Social Impact FAQs

Frequently Asked Questions

What is considered social impact?

Social impact is any non-financial benefits that a venture will create for society that would otherwise not be created. Social impact can encompass a broad spectrum of focus areas, from human rights to environment to health and wellness to gender equality.

“It is important to note that companies can create social impact both internally and externally. Internal impact includes the impact on the employees’ health and economic security, the environmental effects of the company’s supply chain and operations, and impact on issues of access, fairness and trust in company policy and management practices. External impact includes the health, economic, environmental, and other effects on parties outside the company such as customers and communities. While it is easy to overlook internal impact in early stage ventures, this is the time to bake practices into the company’s DNA that will shape the larger internal impacts as the company matures.” (From Impact Investor Perspectives, Rockefeller Foundation)

Why do we need SIA?

By including social impact assessment, the GSVC seeks to help early-stage social ventures define, quantify, and monetize their desired social benefits in order to fully illustrate their value proposition to investors and manage their performance relative to their social mission.

Traditional businesses track their performance based on certain economic and accounting metrics. Similarly, in order for social ventures to chart their progress and continually improve their desired impact, they must define and collect data that allows them to quantify their outputs and outcomes – consider this a form of “social accounting.” Measuring social impact using discrete metrics allows for rich knowledge sharing in the social venture community.

Furthermore, in the past decade, a new breed of investors has emerged – a group that is concerned not only about the bottom-line, but also the social impact of their investments. Investors are beginning to realize the social and environmental consequences of the “business as usual” mindset, and this is clearing the way for a new social capital market.

What is the industry standard for measuring impact?

The social impact movement is underway. In nearly every conversation regarding social ventures and investments, stakeholders emphasize the urgency of evaluating social impact. The principles of social impact assessment are currently developing but there are not yet standard practices among social ventures and social investors. The field has yet to establish a common understanding of “social impact” – what it is or how to measure it. Current measures of impact vary from funder to funder, investor to investor, organization to organization. However, GSVC seeks to form a community that will further define what it means for social ventures to have an impact.

See the SIA Examples page for more information on different assessment models.

My venture only affects a local community. Does that still count?

Yes! While GSVC is a global competition with entrants from around the world, social impact can happen at any scale – the level of the employee, the community, the region, or the world.

How is SIA being judged?

See SIA Entrant Requirements 2009