THOUGHTS—Why is impact measurement important?

14 October 2020


5 minutes

Why is impact measurement important

Business owners increasingly understand that financial and social performance are no longer mutually exclusive. This is driving a need to measure and demonstrate social impact. Impact measurement can help create systemic, sustainable change and it also drives value creation for an organisation. Impact measurement enables organisations to account for their social performance, value their contribution to society and generate greater credibility with stakeholders such as customers and suppliers.

Why is impact measurement important?

In a world facing a plethora of problems, from climate change to inequality and disadvantage, social and environmental impact has never been more important. Now more than ever, corporate, government and philanthropic investors are seeking an impactful return on their investment. There’s an emerging interest in social procurement and a growing demand from investors and customers to solely invest and spend with businesses who align with their values. While it’s all good and well to have an impact, if you’re not measuring it then your key stakeholders aren’t going to know the good you’re doing, and in turn provide you with the continued support you need and deserve. You can no longer say you are doing good, without backing it up and being accountable.

What are the benefits of impact measurement?

Better for beneficiaries

So why bother measuring your impact? First, and foremost it helps you see the results of your work. If you’ve put impact at the core of your business or organisation, then you want to know how successful your programs are. It allows you to become more targeted and it highlights areas where improvements could create even greater social impact.

Attract investment and funding

If you have investors or rely on government funding then it is critical you can illustrate the results of your efforts. The more impact you can show, the more chance you’ll have of funding future projects or expansions. Well executed impact measurement gives investors confidence in the financial and social returns they can expect to see from their investment.

Connect and communicate with customers

Impact can be a critical differentiator between you and your competitors. The powerful stories that arise from your impact can be used to promote your organisation. Communicating your impact to customers provides a deeper meaning to their purchase and develops a connection that can enable long-term engagement and brand loyalty.

Industry development

We’re in this together right? Typically, the problems an organisation is trying to solve won’t go away with singular efforts. Homelessness, environmental degradation, social upheavals and disadvantage to name just a few. These are big problems. Contributing to industry knowledge helps others and learning from their experiences helps you. A rising tide floats all boats.


Measuring your impact shows accountability and transparency, which are vital in a world where walking the talk is more valued than ever.

What are the concerns with impact measurement?

Impact measurement can be a costly and time consuming exercise. Some argue that it can distract and take resources away from other projects that would have a better return. If done poorly, organisations can find themselves drowning in data, much of it irrelevant, that they don’t have the time to adequately analyse. It can become a wasted effort and fail to give the information needed.

Poor measurement can mean an organisation isn’t able to determine whether an outcome has occurred because of their actions. It can lead to effective programs missing out on future investment and ineffective programs being incorrectly invested in. Worse yet, we believe if done well, these issues around impact measurement can be largely eliminated.

Where to start with measuring impact?

Impact measurement can be so complex that organisations become paralysed into doing nothing. We suggest starting small. You don’t need to measure everything across your entire business, instead find a project or program and start there. Once your team has gained experience and you’ve found the right tools to work with, only then build impact measurement into other areas of your operations.