What does “social impact” really mean today?

Social impact refers to the lasting difference an action makes in people’s lives and in the systems that shape opportunity. It has moved beyond one-off projects and donations toward changes that endure after funding ends. A modern view links intention, participation, and accountability so that benefits are shared and resilient. It recognizes that products, policies, and data practices all influence community well-being. In short, social impact is about aligning purpose with outcomes that matter to people, not just to programs.

How is business social impact different from philanthropy or CSR?

Business social impact is embedded in core operations, not only in side projects or donations. It appears in sourcing, labor practices, product design, accessibility, and local participation. Philanthropy can still help, but embedded impact ties purpose to strategy and daily decisions. CSR supplies the governance and transparency to track and communicate these commitments. Together, they ensure that impact is intentional, accountable, and durable.

What are clear examples of positive and negative social impact?

Positive examples include access to clean water, inclusive schooling, mentoring and job training that lead to quality employment, and climate-aware supply chains. Negative examples include unsafe workplaces, discriminatory practices, extractive sourcing, and pollution that harms local communities. The key test is whether people gain agency and opportunity—and whether harm is prevented or remedied. Context matters, and stakeholder participation determines whether benefits are real and equitable.

What’s the difference between outputs, outcomes, and impact?

Outputs are immediate products of activity—classes held or trees planted. Outcomes are the changes those outputs intend to produce—skills gained or improved behaviors. Impact is the durable difference for people and systems that remains over time—such as mobility, equity, or resilience. Clear distinctions prevent activity bias and keep initiatives focused on meaningful change that persists.

Why does systems thinking matter for social impact?

Systems thinking addresses root causes by examining incentives, policies, and information flows. It promotes cross-sector collaboration so gains are reinforced rather than isolated. It also anticipates unintended consequences and equity gaps. By designing for relationships—not just activities—organizations create change that survives leadership transitions and funding cycles.

How can organizations avoid impact washing and build trust?

Be explicit about who benefits, who decides, and what trade-offs exist. Include stakeholder voice in design and feedback loops, not just in marketing stories. Publish limitations alongside achievements to signal integrity. Align incentives so teams are rewarded for learning and improvement, not only for positive headlines. Over time, consistent practice—more than claims—earns credibility.

How do nonprofits, businesses, and investors work together effectively?

Partnerships succeed when roles are explicit and complementary. Nonprofits bring community proximity and policy insight; businesses bring scale and employment pathways; investors align capital with long-term outcomes. Shared guardrails—equity, transparency, and learning—help navigate trade-offs. Co-created goals and open data practices reduce duplication and accelerate progress.

What are first steps to embed social impact in strategy?

Begin with a clear purpose statement naming who you serve and what will be different. Map outputs, outcomes, and intended impact to surface gaps and assumptions. Invite stakeholders to test relevance and feasibility before scaling. Align governance, incentives, and procurement with the stated purpose. Share progress regularly and adjust—treating impact as a continuous practice.

Where do CSR measurement and reporting fit into the picture?

CSR provides structures to set commitments, track progress, and communicate responsibly. Measurement clarifies whether outcomes occur and for whom; reporting shares methods, context, and results with stakeholders. The aim is to pair evidence with voice and lived experience, not to reduce impact to numbers. Strong CSR practices protect against impact washing and anchor business social impact in accountable practice.

Social Impact: What It Means and Why It Matters Today

Social impact is the lasting difference an organization, initiative, or movement creates in people’s lives and the systems that shape them. It’s not limited to charity, philanthropy, or compliance—it’s the sum of intentional actions that lead to better outcomes for communities, equity, and the environment. In today’s world, every decision has a ripple effect. The products we build, the policies we design, and the data we collect influence how people live and thrive. Understanding social impact means asking a deeper question: not just what do we achieve, but who truly benefits—and for how long. As global challenges intensify, the ability to define, create, and sustain meaningful social impact has become the defining measure of purpose and progress.

How the Meaning of Social Impact Has Evolved

The meaning of social impact has shifted dramatically over the past few decades. Once used mainly to describe charitable acts or corporate donations, the term now represents a more holistic understanding of how organizations interact with society. Early examples of social impact focused on tangible outputs—building schools, planting trees, or distributing aid. These actions mattered, but they often ended where the project did.

Today, social impact encompasses far more than transactions or one-time initiatives. It is about changing the systems that produce inequity, not just treating the symptoms. The most powerful social impact emerges when businesses, governments, and communities work together to create conditions where progress continues—long after the initial intervention is over. This shift reflects a growing recognition that sustainable progress depends on collective accountability and the continuous alignment between intent and outcome.

Understanding the Dimensions of Social Impact

True social impact operates across three dimensions—individual, organizational, and systemic. At the individual level, impact improves lives through education, employment, or access to resources. At the organizational level, it influences how institutions embed purpose into their culture, decision-making, and accountability. And at the systemic level, impact redefines the structures that sustain inequity, such as policies, market incentives, or information gaps.

Social impact becomes transformational when these dimensions connect. An educational initiative that trains students is valuable; one that shifts how an entire school system prioritizes access and inclusion is enduring. Understanding these dimensions helps organizations avoid short-term outputs and instead pursue long-term change—aligning with both community voice and institutional capacity.

Why Social Impact Is a Strategic Imperative

In the past, social impact was seen as optional—a responsibility handled by a department or reported once a year. That mindset no longer holds. Today, social impact is central to an organization’s reputation, resilience, and relevance. Stakeholders expect purpose-driven action backed by transparency. Employees seek meaningful work. Funders demand evidence of benefit. Communities expect participation, not charity.

Organizations that embed social impact into their strategy create shared value. When equity, sustainability, and inclusion are not afterthoughts but core design principles, organizations unlock innovation and trust. The return is tangible: stronger partnerships, greater adaptability, and a brand grounded in credibility. The more interconnected the world becomes, the clearer it is that social impact is not a side effort—it’s how long-term success is built.

Examples of Social Impact in Action

Examples of social impact appear across every sector. In education, programs that expand access to digital learning or mentorship for underrepresented youth create pathways that shift lifetime opportunity. In workforce development, organizations that invest in skill-building for women and rural populations strengthen both livelihoods and local economies. In health, community-driven initiatives that combine medical access with nutrition or behavioral support address root causes instead of symptoms.

Even in the private sector, social impact is reshaping models of value creation. Companies aligning with fair labor practices, circular supply chains, or local sourcing show that purpose and profit are no longer opposites. Each example reveals the same pattern: social impact succeeds when it aligns human outcomes with systemic change.

Challenges in Creating Lasting Impact

Despite growing awareness, achieving meaningful social impact remains difficult. Many organizations still approach it as a project rather than a process—measured by short-term milestones instead of long-term transformation. Fragmented systems, limited collaboration, and inconsistent follow-up often mean that progress stalls once funding ends.

Another challenge is misalignment between what organizations value internally and what communities actually need. A well-intentioned intervention can still miss the mark if it fails to include those most affected. Sustainable social impact requires shared ownership, consistent feedback, and transparent learning. It’s not enough to act; organizations must continually ask whether their actions still serve the people and systems they aim to change.

From Programs to Systems: The Future of Social Impact

The future of social impact lies in systems thinking—the ability to connect individual efforts to larger social, economic, and environmental ecosystems. Impact is no longer a linear path from activity to outcome. It’s a network of relationships, incentives, and behaviors that evolve over time.

To adapt, organizations are moving away from rigid frameworks toward continuous learning systems that integrate data, voice, and evidence into daily practice. These systems do not replace human judgment; they strengthen it. They allow teams to see what’s working, what isn’t, and why—making impact transparent, adaptive, and shared. This is where technology, when used ethically, can help scale learning without reducing complexity to numbers.

Building Purpose That Scales

Social impact that scales is grounded in values, not campaigns. It begins with how leaders define success, how organizations listen to stakeholders, and how they learn from failure. When purpose drives operations—not just storytelling—social impact becomes self-reinforcing. Teams stay aligned, communities stay engaged, and progress sustains beyond funding cycles.

The organizations that thrive in this era will not be those with the biggest budgets, but those with the deepest alignment between mission and method. They will build ecosystems where data, people, and practice move together—where every action, however small, contributes to a larger, lasting impact.

Social Impact Examples

Now, let’s explore some examples of both positive and negative social impacts.

Positive Social Impact Examples

Providing access to clean drinking water in a community that lacks it.
Building a school in a society where education infrastructure is missing.
Offering job training to unemployed people.
Planting trees to improve air quality and reduce pollution.
Supporting local businesses and farmers by purchasing their goods and services.
Providing education for marginalized children.

Each example shares a common thread: agency and access. Positive social impact strengthens both—the ability of people to act and the opportunity to thrive.

Negative Social Impact Examples

Building a factory that pollutes local air and water.
Cutting down trees without replanting them.
Failing to ensure safe working conditions.
Discriminating based on race, gender, or identity.
Underpaying employees or denying benefits.

These examples remind us that social impact cuts both ways. Every choice—product, policy, or investment—creates a ripple effect. Transparency and reflection are essential for ensuring that impact remains net-positive.

Social Impact Organizations

Social impact organizations focus explicitly on creating positive change. They include nonprofits, social enterprises, and impact investors. Each uses different levers but shares one mission: to address social and environmental issues through purposeful action.

They build community resilience, advocate for equitable policies, and channel capital toward long-term well-being. Their tools differ—some design programs, others fund innovation—but their shared focus on outcomes over outputs distinguishes them.

1. Businesses

Businesses play an increasingly vital role in shaping social impact. They can:

Offer products or services that solve social or environmental challenges.
Solar companies promote renewable energy; ethical fashion brands champion fair labor; sustainable agriculture firms protect ecosystems.
Generate employment and strengthen local economies.
By hiring locally and supporting small suppliers, businesses multiply impact across communities.
Engage directly in community support.
Through volunteering, philanthropy, and partnerships, companies can co-create solutions rather than impose them.

When businesses embed purpose into operations—not just messaging—they contribute lasting social and economic value.

2. Nonprofits

Nonprofits drive much of the world’s direct social change. They operate on the frontlines of poverty reduction, health access, education, and rights advocacy.

Their impact emerges in several ways:

Providing essential services like food, housing, and healthcare to underserved communities.
Advocating for policy reforms such as affordable housing or fair wages.
Supporting research and innovation to address root causes.
Offering education and leadership training that empower people to sustain change.

Despite funding challenges, nonprofits remain essential catalysts for inclusion and equity—bridging gaps where markets or governments fall short.

3. Social Impact Investments

Impact investing channels capital into organizations that generate both financial and social returns. Investors fund companies or funds that advance education, renewable energy, affordable housing, or climate adaptation.

The value of impact investing lies in alignment: matching financial goals with moral ones. Investors no longer ask only “what’s the return?” but also “what’s the result?” This dual-purpose mindset helps scale innovative solutions while holding organizations accountable for real-world outcomes.

Business Social Impact and the Evolution of Corporate Responsibility

Businesses today are at the center of social impact. The term business social impact describes how companies integrate purpose and ethics into their core strategy—not just as philanthropy, but as a defining part of how they operate. Modern enterprises understand that their products, supply chains, and employment practices shape entire communities. They are realizing that the health of their business depends on the health of the society around them.

This transformation has given rise to Corporate Social Responsibility (CSR)—a structured approach for embedding social and environmental accountability into corporate strategy. CSR ensures that organizations measure what matters, report transparently, and create shared value beyond financial returns. While early CSR efforts often focused on donations or compliance, modern approaches link impact directly to business outcomes such as employee retention, stakeholder trust, and long-term resilience.

To see how companies are redefining accountability, explore:

CSR Measurement — how businesses quantify purpose-driven outcomes and align them with core metrics.
CSR Reporting — how organizations communicate impact clearly, ethically, and in alignment with global standards.

Together, these practices represent the evolution from corporate citizenship to corporate stewardship—where success is measured not only by growth but by the positive difference it leaves behind. Business social impact, once a side initiative, has become a strategic foundation for trust, innovation, and sustainability.

Social Impact Framework

A social impact framework provides a structured approach to design, evaluate, and improve how initiatives create positive change. It connects intent, action, and evidence in one continuous learning loop.

The framework usually involves:

Defining clear objectives — understanding the issue to address and setting measurable, time-bound goals.
Identifying relevant metrics — selecting indicators that reflect both scale (how many) and significance (how meaningful).
Implementing data collection and analysis — using feedback, surveys, and participation data to assess whether progress is real and inclusive.
Reporting and learning — sharing findings with transparency to build trust and drive improvement.

When done well, a social impact framework becomes more than a reporting tool—it’s a roadmap for responsible growth. Sopact’s own framework supports organizations in linking learning with accountability, ensuring every data point serves people, not paperwork.

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Social Impact Across Different Sectors

Corporate Social Responsibility (CSR)

CSR has evolved from annual donations into strategic action. Modern companies integrate sustainability into supply chains, adopt ethical labor practices, and measure their social footprint with rigor. They understand that positive social impact strengthens brand equity and resilience.

Nonprofit Organizations

Nonprofits tackle issues that markets often ignore. Their deep local knowledge makes them effective partners in systemic change. By combining data, storytelling, and advocacy, they transform lived experiences into policy influence.

Social Enterprises

These hybrid models merge mission with market. They reinvest profits into solutions that benefit society—whether through eco-friendly products, fair trade practices, or inclusive technologies.

Across sectors, the key shift is integration: social impact is no longer separate from core operations—it is the core.

Types of Social Impact

Direct Impact

Direct impact occurs when an organization’s actions produce immediate, measurable results. For example, training programs for people with disabilities lead directly to new employment opportunities.

Indirect Impact

Indirect impact happens when outcomes extend beyond the original intervention. When a person with a disability secures employment, their family gains financial stability, and workplaces become more inclusive—multiplying the initial effect.

Both forms of impact matter. Direct impact shows accountability; indirect impact reveals how systemic change grows organically through connected lives.

Overcoming Data Challenges in Social Impact

Data remains a persistent challenge. Collecting accurate, ethical, and inclusive information requires thoughtful design. Privacy issues, fragmented systems, and limited feedback loops often slow progress.

The solution lies not in more data but in better connection—clean collection at the source, transparent sharing, and continuous learning. Sopact’s approach emphasizes context-driven data that respects dignity while enabling better decision-making. Data should serve communities, not control them.

Measuring Social Impact

Measuring social impact is essential for learning and accountability, but it should never reduce human stories to numbers. Different methods exist depending on goals:

Outcome metrics: track results achieved, such as people trained or policies influenced.
Impact metrics: assess broader change, like improved livelihoods or environmental health.
Performance metrics: evaluate processes—how effectively programs operate and engage stakeholders.

Together, these lenses help organizations see not only what changed, but why it mattered.

Conclusion: From Intention to Transformation

Social impact is no longer an afterthought—it’s the currency of trust and the foundation of progress. It asks us to rethink what success looks like, to measure beyond numbers, and to design systems that learn as they grow. True impact is not achieved through isolated projects but through connected, consistent actions that elevate dignity, opportunity, and sustainability.

As the world navigates new social and environmental realities, one truth remains clear: impact that lasts begins with intent that listens. Organizations that understand this will not only create change—they will inspire it.

Social Impact Definition and Terms

Social impact is a term designed to demonstrate positive or negative outcomes for people or the planet. COVID-19 has only further exposed these gaping cracks in the social fabric globally, highlighting many inequities that will continue to impact people's lives and degrade environmental outcomes disproportionately. The purpose of this article is to provide a quick dictionary of terms within key social impact ecosystem players.

Enterprise (Social Purpose Organization)

Enterprise or Asset is often used in relationships with Asset Owners or Managers. There are many examples of enterprises, large businesses, small and medium-sized businesses (SMBs), B-Corps, and even nonprofits.

Financial Sustainability

Financial sustainability for a social enterprise is the degree to which it collects sufficient revenues from the sale of its services to cover the full costs of its activities. It involves achieving adequate and reliable financial resources for charities, normally through a mix of income types.

Investee

A company or entity in which an investor makes a direct investment. More commonly used in the venture capital vernacular to describe a company in which a venture capitalist firm holds a controlling interest.

Association and Membership

American Evaluation Association (AEA)

The American Evaluation Association is a professional association of evaluators devoted to applying and exploring program evaluation, personnel evaluation, technology, and many other evaluation forms. AEA has approximately 7100 members representing all 50 states in the United States and over 60 foreign countries.

GIIN

The Global Impact Investing Network. A nonprofit organization dedicated to increasing the scale and effectiveness of impact investing around the world.

IIRC

The International Integrated Reporting Council. A global coalition of regulators, investors, companies, standard setters, the accounting profession, and NGOs – seeks to raise awareness and encourage companies to include non-financial information in their regular reports.

OECD

The Organization for Economic Co-operation and Development. It uses its wealth of information on a broad range of topics to help governments foster prosperity and fight poverty through economic growth and financial stability. Also, it helps ensure the environmental implications of economic and social development are taken into

SOCAP

Social Capital Markets. The network of investors, entrepreneurs, and social impact leaders addresses the world’s toughest challenges through market-based solutions by convening ideas and capital to catalyze positive change.

SVI

Social Value International. A global network focused on social impact and social value. Their members, comprised of 40 countries across many sectors and disciplines, share a common goal: to change how society accounts for value.

Impact Institutions and Structures

B Corporation

A benefit corporation that is certified by B Lab.

Benefit Corporation

A class of corporations that voluntarily meets higher standards of corporate purpose, accountability, and transparency. The major characteristics of the benefit corporation form are 1) a requirement that a benefit corporation must have a corporate purpose to create a material positive impact on society and the environment; 2) an expansion of the duties of directors to require consideration of non-financial stakeholders as well as the financial interests of shareholders; and 3) an obligation to report on its overall social and environmental performance using a comprehensive, credible, independent and transparent third-party standard.

CSR

Corporate Social Responsibility. An organization's initiative to take responsibility beyond profit maximization.

CSR may also be referred to as “corporate citizenship” and can involve incurring short-term costs that do not provide an immediate financial benefit to the company but instead promote positive social and environmental change.

CDFI

The Community Development Financial Institution. A private-sector financial institution that focuses on personal lending and business development efforts in local communities. CDFIs can receive federal funding through the U.S. Department of the Treasury by completing an application.

Donor-Advised Funds

Donor-Advised Funds. Charitable giving vehicle sponsored by a public charity that allows you to make a contribution to a charity and be eligible for an immediate tax deduction, and then recommend grants over time to any IRS-qualified public charity.

Development Bank

Financial institutions are dedicated to funding new and upcoming businesses and economic development projects by providing equity capital and/or loan capital.

Development Finance Institutions

The term ” development finance institutions ” (DFI) encompasses not only government development banks, but also non-governmental Microfinance organizations, that match grants to attempt to promote community development, decentralization of power, and local empowerment. Measures of the social cost of DFIs that receive public funds, help to check whether DFIs are good uses of public funds, i.e., if the social benefit of a DFI exceeds the social cost, then public funds are indeed well-spent, further improving social welfare.

Development Impact Bonds

Development Impact Bonds. Provide upfront funding for development programs by private investors, who are remunerated by donors or host-country governments—and earn a return—if evidence shows that programs achieve pre-agreed outcomes.

Fourth Sector

The “fourth sector” is an emerging sector of the economy that consists of “for-benefit” organizations that combine market-based approaches of the private sector with the social and environmental aims of the public and non-profit sectors.

Impact Models

Collective Impact: Collective impact is the commitment of a group of actors from different sectors to a common agenda for solving a complex social problem.

Cooperative: Firm owned, controlled, and operated by a group of users for their own benefit. Each member contributes equity capital, and shares in the control of the firm on the basis of one-member, one-vote principle (and not in proportion to his or her equity contribution).

Corporate Governance: The framework of rules and practices by which a board of directors ensures accountability, fairness, and transparency in a company’s relationship with its all stakeholders (financiers, customers, management, employees, government, and the community).

Catalytic First Lost Capital: Catalytic first-loss capital refers to socially- and environmentally-driven credit enhancement provided by an investor or grant-maker who agrees to bear first losses in an investment to catalyze co-investors participation that otherwise would not have entered the deal. Catalytic first-loss capital has gained recent prominence in impact investing dialogue as more investors look to enter the market.

Charity: An organization set up to provide help and raise money for those in need. Related to non-governmental organizations (NGOs), Nonprofit organizations, and not-for-profit organizations.

Fourth Sector: The “fourth sector” is an emerging sector of the economy that consists of “for-benefit” organizations that combine market-based approaches of the private sector with the social and environmental aims of the public and non-profit sectors.

Green Bond: A bond to fund environmentally friendly projects. Financial projects to combat pollution and cultivate environmentally friendly technologies include energy efficiency, sustainable agriculture, fishery, forestry and water management, aquatic and terrestrial ecosystems protection, and clean transportation.

Green Tech: Alternatively called environmental technology or clean tech, this term describes a collection of modern technologies and approaches that maximize human, environmental, and economic benefits. Specifically, green tech utilizes advancements in modern environmental science, biotechnology, and engineering to provide products and services in a way that least degrades natural resources and in some cases, regenerates them. Common examples of green tech include materials recycling; using solar, wind, and other renewable energy sources for power; biological water treatment and gray water recycling; biofuels; and energy-conserving electronics.

MRI: Mission-Related Investment. An investment made using assets from a foundation’s endowment that seeks to create social impact as well as typically risk-adjusted financial returns. Similar to Impact Investing.

NGO: Non-Governmental Institution. A non-profit, citizen-based group that functions independently of government. NGOs, sometimes called civil societies, are organized on community, national, and international levels to serve specific social or political purposes and are cooperative rather than commercial in nature.

Non-Profit: A corporation or an association that conducts business for the general public's benefit without shareholders and a profit motive.

Pay for Success Bond: Also known as “Social Investment Bond”, “Pay for Success Financing”, “Social Benefit Bond” or “Social Bond”. A contract between the public sector and one or more non-government entities to address social challenges. Commitment to improving social outcomes that will result in public savings and reduce taxpayer expenses.

Pay for Success Financing: See Pay for Success Bond

Pension Fund: Fund to strategically invest in order to achieve their corporate societal engagement strategy.

Philanthropy: An act or gift done or made for humanitarian purposes.

Program Responsible Investments (PRI): Principles for Responsible Investment. Encourage investors to use responsible investments to enhance returns and better manage risk. Does not operate for its own profit but engages with global policymakers.

Impact Measurement Terms

Beneficiaries : The individuals, groups, or organizations, whether targeted or not, that benefit, directly or indirectly, from the intervention

Blockchain: A distributed database maintains a continuously growing list of records called blocks. Each block contains a timestamp and a link to the previous block. A peer-to-peer network manages a blockchain, collectively adhering to a protocol for validating new blocks

.Blockchain for Social Impact: Using blockchain technology to ensure positive economic, social, and environmental impact.

Disruptive Innovation: A process by which a product or service takes root initially in simple applications at the bottom of a market and then relentlessly moves upmarket, eventually displacing established competitors. Clayton Christensen coined the term in 1995.

Development Evaluation: An evaluation approach can help social innovators develop social change initiatives in complex or uncertain environments. Developmental evaluation (DE) originators liken their approach to research & and development in the private sector product development process because it facilitates real-time, or close to real-time, feedback to program staff, thus facilitating a continuous development loop.

Double Bottom Line: Simultaneous pursuit of financial and social returns on investment – the ultimate benchmark for a social enterprise or a social sector business.

Due Diligence: An investigation or audit of a potential investment confirms all facts, such as reviewing all financial records, plus anything else deemed material. Due diligence refers to the care a reasonable person should take before entering into an agreement or a financial transaction with another party. When sellers perform a due diligence analysis on buyers, items that may be considered are the buyer’s ability to purchase and other elements that would affect the acquired entity or the seller after the sale has been completed.

Data: Information collected by a researcher. Data gathered during an evaluation are manipulated and analyzed to yield findings that serve as the basis for conclusions and recommendations.

External Validity: The degree to which an evaluation produces findings, conclusions, and recommendations that apply to other settings and contexts.

Environmental Accounting: Environmental accounting refers to a) national accounting: physical and monetary accounts of environmental assets and the costs of their depletion and degradation; b) corporate accounting: the term usually refers to environmental auditing but may also include the cost of environmental impacts caused by the corporation.

ESG: Environmental, Social, and Governance. A set of standards for a company’s operations that socially conscious investors use to screen investments. Environmental criteria look at how a company behaves as a natural environment steward. Social criteria examine how a company manages relationships with its employees, suppliers, customers, and the communities where it operates. Governance involves a company’s leadership, executive pay, audits, internal controls, and shareholder rights. Investors who want to purchase securities that have been screened for ESG criteria can do so through socially responsible mutual funds and exchange-traded funds.

Environmental Impact: An environmental impact results from environmental impacts on human health and welfare.

ESG Integration: Integration of ESG factors measuring the sustainable and ethical impact of investment for long-term risk assessment

Evaluation: The systematic and objective assessment of an ongoing or completed project, program, policy, design, implementation, and results. The aim is to determine the relevance and fulfillment of objectives, efficiency, effectiveness, Impact, and Sustainability. An evaluation should provide credible and useful information, enabling the incorporation of lessons learned into the decision-making process of both recipients and donors. An evaluation also refers to determining the worth or significance of an activity, policy, or program. As systematic and objective as possible, an assessment of a planned, ongoing, or completed intervention. In some instances, evaluation involves the definition of appropriate standards, the examination of performance against those standards, an assessment of actual and expected results, and the identification of relevant lessons.

Gamification: A process of adding games or game-like elements in a non-game context to increase user engagement.

GIIRS: Global Impact Investing Rating System. A B Lab project assesses companies and funds' social and environmental impact (but not the financial performance), using a rating approach analogous to Morningstar investment rankings or rating agency credit risk ratings.

GRI: Global Reporting Initiative. It is an international independent organization that helps businesses, governments, and other organizations understand and communicate the impact of business on critical sustainability issues such as climate change, human rights, corruption, and many others.

GNH: Gross National Happiness. Philosophy tries to measure the collective health of a country. Attempts to measure the total sum of economic output and net environmental impacts, the spiritual and cultural growth of citizens, mental and physical health, and the strength of the corporate and political systems. Impact positive and negative, primary and secondary long-term effects produced by an intervention, directly or indirectly, intended or unintended.

Impact Assessment

Identifying the future consequences of current or proposed action and analyzing, monitoring, and managing the social consequences of development.

Impact Chain

The impact chain represents how a social purpose organization achieves its impact by linking the organization to its activities and the activities to outputs, outcomes, and impact. The impact chain forms the central line running through the impact plan.

Impact Evaluation

Provides information about the impacts an intervention produces – positive and negative, intended and unintended, direct and indirect. This means that an impact evaluation must establish the cause of observed changes. Typically involves collecting baseline data for both an intervention group and a comparison or control group and the second round of data collection after the intervention, sometimes even years later.

Impact Management:

The process of channeling the holistic impact of the organization into creating sustainable business value in the ecosystem. An ongoing process of figuring out which effects experienced by people and the planet are material, both positive and negative. Guided by this assessment and our intentions and constraints, we set impact and financial goals. We established the governance and processes to deliver consistently on those goals. Still, we also continue to learn about people and the planet's experience and use that information to adapt our goals and improve.

Impact Map

A table that captures how an activity makes a difference is how it uses its resources to provide activities that lead to particular outcomes for different stakeholders.

Impact Measurement

Measuring and managing the process of creating a social and environmental impact to maximize and optimize it.

IRIS

Impact Reporting and Investment Standards. Common indicators describe an organization's social, environmental, and financial performance. Seeks to standardize the definitions of commonly used indicators.

Input

The financial, human, and material resources used for development intervention.

Institutional Development

Creating or reinforcing a network of organizations to effectively generate, allocate, and use human, material, and financial resources to attain specific objectives is sustainable.

Intentionality

A characteristic of our mental states and experiences represents something other than itself and gives a sense of something. This representational character of mind or consciousness – its being “of” or “about” something – is intentionality.

Impact Strategy

Overall strategy aligning societal, environmental, and business objectives to increase business value.

Impact Report

Presentation of an organization's economic, social, and environmental impact.

KPI

Key Performance Indicator. A set of quantifiable measures a company uses to gauge its performance over time. These metrics are used to determine a company’s progress in achieving its strategic and operational goals and compare its finances and performance against other businesses within its industry.

Logical Framework

A management tool is used to improve interventions' design, most often at the project level. It involves identifying strategic elements (inputs, outputs, outcomes, impact) and their causal relationships, indicators, and the assumptions or risks that may influence success and failure. It thus facilitates planning, execution, and evaluation- of a development intervention.

Livelihood(s)

A livelihood comprises the capabilities, assets (including material and social resources), and activities required for living. A livelihood is sustainable when it can cope with and recover from stress and shocks and maintain or enhance its capabilities and assets both now and in the future while not undermining the natural resource base.

Metrics and Standards

Used by investors to invest in revenue-generating social enterprises to generate social and/or environmental impact.

MATERIALITY

Defining what matters is at the core of materiality. In business and sustainability, materiality refers to identifying and prioritizing the environmental, social, and governance (ESG) issues that are most significant to a company and its stakeholders. It involves determining which issues have the potential to impact the company's long-term success, reputation, and value creation.

Materiality goes beyond simply identifying all possible ESG issues. It requires a careful analysis of their relevance and significance to the company, considering factors such as stakeholder expectations, regulatory requirements, industry standards, and emerging trends. By understanding what matters most, companies can focus on addressing the most material issues to their business and stakeholders.

Defining materiality involves a comprehensive assessment that considers both internal and external perspectives. Internally, companies must consider their business strategy, operations, risks, and opportunities. Externally, they must engage with their stakeholders, including investors, customers, employees, communities, and NGOs, to understand their concerns and expectations.

The materiality process typically involves conducting a materiality assessment, including surveys, interviews, benchmarking, and stakeholder consultations. The findings of this assessment help companies identify the most relevant ESG issues and prioritize their actions accordingly. The results are often presented in a materiality matrix or report, which visually represents the importance and impact of each issue.

Defining what matters through materiality is not a one-time exercise but an ongoing process. As business and societal landscapes evolve, so do the material issues. Companies must regularly review and update their materiality assessments to ensure they remain aligned with changing expectations and emerging risks.

Ultimately, materiality enables companies to focus their resources and efforts on the most important issues for sustainable value creation. By addressing these material issues, companies can enhance their performance, mitigate risks, build trust with stakeholders, and contribute positively to society and the environment.

Output

The products, capital goods, and services result from a development intervention. It may also include changes resulting from the intervention, which is relevant to achieving outcomes.

Outcome

A result or consequence of an intervention’s outputs.

QUANTITATIVE IMPACT

Quantitative impact refers to the collection and analysis of numerical data that measures the extent and magnitude of the impact created by an intervention. It involves systematically gathering and evaluating various quantitative indicators to provide a comprehensive understanding of the intervention's effectiveness.

By quantifying the impact, organizations can assess the tangible outcomes and progress toward achieving their goals. This data-driven approach helps make informed decisions, set realistic targets, and monitor the intervention's success over time.

Quantitative impact measurement involves using key performance indicators (KPIs) and other metrics to quantify the changes brought about by the intervention. These metrics can include financial figures, such as revenue generated or cost savings, as well as social and environmental indicators, such as the number of people reached, reduction in carbon emissions, or improvement in education outcomes.

By collecting and analyzing quantitative data, organizations can gain insights into the effectiveness and efficiency of their interventions. It enables them to identify areas of success and areas that require improvement, allowing for evidence-based decision-making and strategic planning.

Moreover, quantitative impact assessment provides a standardized and objective way to compare interventions and measure their relative success. It allows for benchmarking against industry standards, best practices, and previous performance, enabling organizations to track progress and make data-driven adjustments to their strategies.

Overall, quantitative impact assessment plays a crucial role in understanding the effectiveness and efficiency of interventions. By collecting and analyzing numerical data, organizations can gain valuable insights, demonstrate accountability, and continuously improve their impact on society and the environment.

QUALITATIVE IMPACT

The qualitative impact goes beyond the numbers and focuses on the narrative behind the quantitative data. It involves capturing the stories, experiences, and perspectives of individuals and communities affected by an intervention to provide a deeper understanding of its impact.

While quantitative impact measurement provides valuable metrics and indicators, qualitative impact adds richness and context to the numbers. It allows for a more comprehensive assessment of the social and environmental changes an intervention brings, highlighting the human stories and qualitative dimensions that cannot be captured through numbers alone.

Through qualitative methods such as interviews, focus groups, and case studies, organizations can gather firsthand accounts and personal narratives that shed light on the real-life implications of their interventions. These stories provide insights into the lived experiences of individuals, their perceptions of change, and the broader social dynamics at play.

Qualitative impact assessment also helps uncover unintended consequences, unforeseen challenges, and hidden opportunities that may arise from an intervention. It allows organizations to understand the nuances and complexities of the impact they are creating, enabling them to adapt and refine their strategies accordingly.

Organizations can paint a more holistic picture of their impact by combining quantitative and qualitative approaches. The numbers provide quantitative evidence, while the stories and narratives add depth and meaning. Together, they create a more comprehensive understanding of the intervention's effectiveness and its implications for individuals, communities, and the environment.

Ultimately, qualitative impact communication brings the numbers to life by giving them context and human relevance. It helps stakeholders connect with the impact deeper, fostering empathy, understanding, and engagement. Organizations can inspire action, drive change, and create a lasting positive difference by effectively communicating qualitative impact.

Social Accounting

Preparing and publishing an account about an organization’s social, environmental, employee, community, customer, and other stakeholder interactions and activities and, if possible, the consequences of those interactions and activities. Contains both financial and descriptive non-quantified information.

Social Enterprise

An organization that promotes economic, social, and environmental impact alongside generating revenue is a powerful force for positive change. These organizations strive to create a meaningful impact on society and the environment by focusing on sustainability and responsible business practices. They understand that their success is not solely measured by financial gains but also by the positive outcomes they achieve.

As these organizations grow and thrive, their impact expands exponentially. They can implement larger-scale initiatives and make a greater difference in the world with increased resources and reach. They leverage their revenue generation to fund social and environmental projects, support local communities, and drive innovation towards a more sustainable future.

By integrating economic, social, and environmental considerations into their business models, these organizations create a holistic approach to growth. They prioritize the well-being of all stakeholders, including employees, suppliers, customers, and the communities in which they operate. They foster strong relationships and build trust by actively engaging with these stakeholders, further amplifying their impact.

In this interconnected world, the actions of these organizations ripple far beyond their immediate sphere of influence. They inspire others to adopt similar practices and contribute to a collective effort to address pressing global challenges. As more organizations embrace this mindset, the potential for positive change grows exponentially, creating a ripple effect that can transform industries and societies.

Ultimately, an organization that promotes economic, social, and environmental impact alongside generating revenue is a catalyst for a more sustainable and equitable future. By redefining success beyond financial metrics, they demonstrate that profit and purpose can coexist and that businesses have the power to be a force for good. Through their commitment to creating a positive impact, they inspire and empower others to join the movement towards a more sustainable and inclusive world.

Social Impact

Social impact refers to the profound effect of an activity or intervention on a community's social fabric and the overall well-being of individuals and families. It encompasses the positive changes and improvements resulting from initiatives aimed at addressing social challenges and creating a more equitable and inclusive society.

When an activity has a social impact, it goes beyond simply generating economic value. It reaches the core of human existence, touching the lives of individuals and families in meaningful ways. This impact can manifest in various forms, such as improved access to education, healthcare, and basic necessities, enhanced social cohesion, increased employment opportunities, reduced inequality, and greater empowerment of marginalized communities.

By focusing on social impact, organizations and initiatives can create a ripple effect of positive change that uplifts entire communities. They recognize that a thriving society is built on the well-being and flourishing of its members, and they actively work towards addressing systemic issues and creating opportunities for all.

Social impact is not limited to the immediate outcomes of an activity but extends to the long-term sustainability and resilience of communities. It involves considering the broader social implications of actions and interventions, understanding the interconnectedness of social systems, and working towards inclusive, participatory, and equitable solutions.

Measuring and evaluating social impact is essential to ensuring accountability and understanding the effectiveness of interventions. It involves collecting quantitative and qualitative data to capture the tangible and intangible outcomes of activities. This data-driven approach helps organizations assess their initiatives' success, identify improvement areas, and make informed decisions to maximize their social impact.

Ultimately, social impact represents the transformative power of individuals, organizations, and communities coming together to address social challenges and create a better future. We can build a more just, compassionate, and sustainable society for all by prioritizing the well-being and empowerment of individuals and families.

Social Impact Investing

Investments into businesses to generate social and/or environmental impact alongside generating revenue.

SAAB

Sustainable Accounting Standard Boards. An independent standard board sets industry-specific corporate sustainability disclosure to ensure that disclosure is material, comparable, and decision-useful for investors.

Social Benefit Bond

See Pay for Success Bond

SOCIAL BOND

A social bond, also known as a pay-for-success bond, is a financial instrument that serves as a unique and innovative way to address social challenges and promote positive change. It brings together investors, governments, and service providers in a collaborative effort to achieve specific social outcomes.

Similar to traditional bonds, social bonds involve raising capital from investors. However, the key difference lies in how the funds are utilized. Instead of being allocated for traditional purposes like infrastructure or business expansion, social bonds are specifically designed to fund social programs and initiatives that aim to address pressing societal issues.

The success of a social bond is linked to the achievement of predetermined social outcomes. These outcomes are typically aligned with the United Nations Sustainable Development Goals (SDGs) and focus on areas such as education, healthcare, poverty alleviation, and environmental sustainability. The bond issuers, often governments or social enterprises, enter into agreements with service providers who are responsible for implementing and delivering the social programs.

The impact of these programs is rigorously measured and evaluated through data collection and analysis. If the predetermined social outcomes are successfully achieved within a specified timeframe, the investors receive financial returns on their investments. However, if the outcomes are not met, the investors may receive reduced or no returns.

The use of social bonds has gained significant traction in recent years as a means to mobilize capital for social impact. They provide an opportunity for investors to align their financial goals with their desire to make a positive difference in society. Additionally, social bonds encourage collaboration and accountability among stakeholders, fostering a collective effort to address social challenges effectively.

By expanding the scope of traditional financial instruments to encompass social impact, social bonds contribute to a more inclusive and sustainable future. They demonstrate the potential for finance to catalyze positive change, unlocking new avenues for addressing societal issues and improving the well-being of communities.

SROI

Social Return on Investment. A method for measuring values that are not traditionally reflected in financial statements. Including social, economic, and environmental factors, which can identify how effectively an organization uses its capital and other resources to create value for communities.

Social Venture Capital

Unlike traditional venture capital - investors look beyond financial return and risk-reward models when deciding where to place their money.

Sustainability

To meet the needs of the present without compromising the ability of future generations to meet their own needs.

Theory of change

Theory of Change (TOC) documents the change – or impact – that you seek accountability and internal organizational awareness of potential challenges. In the ToC, the primary challenges indicated are your underlying assumptions.

Essentially, it's all about understanding the long-term goal and mapping backward in a way that irons through details. By doing this, you might uncover gaps or potentially at-risk assumptions.

UN SDG

United Nations Sustainable Development Goals. Also known as “Transforming Our World: The 2030 Agenda for Sustainable Development”. Established in 2015 and consists of 17 Global Goals and 169 Targets to combat sustainable development issues by 2030.

UN MDG

United Nations Millennium Development Goals. Established in 2000 and consists of 8 international goals for 2015 to combat sustainable development issues.

UN GA

United Nations General Assembly. Established in 1945 under the Charter of the United Nations. Occupies a central position as the chief deliberative, policymaking, and representative organ of the United Nations.

Visionary

A person with a strong belief that the world will be a better place in the future.

Explore more on Social Impact

Score Terms & Actors

Enterprise / Social Purpose Organizationoc
An enterprise (also called a social purpose organization) is any actor—nonprofit, social enterprise, or mission-oriented business—that balances financial sustainability with measurable impact.

Social Enterpris
A model of enterprise that integrates revenue generation with social or environmental goals. Profits are reinvested to further mission rather than distributed solely for financial gain.

Investee
An entity in which capital is invested—especially in the impact investing context. The investee is expected to deliver both financial return and social or environmental outcomes.

Association & Membership Bodies
Networks or professional bodies that form the infrastructure of the impact field. Examples: AEA (American Evaluation Association), GIIN (Global Impact Investing Network), Social Value International (SVI), IIRC.

B Corporation / Benefit Corporation

B Corporation: A certification from B Lab for companies that meet high standards of social and environmental performance, accountability, and transparency.
Benefit Corporation: A legal corporate structure that requires consideration of stakeholder and mission impact beyond financial returns.

CSR (Corporate Social Responsibility)
CSR refers to how organizations incorporate social, environmental, and ethical concerns into their business operations and stakeholder practices. Modern CSR links directly to business social impact strategies.

Organizational Assessment
A structured evaluation of internal capacity, alignment, governance, and performance. (See Sopact’s AI Ready Organizational Assessment use-case)
—> AI Ready Organizational Assessment Sopact

Impact Assessment / Measurement
The process of evaluating the social or environmental consequences of a program or enterprise. (See AI Ready Impact Assessment use-case)
—> AI Ready Impact Assessment Sopact
Also connected: Impact Measurement & Management
—> Impact Measurement and Management Sopact

CSR Measurement
How companies quantify the outcomes of their CSR efforts.
—> CSR Measurement Sopact

CSR Reporting
The process of communicating impact results in structured, auditable, and stakeholder-friendly formats.
—> CSR Reporting Sopact

Grant Management
The system of structuring, funding, monitoring, and evaluating grants and partners.
—> Grant Management Software Sopact

Data Collection Tools / Techniques
Systems and methods for gathering evidence from stakeholders.
—> Data Collection Techniques / Methods / Tools Sopact
And
—> Data Collection Tools Sopact

Longitudinal Survey / Design
A research method tracking the same individuals across multiple time points.
—> Longitudinal Survey Design Sopact

Mixed Method Design
An approach combining quantitative and qualitative data for richer insight.
—> Mixed Method Design Sopact

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