The Art of Impact

I’m looking forward to presenting at the annual YMCA Chief Executives Network conference later this week. My focus will be on the recent Impact Management project I’ve been doing for YMCA Humber and YMCA North Tyneside.

Kicking off the session I want to face the fact that for those in the business of restoring damaged lives ‘Impact’ is a pretty bizarre choice of word. It is defined as “forcible contact or collision; the act of striking against”. As anyone who’s had a prang in their car knows that impact leaves a noticeable impression. The force can produce an unwanted change in shape. So how can this be a positive thing?

This is why we need to place the idea of Impact within the wider discipline of Impact Management. The positive potential of Impact is unleashed when it is carefully controlled and directed. Think about the way a sculptor skilfully rests the chisel against the rock before striking with just the right amount of force. Deploying a lucid imagination, a trained eye and the repetition of artfully applied blows beauty is slowly revealed. 

When considered this way Impact Management suddenly feels like a perfectly appropriate way to describe a process of personal transformation.

Of course every metaphor has its limitations and I won’t be wanting to give the CEO’s gathered the impression that their organisation’s clients are lifeless boulders. What I do want to do however is to help people to see that Impact Management is not an obscure branch of science to be sub-contracted to spreadsheet-happy ex-accountants; rather it is an artisan process, concerned with deeply human subject matter.

I believe that if we can first conceive of Impact Management as an Art rather than a Science, then we will ensure that we keep in mind the necessity and intensity of personal investment required. In doing this we will avoid losing touch with the real people whose stories often remain hidden in the aggregate data. We will foster working environments for our teams that unlock the imagination they need to respond on a daily basis to the raw human material as they journey with clients in their process of restoration and lasting transformation.

Do let me know any thoughts you might have about the distinction between Impact as an Art and Impact as a Science. I’d love to hear from you.

Showing your Impact to Donors

When we give to charity we like to know that our donation is going to make an impact. Much of this is based on trust. We receive communication from the charity about the nature and extent of the work they're delivering and draw our conclusions from it. If we want to be particularly diligent, perhaps because we’re thinking about making a large donation, we might take a look at their last available annual report. Typically this will include a chart that seeks to offer a degree of transparency about how much it costs to run the charity (i.e. its administrative overheads) in relation to the amount spent on delivering its core mission, what we might call its interventions. 

On this basis all charities tend to look very similar. Trustee boards and executive teams know that donors don't like to see too much money being spent on overheads, expecting as much of their giving as possible to be directed to the ‘front line’. This is where understanding Impact makes all the difference.

The Charity annual report, increasingly referred to as an ‘Impact report’, will describe the nature and variety of work being undertaken, along with statistics about how much of it is happening and who is benefitting from it i.e. elderly people, children, donkeys etc. For an Annual Report to truly become an Impact Report it needs to give a clear picture of what is changing for the better as a result of its interventions.

An awkward, but legitimate question that a donors might ask, is:

• how often does the charity make an intervention without any change resulting?

We can explain this using the diagrams below.

Charity A and Charity B are involved in identical work, both with annual turnovers of £1 million. On the surface seem to be identically efficient – with 10% of their income going to overheads and the rest to interventions.

However, if we could see more deeply into the impact of the two charities we would see that Charity A has an 80% success rate and Charity B has a 50% success rate.

If a donor has £100 to give it would now be clear to which charity that donation would be most effectively directed. 

Finally, if the donor really wants to be assured that their giving will make the maximum impact then it would also be good to know what the expected success rate is within that particular sector. For example, charities working to rehabilitate ex-prisoners may be delighted if half of those they work with to go straight. If the focus of the charity is helping unemployed school leavers to get jobs then the expected rate of impact might be more like 80%.

Goodlabs believes that if charities will be more transparent with their donors about these issues, then greater trust will result, which is essential to a long-term donor engagement strategy.  

If you run a charity and would like help in demonstrating your Impact to potential donors then drop us a line at impact@goodlabs.uk

Triple Bottom Line

It's almost impossible to conceive of the recent emergence of the Social Value and Social Impact without giving credit to the idea of ‘Triple Bottom Line’ (aka TBL/3BL), a revolutionary business philosophy pioneered by John Elkington in the mid 1990’s. TBL argues that successful and sustainable organisations create (or destroy) value within three distinct but inter-related arenas – social, economic and environmental.

Economic success: The financial bottom line remains the ultimate barometer of the performance of an organisation, whatever the sector it operates in. It is of no surprise then that there are over 300,000 accountants in the UK. Goodlabs is comfortable working with accountants, but is in no way seeking to duplicate their work.

Environmental success: Increased regulation as well as changes in public mood have led to the emergence of a busy environmental consultancy sector ensuring that organisations meet relevant sustainability standards. It is becoming increasingly common for firms to produce a ‘sustainability report’ alongside the publishing of their annual accounts. Goodlabs is comfortable working with consultants in this sector, but again is not seeking to duplicate their work either.

Social success: The social dimension of TBL remains poorly defined and under-resourced. Organisations that wish to demonstrate that they are having a positive impact within human society, for individuals, families and communities, cannot draw on the same levels of expertise that can be found in the financial and environmental sectors. Where expertise does exist the fees make accessing help cost-prohibitive for all but the largest corporations.

This is precisely the gap that Goodlabs now fills...

The New Convergence

As we progress further into the 21st century we are witnessing increasing convergence between the public, private and voluntary sectors. The public sector is commissioning out more of its work. Private sector and voluntary sector often bid against one another for the contracts. The effect is that charities are needing to become more commercially astute and businesses are needing to become more socially aware. A new common ground is emerging in the process, a more nuanced understanding of the relationship between costs, impacts, outcomes and value creation. The ability to articulate, measure, report and communicate social value, as distinct from financial bottom line, is becoming an essential requirement.