You’ve come up with a great idea, sorted out your business model, built a strong team, dealt with cash flow and all the other aspects of setting up your own business. And then you discover that you also need to think about whether you are having a positive social impact. 

For social start-ups, measuring impact can often be the last thing on a long list of essential to do’s. But it is an important thing to get right. If social start-ups stand a chance at success they need to integrate the social side of what they do with their core business model and prove their impact. Measuring your social impact should be dealt with in the same way your business understands and measures its finances. And the good news is that there are processes and methods you can use to do this.
So where should you start?

Step one: where do you want to get to?

The starting point for any social venture is to understand their final vision for impact and how they are going to get there. A good tool for mapping out this process is a theory of change. This will allow you to connect what you do on a day to day basis with the overall change you’re trying to make. 

Step two: Decide on the type of evidence you need

The type of evidence you collect through measurement can range from less to more robust. Early stage ventures may not need to collect at the robust end of that range as they will probably refine and develop what they do as they grow and change. At a minimum, you should have a clear articulation of how you deliver social impact. Nesta Impact Investments has developed Standards of Evidence for Impact Investing to help investees think about these different levels of evidence. 

Step three: Choose the tools and methods you will use

Once you have developed a theory of change, you need evidence. The best way of doing this is to collect information on whether change is happening. This can be done in lots of different ways. For example, when we talk to people or observe them, we are collecting information about their views and behaviours. This type of qualitative research can be used to get very rich information on whether change has happened. It is not good, however, for getting an idea of whether everyone you worked with saw similar effects or understanding how big this change was. To answer these kinds of questions, quantitative research can be used. Questionnaires, or data on numbers of people qualifying from a course, for example, can all be used to gather information quantitatively. The diagram below shows the different types of tools out there for capturing information. Inspiring Impact also has a great new hub to help with this.

Step four: Think about when you will measure and who you will measure with

Timing is important when it comes to measuring change. Think about when it is reasonable to expect change to happen—this could be immediately, or three, six months or one year down the line. Who you measure with is important as you may not want to gather information from everyone—this may be because it will be too resource-intensive or interferes with your service delivery. So, you may consider gathering information from a smaller sample. Generally a sample of fifty will be necessary to see change but the Survey System website can help you decide. 

Step five: Use the results

Finally, as a start-up you will more than likely develop and refine your product—and as you do, your understanding of your impact will change. Just as the lean start-up approach argues continuous refinement of your product based on customer feedback, impact measurement should inform you about what is, and is not, leading to change. You’ll need to adapt your Theory of Change to reflect this and review how you measure your impact. 

Remember that impact measurement is about understanding whether you are having a positive impact on the issue you are addressing and improving your product or service as a result. Ultimately, if the data you collect is not helping you do this, you need to go back to the drawing board and develop an approach that will.