Social Impact for Nonprofits

Social impact is defined as the significant positive effect that your organization’s activities have that addresses a social issue or cause, and, on a grander scale, on the overall wellbeing of society. Nonprofit organizations exist to promote and advocate for specific social causes. To get to the heart of how successfully your organization is performing, and whether the investment of your organization’s valuable resources are bringing about desired results, your organization should be measuring and reporting on its social impact. A popular approach to understanding and measuring social impact is the Theory of Change, which seeks to explain how the activities of a nonprofit bring about its desired goals in the context of the society it functions within. This is a multistep process that can be outlined as follows:

Step 1: Identify desired goals.

These goals should be clear, concise, and measurable. A good starting point to developing these goals would be reviewing the organization’s mission, which should be clearly established. Your organization’s goals should, at a minimum, take into account the following:

• The social issue you are seeking to address;
• The target population you wish to serve;
• The activities you will engage in to enact change; and
• The impact you are seeking to bring about within the community you wish to serve.

Step 2: Identify available inputs.

These are the available resources you can work with and invest to achieve the goals outlined in Step 1. They can be fiscal, physical, intellectual, etc.

Step 3: Identify outputs.

These are the actions your organization will take within the community using the available inputs identified in Step 2, to achieve the goals identified in Step 1. In tandem with identifying outputs, you should also determine specific output indicators that can be measured to track what outputs your organization has delivered to target populations within the community over time. These indicators are generally quantitative in nature, focusing on the number of outputs delivered over a set period of time.

Step 4: Identify desired outcomes.

These are the environmental changes brought about as a direct result of the organization’s activities identified in Step 4. Outcomes should be simply defined and objectively measurable, rather than overly complex or subjective. As with Step 3, you should also determine specific outcome indicators that can be measured to track the changes that occur in the community as a direct result of your organization’s activities. Ideally, your outcome indicators will tell you how successful the organization was in achieving its desired outcomes. Outcome indicators can be both quantitative and qualitative in nature. Qualitative indicators are subjective experiences that are linked to specific outcomes. It’s a good idea to have a mix of qualitative and quantitative indicators to track each identified outcome.

Step 5: Measure output and outcome indicators over time.

How an organization measures output and outcome indicators can vary widely depending on the unique activities of the organization. Your organization should research available data collection tools to determine which best suits your needs and activities. Both output and income indicators can be measured internally by staff responsible for delivering services to target populations. Output indicators should be measured in real time as services are being delivered. Outcome indicators can be measured a determined length of time after services have been delivered. Organizations commonly utilize questionnaires to interface directly with target populations to measure outcome indicators. Measurement and tracking should take place over a predefined period of time. Those responsible for collecting data should be adequately trained to ensure consistency of application across the organization.

Step 6: Analyze the data, measure the impact, and report the findings.

Your organization should review, interpret, summarize, and draw conclusions about whether the data supports that your activities brought about a meaningful social impact. In addition, the data should be formalized into a narrative report that can be shared internally with management and the governing body. Keep in mind that if the results of your analysis are inconclusive, you may benefit from modifying indicators or data collection procedures and repeating the process.

Considering social impact is a vital and meaningful way to measure an organization’s success towards achieving its purpose. By taking a systematic approach to both

measuring and reporting on its social impact, organizations can obtain meaningful feedback that it can use to improve the quality of its programs, and ultimately further its mission. Social impact reporting can also be repurposed to market your organization to the various stakeholders (funders, donors, governments, communities, etc.) to whom your organization may be held accountable, to potential funders and donors who are looking for an organization that stands out among the pack, and to other nonprofit organizations with whom you can collaborate.

Download the full guide for Nonprofit Board Members