Impact measurement and management play a vital role in impact investing. By collecting and using impact data, investors can increase the positive effects of their investments, reduce any potential harm and assess whether they are achieving their impact goals.
In my work at the impact advisory firm The Good Economy, I have seen growing demand for credible and actionable impact measurement strategies. Below, we share a case study from our work with J&J Impact Ventures, and we offer four recommendations for impact investors:
- Prioritize outcomes data over output data to understand real change.
- Keep things simple, especially with early-stage companies, and integrate impact measurement into existing business processes and CRM systems.
- Develop impact frameworks to improve impact performance and communicate outcomes, using tools like theories of change to guide investment and business decisions.
- Invest in capacity building, especially with early-stage companies, and push for the standardization of data requests where possible.