Hi! I’m Catherine Dun Rappaport, Senior Vice President, Learning and Impact Management at BlueHub Capital. BlueHub is a national, nonprofit Community Development Finance Institution (CDFI) focused on investing in economically and racially marginalized communities. Prior to BlueHub, I worked in an analogous measurement and applied learning function at the United Way. I also was a researcher at Abt Associates for over a decade.
The following post reflects lessons I have learned from my tenure in all of those places: to be legitimate, impact measurement and management (IMM) must be intentional, humble, and “right-sized”, balancing rigor and practicality. Below, I elaborate on what I mean by each of these things and share resources about how the impact investing field can incorporate effective IMM.
#1: Be Intentional
In this context, intentionality means using IMM to inform investment strategy, decision-making, and post-investment follow-up. Jane Reisman and Karim Harji, whose work I have long admired, write eloquently about the importance of an Impact Theory of Change and/or a framework that specifies investors’ impact goals, strategies for achieving those goals, and metrics investors track to hold themselves (not always or exclusively their investees) accountable for progress. Investors also should be clear about when they collect data, how they collect data, and how they use data to inform practice.
#2: Be Humble
It can be difficult for well-resourced, well-intentioned, and often brilliant investors to be humble, but humility is essential in IMM. Humility, after all, is, as A.R. Bernard said, “not weakness, but strength under control.” In IMM, being humble means treating investees and targeted communities as partners and experts, and it means sharing power with them to determine what impacts matter, what to measure, and whether it is feasible to collect associated metrics. This kind of consultation reduces the risk of negative impact and of requesting data that are sensitive, unavailable, or triggering.
Humility also is a remedy for impact washing; it keeps impact investors real about how impact actually happens. Here, being humble means recognizing that investors are part of broader financial, policy, and community ecosystems, and that investees, people receiving goods and services, and community members have more agency in shaping impact than do individual investors.
#3: Balance Rigor and Practicality: Right-Size the Work
Finally, to credibly inform investment decision-making, IMM practices require data that are relevant, objective, and clearly defined. Getting (and cleaning and analyzing) data can be time-consuming. Generally, the juice is worth the squeeze in these efforts, because impact-informed investment decisions rely on good, clean, clear data. However, this is true only up to a point. The level of effort required to obtain, analyze, and use impact data cannot stymie the investment process. Traditional research and evaluation operate at a slower pace than investment, and IMM practitioners need to ensure that impact measurement processes are not so laborious that they are impractical in the investment context. Overly cumbersome IMM processes are worse than useless because they end up unused and sap buy-in for doing this essential work.
- Ventures at the Helm, How Ventures & Investors Navigate the IMM Journey, Together by Laura Budzyna, Heather Hachigian, Karim Harji, and Penny Hawkins. Look for a blog post by these authors that’s coming up on Day 5 of our SIM TIG blog week.
- Ten Reasons Not to Measure Impact – And What to Do Instead by Mary Kay Gugerty and Dean Karlan in Stanford Social Innovation Review, Summer 2019
- Putting the “Impact” in Impact Investing: The Rising Demand for Data and Evidence of Social Outcomes” by Jane Reisman, Veronica Olazabal, and Shawna Hoffman
- Impact Frontiers Resources for IMM practitioners
This week, AEA365 is hosting Social Impact Measurement Week with our colleagues in the Social Impact Measurement Topical Interest Group. The contributions all this week to AEA365 come from our SIM TIG members. Do you have questions, concerns, kudos, or content to extend this AEA365 contribution? Please add them in the comments section for this post on the AEA365 webpage so that we may enrich our community of practice. Would you like to submit an AEA365 Tip? Please send a note of interest to AEA365@eval.org. AEA365 is sponsored by the American Evaluation Association and provides a Tip-a-Day by and for evaluators. The views and opinions expressed on the AEA365 blog are solely those of the original authors and other contributors. These views and opinions do not necessarily represent those of the American Evaluation Association, and/or any/all contributors to this site.e.