Social Impact Definition: How to Measure Social Impact

Social impact describes any improvement that confronts or solves inequalities and injustices in a community. Different sectors—including businesses, government agencies, and nonprofit organizations—can contribute to positive changes on a small and large scale. Instead of viewing a potential solution in terms of financial returns or personal gain, groups that advocate for social impact consider the effect their actions have on the surrounding community. Since social impact advocates address systemic issues, the work and result of social impact require a series of many actions rather than one event.

There are four types of social impact:

1. 1. Direct impact: Organizations and businesses use their products or services to create direct impacts. You can quantify and measure direct impacts since they outline how an organization’s interactions generate results.
2. 2. Indirect impact: Partnerships are the main form of indirect impact. When a company or organization connects with community partners to create social change, their collaborative results are a form of indirect impact.
3. 3. Negative impact: As the opposite of positive impact, negative impact describes any change that detrimentally impacts a community or the environment. An example of a negative environmental impact is an increase in pollution.
4. 4. Positive impact: Any beneficial improvement an organization initiates is a form of positive impact. From a business standpoint, positive impacts include improving gender equality in the workplace and implementing well-being workshops.

Consider the below steps for developing and implementing a social impact initiative that creates systemic change:

• Identify the social challenges you want to address. From social justice issues to environmental challenges, you and your organization can address various obstacles. Consider holding a meeting with necessary stakeholders to decide what issues matter most to you collectively. As you discuss different social issues, consider how different challenges relate to your mission statement. During this first stage of decision-making, you and your team should choose a social challenge that connects to your purpose, so you can more easily integrate your vision into your business strategy.
• Consider your goals. After choosing a social issue to focus on, outline short-term and long-term development goals to make your vision a reality. Establishing benchmarks provides your team with manageable steps. As you outline your goals, create a project timeline, so everyone is on the same page.
• Take stock of your resources. Identifying your organization’s resources helps determine how to best support local communities. Consider the financial resources at your disposal that you can allocate toward social impact projects. Resources also include volunteers, facilities, and supplies, so include these factors in your checklist.
• Reach out to community partners. Connect with other changemakers in your surrounding area to develop long-term partnerships. By collaborating with other groups and volunteers, you and your team can scale projects and create a larger impact.
• Outline and implement development programs. Use your goals and resources to create a development program that addresses your social issue. To foster commitment toward initiating change, discuss how your organization can implement your social impact work into your business model.

When analyzing your social impact, focus on quantifiable metrics you can use to track and report your work.

1. 1. Develop a social impact assessment. Create a social impact assessment to establish annual reports. Interview team members who volunteered or contributed to the project to collect anecdotes and first-hand accounts that describe the positive impact. Combine this qualitative information with your metrics to write a report that summarizes your work.
2. 2. Identify quantifiable metrics. As a team, brainstorm different frameworks for collecting data on your progress. For example, if you want to outline your organization’s sustainability practices, consider comparing your supply chain’s carbon footprint from different years to highlight your decrease in emissions and commitment to combating climate change. To streamline your data collection, integrate software into your company’s system that measures quarterly donations, volunteer hours, and other forms of social impact metrics.
3. 3. Outline the five W’s. The five W’s include “who,” “what,” “where,” “when,” and “why.” As you review your progress, outline who or what your social impact helps along with when and where you have initiated the project. Explaining these details establishes a clear basis for communicating your results.

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