How to measure your social impact
If you want to create a successful social business, you should be able to verify its positive impact on society. For this reason, establishing rigorous methods of business measuring and monitoring is as important as any other step that you will take in order to design and implement a winning business.
So let’s discover together how you can measure the impact of your business idea.
What is the social impact?
Think of it this way: the Business plan is a roadmap with a few key stops along the way. Social impact is one of them. Out of all the outcomes that your business can produce, social impact – how a product affects society and individuals – is maybe the hardest to measure.
“the effect of an activity on the social fabric of the community and well-being of the individuals and families”.
In other words, we can define the social impact as
“A significant, positive change that addresses a pressing social challenge”.
Increasingly, businesses find that consumers prefer products with ethical or environmental attributes and there is now evidence that a majority are also willing to pay more for them. A study by marketing research group Nielsen founded that 55% of online consumers across 60 countries would pay a premium for ‘green’ or socially responsible goods and these data are growing throughout the years!
Business planning and Social impact
As we will find out in the final step of this Guide, a well-constructed Business plan should provide a clear and compelling story about the social problem your organisation aims to solve, the unique approach that you will take to address it and the expected impact on society.
Before you can measure the impact that your business has on the community, firstly you need to identify long-term social impact indicators and, secondly, you have to assess your short-term performance actions.
Key models of Social impact Measurement
After you have put so much time and effort into developing a strategy that will ensure a sustainable social impact of your business, you should also be aware of the methods that you can use in order to measure it.
If you want to know more about social impact measurement, take a look to the Handbook for Product Social Impact Assessment.
What can you do in order to increase the social impact of your business?
Tips & Tools
There are lot of tools which are meant to help businesses to measure their social and economic impact:
Prove and Improve Tools – NEF Consulting
Based on research from the New Economics Foundation, NEF Consulting offers tools and resources to test and improve the impact of social enterprises, charities and other mission-driven organisations and projects.
These pages provide a valuable introduction to a number of tools and methods for measuring and improving impact. NEF Consulting also offers a variety of trainings which are aimed at strengthening the capacity of organisations to think in new ways and to realize the value of their contribution towards shaping a new sustainable economy.
The Tool Decider
NEF Consulting – this is designed to help you to identify the tool best suited to your organization and to your performance management needs. Start at the center of the chart selecting your organization size and discover which is the strategy that best fits in your case.
GEMI Metrics Navigator
this tool was developed by The Global Environmental Management Initiative (GEMI) and it is designed to help organisations developing and implementing metrics that provide insight into complex issues and support business strategy. The tool presents a six-step process to select, implement and evaluate a set of “critical few” metrics that focus on organisation’s success. Each step of the tool provides guidance in the form of a worksheet, series of questions or checklists.
Impact Reporting and Investment Standards (IRIS)
it is developed by the Rockefeller Foundation; Acumen Fund, a non-profit venture that invests in business working to address global poverty; and B-Lab, a non-profit that builds market infrastructure intended to support such business. These founding partners have been supported by Deloitte and PricewaterhouseCoopers. IRIS is a free public good to support transparency, credibility, and accountability in impact measurement practices across the impact investment industry.
Total Impact Measurement and Management (TIMM)
PricewaterhouseCoopers’s Total Impact Measurement & Management (TIMM) puts a value (positive or negative) on impacts across society, tax, economics and the environment. It gives business the ability to compare strategies and investment choices, evaluating the total impact of each. One of the quadrants that the TIMM framework measures is the social impact – the consequences of business activities on society such as health, education and community cohesion.
Isn’t enough for you? More tools are available in The Guide for Business created by the World Business Council for Sustainable Development (WBCSD).
Online platforms to share Best practices
To help you understand better the importance of the social impact plan and how to measure it, we have gathered a few online platforms where businesses can upload their own case studies and best practices. These platforms are also a great way to connect with peers facing the same challenges!
Moreover, if you want to keep it practical you should take a look to The Business Value of Impact Measurement (BVIM) with a great number of case studies which will surely motivate and inspire you… So check them out!