An Introduction to Impact Measurement

February 27, 2013 at 8:05 am Leave a comment

By Jacen Greene, Ames Fellow for Social Entrepreneurship at Portland State University

Impact measurement is important for any organization seeking to create positive social and environmental change. Without appropriate measurement, it can be harder for organizations to improve their model, to communicate effectively with funders, partners and beneficiaries, or to prove that they are creating desired outcomes. As measurement tools become more accessible and effective, anecdotal evidence alone is no longer considered sufficient to demonstrate impact. Although storytelling remains important, data-driven analysis is increasingly being adopted as an essential component of creating real and lasting change.

Impact measurement begins with a theory of change: in what ways are we creating the change we seek? One way to illustrate a theory of change is through a social impact value chain. This illustrates the basic ways in which your organization creates impact:

  • What inputs are required for your organization to work (human, financial, intellectual, and physical resources)
  • What activities the organization performs (design, manufacturing, sales, training, teaching, etc.)
  • The immediate outputs of those activities(for example, number of beneficial products sold, people trained, or children educated)
  • The final outcomes of the entire process (the resulting positive changes in society or the environment)

Your impact is measured by the outcomes that can only be attributed to your organization—outcomes that wouldn’t happen if your organization didn’t exist. Put simply, impact = outcomes – what would have happened anyway.

Social Impact Value Chain

Social Impact Value Chain

Measuring change is the key to understanding impact. To do this, you need to select a few indicators that are directly related to your work, preferably from an existing and well-regarded framework (see below for examples). Use these indicators to establish a baseline—the current state of whatever you plan to measure—then track those items over time to see what change occurs. Separating the influence of your work from outside factors is difficult, especially when measuring social impact, but one method is to compare your organization’s beneficiaries to a similar group that doesn’t receive the benefits of your model.

Make certain that the data you collect are both useful and usable. Useful data relate directly to your theory of change, clearly reflect your impact, and measure something meaningful to the people you work with and help. Usable data are timely, accurate, and easily utilized by your organization and partners to improve your model or report your impact.

Not sure where to start? Check out the Bill and Melinda Gates Foundation’s short Guide to Actionable Measurement. Another excellent resource is Stanford Social Innovation Review’s Measuring Social Impact blog. The post on “Real World Impact Measurement” is an especially helpful introduction to the topic and best practices in the field.

Common Frameworks

The Impact Reporting and Investment Standards (IRIS) have quickly become one of the most widely accepted impact measurement frameworks. Developed by a global network of private, nonprofit, and academic institutions, IRIS provides the reporting basis for B Corp certification and numerous nonprofit programs and investment funds. The indicator set is available for free and can be adopted by any organization, although certification carries a fee.

The Greenhouse Gas Protocol (GHG Protocol), developed by the World Resources Institute and the World Business Council for Sustainable Development, is the most commonly used standard for organizations to measure and report greenhouse gas emissions. A variety of free tools are available at their website.

The Global Reporting Initiative (GRI) is frequently used to prepare corporate social responsibility reports, but is also suitable for use by government agencies and nonprofit organizations. The framework is available for free, but users can pay for their reports to obtain a higher “grade” through external assurance or to receive better exposure on the GRI website.

Essential Resources

  • PopTech has a collection of articles, videos, and links to books on measuring impact.
  • The Roberts Enterprise Development Fund describes the process for creating a Social Return On Investment (SROI) analysis for job training and employment programs serving disadvantaged populations.
  • seToolbelt offers an online library of social enterprise resources, including a list of impact assessment tools.
  • The TRASI database, provided by the Foundation Center, has a number of tools for measuring social impact.
  • The Triple Bottom Line Initiative at Portland State University lists tools for measuring social impact, with an emphasis on urban development.

Learn more: read our posts “An Introduction to Social Entrepreneurship” and “An Introduction to Impact Investing.”

Entry filed under: Impact Investing, Social Entrepreneurship. Tags: , , , , , , , , , , , , , .

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