GOAL: Articulate a model that clearly connects the target social problem with your mission, approach to the problem, social impact strategies, intended impact, and vision of what success will look like. This step will ground your approach in the social-entrepreneurial principles of opportunity, innovation, and accountability.

The Social Impact Model articulates your organization’s hypothesis about the best way to address your target social problem, as well as the actions that you will take to test and measure that hypothesis, while working toward an enduring solution. As such, it provides the framework that will guide all the work carried out by your organization, at least over the three-to-five-year time frame of the business plan. Other methods for developing a framework for achieving social impact employ a theory of change or a logic model. Root Cause’s Social Impact Model blends the big-picture thinking of the theory of change and the step-by-step reasoning of the logic model, and adds a feedback loop that enables organizations to continually improve their performance. Once your Social Impact Model is in place, the rest of the business planning process will be aimed at developing a plan for implementing your model and continually testing and improving upon it.
The Social Impact Model is also the key to grounding your approach in three of the core social-entrepreneurial principles: opportunity, innovation, and accountability. Your Social Impact Model will be informed by a need and opportunity analysis, which reviews the context of your target social problem and identifies unique opportunities to address it. As you make decisions about how to further address those opportunities, you will bring into focus the innovations that make your approach unique. Lastly, by clearly stating the logic between your approach and the impact it will have, you will make yourself accountable to the results that your plan predicts. The following diagram shows the components of the Social Impact Model at work.
The social problem definition, mission, and vision of success constitute the foundation of your Social Impact Model; these components will remain the same throughout the time period covered by your business plan. To test your hypothesis about the best way to address your target social problem, your organizational and program performance indicators and social and economic impact indicators will measure your short- and long-term impact. In addition, they will create a feedback loop that will enable you to make course corrections to improve your operating model and social impact strategies.

Below, we discuss each of the components of the Social Impact Model in detail, in the order in which we recommend developing them. We’ll use as our example an organization for which Root Cause has developed a Social Impact Model that is in its pilot phase.

Social Problem Definition

The left-hand side of the diagram marks your starting point: articulating the target social problem. To do this, you must conduct a need and opportunity analysis, which will enable you to produce a concise description of your target social problem, and to identify your niche in addressing it.

Conducting a Need and Opportunity Analysis

The need and opportunity analysis is made up of two main components:
a study of the trends contributing to the target social problem along with the current work being done to address it, and a description of the opportunity that your organization has identified for putting its unique approach to work. Ultimately these two components constitute the basis of an argument that explains: why now and why your approach?

A need and opportunity analysis typically covers the following topics:

Market Need: A data-driven description of the social problem in its current context.
Current Trends: An overview of the current social, political, legal, and economic trends affecting your target social problem.
Root Causes: A theory about the root causes of the social problem, based on the research conducted above and a literature review of current debate and thinking by academics, policy experts, and other leaders in your field.
Environmental Landscape: A description of the approaches of other organizations working on the social problem — the competitive landscape — and of the gaps that still remain in addressing the social problem. This analysis of the competitive landscape can begin to illuminate the opportunity on which you are acting and that makes your approach unique.
Barriers: A discussion of the challenges to making progress in addressing your target social problem, in the context of the information described above.
Opportunity: A summary of how the above information frames an opportunity to test a hypothesis about how to accelerate progress in addressing the target social problem, and why your organization is uniquely positioned to do so. This usually includes a brief introduction to your organization’s approach as well as information about your organization’s progress to date, including recent data about its impact.

In your completed business plan, the results of your need and opportunity analysis will appear as an independent “Need and Opportunity” section. As the first section of the business plan, it should provide a hook that entices your audience to continue reading.

Defining the Social Problem through the Need and Opportunity Analysis

As you conduct the research that will provide you with the information listed above, you will begin to form an in-depth understanding of the aspect of the social problem that your organization is uniquely positioned to target. This will inform the first component of your Social Impact Model: a social problem definition.

Your social problem definition must be based on the research conducted and the data collected in your need and opportunity analysis. It should be specific enough to begin to frame your unique approach to addressing the problem.

Our example organization is an overseas Root Cause consulting client focused on improving the lives of senior citizens. Below are two of the conclusions reached in its need and opportunity analysis.

1. Currently, there is little collaboration and coordination among service providers for the country’s senior citizens.
2. Many seniors in the country do not know what services are available to them.

The social problem definition that followed from these and other conclusions is: “the current national infrastructure required to meet present and future needs of people entering their aging years is not adequate and will have a dramatic impact on their lives.”

Vision of Success

Returning to our Social Impact Model diagram from page 16, the next stop is the vision of success, pictured in the far right-hand side of the diagram. While every organization should also have an idea of the success that it would like to see for itself over the long term, this organizational success should always be envisioned within the context of a broader vision of success: an explanation of what success in addressing your target social problem will look like. As with your social problem definition, the vision of success should come directly from the research conducted in the need and opportunity analysis.
For example, our organization focused on seniors has the following vision of success: “We envision a day when — through collaboration and coordination of government, nonprofits, and the business sector — all seniors, regardless of economic status, will have access to a seamless integration of the high-quality, affordable services they need in order to live healthy and productive lives.”
This would be a very different and much less reasonable vision of success if it did not include the phrase “through the collaboration and coordination of government, nonprofits, and the business sector.” One organization alone could never hope to meet all the needs of senior citizens, but it could hope to organize a network that makes this possible. This vision of success is clearly based on the social problem definition given above. It also articulates a long-term goal that is ambitious enough to be motivating and inspiring to its stakeholders, yet grounded in the organization’s understanding of what’s possible.

Social and Economic Impact Indicators

Next, it is time to begin to develop your social and economic impact indicators, which assess your organization’s long-term progress toward meeting your vision of success, and ultimately determine whether your hypothesis about your approach to solving your target social problem is working. In some measurement methodologies, the long-term results that social and economic impact indicators measure are known as outcomes. Your social and economic impact indicators will help to ensure that your organization’s vision of success is grounded in a set of achievable, yet ambitious, targets — while providing you with the means of generating evidence of your organization’s overall impact.

Here are some social and economic impact indicators chosen by our organization focused on seniors:
  • The number of seniors matched to services
  • The number of service providers who better meet senior service needs by doing one or more of the following:
    • adding or making improvements to service
    • serving a new geographic area or market
    • improving affordability

Looking at your vision of success, create a list of three to five indicators that will aid you in measuring progress toward your vision of success. In step three, we will describe the process of further developing your list of social and economic impact indicators.


The next step is developing your mission statement, which is the second box on the left in our Social Impact Model diagram (see page 16). While many organizations state their missions in very broad terms, we believe that a mission should describe your target beneficiary, the activities conducted by your organization in order to address its target social problem, and the outcomes that you expect to achieve. A mission statement that contains this information will provide an accurate, measurable description of your work, against which you can gauge your organization’s progress. It will also help your organization to determine what it will and what it will not do in the future.
The mission of our organization focused on seniors, for example, is: “to determine the needs of seniors and link them to necessary resources so that they can lead healthy and productive lives in their aging years.” Notice how the target beneficiaries (seniors), the organization’s major activity (connecting seniors to services), and the desired result (seniors leading healthy and productive lives) are each included here.

Operating Model

The next component is an articulation of your operating model — the way in which your organization’s activities work together to carry out the mission developed above. To bring your operating model into focus, you will need to conduct an operating model analysis, which will help you to review your activities and begin to uncover opportunities to improve upon current practices.

Much of the information for your operating model analysis will come from the documents that you gathered in your gap analysis, including your organizational budget, descriptions and evaluations of your current programs, and documentation of your current management and staffing structure. You should also plan to conduct interviews with your organization’s program directors and management team to gather additional information as you address the following questions.

How would you describe your organization’s current mission-based activities? The goal here is to begin to tell a story that explains how the activities that you undertake to carry out your mission work together. Make a list of all of your current activities that address your mission, and think about how you would describe them. For example, do you think in terms of departments? Stages in a process? Or types of programming?

Who makes up your target market? Your target market consists of the primary beneficiaries of your programs and services. Using data generated from your current activities, develop a profile of the characteristics of your target market. These characteristics may include age, geography, and income level.
How are you currently measuring the performance of your programs and your long-term impact? Take stock of the indicators and methods, if any, that you are currently using to evaluate your programs.

What staff positions are needed to carry out your operating model? Develop a list and a short description of the critical roles needed to carry out these activities.

What does your operating model cost? Look at your expense records to determine the cost of your activities, not including your overhead costs. If the activities generate any earned or recurring revenue, gather this information as well.

Your answers to these questions will allow you to create a text document, and possibly a diagram, that explains: how all of your programs and activities work together toward your mission; what groups are brought together by your programs; how evaluation is integrated into your work; how much these activities cost; and how much, if any, earned income you bring in. In your written business plan, this text and diagram will become your “Operating Model” section, which immediately follows the “Need and Opportunity Analysis.”

KEY TO SUCCESS: Engage in Action While Planning.

Social Impact Strategies

We move now to the social impact strategies, which are the major actions that your organization will take to carry out its mission and to strengthen its operating model, while working toward achieving its vision of success.

Basing decisions on the results of the need and opportunity analysis and operating model analysis, many organizations at this stage will determine that they are doing too much. It is not uncommon to end up cutting one program in order to devote more resources to another — or to recalibrate an existing program. The Root Cause consulting client that focuses on seniors had primarily served as an advocacy organization before beginning the business planning process, and had only recently begun helping seniors connect to services. Yet, the organization’s need and opportunity analysis uncovered a need for better linking and delivering services to the country’s seniors. In addition, the operating model analysis revealed that its existing direct-service programs promised to yield the greatest social impact. As a result, the organization determined to focus on partnering with government to meet seniors’ needs, instead of advocating to government. It developed the following social impact strategies:

  • Collecting data on the needs of the nation’s seniors through a partnership with the federal government
  • Matching seniors with service providers through a membership-driven, technological solution
  • Building and strengthening a service provider network through conferences, data reports, and training to help service providers increase the effectiveness, efficiency, and sustainability of their services
  • Running a “direct service incubator” to develop new services when a gap is identified

These strategies are all directed toward achieving the vision of success stated earlier: “We envision a day when — through collaboration and coordination of government, nonprofits, and the business sector — all seniors, regardless of economic status, will have access to a seamless integration of the high-quality, affordable services they need in order to live healthy and productive lives.”

KEY TO SUCCESS: Look at the Big Picture and Think Creatively

Organizational and Program Performance Indicators

Once you know your social impact strategies, you can begin developing your organizational and program performance indicators. These indicators measure your organization’s capacity to implement its business plan, and assess the progress of your activities in carrying out your operating model and social impact strategies; in some measurement methodologies, these types of short-term results are known as outputs. Developing your organizational and program performance indicators will help to ensure that your organization is accomplishing what you intended to in the short term — in order to achieve your vision of success in the long term. When your complete measurement system is in place, these indicators will also serve as a feedback loop that can help the organization make course corrections along the way.

Looking at your own social impact strategies and the activities they encompass, make a list of three to five indicators that will enable you to measure your organization’s overall performance. For example, here are a few of the organizational and program performance indicators chosen by our organization focused on seniors:
  • the number of members
  • the number of volunteers serving its programs
  • the number of seniors assessed

As with the social and economic impact indicators above, you do not need to develop an exhaustive list. In step three, we will describe the process of further developing a list of organizational and program performance indicators.

Feedback Loop

Keep in mind that two components of your Social Impact Model — the operating model and social impact strategies — are always works in progress, which you will continue to hone based on the results that your indicators reveal. In step three, you will plan for developing a comprehensive self-evaluation system that will include a feedback loop. This feedback loop will establish the systems that will ensure that you regularly return to your operating model and social impact strategies to make improvements based on the data generated by your measurement system. It will also help you evaluate whether your overall hypothesis of how to solve your target social problem is working.
The other components of your Social Impact Model, particularly your mission and your vision of success, should stay the same for the time period covered by your business plan, and should only be revisited when you revise your business plan.

KEY TO SUCCESS: Start Writing Early and Plan for Appendices

Concluding Step 2

The work that you have done in step two will turn into drafts of three sections of your business plan: “Need and Opportunity,” “Operating Model,” and “Social Impact Model.” The working group should review and approve the content of all of these sections.

Next: STEP 3. Developing an Implementation Strategy (Part I)
Previous: STEP 1. Planning to Plan
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