All Things Impact.

private capital & the public good

All Things Impact: no silver bullet for impact measurement

Brian WalshComment

Hi friends,

Welcome to All Things Impact, a newsletter of interesting things I've seen from across the spectrum of impact: effective philanthropyimpact investing (in the private markets), responsible investing (in the public markets) and a wildcard topic
Here are four links worth your time (plus job postings, items of note, and a calendar of upcoming events): 

1. Effective Philanthropy: GuideStar Platinum allows nonprofits to share information about their effectiveness
What’s better than Gold? Michael Wyland of Nonprofit Quarterly reports on GuideStar Platinum, the latest effort to help nonprofits generate & share information to inform decision making:

“GuideStar, the nonprofit repository of information on 2.4 million U.S. nonprofits visited by 7 million people annually, is adding a new way for organizations to report quantifiable data in support of their program achievements. GuideStar Platinum was developed as a way for nonprofits to provide non-financial data to demonstrate effectiveness, thereby addressing the pitfalls of the “overhead myth,” which gauges an organization’s worthiness of support by measuring its effectiveness in terms of its expenditures on program services versus management and fundraising.
GuideStar Platinum features can be used without charge by any nonprofit organization, and may be accessed by any visitor to the GuideStar website. In addition, the program-based data submitted by nonprofits will be shared with GuideStar’s 180 “data partners,” including Amazon Smile and However, only nonprofits that have also completed the disclosure requirements for GuideStar’s bronze (basic information), silver (finances), and gold (qualitative impact) recognition will be able to display a “GuideStar Platinum Participant” badge on their organization’s GuideStar page.
The most ambitious aspect of the program is its effort to promote dialogue about what is being measured by nonprofits. GuideStar provides a “Common Results Catalog” of 800 sample metrics with definitions. In prerelease testing, 900 nonprofits used 1,300 metrics to describe their program accomplishments. GuideStar officials hope that long-term community dialogue about metrics will help develop common definitions for metrics as well as refine which metrics are most meaningful in common usage.”

2. Impact Investing: no silver bullet when it comes to measuring impact
The Annie E. Casey Foundation just released a new report – “Aligning Capital with Mission” – evaluating its $125 million “Social Investment Program”, which was an allocation from their endowment to invest in impact funds, Community Development Financial Institutions (CDFIs), and nonprofit organizations.
A recurring theme of the report relates to the challenges of measuring impact. After all, impact can’t just be in the eye of the beholder. As the report concludes: “Investing in measurement enables mission investors to better monitor and understand the social performance of their investments, leading them to make better-informed decisions that ultimately maximize the impact of their portfolios in alignment with their mission.”

“Impact measurement is an emerging practice and, as such, there are a variety of methods for tracking and reporting on social impact. As investors and investees move to adopt new measurement systems and processes, they find that there is not one agreed upon approach or a “silver bullet” solution for impact measurement and reporting. This fragmentation in the market creates difficulties for investors as well as investees as there remains confusion on how to conduct impact measurement.”
“Impact investors continually struggle with the tension between the desire for standardization and the occasional need for customized metrics”

Here are some of their “lessons learned”:

"By integrating measurement practices into investment sourcing and due diligence processes, investors can better identify mission-aligned investment opportunities and also assess an investee’s likelihood of delivering social impact, leading to better and more impactful investment."
Best practice for investors seeking to embed impact measurement within due diligence:
  • Assess potential investees’ impact measurement practices during due diligence
  • Discuss impact targets prior to making an investment
  • Understand methods and assumptions behind social impact targets
  • Consider social impact benchmarks for investee performance comparison


3. Responsible Investing: Gates Foundation divests entire holdings in BP
“Climate change poses the greatest threat to health in the 21st century, according to doctors, and to avoid catastrophic impacts, most known fossil fuel reserves must be kept in the ground. If the world’s governments succeed as promised and halt global warming, those reserves could become worthless, and divestment campaigners argue there are both financial and moral reasons for divestment.” So reports Damian Carrington in The Guardian:

"The Bill and Melinda Gates Foundation has sold off its entire holding in oil giant BP, in a move welcomed by fossil fuel divestment campaigners.

Bill Gates has called the selling off of coal, oil and gas stocks a “false solution” to climate change, but the known investments of his foundation in major fossil fuel companies has fallen by 85% since 2014.

The foundation, which has spent many billions of dollars improving global health, sold its $187m stake in BP between September and December 2015, according to recent regulatory filings to the US Securities and Exchange Commission (SEC).

It had previously dumped its entire $824m holding in ExxonMobil. BP posted a record $6.5bn annual loss in February while ExxonMobil is under investigation about whether it lied in the past to investors about the threat of climate change.

The Guardian’s Keep it in the Ground campaign has called on the Gates foundation to divest its $40bn endowment from fossil fuels...

An analysis in November found that the Gates foundation would have been $1.9bn better off if it had divested from fossil fuels in 2012."


4. Wildcard: social innovation, "Social Innovation," scale, and the maintenance of civil society
Steve Goldberg (in the US) wrote on Twitter “Social innovation has not scaled. Full stop.” This prompted Dan Gregory (in the UK) to write an essay debating the nature of social innovation (or "Social Innovation"), which Steve then responded to with his own essay.

From Dan Gregory's essay:

"...the excitement and hype associated with this recent, self-styled, hip, urban, technological version of social innovation serves to distract policymakers and resource allocators from the critical maintenance work of civil society, charities and communities which hold our very economy together. Charities, voluntary and community groups, social enterprises and informal social action are worth billions of pounds a year to the UK economy and make up the critical foundations of our society. But the fetishisation of innovation and the attraction of shiny social innovation baubles divert the gaze of politicians, public officials and funders from the boring and essential maintenance work undertaken every day by food banks, homeless shelters, furniture recycling projects, credit unions and citizens’ advice bureaux across the country.

As resources are directed towards this self-conscious social innovation, critical maintenance work is starved. Funders would rather fund new projects but not the core costs, overheads or ongoing costs associated with established models of care. This puts our underlying social infrastructure at risk, undermining the stability of civil society...

A significant proportion of charities admit to pretending to be innovative in order to attract funding when they know what they are doing is really nothing new..

...a handful of academics have questioned whether there is indeed some hidden ideology behind the curtain, suggesting that social innovation functions as a sort of cover for reform of the welfare state and the privatisation or rationalisation of public services. Phill et al, for example, express a concern that social innovation “might simply become a convenient buzzword to forward neoliberal ideology in a time of austerity… social innovation might soon turn out to be simply another way to juxtapose the qualifier “social” to the private sector jargon in order to avoid heated discussions on structural inequalities."

From Steve Goldberg's response:

"I certainly agree that “the attraction of shiny social innovation baubles divert[s] the gaze of politicians, public officials and funders.” But funders don’t starve social services because they’re distracted by social innovation; they do so because, as Sir Ronald Cohen put it so well, “government is out of money and out of breath.” Appropriators and philanthropies have short attention spans and spend irrationally for many reasons, but it has always been and will always be thus, even without the occasional frisson of publicity that comes from backing the Next Big Thing. We’re not “sacrificing maintenance at the altar of innovation”; social innovation (of whatever kind) is a response to the nonprofit starvation cycle, not its cause...

"... scale doesn’t mean “lots” or “many,” it means “all” or “most.” In terms of quantity, it refers to how much of the total need you’ve addressed, not how much bigger you are than before. It means how far you have to go, not how far you’ve come. A journey of a thousand miles might begin with a single step, but a thousand steps later the destination is still, on average, 999.5 miles away. Second, when it comes to social innovation, scale doesn’t matter unless it makes a large difference in something truly important. Having “enough” homeless shelters—which we clearly don’t have—wouldn’t solve homelessness, nor would “enough” food banks solve food insecurity. I’m happy if Dan’s right that there’s an ample supply of fun runs and babysitting circles, but that’s not at all what I’m protesting. Taking a thousand steps might be an accomplishment, unless it’s vital to travel a thousand miles, in which case it’s not."

5. Job Postings


6. Items of Note

  • My friend Laura Callanan recently launched Upstart Co-Lab, which "will work to connect artists with impact investing and social entrepreneurship opportunities and social innovators with the storytelling, improvisation, and creative intelligence of artists. Among other things, the organization aims to increase opportunities for artists as innovators, starting with a greater recognition of artists' accomplishments in the private, social, and public sectors; catalyze more capital for creativity by making creativity investable through public equity, debt, and venture capital investment products; and contribute to the sustainability of creative lives by equipping artists with the skills needed to execute their ideas and linking eligible artists to existing social services and subsidies." Much more to explore here.
  • Fund for Shared Insight RFP on increasing foundation openness proposals are due  by Friday, May 20, 2016, at 11:59pm pacific time. 
  • Guggenheim Partners has launched its PROPEL10 application, through which the firm will invest up to $100,000 each in up to 10 high-performing, early stage non-profit organizations using innovative solutions to address enduring social problems. The application deadline is May 31, 2016 at 5:00PM EST. 

7. Upcoming Events
May 25 Venture Jobs Prosperity Conference (Rochester, NY) Impact Investing
June 1-2  Impact Capitalism Train Stop Tour (Philadelpha & DC) Impact Investing
June 7-8  Social Innovation Summit (DC) Various
June 13 GrantStation Forum on Philanthropy (NYC) Effective Philanthropy
June 23 – July 2  Aspen Ideas Festival (Aspen, CO) Effective Philanthropy
Sept 6-8  PRI in Person (Singapore) Responsible Investing
Sept 13-16  SOCAP (SF) Impact Investing
Sept 26-28 Exponent Philanthropy Conference (Chicago) Effective Philanthropy
Sept 26-28 ANDE Conference (Lessburg, Virginia) Impact Investing
Oct 9-14  Opportunity Collaboration  (Cancun Yucatan) Impact Investing
Oct 18  High Water Women (NYC) Impact Investing
Nov 3-5  Net Impact (Philadelphia) Various
Nov 9-11  Sustainable, Responsible, Impact Investing (Denver) Responsible Investing
Nov 16-18 Independent Sector (DC) Philanthropy
Dec 7-8  Global Impact Investing Network (Amsterdam) Impact Investing

That’s it for this week. Help me spread the word about #AllThingsImpact to your friends and colleagues, who can sign up to receive this newsletter at All Things Impact. Please also send me any job postings, items of note, upcoming events, or compelling links you discover in your own journeys across the web (even things like this gif showing a kid's reaction to a scary book).

Until next time, thanks for reading!

Brian Walsh
Head of Impact at LiquidnetFull Bio