When I talk to impact investors and entrepreneurs, I often hear that they don’t measure impact because “it’s a given.”

They already have a social or environmental purpose built into their business model.

But is that truly enough?

I’ve been working in the impact sector for more than ten years.

I’ve witnessed outstanding projects expend significant resources, only to yield marginal results.

That’s why I recommend both investors and entrepreneurs measure their impact:

1. If you can’t measure it, you can’t improve it.

This famous quote, attributed to Peter Drucker, also applies to social impact.

To make data-driven decisions, you must first collect data.

2. Not measuring impact because you have a social purpose is like not tracking your revenue because you’re profitable.

Even when you achieve product-market fit, tracking financial performance remains essential.

This principle holds true for your impact goals as well.

3. The metrics you measure guide your focus.

If you only track financial performance, your primary focus will be on increasing those metrics.

You’ll lose sight of negative externalities, thereby jeopardizing your reputation as an impact investor or entrepreneur.