As a CSR professional, you play a pivotal role in positioning your company as a driver of good in your community. You're not just executing corporate initiatives; you're connecting your company’s purpose with the causes that matter most. And that connection has never been more important than it is today. 

Despite your critical role, a disconnect often occurs between CSR efforts and the executives you work with: that is, how to meaningfully demonstrate the impact of your work. Without concrete impact measures, it is difficult to determine if you are successful, for yourself or leadership. And if you can’t demonstrate success, it’s hard to inspire support.

Does the following sound familiar? 

A CSR team launches a well-intentioned signature initiative, but they struggle to measure its results. Without concrete evidence of impact, they can't confidently determine whether the initiative (1) achieved overall success or (2) effectively addressed the causes and communities most aligned with the company’s priorities. This disconnect between the company, the cause, and the community diminishes leadership support, leaving the initiative without the momentum it needs to thrive.

How do you avoid this scenario and ensure your initiatives are effective and on target to win over the hearts and minds of internal and external stakeholders? 

We believe the answer is to adopt a straightforward and practical impact measurement process. 

Below, we describe a four-step process that will focus your CSR efforts on your actual一or you could say TRUE一impact, not just your efforts. This process will ensure equitable and accessible processes, streamline your path, and empower you to navigate impact measurement confidently. Before we get to the four-step process, let's ensure we're all using the same measurement terms.

What is social impact measurement?

Much of the confusion about “impact measurement” is rooted in a misunderstanding over what does and doesn't count as “impact.” That’s where a vocabulary lesson may be helpful, gaining clarity on the terms input, output, and outcomes as they apply to CSR.

So to begin with, let’s give you an example of those terms using a hypothetical career development program.

• Input: Your foundation gave $10,000 to a nonprofit to support job placement for underprivileged communities.  
• Output: Your grant helped the nonprofit’s career development program train 50 under-employed people.  
• Outcomes: 43 of those individuals gained new, upwardly mobile, and better-paying jobs.

Inputs and outputs are only measures of your efforts. Outcomes are the results. We define impact as the outcome on your target beneficiaries: that is, how much does your CSR program improve their lives or wellbeing?

While it’s tempting一and easier in the short term一to only measure inputs or outputs, CSR professionals need to focus on impact一how lives were changed一not how much money you gave or hours your employees volunteered. It’s your impact that really matters to your stakeholders and society at large, not the efforts behind that impact. How will measuring your impact help you, your CSR program, and your company? 

Measuring your impact allows you to both measure (prove) and maximize (improve) your philanthropic investments. Specifically, being able to demonstrate the impact of your CSR investment:

• Puts your CSR department on par with other corporate departments and enhances the stature of your work with your company’s leadership.
• Shows your employees that your commitment to social impact is authentic and more than a mere statement. 
• Provides proof of societal impact to external stakeholders. 
• Enables you to evaluate, compare, and improve your CSR work, thus creating more social impact.
  
  

How do you measure your impact?

Based on 20 years of experience working with more than 150 Fortune 1000 companies and thousands of nonprofits, we recommend a four-step process. (For a deep dive into the following steps, we’ve created a guided toolkit for corporate social impact measurement with the team at ACCP. Check it out.) 

STEP 1: Determine and Track Your Philanthropic Priorities

Before you try to measure, you need a clear vision for your CSR.

• Who do you want to help? Try to be specific about gender, age, ethnic and racial identities, employment status, or whatever other characteristics are a priority.
• What do you want to help them achieve? Are you focused on a specific issue (e.g., income, health, food security) or UN SDG (Sustainable Development Goal)?
• Where do you want to focus your support? Are you focused on a region, a market, or a country?

Often, these choices are tied to your business goals, company purpose, or goals of specific stakeholders, including your board, staff, and customers.

Once you’ve identified your philanthropic priorities, determine your capacity and tools for measurement.

STEP 2: Set Practical Reporting Requirements

Now that your philanthropic priorities and donation tracking systems are in place, it’s time to focus on reporting. Good impact measurement contains two key ingredients:

1. A focus on the end outcomes: Simply put, count what counts. For this, you’ll have to rely on your grantees, who are faced with securing and reporting on grants, all while converting those grants to social impact. So, don’t waste their time asking about their inputs or outputs—ask them to focus on how they improved people’s lives (i.e., their impact).   
2. Clarity and consistency: Make clear your reporting expectations from the start so grantees can plan. Ideally, this should include a shared understanding of your grantee’s expected impact at the beginning of the grant (e.g., how many people's lives they expect to improve and to what degree), and offer support and guidance along the way, if needed. Finally, ask for a single holistic report about their program overall, not just your donation.

STEP 3: Claim Your Impact—No More, No Less

Once your grantees have reported on their program’s full impact and provided you with their full program costs, you can calculate the social impact of your donations. These claims are the key to attracting and retaining support from your stakeholders and illuminating opportunities to improve your social investments. The challenge is to capture the full impact of your investments without over-claiming and putting your assertions at risk.

Here's the formula for and an example of a contribution claim, which is the most basic and common claim.

Overall Nonprofit Program Impact * (Your contribution/Overall Program Cost) = Your Claim of Impact

STEP 4: Improve Your Investment with Data

Once your philanthropic priorities are in place, your reporting process is clear, and you’re measuring impact, it’s time to use that data to:

• Track progress toward your goals by mapping impact to your philanthropic priorities.
• Communicate your impact with your internal and external stakeholders via impact dashboards, investor reports, social media, and more.
• Improve your investment strategy and ensure that every dollar spent generates the maximum social and environmental return on investment.
• Collaborate with your community partners to improve your measurement approach, increase the impact of your investments, and deepen your partnerships for years to come.  
  
  

Putting the Pieces Together

PIMCO is a global investment management firm with more than $2T in assets and a deep commitment to philanthropy that blends corporate foundations, employee matching programs, and local grants.

As a data-driven organization, PIMCO was looking to more systematically measure philanthropic efforts as well as model attribution to better understand where investments were making the most impact, without overburdening their nonprofit partners. PIMCO partnered with True Impact to measure and analyze over 180 programs and $27M in investments.

Together, we identified PIMCO’s CSR investments improved the food security of over 12M people and the economic empowerment of over 10,000 girls and women, further underscoring PIMCO’s leadership in the CSR space and in turn helping to provide additional funding for key partners. Additionally, True Impact provided PIMCO’s CSR leaders with critical insights that are enabling them to model future impact and attribution for philanthropic investments, demonstrating the connection back to core objectives of PIMCO’s corporate responsibility platform. 

Ready to Dive Deeper?

Of course, there’s more to impact measurement than this brief overview. 

1. Check out this toolkit we produced with ACCP, which offers a wealth of information for CSR professionals like you: Measuring Corporate Social Impact: Recommendations for Better Partnerships and Reporting
2. Want a guided overview of impact measurement best practices, tailored to your company and CSR program? Schedule a free consultation with one of our social impact experts–you can think of it like office hours but for CSR leaders!