Social Impact Measurement of Nonprofit Organizations

February 10, 2016
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5 minutes

Impact. This one word in recent years has become a hot topic at conferences, meetings, many roundtables, and has been a staple in many articles and blogs. This, of course, led to the mantra known as "measuring impact," making its way into nonprofit organizations, worldwide. It is no longer enough for a nonprofit to operate on a plate of good intentions and boundless faith. It seems that stakeholders today require evidence of a nonprofit's impact on society.

To use the word "impact" in this scenario is to describe it as having an influence or effect on anything from what the current situation is right now. "Social impact," on the other hand, is based more on what effect it has on any particular pressing social challenge.

For now, a single, stand-alone, universally acknowledged framework does not exist. Currently, nonprofits use multiple approaches in their definition and measurement of social impact. To say the least, the task at hand of measuring social impact in response to donor and funder requests has been challenging at best.

Measurement of Social Impact Is A Challenge

Unlike an industrial production line or a corporate product sales operation, measuring nonprofits' impact faces a few hurdles:

Self-esteem

These are difficult and very complex to measure. More-so when trying to measure "self-esteem of an individual" or overall "increase in well-being."

Varying outside factors

To measure social impact also means accounting for factors influencing the element you are measuring that are outside your purview; what is the measurable extent that the change is a direct result of your nonprofit's activities.

No quick solutions

It is a long-term strategy for the nonprofit to overcome the mission. While funders may want to see major results in a short period of time, properly dedicated work can only be done over the course of several years.

Tools to help

Relevant systems framework or even robust tools are very hard to get developed without major backing, in addition to the fact the majority of nonprofits are smaller and will never have the funding available to build out software solutions. Even larger projects struggle constantly trying to reliably evaluate the quality of their own measurement processes.

Mixed communication

Without a set of uniform rules and terminology amongst nonprofits, communication and collaboration remain very difficult to advance any efforts toward building a framework.

Misunderstood definition

The phrase itself, "social impact," is often seen as too vague and commonly misused to imply small changes.

The Importance of Measuring Social Impact

Though it remains a difficult task to accurately measure, social impact matters. It is especially difficult for nonprofits seeking to deliver on their mission and showing the value of donations to large and small beneficiaries.

With a focus on developing the ability to know how or whether they're making a difference, investing wisely in order to do things better over time is not an easy goal to achieve. A few other important factors to support social impact measurement include:

  • When you measure impact, the data and stories you gather can be used in marketing and communications areas.
  • Your programs and activities will receive inputs and feedback that are both quantitative and qualitative. From this data, you will be able to improve upon them.
  • Measuring impact allows you to have tangible data to report back and show accountability to funders and beneficiaries.
  • The strength of your impact assessment can be used to attract new donors.
  • Over time, you will able to share with other nonprofits and work on specific collaboration projects.

Measuring Social Impact; Common Mistakes

On occasion, you may face too much bureaucracy where impact measurement is taking up too much time and resources causing the staff to ignore details and its purpose. Other times, the inflexibility of tools and frameworks being used are too constrictive and cannot adapt quickly to change. Nonprofits must focus on changes that they are accountable for. Confusing accountability with hope will not help social impact measurement.ย 

It is important for organizations to avoid living in a bubble in order to better understand the external context of their mission in order to develop more realistic frameworks. Nonprofit organizations should also be aware that anything they bring forward as a new framework will need to be re-evaluated and retested over time and not just set up and assumed it's all done.

A few areas where the data you have reviewed can be shared or displayed in the following ways:

  • The beginning or end of a grant application
  • During a social media campaign
  • For an annual report
  • For a newsletter
  • For a learning or discovery event
  • A collaborative meeting with another nonprofit
  • For strategy meetings
  • For staff meetings and retreats

Final Thoughts

Measuring impact is not a project. It should not be left to one person only to drive this process. It must be a team effort spanning all departments. Measuring social impact will need to be part of your organization's culture.ย 

By developing and sharing simple, practical tools, your nonprofit will be in a better position to secure funding and deliver value to all stakeholders. The long-term benefits of measuring social impact will have a lasting impact for several years to come. There will be times that short-term actions, while appearing convenient, will actually cause more issues down the road. These must be avoided to better focus on long-term thinking.

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