What is social impact?

Every day, peo­ple get involved to change things for the bet­ter. They invest mon­ey and their heart and soul to help the dis­ad­van­taged, to pro­tect nature or to pro­mote cul­ture in the neighbourhood.

In short: With their work, they try every day anew to advance soci­ety and achieve the great­est pos­si­ble impact.

But what does the term ​“impact” mean in this context?

With ref­er­ence to char­i­ta­ble work, the term ​“impact” is used in sim­ple terms when­ev­er a mea­sure leads to changes in the community.

• in the tar­get group,
• in their liv­ing envi­ron­ment and
• in soci­ety as a whole.

There are dif­fer­ent lev­els that can achieve impact:

(This image shows: 1 Activ­i­ties are car­ried out and planned — 2 Tar­get groups are reached — 3 Targed groups accept offers — 4 Tar­get groups change their atti­tudes and/​or devel­op new skills — 5 Tar­get groups change their behav­iour — 6 Tar­get groups’ liv­ing con­di­tions change — 7 Soci­ety changes // see the trans­lat­ed image )

Because this is very the­o­ret­i­cal, we explain it with an example:

Impact, very practical

A non-prof­it asso­ci­a­tion has deter­mined through an envi­ron­ment analy­sis that there is a great need for qual­i­fi­ca­tion mea­sures for the unem­ployed. So it offers qual­i­fy­ing train­ing to help unem­ployed peo­ple back into employment.

Its out­put (“Out­put”, lev­els 1 – 3) con­sists, for exam­ple, of the num­ber of train­ing cours­es and the num­ber of par­tic­i­pants reached.

How­ev­er, tak­ing only the resources used (“input”) and the out­puts into account, this does not say any­thing about the actu­al impact of the mea­sure! After all, a high num­ber of par­tic­i­pants and the per­son­al sat­is­fac­tion of those respon­si­ble for the project do not guar­an­tee that the unem­ployed will acquire knowl­edge and skills that are rel­e­vant to the labour mar­ket — and that the project will thus con­tribute to the actu­al goal: a return to work.

The actu­al impact of the project is that the par­tic­i­pants in the train­ing cours­es acquire skills and build up self-con­fi­dence!

Only this change in the tar­get group (“Out­come”, lev­els 4 – 6) enables them to re-enter the job mar­ket. And final­ly, this brings about a change at the social lev­el (“Impact”, lev­el 7) in the form of a decrease in unem­ploy­ment, for exam­ple in the district.

Details are explained in the ​“Course book Impact”, which is avail­able for free down­load below, and on the site ​“Effec­tive Project Man­age­ment for Asso­ci­a­tions and Non­prof­its” …

Mea­sur­ing and analysing impact

First of all: Social impact can­not be mea­sured eas­i­ly! Non-prof­it work can­not be based on a grid that mea­sures and com­pares the respec­tive impact — fol­low­ing the pat­tern: Orga­ni­za­tion A has an impact of 1.8 and Orga­ni­za­tion B one of 3, so Orga­ni­za­tion A is the more effec­tive of the two.

How­ev­er, the poten­tial impact can be analysed. It is pos­si­ble to make a valid assess­ment of the per­for­mance of a non-prof­it organ­i­sa­tion and the like­li­hood that a project will have an impact.

And this is where PHI­NEO comes in: We ana­lyze how high the impact poten­tial of a project is and how strong the orga­ni­za­tion behind it is.

Our method of analy­sis is based on a sci­en­tif­ic pro­ce­dure that has been test­ed in the UK, which we have sig­nif­i­cant­ly refined and adapt­ed to the struc­tures of the non­prof­it sec­tor in Germany.

Our PHI­NEO analy­sis is based on eight criteria

1. The objec­tives and tar­get groups of the project should be clear­ly aligned with the respec­tive social chal­lenges. After all, the more pre­cise­ly a project is geared to the needs of the tar­get groups, the more like­ly it is to have an impact.
2. The approach and con­cept of a project must be the­o­ret­i­cal­ly sound and suf­fi­cient­ly proven in prac­tice. All mea­sures should be opti­mal­ly suit­ed to the objec­tive and the tar­get group. The exam­i­na­tion of projects in the envi­ron­ment is also relevant.
3. Con­tin­u­ous qual­i­ty devel­op­ment also con­tributes to effec­tive­ness. In an active learn­ing cul­ture, work results are mea­sured accord­ing to clear stan­dards and, depend­ing on the result, the con­crete project work is fur­ther devel­oped in a goal-ori­ent­ed manner.
4. Vision and strat­e­gy give an organ­i­sa­tion a clear direc­tion. Gen­uine impact ori­en­ta­tion requires that an organ­i­sa­tion’s planned action steps are suit­able for actu­al­ly achiev­ing the long-term goals set.
5. Lead­er­ship and per­son­nel man­age­ment form the frame­work for effec­tive engage­ment. Depend­ing on the size of the orga­ni­za­tion, tasks and respon­si­bil­i­ties should be clear­ly defined and appro­pri­ate to the com­pe­ten­cies involved.
6. Every orga­ni­za­tion needs appro­pri­ate super­vi­sion and con­trol mech­a­nisms (“checks and bal­ances”). Depen­den­cies and per­son­al inter­de­pen­den­cies should be exclud­ed, and finances should be audit­ed by inde­pen­dent persons.
7. Finances and con­trol­ling are fun­da­men­tal to the man­age­ment of an organ­i­sa­tion. The accounts should be pre­pared in accor­dance with recog­nised prin­ci­ples. We also check the financ­ing con­cept as well as the source and use of funds.
8. Trans­paren­cy and pub­lic rela­tions work are also impor­tant for effec­tive engage­ment, espe­cial­ly since social investors often make their sup­port depen­dent on open infor­ma­tion about project work, gov­er­nance and the finan­cial situation.

To leave noth­ing to chance, we sub­di­vide these eight cri­te­ria into 21 sub-cri­te­ria. Each of these cri­te­ria, both indi­vid­u­al­ly and col­lec­tive­ly, reveals how impact-ori­ent­ed an orga­ni­za­tion’s work is and how high the poten­tial is for the project to achieve a high degree of social impact.

Organ­i­sa­tions and projects that want to achieve a high impact can and should be guid­ed by these cri­te­ria.