators or develop key custom indicators
  • Collect results or forecast outputs/outcomes expected during past/future three years

Biolite Impact-page-002

* Example provided by KL Foundation (Charly Kleissner) at Impact Management Project Data Coalition Meeting

Other Impact Management Strategy Ingredients

Other Pillars of Impact Management 

While Impact Knowledge Graphs simplifies your impact management foundation, you need other pillars to be successful

  • Due Diligence Process
  • Impact Portfolio Analysis
  • Impact Data & Results Aggregation
  • Impact Scorecard
    • Design
    • Historical Results
    • Aggregation of Impact Data from Investee (Impact Managers)
    • Data Sources Aggregation, Beneficiary & Stakeholder Survey (Impact Makers)
    • Self-Reporting
  • Impact Learning & Storyboard
    • Analytics - Specific to Investors & Enterprises
    • Visualization
    • Branding & Social Media
    • Impact Story & Impact Learning
    • Field and Program Management Narratives
    • Documents Management
    • Knowledge Management
  • Impact Report 
    • Portfolio Composition
    • Portfolio Summary
    • Impact Thesis
    • Impact Statement
    • Impact Measurement Strategy
    • Narrative
    • Summary of Results and Key Indicators
    • Impact Scorecard

Enterprises

Sustainable Businesses, B-Corps & Social Enterprises & Nonprofits

  • Project & Programs
  • Challenges with data collection, aggregation and tacking
  • Data Strategy
  • Lean Data Management
  • Outcome Management
    • Survey Design
    • Outcome Reporting
  • Analytics
  • Impact Report
    • Outcome Management
      • Stakeholder Outcome Improvement
    • Nonprofits 
      • Project/Program Effectiveness
      • Aligning with grants reporting requirement

Impact Management Frameworks

Tuning to the Social Impact Ecosystem

Impact Strategy tools at Sopact help practitioners define the impact management framework that is right for their impact ecosystem. It delivers impact practitioners of mission driven social businesses, and mission driven organizations a unique platform-based approach to create a step-by step strategy, conduct data management and refine impact communication. 

While the following outline provides common topics to all types of organizations, subsequent sections are unique topics to specific segments. This impact strategy is different from in following ways -

  1. Actionable based on common field practices 
  2. Built on continuous learning and action approach
  3. Hands-on, co-designed with Impact Cloud to rapidly design, test, implement and improve.

Social impact ecosystem capital flows from Impact Funders (Asset Owners), Impact Managers ( Asset Managers) and Impact Makers (Assets). As we improve the flow of impact data from beneficiary to funders, more capital flows towards social impact.

 

Impact ecosystem

 

SoPact has developed a consistent social impact framework that can be consistently applied across different types of organizations.  Our goal is to give you a deep dive into a consistent process across all the sustainable organization types.  The second part includes unique and advanced processes specific to different entities such as Impact Funds, Incubators, Asset Owners, Foundations, Businesses and Mission Driven Organization. 

Impact Ecosystem Strategy - Sector By Sector

Impact Strategy for Impact Investors

Impact Due Diligence to Impact Reporting 

Impact Investors would follow the same process described in the Impact Strategy. However, depending on the type of funds (asset owners vs asset managers), the size of funds, and focus of the impact theme, the following advance discussions are warranted.

Impact Strategy for Foundations

Foundations historically pursue impact-first investments

New philanthropy aligned with impact-first thinking 

While foundations are historically impact first, their processes are still evolving.   Many young and innovative foundations, especially certain corporate, community and family funds, are rethinking allocation of their funds from 100% negative return to a less negative one.

Many of them start with a community and job creation approach, and grow into a much more sustainable strategy aligned toward their mission.  How should they go about realigning and how should they measure their success?  It depends on what their long-term goals are.

Foundations with focus on the below seems to be building sustainable impact strategies:

  • PRI and Impact Investment
  • International Development
  • Community Development

Unique Impact Strategy Requirements

Foundations' Impact Strategy is not unique from what's described in the general section.  However, there are few unique elements that they must consider.

  • Due Diligence Process
  • Theory Of Change for Foundations
  • Theory Of Change and Data Capacity for Grantees
  • Application Process for Grantees
  • Granularity of Metrics
  • Custom Goals vs Sustainable Development Goals
  • Strong focus on knowledge and impact learning
  • Aggregating data from grant management system
  • Aggregation results from 3rd party, external, or country specific results
  • Unique metrics focus with specific baseline & target values

 

Learn our Foundation Impact Knowledge Management and Impact Learning Solution

Impact Strategy for Social Accelerators & Social Venture Network

Impact Learning for Social Enterprise 

Long term social impact starts here

Social Venture Networks, Incubators and Accelerators play a very important role in growing social entrepreneurs and local businesses.  While many of these ecosystem businesses, just have the intention to do social good, they do not have systematic experience with theory of change (what social change they are aiming to create). 

Hence these network organizations play a key role in making them understand their theory of change, key data collection processes, etc., so that they have an evidence-based approach from the start. A good evidence-based approach ultimately helps them raise smart impact capital from an impact investor aligned with their impact thesis.

Learn More:

Impact Strategy for Social Enterprise Networks or Accelerators/Incubators

Social Impact Accelerators or Incubators often have a goals to improve social impact and financial capacity of their investee or social enterprises. 

Learn More:

 

Deep Impact Network

 

Based on IRIS metrics aligned with 3rd party (Sectors)

Impact Cloud is the most comprehensive platform that provides out-of-box theory of change, indicators & reporting. Just select theory of change unique to your need, remove indicators not relevant to your need and add key standard and custom indicators.  You are ready to build out-of-box impact reporting for your context

  • Opportunity Zone 
  • Community Investing: Aeris
  • Healthy Communities: Build Healthy Places Network
  • Community Banking: National Community Investment Fund (NCIF)
  • Corporate Sustainability Reporting: The Global Reporting Initiative (GRI)
  • Water Stewardship: Alliance for Water Stewardship
  • Early-Stage Enterprises: Toniic
  • Gender Lens (Financial Inclusion): Women's World Banking
  • Financial Inclusion: CERISE and the Social Performance Task Force (SPTF)
  • Healthcare Delivery: Center for Health Market Innovations (CHMI)
  • Sustainable Development Goals (SDGs): The UN Sustainable Development Goals
  • Impact Employment: The Impact Sourcing Metrics Working Group
  • International Financial Institution (IFI) Private Sector Operations: IFI Working Group on Development Results Indicators Harmonization
  • Land Conservation: The David and Lucile Packard Foundation
  • Microenterprise: FIELD
  • Microinsurance: Microinsurance Network
  • Off-Grid Energy: The Global Off-Grid Lighting Association (GOGLA)
  • Smallholder Agricultural Finance: Council on Smallholder Agricultural Finance
  • Small and Growing Business (SGB): Aspen Network of Development Entrepreneurs
  • Social Performance for Microfinance: Microfinance Information Exchange (MIX) and Social Performance Task Force (SPTF)
  • Sustainable Agriculture: Finance Alliance for Sustainable Trade (FAST) - Sustainable Agriculture

Nonprofit Impact Strategy

The best fundraising strategy for nonprofits

Demonstrating success of a program or evidence of key indicators are best way to achieve success

If your nonprofits are relying on public funding or grants, you're likely facing stiff competition. Chances are you will hire grant writers or consultants to raise grants. 

But are they really familiar with your impact?  Are you just reporting activities or outputs? Make sure they are familiar with the following (as they relate to your organization) so that they (and you) can ensure you are building a robust strategy.

  • Projects & Programs
  • Challenges with data collection, aggregation and tacking
  • Impact Data Strategy
  • Data Collection vs Data Aggregation
  • Lean Data Management
  • Outcome Management
    • Survey Design
    • Outcome Reporting
  • Analytics
  • Impact Report
    • Outcome Management
      • Stakeholder Outcome Improvement
    • Nonprofits 
      • Project/Program Effectiveness
      • Aligning with grants reporting requirement

Social Impact Measurement Framework

Benefits of Social Impact Measurement Framework

Social impact measurement framework allows a mission-driven organization a logical and step by step  path to a clear impact thesis, creation of an impact map between partners, better data collection processes, and to demonstrate impact effectively.

Topics

  • Theory Of Change & Groundwork: Theory of Change, and Metrics Integration for enterprises, grant makers, and impact investments.
  • Social Impact Metrics: Search & Assign metrics to your enterprise, grant makers, and impact investments from the largest metric repository on the internet!
  • Data Strategy: Step by step guide to improve data collection for an outcome, survey and application.
  • Reports & Storytelling: Seamlessly aggregate and report outcomes to your investors monthly, quarterly, or annually.

Social Impact Consulting & Certification

How do you certify for social impact measurement?

Social impact consulting practitioners work with sustainability, impact investment, philanthropy and international development to systematically design impact frameworks that suit unique client needs. 

Impact Cloud is a unique platform driven approach that helps practitioners build strategic practices in more domain specific expertise through a better streamlining.

With the tools, Social Impact Practitioners can:

Start with Freemium Impact Cloud

Coming in Early 2019

Start Your Impact Knowledge Graph

 

 

IM header

Raise capital for social entrepreneurs, nonprofits & impact investors.

  • Start your journey with the theory of change wizard
  • Align theory of change with your impact thesis or sustainable development goals, targets
  • Select metrics from global metrics repository or custom metrics
  • Provide results or forecast results if you just starting out
  • Build powerful impact report including reports aligned with impact management project

 

See Impact Cloud

Impact Perspectives

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Review impact strategy, impact reports from social impact practitioners. Learn more about them before start the project 
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