Publications by SVT and others on how to measure impact, what investors need to know about impact, and where the emerging field of impact accounting and management is headed.
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A few years ago the Rockefeller Foundation convened a group of investors actively deploying capital into private equity, debt and real estate investments that generate financial as well as social or environmental returns. These investors, representing diverse backgrounds, institutional affiliations and investment philosophies, met to discuss how significantly greater amounts of capital could be placed more effectively into what they called “impact investments.” The group specifically identified the lack of clear, consistent, credible impact information as an impediment to achieving greater scale in this sector.
They made it a priority to understand what methods exist for identifying and measuring impact, and to examine whether and how they might build on existing work to implement a common system of measurement. The group commissioned SVT Group to conduct a survey of existing impact measurement methods suited to the private equity and debt context, and to advise members on how they might proceed. The results of this work are presented in two documents downloadable below. Shortly after this report came out the group re-branded and became the Global Impact Investors Network (GIIN).
Catalog of Approaches to Impact Measurement for Private Equity Investors
This report summarizes and compares the impact evaluation and reporting practices of the diverse group of investors at the vanguard of the impact investing movement, who became the GIIN.
Impact Measurement Approaches: Recommendations to Impact Investors
This report explores answers to several questions posed by the GIIN:
• How can investors know whether they are in fact helping or hindering progress toward the goal of an environmentally sustainable, healthy, dignified economy?
• How does a portfolio company’s pursuit of this goal affect risk and financial returns?
• If there is an added cost associated with pursuing this goal, what approach can be used to assess whether it is “worth it”?
We examine the different types of approaches to impact measurement, and how each is applicable to the various perspectives from which impact investors approach investment.
Managing Social and Environmental Impact: A New Discipline for a New Economy
This article builds upon our findings in the Rockefeller reports to explore the potential of a universal system of impact accounting and management.
A key issue for both companies and nonprofits is how to gauge whether you are having the impact you set out to create. Reporting standards like those used by investors to simply tell whether you are or are not an “impact investment” do not speak to this issue. One approach you can use is Social Return on Investment (“SROI”) analysis. Different than the pre-defined reporting standards often used by investors, which may not capture an organization’s core value proposition, SROI strives to combine social science rigor with pragmatic judgments that enable management and funders to understand what changes as the result of a given company/initiative/fund, and how important that change is to the parties affected. Here are several of the best how-to resources.
Starting Out on SROI
This guide will help anyone looking for a step by step guide to Starting Out on SROI – if you want to understand more about how your organization makes an impact – and how much this matters – then read on.
Social Return on Investment: A guide to SROI analysis
This 132-page book contains step-by-step instructions for how to analyze the social return on investment of any business, organization or project. It has six detailed case studies of programs in a range of countries and industries. The cost is $25.00 plus shipping. To order please email the number of books and your mailing address to book [at ] svtgroup.net and we will send you payment instructions.
A Framework for Approaches to SROI Analysis
Presented here for historical reference, this “SROI Framework 1.0” describes the general philosophy and an early version of the steps of SROI methodology.
SROI Analysis for Wicked Problems
Wicked problems as defined by Wikipedia, “have incomplete, contradictory, and changing requirements; and solutions to them are often difficult to recognize as such because of complex interdependencies.” Such is the nature of impact assessment in complex areas such as human rights. This paper from SVT attempts to address the challenge using a case study from SVT’s client, Witness.
Click here to download SROI Analysis for Wicked Problems
More practical how-to information and examples are contained in the following resources.
The Cornerstone Videos
This series of six short videos walks you through how to measure your impact, from defining your intended purpose, to differentiating between your activities and the results of them, to developing Key Performance Indicators of impact. The Monterey Institute of International Studies and REDF along with a number of other crowdfunders enabled the creation of the series.
Social Environmental Technologies (SET) Catalog
This catalog of inventions illustrates how to define the potential “addressable impact” of a product innovation.
Mission-Related Investing: A Workshop for Foundations
This paper provides a framework and step-by-step process for deploying foundation investment assets in a way that complements the foundation’s mission. Examples include JP Morgan Chase’s Community Development Fund, Calvert Foundation, Pacific Community Ventures, and Boston Community Capital. Has lessons useful for boards, financial advisors and executives of foundation endowments and other investment funds.
Double Bottom Line Project Report: Assessing Social Impact in Double Bottom Line Ventures
This catalog provides summaries and analysis of nine methods used by social-purpose venture funds and engaged philanthropy portfolios to assess the non-financial impact of their investments or grants.
Foundations Need Grant Recipients’ Feedback
Argues for a mechanism to provide feedback to foundations about their own performance. Soon after this was published, the Center for Effective Philanthropy was founded.