What Is Impact? Understanding, Measuring, & Amplifying Social Change.

In a world increasingly focused on making a difference, the concept of ‘impact’ has become a central theme across various sectors. From nonprofits striving to address social issues to businesses seeking to create sustainable practices, the desire to generate a positive impact has become a driving force behind many endeavors.

The impact of nonprofit organizations is significant in various ways. They play a crucial role in addressing social issues and improving the overall well-being of communities. By focusing on specific causes and providing essential services, nonprofits contribute to positive change and make a difference in people’s lives.

The same is true in the business context. Businesses have enormous opportunities to transform the way the world works and create a positive impact across society. The purpose of this blog is to clarify what impact means, how you can measure impact, and what you can do to make your organization more impactful.

Delving into the essence of what is impact

All organizations have a substantial impact on society, whether it be positive, negative, or neutral. What matters is that we focus on bringing about positive change and enhancing the overall welfare of communities while accomplishing our organizational goals. Impact-driven organizations focus on the short-term and long-term outcomes of their products and programs while improving operational efficiency.

What’s the official definition of impact

Impact, in its simplest form, refers to the measurable change or effect that an action or initiative has on a particular group, community, or environment. It’s the tangible outcome that results from an intervention, often aimed at addressing a specific need or challenge.

Distinguishing between impact and outcomes is crucial for effective measurement. Outcomes are the immediate results of an action, while impact encompasses the broader, long-term effects that extend beyond the initial intervention.

Harnessing the Power of Measurement

Measuring impact is fundamental to understanding the effectiveness of efforts and ensuring that resources are directed toward initiatives that create meaningful change. By quantifying and evaluating impact, organizations can refine their strategies, optimize resource allocation, and demonstrate accountability to stakeholders.

The Sorenson Impact Center at the University of Utah has a wonderful blog on impact measurement.

In the blog, they outline the 5 Stages of Impact Measurement.

1. Create a Theory of Change
   1. A theory of change (TOC) is a logic model that helps you and your team understand what impact you are trying to create and what you need to do to create that impact. To put this bluntly, every organziation that wants to make an impact must have a theory of change. Your TOC is your guiding document on how you plan to make a social impact. Without a TOC, people often get confused on how their work is contributing to the goal of making an impact.
2. Track Key Performance Indicators
   1. Key performance indicators (KPIs) serve as measurable benchmarks that reflect the specific goals of an organization or project. These indicators provide a framework for assessing progress and identifying areas for improvement. KPIs will focus on activities and outputs, two of the primary drivers for impact. While you are not yet measuring your impact, you are doing the work that leads to creating real change in the world.
3. Collect data on short-term and long-term outcomes
   1. The outcomes of your products and programs are your impact. When you actively measure your outcomes, you are measuring your impact. Once you have reached Stage 3, you have entered into the top echelon of impact-driven organizations. This is a tremendous accomplishment and a goal we have for all of our clients.
   2. Additionally, this is exactly the impact your donors want to see. Read this blog to better understand why donors fund nonprofits and what social returns they expect from the organizations they fund.
4. Quasi-experimental design
   1. If you are in Stage 4, you have been measuring your outcomes for some time and want to determine which aspects of your products and programs are most impactful. You are consistently reviewing your data and are trying to find your primary impact driver. You consistently ask yourself, what aspect of program x is driving the most impact for our beneficiaries? How can we be sure that we are creating the impact we desire across all demographics? What gaps are we failing to address? How can we improve product y in a way that would make a more meaningful change for society? To be in Stage 4, you must have access to your data. You have impact dashboards that you and your team review fanatically.
   2. In short, you’re an innovator. You are optimizing for impact and you are actively looking for which impact lever will make the greatest change for your stakeholders.
   3. To quote Ann Mei Chang, “impact is the destination, innovation is the path.”
5. Randomized Control Trials
   1. Very few businesses and nonprofits arrive to Stage 5. Randomized Control Trials (RCTs) are extremely important but can be quite costly. The ultimate purpose of RCTs and all of the 5 stages of impact measurement, is to establish reliability. You are trying to determine how reliably does your product or program create your desired social impact. RCTs are the most rigorous form of measurement and are usually conducted by academic institutions or private research firms.

Impact in the Nonprofit Landscape

For nonprofits, impact lies at the heart of their existence. Their mission statements often articulate the desired impact they seek to achieve, whether it’s alleviating poverty, improving education, or protecting the environment.

Effectively communicating impact stories is crucial for nonprofits to engage donors, attract volunteers, and garner public support. By showcasing the tangible difference they make, nonprofits can strengthen their credibility and inspire others to join their cause.