As a rule, commercial organizations measure their success by financial returns (profits), while mission-driven organizations measure success using impact metrics which help assess the organization's ability to address its targeted social or environmental challenge.
And yet, often impact-driven organizations do not invest in developing effective and comprehensive impact measurement systems, with cost cited frequently as the reason why.
Impact measurement does not have to be cost-intensive to be effective. In fact, it shouldn't be. And in this blog we'll share how you can keep it resource-lean while achieving your measurement goals.
By illustrating the process/steps you can undertake and the tools you can leverage, you'll be able to take your organization's impact measurement seriously, without breaking the bank.
Why Impact Measurement is Important
Financial return is purely quantitative and as a result is relatively easier to measure. More than 97% of recent GIIN survey respondents agree that impact data has substantial business value. In other words, it can help improve the financial performance of portfolio companies and inform future investment decisions. The research found five common ways impact data can be used to drive value:
- Revenue growth
- Operational effectiveness and efficiency
- Investment decisions
- Marketing and reputation building
- Strategic alignment and risk mitigation.
- All of these value adds to the financial return to an organization.
Is Impact Measurement Really Cost-Intensive and Complex?
Measuring the social impact of an organization can be complex. Nearly all mission-driven organizations track a metric such as “number of people reached” or “number of lives impacted.” But does this go far enough for assessing impact? The answer is simple. No.
There is a common misconception among mission-driven organizations that social impact measurement is complex and cost-intensive. To ease the complexity there are multiple resources and frameworks and it's just a matter of putting these tools into practice (which sometimes does require capital, just maybe not as much as you feared).
Social impact measurement is not necessarily expensive if we change the way we approach it by leveraging the available research and tools.
How to Make Impact Measurement Easy and Relevant
There is no need to reinvent the wheel. For organizations who are wondering how to get started, Actionable Impact Management (AIM) offers a series of four guidebooks that lay down a path that starts with Volume One: Groundwork. Each guidebook is designed to move you through the process of establishing your own unique impact framework. The series includes:
Another resource is Acumen's Lean Data for social enterprises. It is designed to find cost-effective ways and technology of collecting data from beneficiaries on the ground.
Change takes time and so does measuring impact. For example, investment in the education of a community may take several years before graduated classes enter the workforce and the full extent of benefits begin accruing. Efforts of ongoing evaluation may bring valuable insight for mid-course iterations that save significant resources. So think of impact management as a long-term game.
Proof of impact attracts funders. Capital will flow to where an impact is well demonstrated. Social accountability through impact communication will engage existing funders while attracting new ones.
As Marc J. Epstein (co-author of the book, Measuring and Improving Social Impacts: A Guide for Nonprofits, Companies, and Impact Investors) said in one of his interviews:
There is an increased interest among both donors (of nonprofits) and investors (of for-profit social enterprises) for greater accountability for the money intended to be used for social purposes. Donors and investors want the accountability and performance excellence that they expect in the for-profit world. And they want evidence that they’re making a difference."
Leverage technology for social impact measurement
Mission-driven organizations too often aren't using available technology for data collection. Many are using a collection of various spreadsheets which can be very time consuming and complex. Also, tools like Excel were never meant to be used for impact management. It is a powerful technology tool for handling data but outcome mapping to analyze and visualize impact data results is nearly impossible. This heightens the likelihood for human error in data reporting.
By using available tools such as Impact Cloud™ to collect data, streamlining the impact framework from the very beginning, you can build an enduring and more data rich process.
To conclude, it is clear that by managing (and not just measuring) impact data with available research and technology you can not only make measuring affordable but create substantial GROWTH for your organization.