Top Tips Series: 5 tips for developing an impact plan
This article is part of a series of blogs offering our tops tips on surviving the process of raising impact investment. Investment raising is difficult and time consuming, and the process can seem daunting if it's your first time. We have written this series of blogs as a way to share some insight in to what impact investors are looking for.
The good news is that as a startup, you probably already have most of what it takes to develop a good impact plan. Spotting a gap in the market and developing an innovation that plugs that gap requires a skill-set that comes in handy when thinking about impact.
You start with asking the right questions. For example: Who will benefit? How will they benefit and why is this important?
Such questions can lead you to developing your Theory of Change: a visual map of why and how your enterprise will make a positive social impact. This roadmap will then guide you to choosing the right impact metrics for your venture.
Going through this process not only gets impact investors like Nesta Impact Investments excited but also helps you to focus on the social mission at the heart of what you do. So our top tips for getting started on an impact plan are:
Identify what social issue you are trying to address
What are the factors behind this problem and why will your venture help to tackle these factors?
Outline why your innovation will make a difference
Are you duplicating what is already out there or are you addressing a genuine gap? Do you have any research or evidence showing that your product or service can help tackle the issue you are addressing?
Map out how your innovation will have an impact
Try to map out the short- and long-term impact of your product or service and why it links to your final vision. A good tool for this is a theory of change which helps you to connect what you do on a day to day basis with the overall change you’re trying to make.
Choose the impact metrics you will use
Qualitative data like case studies or observation are good sources for a rich and nuanced picture on whether change has happened. Quantitative research is useful to understand effects on larger groups of people. Questionnaires, or data on numbers of people qualifying from a course, for example, can all be used to gather information quantitatively. Inspiring Impact has a great hub to help you choose different types of impact metrics.
Work out how you will use your impact data to learn and improve
Make sure you learn from your data and make changes to what you do as a result. Ultimately, impact measurement is about understanding the impact you are having and improving your product or service as a result. If the data you collect is not helping you do this, you need to go back to the drawing board and develop an approach that will.
There are many resources out there that can help you develop your impact plan. ThinkNPC’s website has a number of reports on Theory of Change and impact measurement; the Inspiring Impact website has a good collection of tools; and the G8 report on impact measurement in social investment outlines a best practice guide for impact measurement in social investment.
But remember, the best place to start is asking the right questions.