3. Impact Metrics Template
• [List 1-5 metrics, such as number of jobs created,
increased income. ]
• [One of the metrics should be: Number of lives
positively impacted since the founding of the
enterprise.]
3
This video explains best practices on creating impact metrics, which is an element of the social impact model.
The goals of having impact metrics are, first and foremost, to show your audience how you track your impact. This tells them what is important to your enterprise and how you measure it. Impact metrics also demonstrate your impact to date.
Here is the impact metrics template. Simply, put this will be a list of 1 to 5 impact metrics showing your impact to date. If the enterprise has not launched yet, then it will be a list of the metrics that will be tracked.
The metrics should be listed in order of importance to your enterprise, with the most important metric being listed first. Also, at least one of your metrics should be the number of lives positively impacted by your enterprise. For example, if you provide clean drinking water, then a metric could be “number of people with access to clean drinking water”. While you may measure your impact in other ways, such as number of liters of water sold, your audience is usually most interested in the impact on peoples’ lives, so providing a direct link to the number of lives benefited makes it easier for them to appreciate your impact to date.
The goal of having 5 or fewer impact metrics is to help you focus on the metrics that are most important for guiding your internal operations and for telling your social impact story to investors, partners, and others.
IF you are unsure about what metrics to use, one approach to defining your metrics is to show your mission, problem statement, and solution description to someone, who is not too familiar with your enterprise or the sector and ask them how they would measure your success. Based on their responses, you may be able to define metrics that tell them what is important. But, be sure that the metrics can be tracked directly or indirectly as part of your normal operations. (In other words metrics that require extra surveys may be too hard or too expensive to collect.) Also be sure that the metrics you define can be attributed directly or indirectly to your engagement with a beneficiary. In other words, don’t create metrics for social impact that you cannot take credit for.
An important distinction to make is between output metrics and outcome metrics. Output metrics quantify what you do, but that may or may not lead to social impact. For example, number of people trained. Just because you train someone, you don’t know that their life is better, much less how. However, it is still an important metric because the audience will agree that training people is a good thing and that some percentage, probably a high percentage of the people trained will have an improved life as a result.
Outcome metrics are the ones that actually quantify an impact in someone’s life. The challenge with these metrics is that they can be hard to track and the results can’t always be linked directly to your enterprise. However, they are usually the metrics that your audience cares about the most.
One way to link output measures, which you can track as part of your normal operations, and outcome measures, which is what investors and other supporters care about is through proxies.
The best way to do this is by finding existing research that connects your outputs to your outcomes. For example, if you know that in our region, for every cookstove sold a certain percentage are actually used by the buyers families and the average number of people per household, and the average reduction in health problems per stove, then you can do the math to show how many people’s lives are benefited per stove sold.
I would be remiss if I did not mention the IRIS metrics catalog created by the Global Impact Investing Network. Many leading impact investors are using these metrics and requiring their investees to use them.
IT is worthwhile to spend some time looking through the catalog to see which IRIS metrics make sense for your enterprise. However, most of them are operational, so they will not help your social impact model. Don’t track metrics for the sake of tracking them. You already have too much to do! But, if you do find some IRIS metrics that are relevant for your enterprise, it will speed up conversations with many impact investors.
Here are some example IRIS metrics that are useful for your social impact model
Here are example metrics for Skills Tank. Note that the first two are output metrics and the next two are outcome metrics.
Here are examples for Washing Works. These are all output metrics. The challenge here is that two of the metrics (the second and fourth) can only be tracked over time.
To end, here are examples for Kinopia Development Association. Note that the first is an output metric and the second is an outcome, probably based on a proxy of the number of people who benefit per stove sold. Thee metrics show social impact, environmental impact, and financial impact.
