The Impact Programme will work with partners on establishing industry-level, standardised frameworks and norms for impact measurement and management to help build a more efficient and transparent impact investment industry globally. It will support the development of practical, innovative and low-cost measurement tools and services that provide business insights for managing impact. It will also build connections between impact measurement and management stakeholders.
Establishing frameworks and norms:
• Building a Global Convention
• Building Industry Practice
Supporting innovation and scaling of low-cost tools and services for impact measurement and management:
• Lean Data Services
• Poverty Probability Index
• Catalysing Local Metrics and Impact Assessment
Building a Global Convention
Partner: Bridges Impact+
The Impact Programme supported the co-design of a global convention that enables investors and other stakeholders in the impact investing value chain to be explicit about their impact expectations and illustrates norms for attempting to meet different expectations.
Scope of work
DFID is helping to meet the costs of The Impact Management Project as it develops:
• Principles and procedures for understanding impact expectations, through convening people from many disciplines to agree on what we need to communicate effectively with each other
• Norms for attempting to meet impact expectations, through “end-to-end” case studies illustrating how information might flow along a value chain and a series of model portfolios for investors showing different combinations of impact and financial expectations
• Positioning of frameworks, standards and measurement approaches that are useful for managing different impact expectations (the GIIN is playing a leading role on this area of work – see below)
• Global engagement, ensuring that project content is open-source and interactive through virtual and in-person collaboration with a wide range of audiences, and alignment with existing infrastructure
The objective of this project was to develop a shared convention for impact management. Adoption of the convention should increase the efficiency and effectiveness of matching the demand and supply of capital, thereby increasing investment capital flows to impact. It should also allow the measurement and management of impact performance to become more lean and more insightful.
Completion: 31st May 2017.
Building Industry Practice
The Impact Programme is supporting the GIIN to focus on improving impact measurement and management practices among investors. The GIIN is coordinating closely with the Impact Management Project (see above) which is working with all stakeholders in the impact investment value chain.
Scope of work
The GIIN’s work in this area has two main strands:
• Bringing clarity to the “how” of impact measurement and management:
– Engage with stakeholders to ensure the GIIN’s work is informed by and connected to market needs and developments
– Develop sector-based strategies and metrics to advance investor sophistication in using metrics that match impact intent and inform investment decision-making and publish practical case studies and guidance materials – a project known as Navigating Impact
– Linkages to IRIS – develop partnerships to show linkages between IRIS, the catalogue of generally accepted performance metrics for use by impact investors, and sector-specific frameworks
• Encouraging collective action through balanced thought leadership
– Establish collaboration and coherence in the advocacy for sound impact measurement and management including through collaboration with the Impact Management Project and other global initiatives (e.g. OECD and World Economic Forum)
– Raise the profile of impact measurement and management in the investment process
The intent is that impact measurement and management will improve the industry’s effectiveness and accountability for achieving intended impact results.
Lean Data Services
Acumen’s Lean Data uses low-cost technology and methods to gather high-quality data on customer feedback, behaviour and impact quickly and efficiently. The Impact Programme is supporting the development of Acumen’s Lean Data Services (‘Lean Data’) proposition to enable enterprises in DFID target regions – including investee companies in the Impact Programme – to access better data on their social performance, customer feedback and behaviour.
Scope of work
Lean Data will be made available to DFID Impact Fund companies, both as part of the programme’s ‘deep dive’ research agenda and on a subsidised basis for companies who want to ‘opt in’ to the service. Acumen will also undertake a range of R&D projects which will contribute to the development of new surveys or delivery methods that further increases the scope and speed of Lean Data Services and similar services or reduces the cost.
This support is intended to ensure better data on DFID Impact Fund portfolio companies, leading to improved insight on their social performance. In addition, it aims to test the appetite of funds and portfolio companies to pay for this service. It also enables new Lean Data innovations to be tested, and open sourced where possible, leading to wider adoption by service providers, enterprises and impact investors in emerging markets.
For more information please visit the Lean Data website.
Poverty Probability Index
Innovations for Poverty Action
The Poverty Probability Index® is a 10-question survey that provides a statistically reliable estimate of whether a household is living below a given poverty line. The Impact Programme is supporting the further development and roll out of the PPI to help base-of-the-pyramid focused enterprises, funds and service providers in DFID target regions to access low-cost poverty measurement tools.
Scope of work
Along with 11 other PPI Alliance members, the Impact Programme provided a small grant to support the PPI’s transition to a sustainable, long-term business model. This involved moving the PPI to Innovations for Poverty Action and creating a new methodology for PPI scorecard construction. The PPI Alliance provides funding and governance for the ongoing development of the PPI, including PPI scorecard updates for 10 DFID countries and future product variations. The focus will also be on developing ongoing communications, training and support for users.
This activity aims to enable the wider adoption of PPI amongst donors, NGOs, donors, businesses and investors and the establishment of a sustainable platform for future PPI growth.
For more information please visit the PPI website.
Catalysing Local Metrics and Impact Assessment
ANDE is partnering with DFID to build the capacity of impact investors, social entrepreneurs and entrepreneurial support organisations, working in Sub-Saharan Africa, to measure their social and environmental performance. By doing this, the project aims to catalyse greater local impact assessment within the impact investing and entrepreneurship sectors.
Scope of work
ANDE will be hosting events and developing a virtual community (through ‘Learning Labs’) that will focus on four themes for the impact investing ecosystem, with a particular focus on Sub-Saharan Africa. These themes are: creating a culture of measurement, focusing on outcomes, measuring along the “impact value chain” and creating standards for the sector.
The project will also be hosting a regional metrics and impact conference which will connect practitioners to innovative new methods, emerging industry standards and evaluation experts. ANDE will also be running a grant-making facility which will offer grants to practitioners looking to develop new analytical approaches, test technologies and develop case studies or resource guides.
This project seeks to encourage more fund managers, entrepreneurs and capacity development providers to measure their social performance, to increase the rigor of social performance measures and to improve the perception of the business value of social performance measurement.