Social impact is a huge buzzword. It’s thrown around a lot in the social enterprise and nonprofit worlds. But what is social impact? And why does it matter? definition of social impact
Good and helpful change
The Business+Impact initiative at the University of Michigan’s Ross School of Business defines social impact as, “a significant, positive change that addresses a pressing social challenge.”
This definition is a great place to start. While impact in a general sense is the effect that one thing has on another, social impact often specifically refers to positive effects– something that we want to happen. The social part of social impact refers to “a pressing social challenge,” some social problem that is countered or solved as a result of that positive change.
Alexandra Ostrow, founder of Social Impact Strategy firm WhyWhisper Collective, says that social impact should, “meet an actual documented need and… provide a solution that is both measurable and sustainable.”
More simply, social impact might be described as good and helpful change– although it is often much more than that.
Measuring social impact
So social impact is a good thing– but how do we know that a program, company or individual has social impact?
Many institutions record and measure their impact and share them in the form of annual reports. These documents communicate results and impact to stakeholders, beneficiaries, and the general public.
In a more broad sense, social impact can be measured using a social impact assessment (SIA).
The International Association for Impact Assessment (IAIA) defines a social impact assessment as:
“the processes of analysing, monitoring and managing the intended and unintended social consequences, both positive and negative, of planned interventions (policies, programs, plans, projects) and any social change processes invoked by those interventions. Its primary purpose is to bring about a more sustainable and equitable biophysical and human environment.”
SIAs are holistic– they consider each effect, whether intended or not, of intentional actions. They also consider larger processes of change that occur as a result of an intervention. Both comprehensive and robust, and SIA helps an agent to understand how their action affects both the environment and people.
What changes might an SIA measure? The IAIA recommends defining social impacts as changes in people’s way of life, culture, community, political systems, environment, health and wellbeing, personal and property rights, and fears and aspirations. When a planned intervention such as a government program or the founding of a new company affects any of these areas, an SIA aims to recognize, measure and monitor that social impact.
Social Impact in 2020
A 2015 article in Entrepreneur describes the importance of social impact strategies, “concrete and measurable plans that have quantifiable business outcomes and definitive societal impacts,” for modern businesses. Five years later, with increasing concerns about racial justice, global poverty and inequality, and the environment, social impact is all the more important.
Many businesses have stated their commitment to corporate social responsibility. But a social impact strategy goes one step (or many steps) further.
New Belgium Brewing Company has a particularly robust social impact strategy. The creator of Fat Tire beers has a long-term carbon reduction plan to reduce their emissions and overall environmental impact. In turn, they are supporting communities and farmers while ensuring an equitable economy.
Understanding social impact can help us to better consider both individual and corporate action. What is your social impact?
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