Putting the “Impact” in Impact Investing

Abstract

Traditional social sector and international development organizations have prioritized measuring the impacts of their work for decades. Understanding the ways in which they are bringing about change or helping people and communities has long been part of the traditional social sector ethos. And, accountable to taxpayers, funders, and a diligent global community, these organizations have long felt the pressure for demonstrating tangible results. Consequently, most international development and social sector organizations-whether government agencies, philanthropic, multilateral, or nongovernmental organizations-have embraced a practice of robust measurement and evaluation and invested in the processes, systems, tools, capacity building, and partnerships necessary for assessing the progress and outcomes of their work. Beginning around 2007, the world began to witness the proliferation of new players into the social impact scene. The emergence of new actors dedicated to using market forces and capital markets for social good-such as impact investors, for example-has dramatically increased the pool of funding available to solve complex social problems. Current estimates of assets under management for impact investing range from US$ 114 billion dollars (Global Impact Investing Network, 2017) to upward of a trillion dollars (Paynter, 2017). The types of impact investments similarly vary-ranging from direct investments into social enterprises by fund managers representing high net worth individuals to socially responsible and sustainable investing by large institutional investors. The announcement of the Ford Foundation to invest one billion dollars in mission-related investments over the next decade represents the single largest investment to date. With a dual focus of generating good at the same time as financial returns, market actors, specifically impact investors, have fundamentally disrupted the old way of doing business.

Program evaluation: Outcomes and costs of putting psychology to work.

“…These are impacts that can result from treatment outcomes. A wide variety of "big data" measures have been advocated for evaluating social impact (Reisman et al, 2018). The promise of this focus on more socially and financially significant measures is that evaluation becomes a more positive, transformative effort (Bolinson & Mertens, 2020).…”

“…Impacts have received special attention from evaluators in the past decade, as governments offered financial incentives to programs that promise to deliver specific, measurable impacts (Reisman et al, 2018). Evidence-based programs now are evaluated to determine whether anticipated impacts are actually achieved.…”

“…Millions of dollars available annually in the United States for these projects have heightened evaluator attention to impact variables. Billions of philanthropic dollars available globally each year have fostered evaluation efforts to assess the social return on investment for these programs (Reisman et al, 2018). Concerns have been expressed about how social impact evaluation could have unanticipated, deleterious consequences unless political and economic contexts of impact measurement are considered (Bolinson & Mertens, 2020;Yates & Marra, 2017).…”

Social Impact Investing for Marginalized Communities in Hong Kong: Cases and Issues

“…These classification criteria provide a baseline to recognize SII business. How to measure social impact remains to be an area deserving further study [27,39]. Measuring social impact is associated with licensing SII business for tax benefits or other government supports.…”

A Systematic Review of Meta-Evaluations: Lessons for Evaluation and Impact Analysis

“…As Picciotto (2015) puts it, social impact measurement is “the fifth wave of evaluation diffusion” (p. 2). Additionally, practitioner communities from each field have formed separate, yet overlapping, camps, with evaluation practitioners working primarily in public, philanthropic, and not-for-profit sectors and social impact measurement practitioners with market-based entities (Reisman et al, 2015). To foster practical and viable approaches, it is necessary to engage with both evaluation practice and social impact measurement practice and draw from shared knowledge and learnings across sectors and fields.…”