Reporting on Impact by Enterprises in our Portfolio

 

Impact Foundation has invested $33m in 62 companies through the end of 2017. As we deploy charitable capital to create economic, social and spiritual transformation, it is imperative that we have tools and data to shed light on the progress being made by enterprises in our portfolio. Are lives and communities actually improving through the investments we make? 

Theory of change modeling and impact measurement are robust fields of study with reams of research papers and detailed theoretical papers. These researchers explain the differences between inputs, outputs, outcomes, and outcomes (see a few examples: SSIR, HBS, Council on Foundations). As much as professionals understand about theory, there's still much work to be done in translating this to best practices for busy entrepreneurs and donor-investors. We view some of that translation work as the unique role Impact Foundation can play. 

As we enter our third full year and take stock of the enterprises in our portfolio, it is too early to assess the full extent of the impact, or even outcomes, of our investments. We can, however, begin to see patterns in the types of data being collected. These patterns can help us see areas for improvement and lend to the creation of practical tools and tips for impact companies.

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To understand the current state of impact reporting among the 62 entities in our portfolio, we sent out a short survey, trolled every website, read each monthly/quarterly/annual communication, and reviewed the initial information given to us during the vetting process. 

We saw a few patterns emerge. First, stories are the easiest way to communicate how lives and communities are benefited by an enterprise. In fact, 100% of companies have stories to demonstrate the redemptive effects of their work; 98% regularly share those stories. (For those of you keeping score at home, that means 2% tell stories when prompted but aren't great at regular communication).

Next, enterprises will count recipients, employees, viewers of a movie or other quantitative data about the numbers of people receiving a benefit is the next easiest. For example, a company might report on the number of jobs created, participants in a bible study, or downloads of a particular educational software, etc. These are important details to tell us the reach of a redemptive product or service, but they do not tell us if lives are made better by those interactions. 

The next most difficult and informative type of impact data reported involves tracking outcomes. For example, one company reports on the GDP of the country in which it operates has been impacted by its operations in that country. That's an outcome, but it still doesn't tell us how lives are made better; we are left to assume that increased GDP means lower unemployment and greater overall access to education, healthcare, sanitation, etc.

We will continue to push toward greater understanding of the impact of our investments, along with the ability to measure and report.  

Every enterprise in which we have invested seeks redemptive impact - social, spiritual, environmental, and economic transformation. The easiest method of demonstrating impact - telling stories -