Impact measurement in different industries

Having discussed the importance of measuring impact and how it aligns with your mission and strategy, we’re now going to consider how to measure impact. This step introduces two different approaches: social accounting and audit, and the logical framework.

While the social accounting and audit approach evaluates impact from an organisation-wide perspective, the logical framework evaluates impact from the perspective of a specific project or program. Both approaches to impact measurement require the engagement and input of the stakeholders of the venture (Zappalà and Lyons 2009).

The social accounting and auditing approach

This approach consists of three stages: planning, accounting, and reporting and auditing (Zappalà and Lyons 2009).

Before commencing the planning process, some important issues need to be considered, such as the principles of the framework, required resources, the process and its ultimate goal/aim, and the implications on the organisation. Once these issues have been settled, the planning process follows.

Stage 1: Planning

During the planning phase, the venture needs to elucidate its mission and objectives, and clearly set the activities that will enable it to achieve its objectives. Furthermore, the venture needs to define its underlying values. A stakeholder analysis should be done in order to determine who the stakeholders are and what strategies are needed to engage them.

After a clear presentation of the goals, activities and stakeholders and how to achieve the set goals, the venture proceeds to the accounting step.

Stage 2: Accounting

At this stage, a social bookkeeping system that enables the organisation to collect information on performance indicators against the predefined objectives and values should be set up. The information collected includes both quantitative and qualitative information. The information will then be analysed and fed into the management of the venture.

Stage 3: Reporting and auditing

The information collected in the accounting step is compiled and interpreted in the social account. This information is then audited by impartial individuals to ensure the information collected is fair, honest and represents the activities conducted by the organisation at that specific point in time.

If the panel is satisfied with the information provided in the social account, an audit report is then prepared. The approved social account is then made public to the stakeholders of the venture. Based on this, the organisation may decide to set new targets and see the impact of the organisation’s activities on its stakeholders.

Logical framework matrix

A logframe matrix is an analytical tool that is used to embed the evaluation of a project/program into the design phase of a project (Crawford and Bryce 2003). It provides a visual understanding of cause and effect relationships in an organisation (Zappalà and Lyons 2009). As a result, it shows the interrelationship between activities, outcomes and impact, by showing how activities lead to outcomes, and outcomes to impact.

The logframe matrix ensures that a project/program is well designed and structured, as well as meeting the objectives set out. Performance indicators are also outlined during the design phase. The figure below shows an example of a logframe matrix.

Example of a logical framework matrix: river pollution (Crawford and Bryce 2003: 48) (Click to expand)

Your task

Download the document Measuring Impact: Subject Paper of the Impact Measurement Working Group, available from the New Philanthropy Capital (NPC) website.

Read pages 11-15, illustrating how impact is measured in different companies.

Pick one of the case studies and answer the following questions:

• What factors influenced their approach to impact measurement and how?
• Has their approach been successful? How do you know?
• What could they do differently?

Share your thoughts in the comments.

References

_{Crawford, P. and Bryce, P. (2003) ‘Project Monitoring and Evaluation: A Method for Enhancing the Efficiency and Effectiveness of Aid Project Implementation’. International Journal of Project Management 21 (5), 363-373}

_{Matarasso, F. and Halls, S. (1996) The Art of Regeneration. Stroud: Comedia}

_{Maughan, C. (2012) ‘Monitoring and Evaluating Social Impacts in Australia’. Working Papers, CW003. Cooperative Research Centre for Remote Economic Participation. Alice Springs: Ninti One Limited}

_{Moriarty, G. (1997) ‘Taliruni’s Travellers: An Arts Worker’s View of Evaluation’. The Social Impact of the Arts, Working Paper 7. Stroud: Comedia}

_{Zappalà, G. and Lyons, M. (2009) Recent Approaches to Measuring Social Impact in the Third Sector: An Overview. Sydney: Centre for Social Impact}