How to assess social impact

Working for the good of society: the goal of social enterprises. Exclusion, health, the environment… they place public interests at the very heart of their activities to make a positive impact.

Measuring social impact is thus a major stake for such organizations, but it can sometimes be hard to figure out which method is the right one.

A multitude of approaches and tools can be used to highlight the changes brought on by a social enterprise’s activities: change assessment, cost-benefit approach, etc.

In Luxembourg, an evaluation grid based on the CDI ratings method has been developed to provide a practical and precise reference point to social businesses and approved by the Social Impact Company (SIS). You can find it here.

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No matter the method you choose, you will have to start by drawing up a list of questions to consider before getting started.

#1. Identify the purpose of the assessment

Before anything else, you need to give thought to your objectives, your target and the available resources (financial and human). These are determining factors in whether or not an assessment is feasible. What are the main objectives in measuring your social impact? With whom do you intend to share the results? What are the targeted audiences?  The clearer you are as to the impact you hope to have, the easier it will be to find your focus and move in the right direction.

#2. Keep your “raison d’être” in mind

In the course of your impact assessment, linking your efforts to the social context, world issues in the sector and the social mission is essential. Redefining and formalizing your enterprise’s social mission can help clarify what you should be focusing on. In a single sentence, sum up how your activity specifically responds to an issue. That is your mission, your “raison d’être.” For instance, the mission of Microlux is to “provide microcredits and personalized coaching” to meet the needs of people who do not have access to traditional bank loans.

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#3. Include your stakeholders in the study

Beneficiaries, employees, volunteers, public and private financers, partners… it’s recommended to map out your stakeholders and defining their level and mode of implication from the very beginning. Map out your stakeholders by segmenting them by profile, characterizing their needs and indicating any relationships that exist between them. How many are there? What channels do you use to communicate with them? How can you poll them? These questions will help you define a realistic perimeter.

 #4. Think about your long term impact

Measuring your current impact can bring forth some interesting elements for your assessment but do remember to think long term.

Take this example: Impuls is a coaching program for future social impact entrepreneurs. During the program, a satisfaction survey is regularly sent out to participants to assess their satisfaction in different areas. The collected data allows us to gauge their satisfaction with our services but not to see what will need improvement over a longer term. Careful definition of KPIs can help you assess your actual impact and have tangible, impactful results. For instance, for Impuls, a change in the entrepreneurial/professional situation of participants a year after the program would be relevant to measure.

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 #5. Choose the approach that fits your needs

Several methods provide frameworks for driving an assessment process. Approaches can be more or less comprehensive, and give some flexibility, mostly in the choosing your indicators. It is absolutely essential to ensure that the chosen approach lines up with your needs and can realistically be implemented. Do keep in mind that the process you’re entering into and the generated results will help you communicate outward, especially with your stakeholders.

#6. Take things step by step  

Knowing which KPIs to measure in an impact study greatly contributes to the sustainability of your efforts (in terms of both finances and impact). Impact assessment can seem complicated given the inconsistencies between the existing methods, not to mention the time and means you will need to invest. What’s most important is to be well prepared and know why you’re doing it.

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