For those of you considering the merits of social investment, CAN’s Rohan Martyres provides advice on how to use your impact to guide your overall strategy.

Is social investment right for your organisation? Few people understand how complex it can be, and whether their organisation can manage the increased diverse demands for its attention and resources.

Previously, it was ‘only’ end users, staff, volunteers, funders and commissioners you needed to consider (to name a few) when planning for the future. Now, social investors need to be added to the list.  

In my experience, the voluntary, charity, and social enterprise organisations best prepared for the complex social investment landscape are those that have an impact-led strategy in place. This is an organisational strategy and business plan that considers the implications of all activity on its social impact.

Why so crucial? A good impact-led strategy can help an organisation (a) prioritise between stakeholders in different contexts, (b) influence its market and (c) truly sustain its growth.

A. It’s not you, it’s my beneficiaries

Social investors often ask their investees for increasingly sophisticated data on social impact. But VCSEs can do a number of things to make this demand work first and foremost for them:

• Be clear that the main driver of your impact measurement is your organisation’s long-term purpose and ‘unique selling proposition’
• Focus resources on areas of the highest impact: the things that can accelerate your most positive outcomes or mitigate your negative outcomes
• Ensure your ongoing impact measurement is primarily designed to help your organisation make more effective decisions, rather than centred on helping social investors make their decisions

In other words, make sure you can truly tell social investors, ‘it’s not about you, it’s about my beneficiaries.’

B. Be a market maker

As you continue to build and prove your impact, you can use it to influence your commissioning and funding environment. The insight that comes from measuring your social impact can help shape commissioners’ broader priorities, beyond the individual contracts you may win or lose in the short and medium term. In this way, impact-led strategy helps you influence your market, not just meet its demands.

C. Sustaining growth and impact… for the short, medium and long term

One of the hardest aspects of sustainable growth is juggling different financial and social impact challenges. A clear impact-led strategy will help address some of the thorny issues involved:

• When does boosting short-term financial sustainability in the short-term become ‘chasing the money’?
• When does raising productivity in the medium-term start to risk high staff burnout and turnover?
• When do longer-term efforts to engage commissioners or create new strategic opportunities become ‘mission drift’?

Where to begin?

VCSEs can create a strong impact-led strategy by first expanding their ‘Theory of Change’ to make clear both (i) their track record and planned future changes for stakeholders, and (ii) which set of beneficiaries and commissioners/donors they can most effectively engage.

It then continues by (iii) developing impact measurement and reporting frameworks that can usefully inform (iv) impact-led operational and strategic goals for the short, medium and longer-term.

But if this all sounds heavy going, here’s a simpler way to begin: look at each major section of your organisation’s strategy and business plan and ask yourself a few related questions:

• In what ways will this affect each of our stakeholder groups positively?
• In what ways will this adversely impact each of them?
• So what should we change or do differently?

If you manage to answer these questions effectively, you’ll be well on your way to achieving sustainable growth and ensuring that your key stakeholders support your organisation in the short, medium and long term. And more importantly, you continue to strengthen the positive social impact you achieve.

Rohan Martyres is Head of Impact & Investment Strategy at CAN, a charity trading as a social enterprise. CAN has recently launched CAN³ - a fast-growth accelerator programme for established VCSEs. www.can-invest.org.uk/can3

Website: http://can-online.org.uk/
Twitter: @CANhq

Civil Society Media would like to thank CAN for their support with this article.