Hello, we are Nora Prahar from Yunus Social Business (YSB) and Donna Loveridge and Fabiola Lopez–Gomez working with Itad UK Ltd. We have been working together since 2020 to strengthen the IMM framework for YSB’s venture philanthropy fund that invests in social businesses in emerging markets.
We did not want to reinvent the wheel but aimed to ground IMM in known frameworks and tools, and help busy investment managers, who are not non-IMM experts, compare the impact (intended and actual) of their investments.
Lessons Learned
The Sustainable Development Goals are great at a conceptual level but not well suited to individual businesses. It is easy to link businesses’ intended contribution to an SDG at the highest level, e.g. SDG 13 – Climate Action. It is much harder to link their activities to the targets and indicators, as these are generally broader than businesses’ activities and intended impact.
The Global Impact Investing Network’s IRIS catalogue of metrics is a great resource but it does not (and cannot) include metrics for every possible need. The catalogue’s search function is useful to find relevant metrics and related metrics. Many metrics are constructed in a similar way, so it can be a convenient guide on how to develop metrics for the needs of specific businesses and business models.
The IMP’s 5 dimensions of impact are helpful to stretch evaluative thinking, but some dimensions are easier to apply than others. Only a few of the 5 dimensions of impact are regularly used in the industry. WHO and WHAT are relatively straightforward and frequently used. Developing good questions and metrics for the depth and duration elements of HOW MUCH and CONTRIBUTION when a portfolio has very different investments (businesses in different sectors, countries, and business models) is hard, but rewarding, work.
Practical Tips to Bring IMM Standards from Concept to Reality
Link to only the most relevant SDGs: Some businesses might state a contribution to many SDGs, believing this will help them broaden their network of potential investors. Only focusing on the most important helps to focus IMM and increase credibility. YSB has capped SDGs to three for each investment and differentiates between “primary impact” and “secondary impact” to encourage this focus and enable meaningful SDG mapping across the portfolio of investments.
Download the GIIN IRIS metrics catalogue in Excel to help filter and identify relevant metrics. You can then create another column in the sheet to record ‘adapted’ metrics but still clearly trace their origins (including their IRIS reference number) or make notes. Investors and other businesses may gain confidence in understanding the origins of the metrics used. This helps the ‘traceability’ of practices. Applying the 5 dimensions of impact is easier if investors and intermediaries use them from the due diligence stage. Forward-thinking at these first steps of the investment process builds better critical analysis of the intended impact (even if not all the information is available), as well as helps to identify what information is needed to really understand the impact during the holding period. Together, this helps investment decisions and enables investors to start putting in place the systems and processes for collecting and analyzing the impact of investments.
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.