Social impact is a term that's thrown around all over the place - about 1,710,000,000 search results on Google. But there's no one-size-fits-all definition for it.
The world of social enterprise and charity funding is filled with acronyms, buzzwords and jargon. The terms social investment and social impact can be equally as confusing and difficult to understand, their interpretations often depending on context.
You've probably heard businesses say "we're making a social impact". Or customers say "I prefer to shop from companies who make a difference"... but what do they mean? And how can you make a social impact?
Social impact is the effect on people and communities that happens as a result of an action or inaction, an activity, project, programme or policy. (Ps. that's not a complete & definitive definition, but we like it).
People want more from the businesses they work with and buy from.
World Economic Forum recently studied 5,000 millenials across 18 countries. They said that the most important job of a business should be to "improve society". More people care about businesses that do good for society.
That's why we think campaigns like SEUK's #BuySocial are so impactful. For so many entrepeneurs and businesses, running an organisation that creates good social impact is not just an essential ethical approach but also a commercial competitive advantage.
This is what makes social investors... social.
For social investment, good social impact is essential for your business plan. Social investors want to invest money for a positive social and financial return. So, they'll want a full understanding of the social impact that you hope to achieve. Which means you need to measure and evidence your social impact!
Good social impact evidence can help charities and social enterprises to:
- Improve their services
- Compare achievements with similar organisations
- Communicate the difference they are making to be able to attract further investment.
And how do I measure it?
It can be pretty difficult to know how to do this, but here are some things to consider when measuring yours:
- Who benefits?
- How many people benefit?
- How do they benefit?
Some social investors are interested in a specific social issue or geographical area. Others may provide capital for a diverse range of social issues.
If you want help with measuring your social impact, our Outcomes Matrix provides a useful starting point. This will help you to consider the social impact that you are trying to deliver and how you will measure it. It includes outcomes and measures for nine outcome areas and 15 beneficiary groups. So be sure to try this if you're feeling stuck on where to go to measure your social impact.
You can also read further guidance on measuring social impact here.
Or check out Impact Support for Impact management made simple. It helps you realise what is or isn't working and what you can do about it.
Let us know: What does social impact mean to you?
By Emily Parrett, Good Finance Digital Marketing and Communications officer.