Impact measurement remains a big challenge for social businesses across the world because it’s just not as straightforward as dollars and cents. To truly capture impact, a social venture might need a larger allocation of time and resources.
It’s important to get acquainted with some of the standard metrics and data points of impact measurement. Measuring lasting impact usually requires a long-term study but there’s plenty of information to communicate to stakeholders prior to that. Ultimately it’s the mix between data points and longer-term studies which paint the full picture of social impact.
There’s no one impact measurement framework but the most common one involves an assessment of a business’ inputs (the resources available), outputs (the activities and services of a business), outcome (the change created), and impact (the long-term effects). Unfortunately, impact is the area which requires the most amount of resources to measure so if a company is short on resources, it’s best to focus on outputs and outcomes as these can be more quickly measured and communicated. If you need help in deciding what metrics are appropriate for your project that adhere to industry standards, check out Impact Reporting and Investment Standards (IRIS).
IRIS is an initiative of the Global Impact Investing Network’s (GIIN), a non-profit dedicated to increasing the effectiveness of impact investments. Some of its most prominent members are: The Bill and Melinda Gates Foundation, The Rockefellar Foundation, and The MacArthur Foundation. IRIS is the go-to catalog for impact performance metrics so that impact investors can measure the social, financial, and environmental performance of initiatives. IRIS metrics are available for free. If you’re just starting out and want to incorporate some impact measurement metrics from the get-go, this is a good place to start to find the metrics that best describe your project.
Global Impact Investment Ratings System (GIIRS)
B Lab’s GIIRS system is more investor focused. While the reports include data points and analytics about a venture’s social impact, the goal of these metrics and data points are to create a standardized way for impact investors to compare the performances of various companies and funds. GIIRS is driven by IRIS and its ratings methodology is overseen by an independent Standards Advisory Council and subject to a rigorous audit process.
Depending on the project, impact isn’t always so black and white. It takes time for certain projects to truly demonstrate their impact and this should be communicated to all stakeholders. If longer term studies are needed, allocate the appropriate resources or find partners to help. In the end, capturing and communicating the impact you’ve created might be just as important as the impact itself.