DEFINITION: IMPACT
‘’Impact is the reflection of social results, tailored to the results achieved anyway, for negative consequences and for consequences declining as time goes by” (GECES, 2014).
An example of a social enterprise ‘s impact is the results of developing any kind of employment. If yes, the measurement of the impact will be shown by the number of people who had any positive change in the quality of their living.
Social enterprises, from their nature, are dedicated to adding positive social value. Measuring the positive impact, makes it easier for stakeholders such as future sponsors, to briefly understand the beneficial outcomes from their investment.
The most common categories of impacts that are counted are social and cultural:
Social impacts: That kind of impact is related to the aspect which cares for the prosperity of people. Through this aspect, it is counted how much has positively affected the wellbeing and the living conditions of people.
Cultural impacts: That kind of impact aims to positively affect the culture, which is referred to traditions, language, values, beliefs etc.
Social businesses use social reporting and accounting in conjunction with other tools to assess their impact on society due to lack of standard measurement methods. The most commonly used methods are cost-benefit analysis, taxonomy evaluation, social accounting SAA, EVPA, SROI.
The need to create parameters and methods that will accurately calculate the generated social counterpart, so that both businesses as well as financial institutions can be able to manage it for their benefit at the socio-economic level. To achieve this, the establishment and operation of a national counting impact system could be launched as a social value assessment body where, among others, the social entrepreneurs could apply social impact measurement methodologies.
The importance of counting Social impact
The resources that social enterprises are required to manage are as specific as possible and so do with their expenses. The accounting systems that have been developed offer them the ability to monitor their revenue and expenses, in order to have an overview of their financial situation that allows them to know if they are sustainable, but they cannot attend if it happens and at which level. Their actions contribute to:
- The change of society, which will be affected or not from the existence of their business,
- What is the social value and the impact that they eventually produce?
The measurement of the social impact is important for the companies themselves since it will give them the opportunity to develop realistic goals, improve performance to prioritize their decisions and gain access to capital markets (Nichols, 2007) can also more effectively manage those involved risks arising in a business.
It is a tool that gives them the ability to improve both their image and the ways they use for to make their work known. But also, to accurately identify their social goal and organize their activities accordingly. Identify users of their actions, to capture the changes that their actions create.
To identify any negative effects that should be eliminated and the points that need improvement. If the changes are measurable or long-lasting, its extent impacts the importance of change and whether it would happen anyway. Also designing those products and services that will ensure their growth competition and their reliability and ultimately increase their social performance in the future. So, measurement is a tool to create opportunities on the one hand future funding on the other hand to maximize the impact that produce their activities.
Finally, the social impact’s measurement contributes to the additional development of the social economy branch by contributing to the development of relationships of trust between society and social enterprises and organizations that have been evaluated positively for their social performance, consolidating social entrepreneurship with clear social impact. Funding increases the social impact of businesses as it contributes to improving their financial performance, its environmental footprint and the creating of new jobs.
Below there is an inspirational video for a Social Enterprise.
