Monday, August 24, 2009 – Friday, August 28, 2009
In honor of the lead-up to SOCAP09, which is taking place in San Francisco, September 1 – 3, last week, as our Twitter “Social Enterprise of the Day,” we decided to highlight the work of social enterprises that are best at measuring impact and achieving scale. Over the past few years, impact investing has become the new ‘it’ industry in the social development space, generating tons of interest and chatter. As a result, there is another burgeoning movement, that to create metrics that measure impact. Figuring out how exactly to measure social impact, though, has long been a challenge. The problem has been that everyone tracks social performance differently – some rely on anecdotal evidence while others use varying metrics. As a consequence, there are no ways to compare performance of non-profits across a sector and each grant maker asks grantees to report different metrics.
While the group of organizations working to measure impact is still small, they are incredibly influential, true leaders in this emerging field. We profile five below.
As an aside, The Rockefeller Foundation and B Lab will be unveiling and unpacking their Impact Reporting and Investment Standards and Global Impact Investing Rating System initiative for the first time to the SOCAP09 audience. In the process, it will become clearer how market infrastructure funded by foundation dollars can help bridge the gap that large institutional players say keeps them from crossing over into serious impact investing. This initiative will serve as the nuts and bolts of the market mechanism, and a roadmap to new results. We, at Beyond Profit, really wish we could be there in person!
We look forward to seeing the new entrants into this field and dialogue that will begin in the aftermath of SOCAP09!
Monday, August 24, 2009
Social Enterprise of the Day – Acumen Fund
Acumen Fund is a non-profit global venture fund that uses entrepreneurial approaches to solve the problems of global poverty. Acumen uses philanthropic capital to make disciplined investments – loans or equity, not grants – that yield both financial and social returns. Any financial returns they receive are recycled into new investments. Acumen’s investments focus on delivering affordable, critical goods and services – like health, water, housing and energy – through innovative, market-oriented approaches.
In the realm of metrics, Acumen has been a leader in creating a framework that is designed to tackle the difficult questions facing many impact investors interested in social returns – by evaluating financial, operational and social metrics, including environmental impact. Using its internally developed framework called the Best Available Charitable Option (BACO), Acumen compares each investment with a real or hypothetical charitable option.
Additionally, Acumen has developed a portfolio data management system called Pulse (co-developed with Google engineers) – a web-based vehicle to collect social, operational, and financial data from its investments. Pulse helps social investors track, measure, and evaluate operational data to understand whether different approaches to solving the problems of global poverty are working. Although originally designed as a tool to help Acumen manage its own portfolio, Acumen has been working with Salesforce.com to make it available for adoption by peer organizations and to share data across the sector. Pulse 1.0, available in Q1 ’09 will allow individual funds to track and manage financial and non-financial metrics. Pulse 2.0, available later in 2009, will create a common data repository for the publication of social impact performance for entities reporting against the new standards.
Along with key partners in the impact investing community, Acumen has also worked to develop a set of industry standards called the Impact Reporting and Investment Standards (IRIS) to be able to aggregate sector-wide data, analyze it, and compare it across organizations. The IRIS initiative will build on these sector-specific efforts to create a common language that will allow comparison and communication across the breadth of organizations that have social or environmental impact as a primary driver. IRIS is an essential element in the evolution and maturity of the social and environmental impact investing market. A common language for measuring and reporting performance forms a basis for enabling infrastructure and leads to transparency and credibility.
The ultimate goal of all of these initiatives is to provide transparency for investors and organizations looking to maximize their philanthropic and investment capital.
Follow Acumen Fund on Twitter at @acumenfund
Tuesday, August 25, 2009
Social Enterprise of the Day – Voxtra
Voxtra aims to accelerate the growth and effectiveness of international philanthropy by bridging the communication gap between the business world and the development world. Voxtra’s objective is to contribute to the reduction of poverty by supporting organizations that empower people at the base of the pyramid to lift themselves out of poverty.
Documenting and measuring impact is at the core of Voxtra’s mission. Voxtra identifies exceptional development programs and innovative social entrepreneurs in developing countries, invests to increase their reach, and documents the impact. Voxtra invests in non-governmental organizations (NGOs) or social enterprises that have collected solid evidence on the effectiveness of their approach, reached a certain scale (typically within a range of 3-10 MUSD in annual expenditures), built high-quality systems for financial management and impact monitoring, attracted highly skilled managers and built a track-record of good cooperation with all relevant stakeholders. Enabling such high-impact organizations to grow is what they see as the most effective way of putting their philanthropic capital to work.
Wednesday, August 26, 2009
Social Enterprise of the Day – Rockefeller Foundation
The Rockefeller Foundation has been spearheading the drive towards impact investing globally. They believe that delivering social change, at the scale and breadth we seek, will require more capital than philanthropy and public resources alone can provide. And, if the volume and efficacy of this capital continues to grow, it could prove a potent partner to philanthropy in scaling solutions to pressing social and environmental challenges. Therefore, the impact investing industry stands at a delicate moment.
The Rockefeller Foundation seeks to help catalyze the industry’s evolution. They make grants and Program Related Investments (PRIs) to help create the basic public goods that can build conduits through which others’ investments can flow more efficiently and effectively. Specifically, they focus on assisting with the development of the Global Impact Investing Network that provides the vehicle through which a select group of leading impact investors and intermediaries can help strengthen this nascent industry, undertake advocacy, and execute a coherent communications agenda.
With respect to impact reporting and measurement, Rockefeller supports two complementary initiatives: Impact Reporting and Investment Standards (IRIS), which will create a set of financial, operational and impact measures for enabling transparency of social and environmentally-oriented investments through a user-configurable, open source XBRL-enabled toolset, and Global Impact Investing Ratings System (GIIRS), a rating system designed to provide impact investors with an independent, objective way to assess the social and environmental impact of companies and investment portfolios. GIIRS will let new style investors compare and measure the kind of social and environmental impact they can expect from their investments and donations. For example, GIIRS will let investors who want to make a difference by, say, creating jobs and businesses in the developing world, compare the different kinds of jobs that various social enterprises have created. Using GIIRS, a funder can make the same kind of comparison in areas from healthcare, to slum upgrading, agriculture development, literacy and education or virtually any cause.
The ultimate success of this initiative, and of the impact investing industry, will be evident when substantial impact investment capital is brought to bear in solving social and environmental challenges.
Thursday, August 27, 2009
Social Enterprise of the Day – Monitor Institute
The Monitor Institute is committed to helping innovative leaders de-mystify the work of assessing impact and to changing the frame from a methodological debate to a conversation about what is important to know that would improve results. Their groundbreaking report on the topic is called Investing for Social and Environmental Impact: A Design for Catalyzing an Emerging Industry Report. The report examines impact investing and how leaders can accelerate the industry’s evolution and increase its ultimate impact in the world. It explores how impact investing has emerged and how it might evolve, including profiles of a wide range of impact investors. The report also provides a blueprint of initiatives to catalyze the industry.
The strategy was completed in January 2009 with lead funding and support from the Rockefeller Foundation.
Friday, August 28, 2009
Social Enterprise of the Day – GIIN
The Global Impact Investing Network (GIIN) is a coalition of investors who focus on both social and environmental impact as well as financial return. It is a select global group of investors and intermediaries who put capital to work at scale to generate social and environmental value in addition to financial return. GIIN is a platform for leaders of the emerging impact investing industry to incubate the activities and institutions that can accelerate the impact investing industry’s maturation and ultimately drive substantial capital to solve previously intractable social and environmental challenges. GIIN will bring together impact investors and intermediaries who have the capacity to invest and intervene at scale, making multi-million dollar investments and aggregating funds large enough to access institutional capital.
GIIN was formed to break down the barriers stand between the promise and the reality for impact investors, to accelerate the pace and manner in which these barriers fall. GIIN has already engaged many impact investors around the world. They are currently in the process of developing their membership program and will be recruiting formal members in the near future.
