Key findings

• Impact measurement needs to be flexible enough to allow for innovation and robust enough to measure meaningful results.
• Ventures need to invest in a point person to lead on impact and partnerships with academic researchers to make more progress on impact measurement.
• Impact measurement can ensure that the company considers its mission in making decisions about what markets and revenue streams to pursue.
• Ventures most often run an evaluation, learn about works and repeat this process before investing in a higher rigour trial.
• Some ventures have seen commercial success before focusing on evaluation, and vice versa. This means we focus support on wherever a company is falling behind – so that in the long run, we see a balance in commercial success and impact success.

As impact investors, we make investments first and foremost to create social impact, and secondly to make a financial return. Therefore, measuring the social impact of our investments is fundamental to what we do.

Over the last two years, we have been working with our investees to improve the quality of evaluation that investees undertake over time. This experience of implementing impact measurement has given us invaluable insight into how to meaningfully combine evidence and evaluation with impact investment.

This paper presents our practical experience of implementing impact measurement within an impact investing context. We discuss a number of case studies of how investments have carried out evaluation and what we have learnt from this practical experience.

Recent years have seen an incredible level of interest and activity in the impact investment space. If the ambitions of impact investing are to be realised, the sector needs to focus on measuring and articulating its value in a robust way. We hope this paper adds to this conversation and offers a starting point for ventures and funds that are interested in evidence and evaluation.

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