When it comes to financial measurement, we have centuries of methods and standards to draw from. Established standards for impact measurement are still being developed and it can often feel like the “Wild West” in this field. However, until we can answer the question of “How do we know we made a difference?” all the discussion around innovative methods is moot.
There are a variety of tools that can be used to measure impact. Certain tools are useful for users to recognize and/or compare ventures or investment opportunities. Some organizations choose to create their own metrics and processes. The right impact measurement tool depends on the objectives of the enterprise and the expectations of funders or investors.
Some popular tools for measuring the impact of social purpose businesses include the online B Impact Assessment (which is used for the Global Impact Investment Rating System, GIIRS, and certifying B Corps) that assesses a company’s impact with regards to the environment, community, workers, and governance. Social Return on Investment (SROI) is also gaining traction and seeks to capture the financial value of significant outcomes created by an activity or an organization.