entreSociety

Building an entrepreneurial society

The meaning of impact

We need to move towards a system that assesses social innovation based on impact.  This assessment holds for not-for-profits, government and businesses that profess to have social goals.  Most people agree with this need and we can hold nice conversations around moving from inputs to impact as measurements.  However few people have given much thought to what it means to measure impact.  Too often when someone describes what they have in mind the result is a list of high level statements like, we create jobs or a list of activities like, we deliver food to the elderly.   This response is understandable since effectively measuring impact requires a different way of thinking and a lot of hard work.

I will illustrate impact with an example I have been working on with a not-for-profit group.  We are still in the early stages of developing this metric and still have a lot of work to do.  There are also a lot of complexities around effective metrics that I won’t have room to cover in a blog post.  But my purpose here is to illustrate the difference between measuring inputs versus impact.

Our not-for-profit has been established to help build social ventures and social innovation in our community.  Our expectation is that jobs will be created and social problems will be addressed.  Our plan is to work with all ages ranges to build intergenerational ventures where the experience and knowledge of older generations is combined with the technical capabilities and unique viewpoints of younger generations.  We expect to create jobs for youth as well as seniors and everyone in between.  Some of the roles will be paid and some will be volunteer.  Some of the ventures will also focus on the problems of disadvantaged youth and those faced by an aging population.

The inputs and intermediary measures will be numbers of people mentored, numbers of ventures started and grown, jobs created and investment funds provided.  The measure we want to use for impact is based on the dependency ratio.  That is the number of people dependent on others for support divided by the number of people in the community.  Dependent people are children that are in school and not working, unemployed persons and seniors that are past traditional working age.  Increasing employment and volunteering across all population groups will reduce the number of dependent people.  We can measure our impact by working to keep driving that number lower.  We can also work at a dollar level by making the numerator the cost of dependency including unemployment benefits, healthcare costs, crime, etc. against the total fund flows in a community.  Both of these measures will be difficult to establish and track but it can be done.  Having this measure will enable us to determine the impact of our programs, and those of other organizations, on the prosperity of our community.

So I call upon people looking to make a social impact to start moving past easy conversations and into the hard work of developing true measures of impact.  I also encourage groups to work to together to share ideas and assist each other.  Metrics that can be used across programs to measure community health will align the multiple providers to move in the same direction, reduce duplication of effort and optimize the use of resources.

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