HOW TO MEASURE OUR IMPACT ON SOCIETY: AN ILLUSTRATION OF SOCIAL IMPACT ANALYSIS

Abstract

The purpose of this paper is to help organizations facing the challenge of measuring the social impact of their activities. Although examples of environmental effects’ analyses abound, this is not the case for the analysis of social impact. To illustrate how organizations can demonstrate their impact on society, we evaluated the activities of the Incredible Years (IY) parenting program using the social return on investment (SROI) approach, considering not only the direct impact of the program on children, but a broader range of outcomes for different stakeholders. We show that the monetized impacts of the program are about 10 times higher than the costs of the program. The SROI as an evaluation approach is generally applicable to activities of for‐profit and nonprofit organizations, and serves as a reference to demonstrate the value of expected social impact to investors and funders. Therefore, SROI is a valuable tool not only for managers but for policy makers as well. We discuss the steps, data requirement, interpretation of results, and limitations of the social impact analysis.