This guidance helps charities and social enterprises to understand what a social investor will look for in a good impact plan.
Social investors want to invest their money to achieve a positive social and financial return. Some social investors may be interested in a specific social issue or geographical area, whereas others may provide capital for a diverse range of social issues. As part of the investment process, social investors will want to gain a full understanding of the social impact that your organisation seeks to achieve. This guidance is intended to help you understand what a social investor will look for in your impact plan.
1. The change you want to make
An investor will want you to clearly articulate the change that you intend to make with the capital that you are requesting. Your mission statement should capture the vision for your organisation, the difference you want to make and the overall purpose of your work. It is not just a summary of activities or charitable objectives.
You will need to show how you understand the problem you are trying to solve including its causes, consequences and the policy environment. This should include how your work will make an impact on the problem and include an idea about the scale and scope of your work in addressing it.
Some organisations find it useful to complete a theory of change exercise at this stage.
2. Who will benefit
You should explain clearly who will benefit from the services that you are offering. This should include an idea of how many people you are intending to help and the level of support you will provide. This is often referred to as the depth and breadth of impact. You should show how you have assessed and listened to the needs of the people you want to help and how you have involved them in shaping solutions.
Your impact plan should show how activities will be inclusive, affordable and accessible to the people you are aiming to support and that there are no barriers to accessing services for people.
3. Linking activities and revenue
An investor will want to see how your products, services and interventions are linked to your ability to generate revenue from the social activities that you deliver. Your impact plan not only shows how your activities respond to the beneficiary needs identified but how this links into your fundamental business success and growth.
This can be through trading activities, deliver contracts, revenue fees from consultancy or deliver advice and services. However, you need to make sure that these activities are congruent with your mission as a social purpose organisation.
4. Measuring and reporting
There are many systems for measuring and reporting impact and it is important for you to gather information that helps to fulfil your mission. There is no universal standard for impact measurement although there are many useful guides on best practice that you can use to help develop your approach.
You should set realistic targets and indicators that help you to track progress over time and improve. This usually means that you gather a range of both qualitative and quantitative indicators to capture your outputs and outcomes. Indicators should be reviewed and refined regularly to check that you are on track.
The level and detail of reporting should reflect the size and complexity of your organisation and a good investor should not burden you with reporting requirements that detract from your core purpose and mission. You should work with your investor to develop your measurement approach and set aside appropriate time and resources for it.
5. Learning, improving and moving forward
A good impact plan will give you and your investor essential information for managing performance, learning and improving. Bad results, as well as good, are a crucial part of the learning process. You can draw lessons to improve and develop your future strategy together with your investor.