Help your readers understand the social impact of your co-operative, and how you will measure this impact.
What is social impact?
Social impact will have more or less significance depending on the type of co-operative you are setting up.
- If you are operating in a business-to-business environment then social impact will be less central to your business model than in, say, a co-operative that provides care to elderly people.
- If social impact does not at first glance seem central to your business model, other factors will affect your social impact, such as your prospective employees, suppliers and where your premises are located.
Regardless of the centrality of social impact to your co-operative, it is still important to consider it in your business plan. After all, ‘concern for the community’ is one of the seven co-operative principles on which your buiness will be based, and considering your impact will help your understand your business better.
When defining your social impact, you will need to be clear on the following:
- What it is
- How it will be achieved
- How you are going to measure it
- You need to have mechanisms in place to measure these impacts and, potentially, report on these impacts. This might be information that’s of interest to your co-operative, and even your members and/or the wider public.
Describing the 'community' in which your co-operative will operate
- Describe or define that community.
- Describe how the need being addressed impacts this community. Does it affect individuals, families, schools, the local economy etc?
- Estimate the size of the community in terms of population, geographical area etc. Within that community, what is the scale of the problem?
- If you draw on research to do this, cite your sources.
- If you are setting up a business-to-business co-operative, or one where your social impact is not immediately clear, you might also think about the following potential ‘communities’:
- Your supply chain Who will supply your goods and services? Who they are and how you relate to them will affect your social impact.
- Your employees Issues such as satisfaction, remuneration and demographic profile will also affect your social impact.
- Your business premises What is the area like in which you will be located? Or if you work remotely, any meeting space you will use. Your choice of location and how you interact with the wider area will affect your social impact.
Describing the social output your co-operative will deliver
- What is the social output that your co-operative will deliver to the 'community' you defined above?
- What positive impact will this community have?
Measuring the social output
What exactly are the outputs that will have the positive social impact that you intend?
In order to substantiate your claim that your co-operative or social business has positive social impacts, you will need to provide evidence of how these are achieved. Therefore you will need to:
- Set targets for social outputs
- Measure and record activity against these targets
- Report the results (and possibly have those reports audited)
This process does not need to be detailed or complex.
How will you measure social impact?
Some social outputs are easy to measure, such as qualifications gained or number of meals-on-wheels delivered. These are called hard outputs.
If you are dealing in soft outputs, such as increased self-confidence or employee satisfaction, you will need to consider how you will measure and record them.
In the world of social impact measurement, the following terms have particular meanings, which you will need to understand:
- Social output: This is your social product, as described above, eg number of meals on wheels delivered, fundraising for a local (or business-related) charity, or prompt payment of small suppliers.
- Social outcome: This is the effect that your social output has on the community.
- Social impact: This is the difference that your social output makes.
Examples of social output
|Number of meals on wheel delivered||Number of meals-on-wheels clients getting adequate nutrition over a given period||For example, if you did not deliver meals-on-wheels it may be that some clients would be catered for by carers, so it would seem that your service does not have such a great impact after all. However, it now becomes clear that what your main social impact is respite to carers.|
|Fundraising for a local charity||Amount of money raised for nominated charity||The work that charity is able to do which would not have been possible without your donation.|
|Prompt payment of small suppliers||Percentage of small supplier invoices paid within the term of the invoice||Reducing cashflow problems for your small suppliers.|
Measuring other kinds of 'impact'
Please note that there are other kinds of impact that do not count as social impact. For example, positive environmental impact (or reduced environmental damage). Your business will need additional systems if you want to monitor your environmental impact. Use the same approach: set targets, measure progress, record, report and (optionally) audit.
For advice on measuring your environmental impact, visit the environment section within growing your co-operative which includes some useful tools and resources.
Refer back to where you defined your social impact in your feasibility study. See 'social impact' in the your co-operative business model section.
If you didn’t manage to do this, you must do so now by visiting the above link.
Outlining your social impact
Use the content from your feasibility study to populate the social impact section of your business plan, using this template:
The information and tools in this section have been developed by our colleagues at Co-operative Assistance Network.Updated: 26/03/2019