Social impact is a relatively new idea in the corporate sphere. Unlike financial and business management, social impact management is slowly developing and has a long way to go. Businesses that realign their goals to include social impact face vast challenges and expose themselves to uncertainty that is difficult to manage.


Scope of impact

It is impossible to measure all of the effects a business has on the world. So it is important to consider why measuring impact is useful and necessary. 

  1. To understand how the organisation’s work tracks against a set of social impact goals

  2. Hold itself and employees accountable to targets

  3. Adjust, and make informed decisions about the best way to achieve targets

Without impact measurement, there can be no progress. You need to know where you stand before you make decisions about where you want to go. Just as important is identifying where you are and aren't having the desired impact. A lack of information means that right decisions are left up to chance and makes progress simply impossible.

Impact measurement is vitally important to all the stakeholders in the business. Whether they are impact investors, management, employees, an organisation needs to be transparent about the social impact it has achieved compared to what it promises to achieve. 

What to measure?

It starts with your impact goals. You need to ask yourself: What is the organisation trying to achieve? All organisations are established for a reason, and have mission and vision statements that should inform the impact objectives. Often, impact statements are broad and do not have one statistic that can represent progress, for example, improving access to education, support for long-term unemployed or the homeless, or giving a voice to marginalised groups. It is impractical to try and measure the level of homelessness in a whole city, even in a designated area, and although there may be public statistics, they are unlikely to capture the direct effect of the organisation on the problem. When choosing what to measure, consider the type of information and it's availability in order to illustrate the impact and relationship the organisation has with the social challenge it strives to encounter.

Quantitive vs qualitative statistics. Although qualitative statistics may better capture improvements in 'access', 'support' or 'empowerment', they are limited in their application to tracking progress and change. This is because they are subjective, and cannot be used in many cases to compare the experience of one person from another, or the same person at two points in time. Qualitative stats have to be used in conjunction with quantitative stats, in order to objectively track change. Quantitative statistics are easier to collate, analyse and present. They are necessary to communicate social impact effectively, and for the internal and external reporting of the organisation.

When measuring impact, statistics need to be relevant and accessible. 

A relevant piece of information is one that captures something about the impact goal, as well as the operations of the organisation in this area. For example, when trying to measure accessibility to education, it would be relevant to count (or estimate) how many children have attended school, or trends in school attendance. The amount of money invested is a powerful tool that can be a relevant statistic, how much money was used for school scholarships or bursary. Information that is relevant to the goal that doesn't capture the activities of an organisation, will cause reports to under assess the impact of an organisation. It needs to reflect what the organisation is doing, or something that the organisation can directly influence. The relevance of information has to be judged case by case, but given the importance of measurement, it needs to be something that should be considered carefully. 

Information also needs to be accessible. It needs to be a piece of information that is attainable and reliable. Faced with limited resources, organisations should consider information that is either already being collected by the organisation through their operations, or something that is easily attainable. Lastly, measurements need to be ongoing, or at least replicable from time to time.


There are many ways to measure social impact, but here are some basic questions that need to be addressed.

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What is your goal?

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How will you measure progress?

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What is your target?

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How/who will collect the information?


Measuring the social impact of a business is vital for any business that is seeking support from an impact investor. The better social impact can be measured and reported, the more opportunities for funding arise. Impact investors need to know 1, 2 and 3, in order to reach their goals too.

Evaluate impact risk.

Evaluating Impact can be the first step, but it is incomplete without an Impact Risk model. This is an assessment of risks that could effect the business' ability to deliver on its social impact objectives, or that it could have a negative social impact. 


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Social Impact Model

An impact model is a plan of action. How well do your resources, operations and outputs support your social impact goals?