The primary reason a social enterprise exists is to create a positive impact on those people facing the highest barriers to employment. The importance of delivering on this mission is at the forefront of many of the day-to-day decisions a social enterprise makes. Alone, however, this orientation towards mission is not enough. Social enterprises are asked not just to deliver impact, but demonstrate it – whether by funders, partners, or even their customers.
Quantifying impact can be a daunting endeavor for social enterprises. This learning guide, the first in a series on measuring impact, will provide an overview of the different ways a social enterprise can choose to measure its impact, including some of the pros and cons of each. In subsequent learning guides, we will delve deeper into each of these areas.
Measurement and Evaluation
Impact measurement initiatives operate on a spectrum of complexity and time-intensiveness. On one end of the spectrum, we have program monitoring and performance measurement initiatives which are relatively low in scope and complexity but yield results and data relatively quickly. On the other end of the spectrum, we have more “formal” evaluation efforts of process, outcomes, and impact evaluations. These initiatives are highly complex and can take a long time – years, even – to yield meaningful data.
Impact measurement can be conducted directly by an internal team within your social enterprise or parent nonprofit. This type of work can be done in conjunction with day-to-day operational data collection and program monitoring and has the advantage of being easier to implement than more formal evaluation work. These initiatives can be employed to measure progress toward social outcomes and impact for social enterprises still implementing and perfecting their program model.
Formal evaluations, on the other hand, are conducted by third-party evaluators and are geared towards attributing impact to your social enterprise’s intervention and isolating the root causes that lead to that impact. Conducting rigorous, experimental evaluations is a major investment of time and resources and should only be undertaken when both the program model and business are on a firm footing so the evaluation is measuring the impact of a fully implemented intervention
While impact measurement and evaluation are different, this does not mean they are binary choices. A social enterprise can simultaneously pursue both impact measurement and evaluation initiatives. What remains most important, however, is that these initiatives align with their organizational goals.
Before you start any type of impact measurement initiative, it is essential to clearly articulate what your social enterprise’s goals are in doing so. Are you trying to inform programmatic or operational decisions? Are you trying to come up with data to talk to prospective partners or funders? Are you trying to build evidence towards the efficacy of your model? Depending on your answer to those questions, you will want to explore different methods of impact measurement.
As a general rule:
- If your goals are oriented towards quantifying outputs and measuring change, then lighter touch impact measurement initiatives will be more appropriate
- If your goals are oriented towards attributing impact and isolating root causes, then more formal evaluation efforts will be appropriate
Measuring and evaluating impact is an iterative process that relates back to your organization’s theory of change and logic model. As you learn more about your impact, you need to use that information to test the assumptions made in your logic model and theory of change and update them. These two foundational frameworks help to shape the questions you are evaluating.
Organizing for Impact Measurement
In order to effectively achieve any type of impact measurement, your social enterprise must be organized appropriately to deliver on a number of fronts. It is important for your social enterprise to develop a culture that is based on performance accountability. Constantly ask yourselves: what are you doing with your data to change and improve your programs for better outcomes, evidence, and impact? This will require that each employee has what they need to do their job and make course corrections, and that a culture of transparency facilitates an honest assessment of what parts of business operations and employee supports are working well and not working well.
It will also require that you have the processes and systems in place to support this type of work. Impact measurement is a long-term, often continuous, process and it is essential to have solid business processes in place support collection and analysis of data, and that these processes are adhered to. Processes alone are not enough, your social enterprise must also invest the proper resources into both the people and systems that are dedicated to measurement and management.
Conclusion and Upcoming Resources
Impact measurement initiatives are an important component of any social enterprise as they allow staff at all levels of the organization to work toward their goals and identify problems as they arise. Additionally, they will help clearly articulate the value proposition of your social enterprise, putting it in a better position to secure ongoing funding for growth and expansion.
As we continue this quarter on REDFworkshop, we will be exploring in greater detail the differences between impact measurement and evaluation. We will share resources on effective ways to conduct internal impact measurement and data collective initiatives, as well as information on the types of formal evaluations. Our learning guides will cover:
- How to structure your data collection efforts
- Key components of program measurement, with a focus on employee retention
- Different types of formal evaluations and what you should consider before pursuing
- Data systems to facilitate impact measurement initiatives
- How to use impact data to approach funders