This April, I had the opportunity to spend an afternoon discussing impact measurement with nonprofit leaders in Singapore at an event hosted by the Lien Center for Social Innovation at the Singapore Management University. I shared my own views on measurement in philanthropic and impact investing, but also learned a lot from the participants. As I often work with nonprofits or social ventures on designing their own impact measurement systems, it is always interesting to hear what issues and challenges these organization face when measuring their impact.
Measuring impact should not be a burden imposed on an organization by a funder, rather a management tool that helps an organization ensure it is operating effectively
Organizations that do preventative work, such as drug use, face an extra challenge in measuring impact as it’s hard to prove an organization prevented a problem that did not happen!
In social investing, the financial metrics used are the same across the board but impact metrics differ greatly from organization to organization. Although there will always be subjectivity in a funder choosing a social investment opportunity, if we can begin to use common metrics for impact it will be possible to benchmark and compare social returns in a given sector.
The IRIS metrics are becoming widely adopted throughout the impact and philanthropic investment sectors, they are simple and relevant, and can provide a way for social investors to begin benchmarking potential social returns in different sectors.