It isn't enough for businesses to simply do good. Now they have to prove their worth in measurable ways. Not surprisingly, Australians are spending more than $250 billion each year on social issues. This means that broad claims about making a difference won’t cut it anymore, and Australian businesses must now provide evidence of their impact.

For not-for-profit organisations (NFPs) this is good news, because it means that the audience is listening. The bad news is that measuring social impact can be complicated, expensive and often impractical. Indeed, social impact is one of the key areas of focus for the Not-For-Profit Conference, held in various cities across Australia this week and next. Measuring outcomes by a dollar-replacement value is one thing. But when NFPs try to quantify impacts that are multi-layered over longer timeframes it becomes a whole other story, and there is no definitive right or wrong way to approach it.

Simon Faivel, director of Social Ventures Australia (SVA) Consulting and chair of SIMNA, the Social Impact Measurement Network Australia, is confident an evolution is taking place that will see social impact measurement traverse all sectors. The key, he says, is the large amount of information sharing that is bringing more knowledge and greater access to data. “When you see what others have done it makes it easier to make that first leap,” says Faivel. “If you can get your community to share, you can learn more and foster better application of social impact development techniques.”

Professor David Gilchrist, the director of Curtin University’s Not-For-Profit Initiatives, agrees. He says when like organisations work together to gather outcome data, it can provide a bigger picture for analyses and the costs can be shared. Having a more complete body of information enables a stronger case to be presented to governments when negotiations about policy and funding arise.

Gilchrist warns against restricting data to annual reporting because true impact can often take years, even decades, to be realised. Measuring impacts on a three- or even five-year cycle can be simpler, more telling and shares the financial load across several reporting periods.

Full article can be found on the Intheblack Blog here.