Social Impact Consulting: Here to Stay?

It’s not uncommon for 21st century businesses to tout the positive social impact their business has on a community and the environment. Consequently, the field of social impact consulting is growing.

But what does it mean for a company to make a social impact, and how can businesses ensure they are well-positioned for the high tide?

What is social impact?

Social impact is the effect an individual’s or organization’s action has on people’s lives, communities, and the world. Organizations make a positive social impact when they take thoughtful, intentional action that addresses social challenges through their business operations. While businesses and organizations impact people daily, a social impact is made when a direct positive consequence is realized by society due to an organization’s efforts.

Recycling, planting trees, and providing access to health care for homebound citizens are all examples of social impact.

What is the origin of social impact awareness?

Social impact awareness can be traced back hundreds and even thousands of years, as a form of philanthropic effort made towards helping those in need. Social impact consulting; however, got its start in the early 2000’s and has been a fast-growing sector ever since. Social concerns that are often addressed include, but are not limited to: equitable access to health care, climate change and economic inequality.

Consumers and B2B organizations have come under scrutiny in recent years as people increasingly evaluate how businesses conduct their operations. Consumers have become more mindful of using their purchasing power to stimulate a positive social impact. In turn, many businesses, organizations, and foundations are making conscious efforts towards achieving an enhanced social impact.

Types of social impact organizations

Social impact organizations focus entirely on creating positive social impact. These organizations are mission-driven to achieve certain social or environmental goals by providing services and support, advocating for policy change, and investing in social impact products.

1. Businesses focused on social impact
Businesses that focus on social impact might include a company that offers tutoring services exclusively to children and families who were unable to access remote learning resources during the pandemic. Alternatively, a company might produce and sell biodegradable yard waste bags that are gentler on the environment than plastic bags. Many companies make a commitment to the communities they serve through charitable giving, offering volunteer support, and sponsoring community events.

2. Nonprofit organizations’ social impact
Nonprofits are mission-focused organizations that rely on donations and/or financial support from the sale of memberships and sponsorships in order to operate. A nonprofit may make a positive social impact by offering supportive services to underserved or under-resourced populations (such as that done by MHz Foundation), advocating for change at the policy level (such as that done by the Internet Infrastructure Coalition), supporting research, training, and innovation.

3. Social impact from impact investors
Impact investments are investments made to generate both financial return and social or environmental impact. Impact investments are made in organizations or funds that are focused on achieving certain social outcomes, such as promoting renewable energy or improving access to health care. Such investments help organizations with capacity building and sustainability, ultimately enhancing the impact they are able to make on society as a whole. A secondary outcome of impact investing is providing a financial return to investors.

Social impact consulting work

Social impact consultants work with enterprises, companies, and foundations that are focused on social impact initiatives across a variety of sectors. The goal of consultants in this field is to help the organizations they work with improve efficiencies in order to maximize the good that organizations do for society. Oftentimes, project objectives include impact evaluation, performance evaluation, and capacity building.

Consultants work with clients to make sustainable changes to systems that in turn create a more equitable world. Projects include: research, strategy, execution, and analysis, particularly in areas related to impact measurement and management.

How do social impact consultants measure effectiveness?

While social impact work is a noble pursuit, future investments are typically dependent upon the effectiveness of the work. There are a variety of ways to gauge the efficacy of social impact investments, including the following:

1. Outcome-based metrics
Outcome based metrics focus on the specific results that an initiative can achieve, such as number of meals served, reduction in greenhouse gas emissions, or an improvement of X% in literacy rates by Y date.

2. Impact metrics
These metrics focus on the broad impact an organization can have on a community or society at large, such as improvements made to quality of life.

3. Performance metrics
Performance metrics focus on the processes an organization uses to achieve its goals. Metrics can include the effectiveness and/or satisfaction (as gauged by surveyed, e.g.) and engagement.

Businesses can no longer focus their efforts entirely on returning profit to shareholders without risking criticism from consumers and even shareholders. To remain relevant and competitive, organizations must be able to quantify the positive social impact their operations have on their community and the world. Social impact consultants can help them achieve the outcomes they are seeking.

If you are in need of a social impact consultant in your business, one of our Expert Partners would love to speak with you. Contact info@openeye.email for more information!