Today’s donors are looking for much more than a warm and fuzzy feeling. They want to know how their money is being used. They want to feel like investors.
They want to make an impact.
In their book “Social Impacts,” Marc J. Epstein and Kristi Yuthas discussed ways by which nonprofits and individuals can make an impact and measure how they are doing so. They offer the Social Impact Creation Cycle, which they maintain consists of five steps, in the form of questions that can be asked by individuals or organizations.
The five steps are:
Step 1. What will you invest? What are the investment goals? Also, what returns are expected, social returns alone or financial ones as well? What resources can be committed: time, money, expertise, network?
Step 2. What problem will you address? This starts with deciding whether to address one issue or a portfolio of issues, but it also means considering the intervention approaches that will be necessary.
Step 3. What steps will you take? Social impacts flow from an organization’s mission and culture and can be created by the goods and services offered, by operations, and from passive investments.
Step 4. How will you measure success? At this stage it is also useful to consider the purpose of measurement.
Step 5. How can you increase impact? This means evaluating the dimensions of the performance-measurement system.