Whether you are a CEO, Relationship Manager, or Associate, you probably understand that thoughtful communication to stakeholders is critical to achieving your goals. You may even have heard that according to impact measurement and management standards, there is a “right” way to go about it. But what exactly is impact reporting, and how does an organization begin to do it well?
Broadly speaking, impact reports are created in order for organizations to make better decisions. In impact investing, they can ensure that an investor client’s investment goals are being met while demonstrating the array of impacts for other stakeholders that have been generated as a result of an investment. For nonprofits, foundations, and social enterprises, they also provide important insights to integrate into strategic and programmatic decision-making. The benefits of impact reporting can be profound. From aligning communication about the effects all different kinds of stakeholders are experiencing as a result of the investment, to ensuring mission fit and focus, many organizations find that the process of developing impact metrics and publishing an impact report drives improvements in the company’s strategy.
Having a grasp of the key debates around impact measurement and management (IMM) at large may inform your impact report as well. Published by SVT Group and Middlebury College in 2017, The Pulse of Impact Management provides an examination of key debates currently being discussed in the impact space.
One key discussion among practitioners is the idea of standardization vs. relevance when it comes to metrics. There are many cases in which investors and investees want to use customized indicators to track impact, or where the metrics prescribed by an impact reporting standard are not sufficiently relevant to a particular project, organization, or investment. Possible was to resolve this include using indicators that are standardized within sectors or industries, as opposed to more general metrics, or by hiring a professional impact analyst who can understand the sameness of or differences between the impact underlying apparently differing measures used by different companies or funds. Whatever the future holds, we can expect a future where reporting will be more expected and consistent due to the standardization efforts of groups like the Impact Management Project.
Another issue centers around the frequency of the reporting itself, as there is a lack of guidance around how frequently organizations should publish an impact report. Determining how often to report at this point is a judgment call each organization must make for itself. Because impact outcomes often do not change over short time periods, consider the timeframes that are most beneficial for your stakeholders based on what they may be experiencing, and what decisions users will inform with the reported information. Keeping reports succinct, and only including the most relevant and meaningful information, will help organizations publish reports more frequently. This means understanding what is uniquely important to your stakeholders, and focusing primarily on that information in the report.
As an increasing number of groups begin to put impact reports in front of stakeholders, it is more important than ever that these reports be methodically developed, and that readers are able to understand them. Consult SVT Group, the Impact Management Project, and the International Integrated Reporting Framework for more information about impact reporting.