What you need to know about making sound investments that are ethically sound.
So you want to make social enterprise impact? Social enterprises have two key models that define how they work. The business model describes how a social enterprise trades, and the impact model describes what changes in the world because of the social enterprise.
In this resource, we’ll explore how you create your impact model and how you might use it.
Framework for a Simple Social Enterprise Impact Model
Impact models come in many shapes and sizes each with different levels of complexity, but at Ākina we like the impact model below.
It’s simple to apply, but allows you to tell the story of your social enterprise impact in a really compelling way. It takes the reader on a journey that tells them what the problem is, how you help, what happens because of your help, and how that eventually makes the world a better place.
Here’s a walkthrough guide on how to use the impact model framework:
If you’ve already done a social lean canvas you should be able to use that to fill in this box. If you want to get really complicated you could do a separate impact model for each problem in your social lean canvas, but it’s better to start out with just one and build from there.
For our example we are going to use youth unemployment as our problem. The more specific we can be the better, so we might say that 20% of 18-25 year olds in our town are unemployed, but capable of working.
In the activity box you describe what it is that you actually do to help overcome this problem. This box should come from your solution.
In our case we are going to set-up a cafe that provides employment and training to young people.
So the activity would be ‘a training programme run in a real world environment that gives the participants the skills to move on to further employment’.
In the next box, we think about what happens in the short/medium term as a result of the activity you’ve undertaken.
In a nutshell, this would be a tally of what you’ve done and the change that’s happened as a result.
For example, if we were running a training and employment cafe the output would be the number of students who take part in our programme and the number who get jobs from it. In the medium term the outcome of those students doing the course and getting jobs might be a reduction in welfare costs and an increase in the individual’s’ self-esteem.
Over time the outcomes from your activity will create long-term changes in the individuals, their community and ultimately the country they live in.
For our cafe, this might mean that government spending is re-allocated to more productive uses, and we end up with a community that is happier and more resilient.
How do we connect the dots?
You’ll notice that for the first few steps we can clearly measure or demonstrate what’s happening. We can count the number of unemployed young people, we can show them attending the programme and we can document how many of them get jobs as a result of the programme.
However, as we move further to the right we have to rely more on logic and documented research. For example, we might not be able to prove immediately that participants have a better life because of our programme, but we can point to research that shows that people in employment have better health outcomes.
Similarly, we can’t prove that our cafe programme will lead to reduced spending on welfare, but we can use logic to convince funders that people who successfully join the workforce are less likely to be on government support long-term.
When would you use an impact model?
It’s worthwhile creating an impact model for your own use. It will help you understand how you make the world a better place and help you check for flaws in your logic.
An impact model is also useful if you are looking to get funding to get started or to support your social enterprise. Often investors and funders will want to understand how their investment in your social enterprise will make a difference, and why they should invest in you rather than someone else.