Measuring Impact- Is it really necessary?
For the past few years, social entrepreneurship has become a path of choice for many entrepreneurs who are passionate about bringing about a change and creating impact. More often than not, entrepreneurs are relying on using anecdotes or proprietary metrics to describe the impact they are creating. The very essence of social entrepreneurship lies in making positive impact, but how can we be sure that positive impact has indeed been created? And created in a way that is cost efficient? Are social enterprises the only enterprises that create a “social” impact?
Can you really Measure Impact?
Whether it’s for entrepreneurs or investors, everyone agrees that measuring impact is important to gauge if the social, environmental and financial targets are being met effectively. Unfortunately, there is yet no ONE agreed upon system for measuring that Impact. The most common Impact measurement systems in use currently by Impact Investors include the Social Audit Network (SAN), Logic Models and Social Return on Investment (SROI). After using these and other metrics over the years, impact investors and social entrepreneurs acknowledge that a one size fits all is not effective. Keeping this in mind, GIIN (Global Impact Investing Network) has created one of the most holistic standardized measurement metrics for measuring impact effectively, called the IRIS.
The IRIS catalog of generally accepted performance metrics, are used by leading impact investors to measure social, environmental, and financial success, evaluate deals, and grow the sector’s credibility. The IRIS catalog currently consists of 400 generally accepted performance metrics, which can help create a strong Impact measurement plan. However, metrics on their own are not enough. It is important to understand that in order to truly measure impact, one must understand the entire impact value chain, what needs to be measured and why.