Impact management is a unique and valuable approach to creating more sustainable and socially valuable outcomes for communities. With its modern roots in the 1960s civil rights movement, and protests around issues such as banks investing in armament funds for the Vietnam War, impact management is focussed on the importance of organisations, governments, and businesses investing money in spaces which prioritise social wellness. The realities of modern issues such as climate change and wealth inequality have pushed impact management into the mainstream as a tool for businesses, governments, and organisations to think more about how their work impacts on people and the environment.
So what is impact management? Put simply, it is the idea that your organisation should improve social and environmental issues in the area, and for the communities, it is involved in – alongside more traditional economic models for improvement. This could look like an organisation whose key goal is to lower unemployment in youth making sure that the young people who get help from them are able to maintain work that they enjoy into the long term. This sits alongside other economic models for measuring impact, which might focus on how many young people got jobs, for example, instead of whether they were happy in these jobs, or were supported to achieve their career goals.
The point of impact management is to first understand what social change you make, and then to maximise that positive change.
Case Study; Smart Havens Africa
Smart Havens Africa is a social enterprise helping to support home ownership for women in Uganda. This is in order to allow better opportunities generationally, allowing parents – particularly single mothers – to contribute money towards their children’s education as opposed to things like rent. Smart Havens wanted to ensure that they were producing their promised outcomes and were able to easily convey this information to funders, and so began working with impact management tools. This involved surveying stakeholders – the women part of their home ownership scheme – to see whether they felt they had experienced an improvement in their lives since becoming involved in the enterprise, and whether they were able to maintain home ownership in the long-term. A secondary part of this inquiry was also in bringing together all of their data analysis into a single platform, to ensure the organisation had all information – qualitative and quantitative – together in one easily comparable place. Through this work it was found that they had provided 96% of clients with their desired lifestyle, and 77% of clients had started saving money through the enterprise, highlighting the incredible work they were doing in the community and as part of organisational goals.
There are several key players within the impact management field. These players can be put into two camps. The first camp is organisations which other organisations, governments, and businesses can go to in order to get help to support better social and environmental outcomes for the communities they work with. Often these organisations have established their own methodologies for improving impact management, which they then offer to other organisations. Some key experts in this field include:
The second camp is organisations which other organisations, governments, and businesses can go to improve their internal ethical business practices, such as BCorporation. These organisations will look at current practices in your organisation – such as how diverse your staff are, or how much of your business is co-owned by workers within the business – and give you a rating on how ethical your organisation is compared to other organisations of your type.
In recent years, government bodies and international entities – such as the United Nations and the European Union – have also become involved in creating benchmarks for the social and environment outcomes organisations should be working towards. These are often grouped in themes – such as preventing poverty, or empowering women – and ask that any actions your organisation takes fits within improving one of these outcomes. However, these usually provide goals and do not provide a framework your organisation can use to reach these changes.
Impact management is made up of two parts. One part is the goal that organisations should provide good social and environmental outcomes for the communities they work with, alongside economic outcomes. The second part is to create methodologies and approaches for organisations to measure these outcomes, which we will explore below.
Stakeholders – the community or group of people who your organisation works for and will be most affected by the work you are doing
Metric/indicator – the thing you are trying to measure. So if your organisation is looking at improving youth unemployment, you may have three metrics
It is up to your organisation to define your own metrics, depending on what it is you are trying to achieve
Outcomes – aspects of wellbeing that could change for a stakeholder as a consequence of an activity
Impact – the total effect your work has had on a stakeholder
So what are some key methodologies for impact management?
Theory of change and the five dimensions of impact
Turn the Thinking Curve
Following this, you make an action plan on what changes need to be made ultimately
Rallying questions include:
Social Return on Investment
Maximising Impact Model
Impact management frameworks have key themes and processes:
You should make sure to keep coming back to this plan to ensure that you are continually adjusting it for any changes in resources, time, and goals.
“Value is often invisible because it relates to outcomes experienced by people who have little or no power in decision-making. [Impact management] help[s] organisations become more accountable for what happens as a result of their work, and means being accountable for more than whether the organisation has achieved its objectives – but it also means identifying opportunities to increase the value of activities and create meaningful change in people’s lives.”
Although the impact sector can seem very overwhelming, the key goal of impact management is to provide your organisation a framework to measure what outcomes you are achieving, and to allow your organisation to keep track of these outcomes and ensure their success going into the future. Impact management is a valuable tool for any organisation which is trying to achieve better social and environment outcomes.
If you or your organisation have an interest in using impact management and its tools, there are a variety of resources here at Social Value Aotearoa, or you can reach out to us at firstname.lastname@example.org today!