Impact measurement is often perceived as yet another deliverable that organizations such as NGOs and social enterprises are required to report to funders or partners on. Given that the primary focus of these organizations is to use the resources to facilitate as much positive change as possible in the communities that they work in, impact measurement can sometimes be seen as a distraction or put aside as a task for the end of the project. However, what’s important to understand is that maximizing the positive effects of our interventions requires making the most of our resources. This means taking a proactive approach to planning and measuring impact, being consistently responsive to data collected, and course-correcting or updating strategies along the way to scale impact.
Thanks to the Professional Development Grant (PDG) offered by the Banyan Impact Fellowship, I recently had the opportunity to enhance my skills through a course on ‘Impact Management’ that highlighted its importance in informing both operational and strategic decisions. The course covers various topics including the basics of impact management, problem analysis, root cause analysis, setting impact goals, understanding material outcomes, and best practices when it comes to the quantification and reporting of impact. Below is a summary of my main takeaways that I hope offer fresh perspectives on impact measurement and management:
Dimensions of Impact and Principles of Social Value
The “Five Dimensions of Impact” – WHAT (outcomes or changes), WHO (stakeholders involved), HOW MUCH (amount of change), CONTRIBUTION (organization’s role in creating the impact), and RISK (identifying and managing potential risks). These dimensions take centre stage when assessing the impact an intervention has had on its stakeholders. These along with the eight principles of social value can guide the process of effective impact management for an organization.
Each of the eight principles of social value addresses at least one dimension of impact. If consistently applied in the process of impact measurement, these can give the organization’s leadership, operational teams, and external stakeholders a holistic view of the impact of its interventions:
- Principle 1 – Involve stakeholders (Addresses the WHO dimension): Engaging those affected and involved in the implementation, seeking their inputs in decision-making processes, and considering unintended negative effects to minimize them and maximize positive effects
- Principle 2 – Understand what changes (Addresses the WHAT and HOW MUCH dimension): Identifying outcomes, understanding consequences, measuring the extent of change, and comparing against targets
- Principle 3 – Value things that matter (Addresses the WHAT dimension): Listening to stakeholder feedback to understand where they see value, enabling more informed decisions
- Principle 4 – Do not overclaim (Addresses the CONTRIBUTION dimension): Considering the likelihood of changes happening without an organization’s contribution and focusing resources where they can make the most difference
- Principle 5 – Only include what is material (Addresses the RISK dimension): Focusing on managing factors that are most relevant and have the greatest impact on stakeholders
- Principle 6 – Be transparent: Being honest about approaches used and communicating impact management practices openly
- Principle 7 – Verify results: Providing confidence and trust in its results by conducting social audits and ensuring the quality of data
- Principle 8 – Be responsive: Using collected data to make strategic, tactical, and operational changes to an organization’s activities to maximize impact
Stakeholder Segmentation and Materiality
Materiality plays a crucial role in impact management, as it helps organizations focus on the outcomes that matter the most to stakeholders. Not all stakeholders will experience the impacts or effects of the intervention to the same depth or degree. Segmentation allows us to make more effective decisions on resource utilization as we move along the project and the impact management life cycle. Segmenting stakeholders can help maximize impact and tailor strategies. For example, for a livelihoods (dairy) project for rural women, those heavily dependent on dairy as their main source of livelihood may be more motivated to invest in input costs than those who are just starting out. Understanding the needs of different segments ensures the organization allocates resources to the segments that require the most attention in alignment with impact goals.
Chain of Outcomes, Identifying Indicators and Understanding Contribution
Outcomes are consequences of an organization’s activities, different from outputs that represent the number of activities conducted. To determine which outcomes to measure and which indicators are most suitable to measure them, it helps to first identify a chain of short-term, intermediate-term, and long-term outcomes that lead to the final impact goal. Short-term outcomes often involve changes in knowledge, intermediate outcomes are mostly behavior-based changes and long-term outcomes are changes in overall well-being (eg. financial independence). The best indicators are those that allow stakeholders to articulate the changes they have experienced. Established databases like the IRIS Catalog of metrics by the Global Impact Investing Network (GIIN) can provide standardized indicators that organizations can leverage in addition to the ones they create.
To maximize impact and avoid inefficient use of resources, it’s important to acknowledge that the overall impact is likely a result of multiple factors. In other words, it’s important to find out what amount of change could have happened without our intervention, our resources, and our investments. Stakeholder engagements, research, and RCTs (Randomized Control Trials) are some options to assess an organization’s contribution and avoid over-claiming impact.
Conclusion
Impact measurement and management are essential for impact organizations to maximize their effectiveness, allocate resources wisely, and drive meaningful change. By integrating the dimensions of impact, principles of social value, stakeholder segmentation, and contribution into impact measurement practices, organizations can foster transparency, build trust with stakeholders, and make data-driven adjustments to their activities throughout the project life cycle. Embracing impact measurement as a strategic necessity can empower organizations to improve the depth and scale of their impact, benefiting the communities they serve.
References:
1 Course details – https://efiko.academy/impactmanagement/
2 Global Impact Investing Network (GIIN). “IRIS+ Metrics.” IRIS+, The GIIN, https://iris.thegiin.org/metrics/
Social Value International, “Principles of Social Value.”, https://www.socialvalueint.org/principles
“Impact Workshop Part One: The Five Dimensions of Impact and Theory of Change.” Impact Central, https://impactcentral.co.uk/blog/impact-workshop-part-one-the-five-dimensions-of-impact-and-theory-of-change
