Measuring Impact: Basics & Benefits

By:: 
Ayushi Agnihotri

A quick look at KIVA’s website and you get a clear idea of the impact they are creating through an easy presentation of numbers that flash on the webpage. Though seemingly simple, a lot of hard work has definitely gone behind those numbers. And of course, it is complex to start with.

Have you ever struggled with impact assessment? Take heart; you are not alone! It has been a rather contentious topic for social entrepreneurs, mainly because of lack of consensus among investors and entrepreneurs on what works. Also, none of the popular methodologies have been able to establish their relevance across sectors. But this should not deter you from assessing and communicating impact with the right tools.

In fact, impact measurement should be built into the fabric of your social enterprise, right from inception.

Here are six reasons why measuring impact is crucial to any social enterprise:

Understand influence: A social entrepreneur is beholden to three bottom lines - financial, social and environmental. The expected influence of the enterprise is wide and therefore, understanding the depth and breadth of the results of an enterprise’s activities becomes vital. This helps define the benefits the project is bringing to the community. Make sure to account for both intended and unintended changes that may be taking place due to the activities of the enterprise.

Manage the project effectively: Most social entrepreneurs are faced with the challenge of optimising scarce resources. Impact assessment helps explain the effectiveness of inputs and interventions, helping you better manage and allocate resources for various projects.

Communicate with stakeholders: Most stakeholders expect to hear from you, regularly. Impact assessment results can provide regular, reliable and tangible data. Communicating this is crucial for the success of the enterprise because these stakeholders are the ones supporting your work through thick and thin.

Differentiate the enterprise: In a highly competitive world, standing out among competition is important. Unique positioning is crucial to ensure sustainability and the assessment results would help identify you and distinguish yourself from others working in the same space.

Compare and rate: With more social enterprises clamouring for investor attention, impact assessment results are a good tool to help investors compare and rate organizations. This would help make the process more objective. Though, of course, the challenge of a widely acceptable methodology would arise but having clear results to communicate would be always useful.  

Value impact: Impact assessment can directly answer the question of what results the investment has achieved or what it could possibly yield. It helps define the value of resources invested in terms of the social or environmental good they have created. These tangible numbers would communicate the magnitude of the work being done.  

The world of impact assessment can be quite bewildering despite a social entrepreneur’s commitment. The wide variety of tools and the lack of consensus can leave an entrepreneur grappling with this challenging task. There is thus merit in breaking the processes into more manageable parts.

Always remember to keep the bigger goal in mind. Measurement is often laborious and resource intensive, therefore having a sharp focus is important to make the exercise efficient. A plethora of methodologies are available for impact measurement and reporting. It is always better to stick to the one the investors are using to evaluate your work as well as one that fits the needs and resources of the organization. Being judicious and logical is the key to a good impact assessment exercise.   

Always remember that Impact assessment is an on-going exercise and should be reviewed and appraised regularly.

Interested to learn more about measuring impact? Check out these useful resources.

Abigail Rutheroe and Tris Lumley, Impact Measurement

(2014)

European Venture Philanthropy Association, A Practical Guide to Measuring and Managing Impact (2013)

 

 If you want to find more about socially conscious living in Asia, check out Asia For Good's social enterprise directory.

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