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How to choose the right Impact indicators to demonstrate impact

Know the process of choosing the right impact indicators for demonstrating impact. It is the key to impact reporting before you raise grant
Category
Strategy
Written by
Alan Pierce
Published on
January 3, 2020

Know the process of choosing the right impact indicators for demonstrating impact. It is the key to impact reporting before you raise grants or capital

Mission-driven organizations need to communicate their impact to various audiences effectively. The key to achieving proficiency in this journey is understanding which impact language will best serve your and your audience's needs.

An impact indicator is a measurable variable or metric used to assess the progress and effectiveness of an organization's activities in achieving its intended impact. It provides quantitative or qualitative evidence of the outcomes or changes resulting from implementing programs or initiatives.

The benefit of using impact indicators is that they provide valuable insights into the impact of an organization's efforts. Organizations can effectively measure their impact by selecting the right indicators and communicating it to their intended audience. Impact indicators help demonstrate programs' value and effectiveness, attract funding and support, and inform decision-making and strategic planning.

This article will provide a comprehensive guide to selecting relevant and actionable impact indicators for your organization. Following the four essential steps outlined below will give you valuable insights into choosing the right metrics and effectively measuring your impact.

In this article, you will learn the following:

   KEY TAKEAWAYS  
  • The audience/purpose for metrics sets
  • Are there standards you want to align with?
  • Difference between outputs and outcomes metrics
  • Metrics diversity - quantitative and qualitative metrics
  • Actionable approach to align impact metrics with the theory of change

So if you're wondering what metrics you should be using to measure your impact, if your current metrics are really what you should be using, or if you're curious about the selection process, this blog will clarify that journey.

By now, you have (hopefully!) read the two previous introductory blogs in this series on Actionable Impact Management. The first outlined some clear yet nuanced reasons for the value of social impact measurement. The second gave an overview of Actionable Impact Management and explored some of the groundwork involved.  

Step 1: Audience and Purpose of the Impact Indicator

The first step in selecting impact metrics is understanding the audience you want to communicate with and the purpose behind your metrics. Consider who you are trying to reach and what language will resonate most effectively with them. Additionally, identify any standards or frameworks you want to align with to enhance the credibility and comparability of your metrics.

When selecting impact indicators, ensuring they are SMART metrics and align with a proper data mapping process is crucial. SMART stands for Specific, Measurable, Achievable, Relevant, and Time-bound, which means that the indicators should be clearly defined, quantifiable, attainable, relevant to your goals, and have a specific timeframe for measurement. This ensures that the metrics are meaningful and can effectively measure the impact of your program.

Fig: SMART Metrics

Additionally, it is important to consider whether the data for these metrics already exists or if you need to collect it. This involves assessing the availability and accessibility of the data sources that will provide the necessary information for your indicators. Understanding where the data comes from is crucial for accurate measurement and reporting.

By considering these factors during the selection process, you can ensure that your impact indicators are well-defined, measurable, and based on reliable data sources. This will enhance the credibility and effectiveness of your metrics in communicating the impact of your program to your intended audience.

4-Jul-06-2023-10-54-25-2630-PM
Fig: Data Strategy

Step 2: Differentiating Outputs and Outcomes Metrics

To accurately measure your impact, it's crucial to distinguish between outputs and outcomes metrics. Output metrics focus on quantitative measures that describe the attributes or activities of your program, such as the number of hospitals built or surgeons employed. However, outcomes metrics delve deeper into the changes and effects your program has on the lives of your beneficiaries. By identifying critical outcomes and linking them to your program's activities, you can demonstrate the true impact you are making.

Step 3 - Embracing Metrics Diversity

An effective metrics strategy involves a combination of quantitative and qualitative metrics. Quantitative metrics provide numerical data and measurable indicators, while qualitative metrics capture the narratives and stories that illustrate the human impact of your program. Embracing metrics diversity allows you to paint a comprehensive picture of your organization's impact and engage a broader range of stakeholders.

Step 4 - Aligning Metrics with the Theory of Change

To ensure the relevance and coherence of your impact metrics, aligning them with your organization's Theory of Change is essential. The Theory of Change outlines the causal pathways through which your activities lead to desired outcomes. By aligning your metrics with this framework, you can measure the progress and effectiveness of your program in achieving its intended impact.

Fog:Align Metrics with Theory of change

 

Impact Indicator Examples

Should you align with the Sustainable Development Goals (SDG Indicators) or use non-profit systems like Guidestar Metrics or Guidestar Platinum Metrics? What about impact investing metrics? Or something else entirely? The metrics package you build must speak as loudly as the impact you create.

Within this phase, we explore two broad themes, the who and what of a metrics strategy. To whom are you communicating, and what language are you using to do so. Within these themes, we’ll keep the following in mind:

  1. The audience/purpose for metrics sets
  2. Are there standards you want to align with?
  3. Critical outputs and outcomes
  4. Metrics diversity -- quantitative and qualitative metrics

This blog will use Aravind Eye Care System as a case study to demonstrate how the metrics discovery phase can be applied. Aravind is a chain of hospitals in India with a mission to eliminate needless blindness. We will focus on Aravind’s eye surgery service, which uses a cross-subsidy model to make surgeries and eye care accessible to those who could otherwise not afford it.

What metrics might Aravind use for demonstrating impact, and how might they determine which metrics to choose? Let’s take a look.

Demonstrate impact

Ultimately, your impact reporting should be driven by a desire to stay true to the mission and the overarching why of what you do. But embedded within that is a deeper strategy with layers of multiple objectives.

Consider Aravind in its early stages, and let’s assume it wanted to attract capital from impact investors who wanted to invest within the health sector. Which metrics language might speak to this audience most effectively?

Aravind could engage investor networks, research similar use cases, or tap into other existing resources to answer this question. This ensures they have a clear communication strategy aligned with an impact measurement process. This will help determine whether they want to align with a particular standard (choosing which one will come later).

Of course, Aravind will likely have multiple stakeholders for whom they want to communicate impact. Different metric sets may be appropriate, especially for different programs. Understanding that lays the groundwork for determining which aspects of programming to target in an impact measurement strategy.

How will you Measure Social Impact?

You’ve identified a specific audience or audiences. Now it is time to identify which aspects of your program(s) are most critical to conveying an impact message relevant to them. But focusing on measuring what matters.

If that seems obvious, it’s because it is. But it is relevant because we don’t always adhere to that simple adage. Financial constraints, knowledge gaps, and time scarcity are why we might feel pressured to choose faster, cheaper, and more accessible impact measurement strategies.

In the case of Aravind, their “easy” tracking likely involves administrative outputs like several hospitals built or surgeons employed. A new impact measurement process does not need to be implemented to gather, track or report such data. And yet, these are simple, structural measures describing the attributes of their health care system - simple proxies that do not communicate impact nor causality.

Instead, Aravind could dig deeper into their surgery program for relevant process-related outputs (e.g., how many patients received successful surgeries) and outcomes measuring changes in the lives of surgery recipients. For example, they could measure what percentage of patients regained employment after successful surgical treatment and follow-up.

Thus, starting by outlining aspects of your program(s) that you think will need to be measured in this step is best. And without the help of a standard catalog, brainstorm metrics you think to make sense for capturing and communicating impact in these areas. Then explore if there is any alignment with appropriate existing standards (e.g., for impact investors).

The following graphic facilitates finding metrics alignment for your specific strategy.

Global Goals United Nations Sustainable Development Goals (SDGs).
Impact Investing IRIS
Sustainability Global Reporting Initiative (GRI)
Community (Non-Profit); Guidestar, Robinhood, etc.
Domain-Specific HP2020 (Health), WASH (Water, Sanitation, & Hygiene), etc.
Custom Metrics If you need to fill in any gaps not covered by existing standards.

Measuring Social Impact Indicators

These steps are much easier if you have done your due diligence and completed Groundwork, including a thoughtful Theory of Change model and a detailed programming structure outline.

Notice that Metric 1 (see below) uses a standard metric from the IRIS catalog, which measures impact investment returns. In this way, Aravind can speak the language of potential impact investors. Metric 2 (see below) (Aravind used this in a study they conducted) may also speak to some investors, although it is not aligned with a returns standard.

You can also see a narrative-based metric in this list. Aravind could include this if they want to leverage impact narratives in marketing materials or other less data-inclined audiences. The more impact languages you speak, the more accessible your impact reporting becomes.

As a last note, it is essential to engage stakeholders who might be affected by your budding social impact measurement plans at this stage. Do your beneficiaries believe your metrics are relevant? How does your organization perceive its capacity to implement? Can you realistically acquire such data?

These conversations and the other steps in the metrics discovery phase will support the impact reporting process later. As you move into data collection strategies (step 2 of Actionable Impact Management), you can refer to this foundation to see which metrics might be derived from existing administrative data and need new processes.

What's behind the impact dashboard?

You'll realize this is an iterative process while engaging in metrics discovery and referring back to earlier Pre-work stages. Most critical is that your impact measurement communicates outcomes demonstrating that you affected change.

Because metrics discovery is ultimately a roadmap of accountability for your mission and beneficiaries.

If you stay flexible, keep your mission in mind, and empower your stakeholders to guide you, your following impact dashboard will speak loudly and proudly to the audience who needs to hear it most.

As with any conversation, if you can communicate with authenticity and a shared language, your message will be heard, and your audience will be moved to engage.

impact measurement lifecycle
Fig:Behind an Impact Dashboard


 

You can then run your metrics through a checklist like the one below. This will help you consider whether they are necessary or worth measuring (i.e., mission-critical and realistic). In the example checklist, we continue to use the surgery program area but have narrowed down the programming to low-income patients. We have also targeted a specific outcome for this metric set.

Social Impact Metrics Checklist - Choosing right Impact Indicators

More resources on: Theory of change

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