The Importance of Assessing Your Social Impact with Hannah Gay

As someone who studied culture around the world, I've always been intrigued by the concept of Social Impact Consulting. However, it wasn't until I started working with ethical brands that I started to question the ways that social impact can be measured, and how those measurements can be used to grow the mission of ethical brands. We sat down with Hannah Gay, Social Impact Consultant and founder of Impact Bosses, to pick her brain a little more on the topic.

How would you explain what you do to someone who isn’t quite sure what social impact measurement is, or how they can use your methods to track the impact of their ethical brand?

We all have measures of success in our businesses that extend beyond pure revenue generation. In an ethical brand, customers likely pay a bit of a premium for products that they know are ethically sourced and sold; they may be able to get a similar product for, say $10 somewhere else but they’ll pay $15 for something with a positive footprint and story behind it. So it’s imperative that brands can articulate to both their customers and to their employees, who are making decisions daily, whether or not impact is being made. A lot of us get scared that metrics means tons and tons of data; that’s so far from the truth. While it’d be great to do a long term study tracking the economic autonomy of your artisans versus a control group, that’s an expensive and time-intensive undertaking. If all you can do for now is ask ten of your artisans whether or not their lives are better before or not from working with you and what can be improved, that’s data you can use and publicize! I always say useful data is much better for us than perfect data.

What are some of the first steps an ethical brand can take if they want to start measuring their impact, and continue to increase their impact in the long term?

I explain this in a bit more detail at https://hannahgay.com/metricsdownload, but the first step is to get a solid illustration down of how impact and revenue align and what is necessary to get results in both. I have all my clients start with the ultimate world change they are trying to realize (like eradicating world hunger) and work backwards from there, thinking through how their unique product or service helps drive that world change, what activities are necessary, what resources are necessary to support these activities, and whether or not they’re sure of the links between each – for example, whether or not they’re sure that the activity of skill training for artisans results in increased income for women or better education for their children. Sometimes there’s third party evidence that already supports this link, which is great – use it. If not, the company needs to find some way to “test” this assumption; just like in science class!                             

You encourage every company that has social impact in its' business model to create something called a Theory of Change and within that test assumptions. What is this and why on earth should nonprofits and social enterprises test things? 

Don’t get too bogged down in being scientifically perfect in testing things. Let’s say your core operations are in another country and your team is in the US. Using the above example, you want to test whether or not your skills training program results in increased income for women. You are traveling to your training program for a week. My advice would be to set aside time to have deep, 1:1 interviews with a handful of the artisans your program has trained and just ask them about the program’s efficacy. You’ll get great information. You’ll get information on what needs to be improved to bring back to your team. You’ll get soundbites to use in external communications. And you’ll get a barometer read on whether or not what you’re doing is working. Make a couple small changes in response to what you learn (don’t totally turn over everything), and do the same thing next time you’re in town. Metrics needs to be useful for internal decision making and external communications and sustainable, not perfect.  

How should social impact organizations and businesses share and report on their impact for funders, customers, and other external audiences?        

I’m working on some DIY guides that are templates for this, but I think this is really, really important. You’re asking these stakeholders to financially back your impact, and if you’re not transparent and open, they’re not going to stick around. That said, transparency and honesty does not mean everything is rosy and shiny. Report on both successes and what hasn’t worked, as well as your team’s plans for making them better. I always recommend a robust annual report (online is fine) with both quantitative and qualitative data that shows how your brand is doing with both impact and revenue, as well as quarterly updates. If you don’t have the resources to put out a report quarterly, at least review your data quarterly internally with your team to get a quick read on how things are going. You’ll also be prepared with fairly up-to-date data should a funder or large customer come to you and ask how things are going.

In the long run, how can social impact measuring serve the longevity of a brand?    

I encourage my clients to measure impact for two reasons. First, it informs internal decision making. Let’s say you get $10,000 . . . how would you know what to do with it? Or you lose an employee to a move. How do you decide to reallocate her responsibilities while you search for a replacement? Your organization makes decisions all the time. The second is informing external communications. I also constantly see organizations frantically digging for data and stories to share when a funder or other major stakeholder asks for it. Having a system in place of making sure up-to-date data is at your fingertips is invaluable when this happens! It shows not only that you have your act together, it also just helps you run a sane and calm organization. Finally, having a system of social impact metrics in place means that you can constantly identify areas for improvement, and introduce small changes, then see whether or not they work a few months later. This process of small changes to constantly test is what makes organizations sustainable, much more so than a shiny, new initiative, or program that may or may not work, cost a lot of money, and time!

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Contributed by Hannah Gay

Ris Rose