Complete Story


Determining the Greatest Odds for Social Good

Measuring social good pervades the world of impact investing

Imagine two humanitarian startups. One sends drones into isolated villages in remote areas of South Africa to deliver food, water, medicine, and vaccines. The other is a new organization based in Mexico that creates game-based learning tools. Using artificial intelligence (AI), it detects learning disabilities at a young age to improve children’s education. How do investors compare the social impact of these two projects? How can funders of humanitarian solutions assess the potential for impact and track the performance of solutions across their portfolios?

These questions pervade the world of impact investing, and the problem is this: The "inputs" of the investment (dollars of capital invested) and the “outputs” returned to the investor (social value of the project) are fundamentally different units. Outputs also vary from organization to organization, project to project.

This problem has troubled investors since the industry’s inception. Often even the most sophisticated organizations share only broad metrics such as, “Project X impacted 100,000 children,” with no additional details. Others simply measure the outputs of the project. If a project delivers workshops in Nepal that teach children how to wash their hands, for example, it would likely report the number of workshops it conducted instead of what you really want to know: “The number of sick children declined by 37 percent.”

Please select this link to read the complete article from SSIR.

Printer-Friendly Version