Too many organizations claim they are making a real impact. They use phrases like, “we served 100,000 children this past year,” “our company committed to becoming carbon neutral by 2036,” or “your donations touched the lives of millions.”
While all of these statements are usually meant with the best intentions, they fall horrifically short of impact.
Today’s blog may feel more like a rant. And it is. But it is also a call to arms for everyone aiming to make a meaningful difference in society.
Whether you are a nonprofit, a B Corp, Corporate Social Responsibility Executive, a government agency, or an impact investor, your impact matters, and it is past time to take impact seriously.
Stopping At Outputs
As someone who has worked in the impact sector for many years, I can tell you that our industry has become too focused on generic output metrics that we’ve lost sight of what actually matters: our outcomes.
There Are Two Impact Camps: Those who measure their impact. Those who don’t.
Many people may be surprised to find out that the vast majority of social enterprises do not measure their impact.
At Social Impact Solutions, we have the unique perspective to peer under the hood of many different types of social enterprises. This includes some of the world’s largest social enterprises and impact start-ups. We’ve seen the impact camp that measures, and we’ve also seen the impact camp that doesn’t. We’ve learned that those who measure their impact outperform those who don’t by order of magnitude.
The common thread among these organizations is that they all want to make a difference in the world. But, as we all know, this is easier said than done.
Camp #1: Those Who Measure
Camp #1 comes in all shapes and sizes. We’ve seen early-stage companies and nonprofits fall into this camp and well-funded CSR programs. What’s unique about Camp #1 is that they are actively measuring their inputs/activities/outputs.
As a result, Camp #1 has become obsessed with counting data points and measuring their impact in terms of outputs, not outcomes, which matter the most.
To be fair, it is crucial to understand what we are doing to assess its effectiveness. But, as practitioners trying to make a difference in the world, we should not stop there. \
We should not assume that it is automatically good or bad just because we have created an output (or not). We can’t assume that the result of an action will always be positive, which is why we must measure the outcomes.
Camp #1 falls victim to its obsession with outputs. The metrics that tell them how many services they provided over a specific timeline.
Outputs Are Important But Incomplete.
We applaud organizations that actually measure their outputs but implore them to go one step further to know their outcomes. We need to measure the impact that our outputs have on the world. We need to see if we are making a difference in people’s lives, not just accomplishing pre-determined goals.
Camp #2: Those Who Don’t Measure…
Anything! This camp is even more dangerous than camp #1 because they don’t know if they are making a difference or not. They could be providing services to the wrong people, at the wrong time, and in the wrong place. This can result in their organization wasting money and resources while not helping anyone in need.
Like Camp #1, they come in all shapes, sizes, business models, and industries. What is unique about this group is that they are typically proficient in fundraising or have access to significant funding.
The challenge these organizations face is that their funders are becoming more impact-conscious and want to understand their return on investment. They want to know what quantifiable difference their money is making.
Implementing effective impact measurement processes without the proper guidance can be very difficult. The do-it-yourself approach has its appeal but can leave your organization in shambles.
What does the future look like for Camps #1 & #2?
Not good. Donors, grantors, customers, and stakeholders are becoming more and more sophisticated regarding impact.
They know (or they will someday soon know) what impact is and expect your team to deliver.
Donors are increasingly asking for impact reports and holding their grantees accountable for results. Stakeholders are becoming more sophisticated about the value of their investment, so they expect to see a return on that investment in terms of impact on the community.
Nonprofit evaluators like Charity Navigator have new metrics for ranking your organization according to its impact. Candid (formerly Guidestar & Foundation Center) recently hired the Queen of Impact and author of Lean Impact, Ann Mei Chang, as their new CEO.
Funders are beginning to ask tough questions about how your organization improves lives, how it uses its resources, and how it is held accountable for its performances.
If Camp #1 doesn’t get with the program, their organization will be left behind. If Camp #2 is too worried to discover its real impact, it’ll be seen as irresponsible and ineffective by those who matter most.
The end result is that both Camps #1 & #2 will lose funding to organizations that actually measure their real impact.
Your Path To Impact:
If you are in either camp, it is time to move out of your comfort zone and do the hard work that proves your value. The good news is that this will not be as hard as you think! If you are in Camp #1, you must find ways to measure and track impact. If you are in Camp #2, it’s time for an intervention. It’s time to get serious about monitoring processes, outputs, and the result of your outputs (your outcomes!).
Your outcomes are the short, mid, & long-term effects of your outputs.
These are the goals and the metrics that tell you how you are improving society through your programs and services.
Outcomes are what truly matter. They’re what make us confident about our work. They matter most to our stakeholders/customers (and why they keep coming back).
Outcomes = Impact
If you fall into either camps #1 or #2, understand that you’re the norm, not the exception. But also understand it’s time to change.
The upside of making these changes is remarkable. Organizations that legitimately measure their impact have:
- Increased access to funding
- Improved fundraising efforts
- Greater employee & volunteer engagement
- Provide better services to their stakeholders
- A greater sense of purpose, confidence, and meaning
If you are ready to take your team to the next level, schedule a call with our impact team. We’d love to help you get started measuring your impact.