The impact plan sets out what the social purpose organisation is about, what it is doing, and what it is hoping to achieve.
The central line running through the impact plan is the impact chain, connecting the organisation, via its activities, to its outputs, outcomes and impact. Running in parallel on either side are the organisation’s internal processes, and the external context in which operations are being carried out. Change can only take place through dynamic interaction with this context, and so it is an essential part of the understanding of the impact.
As with the business plan, the investor will want to inspect the impact plan in some detail. This involves working through the various components of the plan (the boxes on the diagram) with the organisation, and ensuring there is appropriate and satisfactory information regarding the key points presented by each one. This process forms the basis for assessments of impact risk and impact generation, and informs the monitoring and evaluation.
An investee organisation may not have a fully conceived, developed and complete impact plan ready to present to an investor upon request, and an important part of getting to know an organisation can be to go through the impact plan together, and work on those areas in need of greater definition. This can be of significant value not only to the investor, but also to the organisation. The essential impact plan structure is widely used throughout the social purpose sector, making it a highly compatible tool for use by the organisation in communicating its impact to funders, other investors, and when bidding for contracts. It also represents recognised best practice for the organisation’s own internal clarity, and for carrying out effective impact-driven management.
For investors, it can be useful to think through the impact plan self-reflexively, and compare it with their own mission, activities, and the ultimate impact they are generating.
Click the boxes on the diagram to see details.
Click here to see a summary of key questions.