What Is Social Impact And Why Is Important?


More than ever, investors and consumers are requesting social startups for metrics on how their work is actually changing people’s lives. Here is why designing your programs for social impact and being able to communicate them is essential for successful and sustainable growth.

Social impact can be seen as the positive or negative effect your organization’s products, services or programs is having on your target population.

The concept stems from the social impact theory developed by American psychologist Bibb Latané in 1981.

Social Impact Theory considers three factors: Strength, Immediacy and Numbers.

Strength relates to the power of influence a person, program or campaign has over others; Immediacy relates to how close or distant is the timeframe for change to happen ; and Numbers is connected how many people are supporting the idea and inviting others to act upon it.

Latané created a mathematic formula to follow: i = f (SIN)

Creating positive social impact is often regarded as the core reason for engaging in social entrepreneurship.

There is a deep and authentic desire by founders to solve a pressing need in a community, hopefully for the better.

Understanding the needs of a community is as essential as learning to communicate and measure added value properly.

Designing for social impact is important because it helps you create a better business strategy and develop a strong sense of connection between your team, tribe and investors with the social work your organization aims to achieve.

If people within and outside of your startup knows what do you stand for and why are you trying to solve a need they are most likely to engage with your cause and find ways to contribute long term.

The same goes with investors and other businesses. Having very clear goals and metrics of the solutions you are providing over time can boost the confidence for more financial support to help you scale.

Questions to answer in your business pitch and strategy:

  • What is your long term vision?
  • What is the mission you are trying to achieve?
  • How will your work impact positively or negatively the people, economy or community you are serving or about to serve?
  • How will you validate your need?
  • What kind of participation will you require from local people? How would that approach look like?
  • What are the benefits of your products, programs or services?
  • How sustainable over time and resources will your engagement be?
  • How will you  measure the social impact you are creating?
  • How will you communicate all your efforts to all stakeholders?
This is #Day13 of the #90DayChallenge for our blog.
With Lumina’s #90DayChallenge we want to provide guidance on the following months with articles, essays and interviews on: female social entrepreneurship, women’s economic empowerment, travel and wellness.
Photo Credit Unsplash: Doug Linstedt

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