The benefits of impact management

In order to understand the advantages of social impact management, it is principal to clarify the difference between impact measurement vs. management. As we all know, it is impossible to manage, control and improve anything without measuring it. Therefore, social impact measurement aims to assess the positive and negative changes that both society and environment suffered as a result of activities of an organization. While, impact management focuses on improving the positive and preventing the negative impact produced by the organization’s interventions.

Impact management guides entrepreneurs through activities that produce a series of direct beneficial outcomes. Here are the main outcomes generated along the social impact management:

• Impact Mapping: At the initial phase, entrepreneurs create their Impact Map, which creates a logic link between organization’s planned actions and impact. Thanks to that, entrepreneurs enhance their ability to plan and communicate their project internally and externally.

• Impact-oriented: As part of the Impact Track Pledge, organizations are asked to set impact indicators and targets that reflect their most relevant impacts (positive or negative). This approach helps organizations to focus towards what matters most.

• Data collection: In order to follow up their development towards impact targets, social entrepreneurs have to collect key data with clients and partners, leading to a better understanding of the customers needs and aspirations.

• Reporting: The frequent reporting of impact provides more transparency about the actual social benefits produced by the venture to funders and supporters.

These outcomes generate diverse benefits which vary in consonance with the context of the institution. According to the study carried out by KPMG Barométre 2017 de la mesure d’impact social, which interviewed 360 social players, the main benefits of impact measurement are:

• Improvement of performance: The creation of a plan for reaching impact enhances the organization’s ability to visualize points of improvements as well as to communicate internally with partners and supporters. In addition, the fact of having a clear and meaningful impact target inspire focus on activities that lead more efficiently to impact. All the entrepreneurs that joined Impact Track mentioned it as the number one benefit while estimating their impact.

• Accountability to partners: All the process of impact management, from elaborating of an Impact Map, setting clear targets and committing to report transparently on achievements - reinforces accountability, transparency and trust among partner entities. Creating trust is a crucial aspect also when fundraising and engaging partners and volunteers.

• Communication: The whole process of impact management consists of creating a feasible plan to reach impact. A logic plan works as a strong support to storytelling and therefore, to internal communication to improve the venture, to engage partners or to raise funds.

We would also add to this list that impact measurement is the basis for acquiring a passport to social investment funds, such as impact investment - see European social entrepreneurship fund (EuSEF) label. That is one of the reasons that Impact Track partners up with social entrepreneurs that want to make the best out of their impact data on their fundraising.

In addition, GIIN elaborated a study about the Business value of impact measurement, based on interviews predominantly with investors, which concludes that the main ways in which impact investors derive business value from measuring social and environmental performance are:

1. Revenue growth

2. Improve operational effectiveness and efficiency

3. Investment decision

4. Build marketing and reputation

5. Strategic alignment and risk mitigation

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