We've all heard the buzzword "impact," but what does it mean? In this article we'll help differentiate between input, output, outcome, and impact and why they matter for your business.
Nonprofits, social enterprises, and individual people work to “make an impact” on the world or their communities. But what is impact and how do you “make” it? Before we get into impact, we first have to understand it’s precursors — input, output, and outcome. To make sense of these buzzwords, let’s take a look at a specific example…
You and your friends volunteer to plant trees. Your work in planting the trees and the trees themselves are the input in this process.
The output? A few dozen small trees planted. Outputs are easy to measure and are typically the immediate result of the inputs.
Outcomes, on the other hand, are the changes that occur because of your actions. Outcomes are time-dated and, although it’s more difficult, can be measured. An important factor of outcomes is goals. Remember those “SMART” goals? Well, the result of these specific, measurable, achievable, realistic, and time-dated goals are outcomes. If the nonprofit sets a goal to absorb 100,000 pounds of CO2 from the atmosphere within the next three years, the outcome of planting trees could be that three years later, that goal is reached. There are often unexpected outcomes as well. Maybe the trees created stronger ecosystems and produced fruit to give to people in need. In short, outcomes are effects that your work has on people or issues.
Ok, so doesn’t it seem like absorption of CO2 and strong ecosystems are impactful? Outcomes alone are not impact, but they can lead to impact. For example, absorption of CO2 from the planted trees can help combat climate change—making for better lives of future generations of plants, animals, and humans.
Impact is perhaps the most closely related to the heart of causes — it is the vision statements of nonprofits and social enterprises. Impact, unlike outcomes, are not time-dated. Climate change will not suddenly end if these trees help to mitigate it. It is an ongoing issue that people and organizations attempt to address over a long period of time. Impact is also exceptionally difficult to measure. How many fewer polar bears have died as a result of these trees being planted? How much less have the sea levels rose?
It might seem like impact is some abstract concept that you can leave in the back of your mind to focus on the more concrete stuff like outcomes. However, focusing on impact is important for a lot of reasons.
For nonprofits and social enterprises, striving to measure impact will push the organization to keep working towards their vision. While keeping track of outputs and outcomes helps with the what and the how of reaching goals, focusing on impact keeps you rooted in the why.
Throughout the lifetime of an organization, thinking about impact may bring out new ideas and perceptions about the core issues and causes. In turn, you will be able to cater your goals and measure your outcomes in a way that will align better with your mission and vision.