Like any new business, the ‘piloting’ phase is the opportunity for you to prove that your idea can work in practice. In a commercial business, this is usually demonstrated by proving the commercial viability of your business model. The proof or ‘evidence base’ required for demonstrating the commercial viability of an organisation is typically defined by a number of key financial indicators that measure the success of your business model (e.g. profit and cash flow position).
A social venture must demonstrate more than simply commercial success; it must also prove the viability of its social model by demonstrating its social impact. However, whereas the viability of a business model can be tested and proven by a set of readily quantifiable financial indicators, the social model must be proven by demonstrating the social impact generated by the organisation. Social impact indicators were introduced in an earlier guide; this guide should help you to define the most suitable indicators for measuring your organisation’s social impact (i.e. the impact of your interventions). The difficulty in defining common indicators for measuring social impact has created a wide range of proposed solutions and methodologies to measuring social impact; some of these, such as social return on investment, are discussed here.
This guide will introduce a typical framework for setting out and documenting your social impact, along with some suggestions and tips for collecting data for social impact indicators. Remember; building a robust evidence base for your social impact will put you in a far stronger position for communicating the success of your organisation. This will help with marketing you product or service to the customers and beneficiaries, obtaining financial support (e.g. grant making or investment) and making strong evidence-based decisions for your enterprise.
Our social model guide introduced a process for deciding on the most suitable social impact indicators for your organisation and the challenges of obtaining data for outcome indicators (weaker link to intervention and difficult to measure) versus output indicators (strong link to intervention and easier to measure). Once you have defined your social impact indicators, the next step is to set specific social impact goals for the pilot period.
You should aim to set clear goals across all you social impact indicators; both outcome and output based. This will often require you to establish ‘benchmarks’ for each indicator, enabling you to set goals based on a change from the benchmark, thereby measuring the impact you have generated through your interventions. Remember, you must also consider any ‘natural change- what might have happened anyway’ that may occur during the pilot period and deduct this from your identified impact.
To complicate matters further, in some cases your organisations intervention may have a delayed outcome; this may require you to monitor and measure the indicator(s) for a period after the original intervention.
Once you have defined your social impact indicators, your benchmark measurements and your goals for the pilot period, it’s worth pulling this information together into a simple table. The diagram below provides an example of how this table might look for Social Venture D that provides advice, information and support to refugees and migrants in city ‘y’.
If you wish to build from an established framework for collecting defining your key indicators and collecting your data, have a look at the Strategy and Impact section of the National Council for Voluntary Organisations (NCVO) website; they provide an introduction to a number of established tools and techniques for developing your monitoring and evaluation framework.
Be careful interpreting data patterns - try not to make untested assumptions or generalisations based on small samples of data. When measuring outcomes, be sure to consider the ‘cause and effect’ of the outcome you are measuring. The change or outcome you are measuring will usually involve a number of contributing factors; i.e. not just your intervention. At this stage, don’t get too bogged down in worrying about proof; i.e. ‘it was your intervention that causes the outcome’, it’s fine to say that your intervention contributed to the overall outcome; just make sure you identify the other contributing factors.
It’s worth spending some time looking at how some organisations approach social impact measurement and define indicators. Some examples include:
The NCVO website summarises a number of these tools and techniques.
There are a number of different data/ information sources you might consider using, depending on the nature of the social impact indicator you are trying to record. These sources of information are typically split into two categories: from data sources:
Work out the best indicators for measuring your impact and focus on those- less is usually more. Ask yourself the question- ‘will this provide me with evidence of our social impact’. It’s far better to record a small number of robust, relevant and up-to-date sources of data. It is also worth considering the audience that you will communicate this information to- what level of detail will they need? Try and keep it simple as possible.
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