What is Social Impact

Our borrowers – whether they’re a charity, social enterprise or voluntary organisation – have a mission to create social, environmental and economic impact.  Their aim is to deliver activities, services or facilities that have a positive effect on people, their communities and the environment.

Increasingly they are being asked to measure their ‘social impact’ or to put a monetary value on achieving their social objectives – to demonstrate the importance of their work to their funders, customers, investors or a government agency, as well as to their staff.

And it makes business sense to do so, because it allows organisations to evaluate their work, and plan for the future more effectively.  And it may make them more attractive to their customers, and help them win contracts.

There are a variety of ways to measure and report on social impact, including Social Return on Investment.  SROI tries to measure the social, economic and environmental impact of the work of an organisation in monetary terms.

As a charity, we are committed to measuring the impact of our work.  But, as a financial institution, we already produce a wide range of financial indicators.  So we have decided to look to other approaches in order to capture our social impact.

Our Definition

Charity Bank was founded on a commitment to be a different kind of bank.  Our ultimate mission is not to maximise profit, but to maximise impact on society.

Our work to create social change is what distinguishes us from other banks. The difference we make, our social impact, is the heart of who we are.   By connecting the desire of our investors and depositors for a better world with the capability of our borrowers to deliver that change, we achieve social impact.

We have many financial indicators of our impact, in terms of the number and value of the loans we make and the size of our deposits and investments.  But this doesn’t tell the full story: it doesn’t measure how the loan is making a difference to the organisation and its beneficiaries.

In the past we have relied on gathering anecdotal evidence from our borrowers, about how their loan helped them survive or thrive.  But this year we have moved towards more evidence-based research, based on “Logical Framework” analysis, with a survey of our existing borrowers.

From this, we are beginning to assess how our financial and business support has enabled them to achieve their mission, increase the scope of their services, and enhance their capacity to tackle social problems.

The results of this survey comprise our 2010 Social Impact Report, which demonstrates how the organisations we support have been transformed.

Our commitment

The 2010 survey is just the beginning of our measurement of the social impact of our work.  We plan to become even better at showing the difference we make.  We are building social impact measures into our interaction with borrowers, depositors and investors, to measure our impact at every stage of the journey, from initial investment or deposit to initial loan application to draw-down and repayment of funds.

The collation of social impact data will also be used to improve Charity Bank services and support to clients and in wider studies to support the growth and development of the charity sector.