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Read the latest expert insights, trends, and best practices around impact measurement and leveraging actionable data to drive meaningful change.

What is Social Impact and Why Does it Matter for Businesses?


The numbers don’t lie. 78% of people believe that businesses should be focused on more than just money. They should also be diligent about impacting society for the better.  

Unfortunately, defining a business’s social impact is difficult.

You need to measure your positive social impact to improve services, tell a story, and show both your partners and customers that you’re doing your part to address the needs of the communities you serve.


Here’s what businesses need to know about the different types of social impact and how to measure it.


Social Impact Explained


Defining what is social impact is difficult as there are many definitions and perspectives. In fact, there are no hard and fast rules on the social impact definition. 


Contrary to what some detractors say, “social impact” is not just jargon. It’s a real concept that drives organizations in the public, private and social sectors to make a positive difference.


Broadly speaking, it’s how the actions of social impact companies and organizations influence and affect a surrounding community.


But why is it important, and how does a business measure its social effects?


Does Social Impact Matter for Businesses?


There are many reasons why a business may decide to think about the impact of its activities upon targeted communities.


Here are just some of the main reasons why it’s important to seriously think about what is social impact.


Recruit Top Talent – Modern workers don’t want to just collect a paycheck. They want to make a difference. Social impact organizations tend to be more effective at attracting and retaining top talent. A 2016 study found that 51% of employees won’t work for a company that doesn’t have strong social and environmental commitments.


Positive Marketing – In a crowded non-profit environment, it can be difficult to stand out. Investing in social impact can deliver positive media recognition.

Did you know - 85% of Gen Z are likely to share a positive opinion about a company that is doing good, up 8% from 2017 to 2019. Source


Attract Investment – Social impact organizations are better positioned to attract outside investment.


Make a Difference – Above all, investing in various types of social impact enables you to make a difference. Whether for business reasons or not, your actions contribute to making the world a better place. You’ll also see a difference in your bottom line - 79% of consumers are more loyal to purpose-driven brands (Source).


These are just some of the benefits for businesses that think about their impact on communities. It’s a myth that social good is a concept exclusively reserved for charities, non-profits, and social enterprises.


Every business can benefit from investing in different types of impact.


What Does Social Impact Look Like?


Focusing on social impact is no longer an option for companies - as you saw above, it is a requirement to attract investment, retain talent, and build loyalty among consumers. It’s also not going away - future generations have shown through action and studies to be passionate about social change and willing to put their dollars behind those values. How businesses focus their corporate social responsibility efforts can vary.


Types of Impact


There are many different types of impact, and it’s important to be aware of them when performing your impact assessment.


What follows is a selection of examples of different types of social impact.


Positive Impact

  • Providing free meals for the homeless by investing excess profits.
  • Improving gender equality by ensuring equalization of wages for men and women.
  • Making profitable product lines more beneficial for communities by focusing on social outcomes during the development and deployment phases.

Negative Impact

  • Business activities increase pollution.
  • Paying workers less than the living wage.
  • Failing to support workers’ mental and physical health.

Direct Impact


Direct impact occurs through interaction with a product or service. This is a relatively easy form of impact to measure.

For example, a job readiness program for ex-felons is a type of direct impact an organization could have.


Indirect Impact


Indirect impact is a more difficult metric to measure. This is the social impact organizations have by the community having access to their products and services.


Using the above example, an indirect impact may be helping to provide a stable home for that ex-felon’s family because they managed to secure a job through your program.


However, organizations need to set accurate parameters for how much indirect impact can be realistically attributed to their activities. It’s important to be honest and transparent about this to maintain credibility.


Impact Themes


Social impact companies will focus on a theme when defining their campaigns. Impact themes are used to provide a broad lens for classifying impact campaigns.

Many thematic taxonomies can be used, but one of the most common is based around the 17 UN Sustainable Development goals. Some examples of these UN goals include:

  • Clean water and sanitation
  • Zero hunger
  • Climate action
  • Clean, affordable energy
  • Reduced inequality

Framing your campaign thematically helps to accurately define and describe your campaign to both insiders and outsiders.


Corporate Social Responsibility


Now that you have a clearer understanding of the types of social impact, it’s important to focus on the concept of corporate social responsibility (also known as CSR). CSR is a practice that allows businesses to be accountable to the public, its investors, and themselves. It requires businesses to be mindful of the social impact they are having on communities and society as a whole. When a business truly embraces the CSR model, they are committed to changing society and the environment for the better.


3 Companies Leading the Way in Social Impact


When thinking about what is social impact, it’s important to look at how organizations address it in practice. It’s also important to focus on those companies making a difference rather than just paying lip service as part of a broader PR exercise.

Here are three social impact examples from companies that are improving communities far and wide.


Anne Lewis Strategies


Anne Lewis Strategies is a digital agency established to instigate social change through the power of advertising, marketing, and fundraising. It works directly on behalf of nonprofits and charities to help them improve their initiatives.


Some of its clients include the Sandy Hook Promise and the Bill & Melinda Gates Foundation. Their efforts have generated over $320 million to date in online donations alone.


Flatiron Health


Focusing on the healthcare sector, this tech company’s core mission is to improve lives via better healthcare outcomes for cancer patients.


They concentrate on understanding the experiences of cancer patients to accelerate research into treatments and cures. Their offerings are designed to tackle traditionally unstructured cancer data by offering organization and standardization solutions.


Since launching in 2012, Flatiron Health has gathered 2.2 million active patient records for research and has since started to work with both the NCI and FDA.




IKEA is a Swedish furniture chain with significant holdings all over the world. Since the 1990s, IKEA has committed itself to fight against child labor practices and providing a future for needy children worldwide.


The company works directly with UNICEF to help achieve this goal. Since 2001, IKEA has donated more than $200 million to the cause.


Furthermore, IKEA has worked to provide clean drinking water to children in undeveloped parts of the world. Again, they have sponsored countless projects and worked with many global and local charities to accomplish this.


One of their most recent campaigns is the “Let’s Play for Change” initiative. This social impact campaign is designed to help children learn and grow through play.


By creating playing spaces for children in undeveloped areas of the world, IKEA hopes to nurture the development of underserved communities across every continent.


In terms of major corporations, IKEA is one of the largest social impact companies.


Measuring Social Impact with UpMetrics


What is Social Impact?


The fact is impact is not just about the positive, direct impacts a business’s activities have. It’s also about the negative and indirect impacts of a company’s business activities.


Consumers are increasingly demanding genuine, provable change from the brands they patronize. In fact, 87% of people will purchase a product because the company advocated for a cause or issue they believe in. On the other hand. 76% of people choose not to do business with a company that supports causes contrary to their beliefs. These numbers highlight the importance of social impact not only to the community at large but to a business’s bottom line. 


At UpMetrics, we believe that data itself is of no value if it cannot be attached to the story of the human experience. Translate your social impact activities into a powerful narrative that inspires employees, investors and consumers alike.


Our impact measurement and analytics platform helps you define, measure, and report the impact of your campaigns for social good. Contact us to request a demo

Kim Lynes
Post by Kim Lynes
July 1, 2021