Sponsored: the real meaning of impact
What distinguishes social investment from high street bank lending is impact social or environmental. When Social Investment Scotland (SIS) make an investment into a charity or social enterprise, we want to know the difference the money is going to make either to the organisation or more commonly, its beneficiaries.
The reason for this is that our investors, the people who provide the money we lend, whether that’s the Scottish Government, corporates like Asda, private individuals or others do so to generate social change. And as a registered charity ourselves, our charitable aims are to ‘Connect Capital with Communities’ and help facilitate significant and enduring impact.
However, we know that some charities and social enterprises find telling the story of their impact to be daunting at times. Focussed on delivering their services, they may not always find sufficient time and resources to measure, collate and report the difference they make, and yet this should be central to their mission and certainly a crucial activity when securing social investment.
One reason for these difficulties may be that organisations who have historically accessed grants from funding bodies and Trusts will have been subject to a raft of quite different and sometimes onerous reporting requirements.
Whilst things have improved in recent years as funders have sought to slim down their reporting needs, one significant benefit social investment brings is a different approach to reporting. Here at SIS, we want to hear the story of the impact in the way our investees want to tell it; there is no prescribed format. It’s still important to distinguish between things like outputs (the numbers) and the outcomes (the changes) but when a social enterprise does this well, they begin to understand that social impact is in fact an asset that’s really valuable. Stories of impact can motivate staff, engage new stakeholders and have the potential to open doors to new opportunities.
Where to start? I quite like to see an organisation develop a social impact plan in much the same way as they would a business plan. A good impact measurement plan should include details of aim, outcome, activities, targets, methods of data collection, responsibility for data collection and frequency of reporting. The Board or Trustees could and should be involved and there’s no reason why this shouldn’t be updated on an annual basis.
There are all kinds of different reporting methodology available but most adopt the principles of what’s called The Theory of Change. At SIS we’re advocates of Big Society Capital’s Outcomes Matrix and it may be a good place to start if your organisation is looking to develop its impact reporting. Personally, one of the best reports I’ve seen comes from a social enterprise called Oomph! Wellness. Their report is comprehensive, engaging and very powerful and can be found here.
During March we’ll be delivering a new series of Investment Readiness workshops across Scotland sponsored by the Scottish Government, where we’ll be touching on the importance of social impact when securing investment. If you’d like to come along or want more details, drop me a line at [email protected] or call 0131 558 7706.
Next month, we take a look at what happens if things don’t go quite to plan once social investment has been secured