Nonprofits and social enterprises change lives. But few of these organizations invest in their own capacity to measure the change they’re making. They need to measure social impact. Here at Archer Impact we have 26 years of combined nonprofit experience and we have never seen an organization with robust impact measurement. We’ve seen plenty of organizations going through the motions of collecting basic data to prove their work, but no one is doing it quite right. Part of this stems from a fundamental lack of understanding of the purpose of social impact measurement. Here are five reasons to measure social impact.
- Why is it important to measure social impact?
- Access funding
- Improving your impact, NOT proving it
- Data-driven storytelling
- Transparency
- Setting and achieving your goals
Why is it important to measure social impact?
Impact measurement is fundamental to the health, growth, and success of your organization. More importantly, it is the key to driving the social change you’re looking to make. There are plenty of ways to implement social impact measurement: in-house, consultants, and high-tech customized social impact measurement software. We’ll cover how to measure social impact in a future post.
A lack of impact measurement in practice
So why don’t organizations invest in impact measurement? At the end of the day, impact measurement is about capacity building – which is not the sexiest thing to invest in. It’s a bit like therapy. People view therapy as “extra,” turning to therapy only when there’s a problem. In fact, therapy is fundamental to your overall health and well being.
Social enterprises and nonprofits tend to follow a similar path. They grow organically, attempting to address a perceived need. They get to a point where they’re having data problems, potential funders are asking for information they don’t have, or they can’t demonstrate (in numbers) what they’ve achieved. At this point, social enterprises and nonprofits start searching for impact measurement to solve a problem, when it should have been a foundational part of their programs.
Access funding
A conventional business can offer up their balance sheet and business plan to potential investors. The returns for social enterprises and nonprofits are social and not always financial. Where is the balance sheet for that? Social impact measurement allows organizations to demonstrate clear social returns in a way that is easily understood and compelling to investors and funders.
Improving your impact, NOT proving it
In the world of nonprofits, we are accustomed to showing our impact through narrative and qualitative information. Quantitative data collection and reporting – like annual reports – are often viewed as a burden, as extra work. Data and reporting are necessary chores to prove the value of an organization’s work.
To measure your social impact is to improve it, not prove it. In implementing social impact measurement, you engage stakeholders, clarify goals, determine indicators of progress, and perhaps most importantly, create a cycle of listening to the very people you’re trying to help.
Imagine a waiter in a restaurant bringing your food to the table and never returning to ask, “how is everything?” The waiter asks this question to make sure that you, the client, are getting the most out of your experience and that the restaurant is providing good food and service. Your feedback to the waiter should change the way the restaurant operates.
It’s the same with nonprofits and social enterprises. You need to listen to your stakeholders in order to provide the best service possible and fill a real need in society. That’s maximizing impact.
Data-driven storytelling
Impact measurement is the key to telling a story about the work you do. Which statement is more compelling:
- We distributed 500,000 condoms
- We reduced instances of HIV in the community by 30%
If you chose the latter, that’s impact measurement.
The world today is far more data-literate and data-hungry than it ever has been. Impact measurement provides clear and compelling visualizations to substantiate our narratives. RIP pie chart.
Transparency
When it comes to donated funds, we want receipts not promises. There are legal requirements for the financial transparency of nonprofit organizations. But when it comes to social impact, there are no guarantees.
Everyone watched in amazement as Ashton Kutcher and Mila Kunis raised $30 million USD in 1 day for relief efforts in Ukraine. How did those funds change lives? Where are the receipts?
Robust social impact measurement allows your organization to show the receipts for your work in clear terms. What you’ve done and the effect you’re having on the community. This transparency builds trust with funders, stakeholders, and the public.
Setting and achieving your goals
A good social impact measurement framework clarifies your goals. A lot of nonprofits and social enterprises develop organically to fill a need in the community. What began as a community center for the elderly is now offering children’s reading classes, HIV/AIDs resources, and a food pantry. In this environment, goals get murky.
Impact measurement helps you understand how your resources, activities, and outputs connect to your goals. Outcomes are the progress indicators you’re looking for.
Transform your organization with impact measurement
To measure social impact is to ask “is anything changing?” Impact measurement attempts to count the previously uncountable. It opens your organization up to feedback from your stakeholders as well as implements a cycle of learning and growth. It helps your organization’s bottom line: driving social change. Let Archer Impact help you build your organization’s impact measurement.
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