When was 'impact' invented? — a genealogy of the idea of social investment

Day two showed that the standard SROI guide was published in 2009 (updated 2012), and the logic-model chain was formalised in 2004. Those dates are not a coincidence. The very phrase 'impact investing' was coined at the Rockefeller Foundation's Bellagio meetings in 2007, and the dedicated international body built around it, the Global Impact Investing Network, launched in September 2009. Much of what is now called SROI or the logic model, in other words, was systematised at almost the same moment as that naming, or just after it. Measuring 'social impact' as a distinct activity is a comparatively recent practice, institutionalised in a hurry in the late 2000s.

That does not mean the idea of measuring the results of social activity began in 2007. In Britain, cooperatives and community businesses had been explaining their own work through 'social audit' since the 1970s. The concept of social capital, taken up in the earlier column Urban Farming and Community that this series assumes, has an even longer history in social science. Today's article shows that several older lineages have converged under the new banner of 'impact investing.'

The use of 'social enterprise' in something close to its current meaning is traced back to British practitioner Freer Spreckley's writing on cooperatives in the late 1970s. In that period, Britain's Industrial Common Ownership Act of 1976 established a legal definition of 'common ownership,' and many cooperatives registered under it through ICOM, the Industrial Common Ownership Movement. In 1979, as part of a social-democratic alternative movement under the Thatcher government, the community-business movement launched a magazine called New Sector.

Within that current, Beechwood College in Leeds published, in 1981, a booklet titled the Social Audit Toolkit: A Management Tool for Cooperative Working. It reportedly sold around 2,000 copies — a practical manual that arrived nearly two decades ahead of the UK's dedicated policy push for social enterprise around 2000. What matters here is that the idea of measuring predates GIIN by a long way; it was something cooperatives on the ground worked out for themselves, to meet their own accountability. What the Rockefeller Foundation's Bellagio meetings did was plant a single flag, 'impact investing,' over that scattered practice, and pull in a new kind of funder: institutional investors.