The social enterprise sector has seen its share of growth in the last few years. However, how are we measuring that growth? In a recent interview with Joann Chen and Lindsay Norcott of Impact Assets, I learned the quantifiable look at Impact with the release of the first annual Impact Report.
Ruth: What has Impact Assets been working on recently?
Joann: Our board and investment committee has given us the impetus to put more focus into reporting and measuring impact. Through their financial and moral support we have built that part of our practice. We have an impact plan for 2013-14 that showcases what we will be doing across all of our work, and included in that is our first ever impact report.
Ruth: What can we see in this impact report?
Joann: The impact report is focused on 2012 and is our first of what will be an annual report. We report across four separate areas of our impact. One is our investments, which is I think what most impact investors think of when they think of impact. But, we also talk about our grants, because we run a donor advised fund which is structured to make grants. Our field building component includes thought-leadership, resources [for the industry], and issue briefs. Last, [we measure] the internal impact of our operations, including internal operation impact on our employees.
Ruth: What were some of the big findings of this report?
Joann: It’s not that we found anything we didn’t already know. I think the big “breakthrough” is that this is the first time that we have consolidated [information] across all four areas of our work.
Ruth: So, you have a collective resource to show potential new investors now?
Lindsay: Yes. We also have something to share. We internally see a lot of this information, but [we’ve now] collected this information and hope to entice organizations that are our peers to do their own reporting of impact as a good practice.
Ruth: What would you say are some of the big values of Impact Assets?
Joann: One of the big things is that we aim to be consistent in our commitment to impact and I think reporting on your impact is one of the ways to do that. In our impact plan, one of the minimum requirements of Impact Assets 50 criteria is measuring impact. The fact that we are incentivizing others, makes us committed to doing this also.
Ruth: So, how do you measure impact?
Joann: It’s not easy! I have a whole PowerPoint I can show you, but there is a range of factors that you can measure and there are a lot of different ways you could go about measuring them. It ranges from inputs like how much money do we have in our donor advised fund that’s being invested, all the way to actual impact where you have done a randomized control trial and you have proven scientifically that you have made a difference in a community at that point in time. That end of the spectrum is very difficult and expensive to measure and so most of the industry is still [primarily measuring] using inputs, activities, and outputs. We’ve started incorporating Impact Reporting and Investment Standard (IRIS) metrics, which is currently the industry standard for our metrics.
Lindsay: So, to break that down a little more, if you say we’ve created 20 jobs, [IRIS] standardized what those jobs are across the industry. Is it a full time job? A part time job? A living wage job? It puts parameters around a job so that everyone knows they are talking about the same thing.
Joann: IRIS is a taxonomy, so it’s not only metrics but it also defines metrics.
Ruth: So, when can we look forward to seeing these annual reports every year?
Joann: Our goal is to release these in Q3 every year.
Ruth: What sort of accessible tools are out there for everyone in the industry to begin reporting?
Ruth: What is the Impact Assets way to get the industry reporting more frequently?
Lindsay: We want to encourage folks. We have asked the managers in our Impact Assets 50 group if they would like to be featured for their impact reporting along with some questions for their process for doing that. We believe this just adds legitimacy to the field and adds a rigor to the point when we say “impact”.
Joann: It’s important to showcase that there is a range of impact reporting. A social enterprise of two employees will look a lot different in their impact reporting than a 100 million dollar fund, but our message is to say get started. Do something. It doesn’t have to be perfect. Doing something shows your intention and will help build your practice.
At SOCAP, we launched the Seed Ventures Platform, which allows our investors to invest in individual social enterprises. We have learned smaller organizations should focus on measuring things that both align with impact and financials. If your product offers an impactful service to someone, start with measuring how many people you are reaching. That’s an impact measurement that can show a future funder what your financial potential is.
Ruth: Now, I have to ask this question, What does impact mean for Impact Assets?
Joann: Our impact comes in making impact investing as a whole more accessible. Our impact is in broadening the industry and making it accessible to a huge number of people.
Lindsay: Impact for us is creating ways for more people to align their investments with their values.
Ruth Braden is a storyteller for Impact Hub San Francisco
Find her @ruthbraden