Demonstrating social impact effectively has become an important approach by which not for profits can carve out a competitive advantage in attracting funding, donations and stakeholder interest.

This comprises strong outcomes measurement and explaining how the organisation in question is able to create significant social improvement to the vulnerable beneficiary group in question.

It’s a fine balance

However, it is rare for not for profits to explain this social impact well in terms of both data and storytelling. Quite often, not for profits will focus on a compelling and heartfelt story, but will neglect to back this up with relevant data to support this theory of change.

On the other hand, some not for profits will offer compelling data that supports a positive theory of change, but will not focus enough on individual stories from key stakeholders and beneficiary groups to showcase social impact.

Combining the head and the heart

This has become a favourite expression of mine is describing the best impact models in the not for profit space.  These organisations are able to tell a change narrative from a range of stakeholder perspectives and provide supporting data to support claims about social improvement.

I first heard this expression from the Effective Altruism Australia at their conference in 2016. They ask the pertinent question:

“How can we use our resources to help others the most?”

Measuring outcomes and impact is key

There are a range of methods and approaches that not for profits can adopt to ensure that they are measuring outcomes and impact effectively. These range from the basic to the advanced, depending on the sophistication, development and resourcing of the organisation.

Some of the most commonly used approaches to measure social outcomes are Cost Benefits Analysis (CBA) and Social Return on Investment (SROI). The announcement of the new Australian Social Values Bank (ASVB) may also be a key development in enabling access to impact measurement tools and values.

“not everything that can be counted counts, and not everything that counts can be counted.”

Most importantly, organisations must be able to understand and clearly communicate the inputs, theory of change (logic), outputs of their supported services to beneficiaries and community groups. This will help to articulate community-level outcomes and social impact.

Proving outcomes produces results

The 2016 GiveEasy Innovation Index included organisations such as Movember, BeyonBlue, and GoodShepherd MicroFinance all produce detailed annual reports that include statistics on impact, including key outputs and community-level outcomes. This report demonstrated that leading innovative not for profits such as these perform 34% better at receiving funding than novices.

Not for profits can also learn from the innovative strategies of social enterprises such as Who Gives a Crap- toilet paper, Thank You water and Pollinate, who use detailed and interactive dashboards to demonstrate community-level outcomes and social impact.

Mike Davis is the Founder of Purposeful, a B Corp advisory.