WASEC

Measuring impact is simply the act of recording and understanding the impact you create. Managing your impact takes this further to use the information collected through impact measurement to make decisions that guide your organisation, its strategic direction and the programs, products and services you offer.

Good Sammy Enterprise

What is impact?

Impact is defined as the net well-being effect on a community, family, individual and/or the environment as a direct result of an organisations products, services and/or programs. Several important aspects to this are who benefits, how do they benefit, how much do they benefit and how long-term is this positive effect. Impact is commonly measured across several core areas including social, environmental, economic and cultural impact. 

Why should you measure and manage your impact? 

Measuring impact is simply the act of recording and understanding the impact you create. Managing your impact takes this further to use the information collected through impact measurement to make decisions that guide your organisation, its strategic direction and the programs, products and services you offer. There are several core reasons why it is important to measure and manage impact: 

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  • Increasingly becoming considered as good business practice
    It is important to understand impact in order to continually improve products, services and programs to maximise impact and financial sustainability. Similarly, understanding impact can help you to minimise and avoid negative impacts. 
  • Communication to stakeholders
    This includes staff, clients and customers, funders and the wider community. This may take the form of reporting but may also be used to motivate and align stakeholders around the core purpose of the organisation. It can also be used to communicate an organisation’s effectiveness and competitive advantage. 
  • Fundraising
    Effective impact measurement and communication of outcomes can help to demonstrate the effectiveness of an organisations work and increase competitiveness of grant applications and investment proposals. Impact measurement and management is a continually evolving practice, however, there are some established best practice principals that everyone should comply with. 
  • Accountability & Independently verifiable
    Impact measurement will be able to be independently verified in order to hold an organisation accountable for the impact they claim to create.

Getting Started

When beginning to develop an impact measurement and management system it is important to understand why you wish to measure your impact and what types of impacts are important to your organisation and stakeholders. This will inform what you measure and how rigorous and onerous your impact measurement system is. It is unlikely that you will be able to rigorously measure all of the impact that you create. Therefore, through developing a Theory of Change and Program Logic, you can narrow your scope to what your intended impact is. 

  1. A Theory of Change is a short statement that outlines what you are trying to achieve through your organisation, program or product. It will outline what your organisation, program or product is, the issue it is seeking to address and its intended impacts. 
  1. A Program Logic is an extension of your Theory of Change that provides a more detailed explanation of your intended impact. It defines the activities you will undertake, how these lead to intended outcomes and how these then translate into long-term impact. A Program Logic is a clear visual presentation of these and the assumptions that guide your logic. Importantly, all of your assumptions should be founded in evidence.
  1.  Developing an Impact Management Strategy: The Impact Management Strategy (IMS) is a document that provides a ‘north star’ for an organisation and its partners. It outlines the intended impact, the way in which it is measured and supports all partners in reflecting on and improving (i.e. managing) impact into the future. You IMS will include your Theory of Change and Program Logic as well as a practical strategy to measure your impact. This includes outlining the metrics you intend to measure and how you intend to collect the data on them.

Common accepted methods for measuring and managing impact

Your Theory of Change and Program Logic will guide exactly what you measure within each of these methodologies. Simply, you should use metrics that allow you to assess if the impact your creating is in line with what you thought in your Theory of Change and Program Logic – i.e. to answer the question, “is my organisation, program or product effective in solving the issue we are targeting, in the way we think it is?”

These are just a few commonly accepted methods for measuring impact. There are many more available that are also widely used and accepted. It is also possible to design your own bespoke IMM system.

Social Return on Investment (SROI)

SROI is a participative approach that is able to capture, in monetised form, the value of a wide range of outcomes, whether these already have a financial value or not. An SROI creates a narrative of how an organisation creates value by demonstrating it as a ratio that states how much impact is created, in dollars, for every $1 of investment.

Results Based Accountability

Looks at the difference made to the client population by comparing it to the population at large. It does this by measuring indicators that demonstrate the wellbeing of a target population at large compared to the performance the program has on the client population.

Most Significant Change (MSC)

The Most Significant Change (MSC) approach involves generating and analysing personal stories of change and deciding which of these is the most significant. MSC is not just about collecting and reporting these stories but also having processes in place to learn from these stories. Often MCS is not used on its own as a measurement framework.

Experimental and Quasi-Experimental Methods

Experimental and Quasi-Experimental Methods are statistical methods designed to prove causality between the program and impact. These include methodologies such as Randomised Control Trials, Pre/Post Tests, Regression Discontinuity Design and Difference in Differences.

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