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Why Measure Social Impact? 4 Reasons for Change Makers

November, 11 2016

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Alan Pierce
Written By
Alan Pierce

What drives you to measure social impact? In the business of social impact, measurement has become one of the most talked about trends. And for good reason. The most obvious, of course, is because it is important to know whether the change we are striving for is indeed occurring. But myriad other reasons exist.

These other reasons are fundamental because they can help us understand why measuring impact is inherently about value creation. And just as important, they can help us create more systemic, sustainable change.

To answer why measure social impact can depend on how you are positioned, whether as a funder, a service or product provider, a beneficiary, or somewhere in between. However, all players on this spectrum find themselves there because of a higher motivation -- to improve a social or environmental condition. I invite you to keep that shared purpose in mind. Because the following answers to the “why” of impact measurement are relevant for us all. 

why is it important to measure social impact 

Why measuring social impact is important for all change makers

It is important to measure impact because,

1) It encourages us to define impact

Ask an impact investor what their impact is and they will likely frame their answer differently than one of their investees. Varied definitions of impact invite a very broad conversation. And this is a problem. We need well-defined impact frameworks in order to accurately measure and compare impact outcomes.

Ambiguous impact frameworks breed similarly ambiguous impact data. For example, we may solely track easily quantifiable outputs -- number of water wells built -- vs. outcomes -- measuring if they are actually being used by a local population and to what extent they are benefitting from it. The latter is important because it allows us to articulate the effect of our outputs, which is valuable for all stakeholders involved.

2) It helps us stay true to our mission

Often we get caught up in the what and how of creating social impact, sometimes at the cost of the why. Measuring impact can actually help us reclaim why we exist to do what we do. This facilitates generation of a streamlined, relevant approach to measuring the effect of that activity.
importance of impact measurement
There can often be a temptation to pursue impact reporting shortcuts or to create hyperbolic narratives of incredible impact to achieve, for example, further funding security. Long-term this has never been a sustainable strategy. I believe it is becoming increasingly ineffective in the short-term as well. As impact measurement gets more refined and the practice more widely shared, the expectation of its quality increases with it. The bar has been raised.

Our employees, our beneficiaries, and our funders may have different priorities regarding impact measurement. But all parties likely resonate with the mission that unites you. And after all, if you’re a mission-driven organization, shouldn’t one of your key drivers for impact measurement be mission-driven?

Thus, we measure impact not because we owe it to our funders, but because we exist for our beneficiaries, and it is the latter for whom our impact measurement should ultimately serve.

3) It creates integrity in social markets

Those who provide the capital to make impact possible have been the traditional drivers of impact measurement. The Mulago Foundation, for example, will not invest unless the potential investee has a process in place for measuring and reporting impact. From a social returns perspective, this could be considered a form of de-risking investments. While The Mulago Foundation doesn’t demand a certain process or reporting style, other foundations and funders do.

The point here is not to measure impact because we are being obliged to do so. Aside from such demand, and keeping mission in mind, measuring impact encourages stronger relationships with our capital sources, whether that’s funders, customers, or something else. Social capital will flow to where impact is well demonstrated. In the process of impact measurement we interpret and analyze the data we acquire. With those data we can more clearly understand the efficacy of our implementation - the what and how of our approach. In this way we aren’t tracking impact solely for impact reporting, we can also measure to uncover inefficiencies and potential areas for process improvements.

This means that in measuring impact we must allow space to be critical of ourselves. It invites pragmatism where there is likely a heavy dose of idealism. And with the courage (and data) for self-evaluation we can then move into creating more effective processes. With it, our impact grows. If we are engaged in ongoing measurement and evaluation we are likely also engaged with stakeholders along our impact value chain. Implementing effective impact measurement may even mean fundamentally shifting the culture of our organization, or the mindset of our funding priorities. Either way, stakeholders across departments, across partnerships and across funding sources, all the way down to our beneficiaries, are positively affected by a transparent commitment to impact evidence.

For example, it could invite increased fulfillment for passionate employees. It could encourage investors to activate more capital. It could amplify the voices of beneficiaries. It may even induce favorable policy changes. People and entities across our sphere of influence will respond and engage with our impact data because it represents an actionable authenticity to a greater purpose.

4) Impact evidence creates value

If you are seeking funding and can tangibly demonstrate impact, you represent a sound impact investment compared to a similar competitor who does not. Conversely, if you are an investor seeking an impact-first investment you will likely want a potential investee to have made a strong commitment to impact accountability. If you are seeking approval to implement a conservation program in a new market, having impact data becomes a necessity of that persuasion process. The competitive reasons are many, and previous items on this list contribute as well.

Simply put, impact evidence creates value. Any time we can leverage untapped value we wield an immense advantage. Think of it as a feedback loop:

Social Impact Measurement Cycle.png


Of course, if we measure and find that we aren’t having the impact we thought, then we iterate our product or service until we do. Either scenario culminates in more impactful results and we return to achieving the mission that motivates us in the first place.

Conclusion: The Importance of Social Impact

You may have noticed some overlap amongst these drivers. That is intentional. And unavoidable. At the highest level we must measure impact if we are to consider who we are and what we do to be driven by our desire to affect positive change. Because all the steps and various side effects of that measurement process ultimately serve that greater goal.

With that greater goal in mind, we also measure impact because it helps us to define and articulate what that is. We measure impact to infuse integrity into social markets. We measure impact because it makes us better at delivering our core business offering. We measure impact because it brings more stakeholder voices to the table. We measure impact because it encourages us to stay true to who we are and why we exist.

Defining our goals. Infusing integrity into our lives. Self-improvement. Giving a voice to the voiceless. Staying true to who we are. If these are ideals we strive for as human beings, and I think they are, our impact journey should reflect them as well. Because as in our own lives, why we do what we do shapes the nature of our journey, and ultimately the quality of our destination.

Read More: Social Impact Assessment

 

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