The Evolution of Measuring Social Impact
Measuring social impact is a vital component of the growing social impact ecosystem. As a social impact entity, measured results are critical to demonstrate success, attract investors and receive funding. Impact investors today range from those who want to see measurable social returns, those who want their portfolios to align with certain principles, and those who simply want to limit their exposure to systemic problems such as carbon regulations and water scarcity. Just as each of these investors can be placed on a continuum of commitment to impact-based investing, there is a parallel continuum of evaluating tools that measure social impact to help these investors in their decision-making.
In fact, tools and frameworks to capture social impact’s value are growing almost as fast as social impact businesses themselves—and each of them targets a specific segment of investor. The Foundation Center website features over 100+ resources, with frameworks ranging from those designed for niche segments such as Planet Rating’s GIRAFE tool which evaluates the performance and institutional risk of microfinance organizations, to good housekeeping seals such as Better Business Bureau’s B Wise Giving Alliance seal for organizations that meet BBB’s code of best business practices.
The most widely accepted heavyweights in the alphabet soup of impact measurement are the GRI, CDP, and the DJSI. Each of these tools relies on self-reporting survey data and covers an extensive breadth of information. It is also the most frequently used set of measurements – the Global Reporting Initiative (GRI) for instance, is used by over 22,431 organizations worldwide in conjunction with company-generated sustainability reports.
For investors and organizations looking for a more simplified and familiar approach to measurement, there’s the Global Impact Investing Ratings System powered by B Impact which translates the social and environmental impact of companies into ratings similar to Morningstar or S&P Credit. Or the International Finance Corporation’s Development Outcome Tracking System which identifies standard performance goals indicators and measures the rate of achievement in assigned categories against certain benchmarks and timelines.
Consumers today are more environmentally and socially conscious than ever before. On the retail side, there’s the consumer focused The Good Guide, which helps buyers choose individual products by rating their environmental impact, health and social responsibility on a scale of 1 to 10. The site has over 120,000 products listed and has a mobile app so you can make decisions in-store, as well as a toolbar to help you navigate as you shop on the web. For a side by side comparison, you can use JustMeans Insights to measure a company’s social impact against its competitors.
Impact that cannot be translated into numbers can often be relayed into a case study. Outcome Mapping by the International Development Research Centre offers a methodology that combines qualitative and quantitative approaches. HCT Group for example, is a social enterprise providing public transportation in the UK. On their website, they indicate “you can find out more about our social impact through the stories of those who use our services” with links to Robert’s Story or Susie’s story. With quotes, pictures and anecdotes from those who have benefited from the work of the organization, these case studies are a potent, creative way to demonstrate success.
In fact, at Digital Union, we find this win-win approach to be the great way of exhibiting our leadership while also providing additional brand value to our clients. Come and see how we can help you fuse profit with purpose and measurement with marketing!
Maggie & Hector