Social impact refers to how the organization’s actions affect the surrounding community. More and more, investors are seeking out businesses that not only generate profits, but are also socially responsible and have a positive impact on the environment.

Social Impact is commonly measured by considering Social Return on Investment (‘SROI’), using reasonable measures of the values of outcomes to calculate an economic value for the effect.

Three basic models to evaluate social impact are:

Economic benefit created: where, either at a micro or macro level, there is an impact on earning capacity, on productivity, on tax revenues, or on trade or indeed wider social or environmental benefits.

Costs saved or not wasted: where the investment or intervention results in a saving in the cost of other interventions, consequential costs, or increases the effectiveness of another intervention

Alternative or cheaper sourcing: the saving achieved where the investment directly replaces another more expensive one.

What does social impact measurement tell me?

Social impact measurement provides you with an understanding of how effective your organisation is at generating measurable social benefits. Engaging with key stakeholders during this process will help you to develop your understanding of which outcomes are most valued by your beneficiaries and funders.

How will social impact measurement help my organisation?

Evaluating social impact can help you to:

Demonstrate the value of your business to potential and existing investors.

Forecast expected outcomes from both existing and new activities.

Develop measures to assess your performance.