Here is something to ponder on over the holidays. I’ll also admit that I don’t have the answers here and will be pondering it myself.
I’ve been speaking with a lot of philanthropists, social investors, impact investors and their professional advisers lately. One thing that comes up time and again is how complicated it can be to understand the impact that their philanthropy and social or impact investing is having.
We already know that there are many ways to measure impact, some more suited to complex, system-level changes and some more suited to project-level interventions. From the practitioner stand-point you can select from a huge tool box to deliver specific analysis, depending on what you’re trying to find out about the impact a programme is having.
Yet from a philanthropist-investor perspective, it is almost impossible to get a unified view of your grants and social investments as well as your financial investments and properly understand the social impact that your giving and investing is having.
After all, if social investing can be 27 times more efficient at lowering your carbon footprint than flying less, using public transport and reducing your weekly intake of red meat (Nordea 2019, Campden FB and Barclays HNW survey 2020), you really want to know about the social impact that your combined (or blended) investment and philanthropic portfolio is having.
So my question is: how do we do that? How do we find an approach that:
- Respects the differences between grants and investments
- Identifies unique impacts derived from different ways of financing an initiatives
- Unites these different measures in a framework or reporting mechanism that is robust, effective and easy to understand?
I have some thoughts, but would love to hear what you think?