Are you treating impact as a by-product of what you do, or a critical input into your decision-making?

How a wellbeing approach to social impact will help you get the most out of your measurement.

The pressure to demonstrate impact across all sectors is growing. Driven by consumer, staff and investor sentiment and recently, the Federal Court¹ cracking down on false and misleading claims on social impact. But with so many buzz words and approaches swirling around - social impact, social value, ESG, social performance, social licence, social responsibility- it can be confusing to know where to start.

But before you do, or even if you are well down the path, the aim of this article is to make sure you get the most value out of your measurement system.

Ultimately, the goal is to ensure your organisation is having a positive impact on the people you interact with; this can be as broad as your clients, suppliers, staff and surrounding communities. Impact measurement should therefore provide you with a system to understand the net effect (not just report on positive outcomes) and identify opportunities to maximise the positive impact.

When it comes to why organisations seek to measure impact, there tends to be a spectrum of motivations.

At level (1) we are doing this because we have to. This is largely driven by compliance requirements as well as growing sentiment across the community. At this level, the motivation is more on reporting positive outcomes than understanding opportunities to improve.

The second level is (2) risk management. Where social impact measurement is approached as a risk management activity to ensure the organisation is not taken by surprise or found to be causing harm. Again, the focus here is not on how to maximise positive impact but primarily on how to mitigate harm. At the other end of the spectrum is level (3) where organisations recognise impact measurement as a core input to inform strategy and decision making. Social impact measurement provides an understanding on the needs and aspirations of the people the business impacts, working to inform decisions across the organisation (human resources, operations, customer service, product/service design and marketing) to maximise both social performance and business success, recognising that the two are inextricably linked.

Measurement systems that are set up to satisfy 1 or 2, are not only narrow in their focus leaving blind spots in your decision-making, but they are also largely self-fulfilling. That is, they start by identifying target outcomes and build a system to measure whether you achieve these or not. In doing so, they only deliver intel on those pre-determined areas, and they take it as a given that the target outcomes reflect the needs and aspirations of the people you impact. In other words, it is assumed that achieving these outcomes is doing good. The issue is, if your target social outcomes do not align to the needs and aspirations of the people you impact, they may not be doing good and may even be causing harm. For example, in 2019 the anti-domestic and family violence charity, White Ribbon, went into liquidation after a series of ill-informed public statements, ambassador appointment and superficial campaigns that left many believing the brand was doing more harm than good.

An impact measurement system that works instead to provide critical intel, starts with understanding the needs and aspirations of the people you impact and evaluating how effectively you serve them. This can be achieved by adopting a wellbeing approach to impact measurement.

Measuring impact in terms of wellbeing recognises that ultimately the goal of social impact is to put people in the best position to fulfil their potential and live a life they value. To measure this, we need to understand

1. overall how they are experiencing their life (often measured using Satisfaction with Life) and
2. what are their needs and aspirations driving this.

This approach aligns with the OECD,² and an increasing number of national governments (including Australia³) as well as the Standards Australia ‘Measuring and Valuing Social Impact Handbook’.⁴

Wait, I hear you say, that sounds like mission creep!

This is not to make you accountable for every aspect of a person’s life. Instead, it provides a measure to ensure, overall, that the impact is positive as well as providing a holistic profile, or roadmap, to understand what is needed and how this aligns with the remit of your work. Where needs fall outside what you offer, this intel may inform partnerships, future programs and advocacy on behalf of the people you serve. To bring this to life, the atWork Australia Job Seeker Wellbeing Index⁵ has been used by atWork Australia and other employment service providers to inform more targeted services and was launched by government,⁶ supporting advocacy for the needs of job seekers across Australia.

Adopting a wellbeing approach to measuring your impact provides you a holistic profile of the needs and aspirations of the people you serve, as well as a framework that can synchronise all your measurement needs – compliance, risk and opportunities. Measured impact thereby becomes a critical input into your strategy (and not just a by-product of what you do) supporting agile, targeted decision making to ensure resources are directed for the greatest impact.

When it comes to social impact, the goal, as well as the means, is wellbeing.

This article was first published in the 2025 Better Boards Conference Magazine.

Further Reading

Critical Success Factors for Social Enterprises

A Decade of Investment – Journey to Social Inclusion

Scaling Impact Through Cross-Sector Partnerships: A Spotlight on Shared Value

Integrating ESG into Not-for-Profits: Managing Risks and Opportunities