The Impact Management Ecosystem
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.
Key terms:
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
- How many youth have gotten jobs through your organisation
- Whether they are happy with their jobs
- Whether their jobs will help them reach their long-term career goals
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
- The theory of change is a way of conceptualising how your organisation works to affect the change you wish to support in your community. It focusses on a central goal (the change) and builds out a theory of how this change happens
- You implement this through the five dimensions of impact:
- Impact (what is the change you are aiming to create?)
- Outcomes (what are the outcomes your stakeholders currently experience, positive and negative)
- Outputs (what do you believe is the output of the work you currently do? What metrics are you using?)
- Activities (what work do you need to do to achieve your goals, based on your current or assumed outputs?)
- Inputs (what resources and investments do you need to put in, and what do you have available, to achieve the outcomes you are striving for?)
Turn the Thinking Curve
- Choose where you want your particular outcome or group to end up
- Analyse the factors which contribute to this issue
- Who within the organisation or community do you need to include in order to make lasting change?
- Using the above research, you then decide on key changes that need to be made in order to improve outcomes
Following this, you make an action plan on what changes need to be made ultimately
Results-based accountability
- You use the ultimate goal your organisation has in mind as the rallying point for the changes you make and the questions you ask
Rallying questions include:
- How much do we do now?
- How well did we do it?
- Is anyone better off from the work we have done?
Social Return on Investment
- Have a goal in mind for what your organisation is trying to achieve
- Create an impact map – who are you affecting? Who are your key stakeholders?
- Indicators – develop key metrics to measure what social impacts have been created by your organisations work
- Valuation – work with your stakeholders to determine the value of the outcomes they experienced
- Contribution – adjust your calculations to accurately affect your contribution to the outcomes, and the duration of those outcomes
- Calculation – how valuable was the program? What is the social return on investment?
Maximising Impact Model
- Plan (what are you trying to achieve ultimately, who are your stakeholders?)
- Do (collect information from relevant groups, analyse data)
- Assess (what does the data tell you about the impact you have been making?)
- Revise (identify viable options to produce goals based on resources available)
Impact management frameworks have key themes and processes:
- Goals: Your organisation must have an ultimate goal that you are working towards improving for the community you work with
- Understanding: Your organisation should understand all the components of the issue you are trying to solve, and the conditions that created it. Which of these conditions is your organisation focussing on?
- Outcomes and impact: You must find out what effects your organisation has already had on this issue. What has the work you have already done in this area produced? Have you been producing the outcomes you have promised? This part of the review process will generally involve doing surveys, interviews, and data analysis with the community you would with, and the people most affected by your work.
- Managing and maximising impact: From your above analysis, what do you need to change in your work in order to achieve the goal(s) you are aiming for?
- And finally, what resources do you have in order to produce these results? Has your work not been producing good outcomes for your community because you do not have the resources to meet your goals? Adjust your goals accordingly.
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 info@socialvalueaotearoa.nz today!