Global Partnerships Named to ImpactAssets 50 for Fifth Consecutive Year
Global Partnerships (GP) is honored to share that we have been selected for the ImpactAssets 50 (IA 50) for a fifth consecutive year in 2015.
Established in 2010, the Impact Assets 50 is the only free, public, searchable database of outstanding impact investing fund managers. It includes a range of funds spanning diverse issue areas and investment, with demonstrated and compelling social and environmental impact. Impact investing fund managers included in the IA 50 2015 manage a combined $13.6 billion in assets dedicated to creating measurable, positive impact.
Since its inception in 1994, Global Partnerships has deployed $168.4 million in impact investments to 83 partner organizations delivering sustainable solutions that help their clients increase their incomes and improve their lives. Through these partnerships, GP has positively impacted more than 3.2 million lives in our work to expand opportunity for people living in poverty.
The IA 50 selection committee is chaired by ImpactAssets' Chief Impact Strategist, Jed Emerson, and includes experts from The CAPROCK Group, Toniic, UBS and Blue Haven Initiative.
Delivering Sustainable Health Services through Microfinance
by Agnes Cho, program associate, Global Partnerships
With the support of the Inter-American Development Bank (IDB), Linked Foundation, FMO (the Dutch development bank) and other generous funders, Global Partnerships has worked with five of our partners in five countries since 2011 to design, implement and scale sustainable business models. In August, GP traveled with three of our health partners to La Paz, Bolivia to present these learnings at the 7th Annual Latin American Village Bank Forum. The presentation represented more than three years of learnings from piloting and scaling these programs, including case studies on four separate business models.
Latin American microfinance has its roots in the high-impact village bank methodology, which was developed to extend financial inclusion and complementary products and services to the world’s poorest people. Since the origin of village banking, this methodology has been used to deliver microloans, savings and business education to improve the lives of people, mostly women, living in poverty and build up their economic resilience.
At the heart of village banking is the recognition by mission-driven MFIs that credit is just one of many tools to help people living in poverty. As part of GP’s Health Services initiative, we work with partners confronting the constant challenges of poor health and limited access to quality health services that their clients face. These challenges are often significant contributing factors to persistent poverty, and the group lending platform provides our partners with a touch point through which they can efficiently and effectively respond to the health needs of their clients.
There are numerous ways in which MFIs can deliver a health program shaped by client need, market demand and regulatory context. The Global Partnerships moderated panel at this year’s Forum featured the business models used to provide health services to clients by three of our MFI partners: Friendship Bridge in Guatemala, Fundación ESPOIR in Ecuador and Pro Mujer in Nicaragua.
All three organizations leverage their clients’ monthly repayment meetings to provide tailored education sessions about common health needs. Pro Mujer and Fundación ESPOIR* also run their own health clinics, where they provide basic preventive screenings and primary care consults. Pro Mujer markets an optional package with coupons that can be redeemed for specialized medical attention and Fundación ESPOIR offers clients access to a national network of dentists, clinics and pharmacies through a micro-insurance package. Friendship Bridge has created a strategic alliance with a third-party health provider for consults focused on women’s health via mobile clinics that travel to client communities.
As MFIs and other social enterprises redouble their commitment to addressing clients’ holistic development needs beyond access to credit, knowledge sharing is critical. With this in mind, as well as the goal of helping organizations throughout the global development sector further develop, refine and scale sustainable business models that provide high-impact, non-financial services, Global Partnerships is working to disseminate the lessons we and our partners have learned. The panel at this year’s Latin American Village Bank Forum was an ideal setting in which to present these key learnings. GP will continue to share and discuss these learnings at other industry events, including the ANDE (Aspen Network of Development Entrepreneurs) Annual Conference the week of Oct 1, 2015. These discussions focus on some of the key questions raised by GP’s work with our health services partners:
- Should MFIs build their own clinic infrastructure or create alliances with third-party providers?
- Should MFIs opt for a prepaid or insurance model? A voluntary or mandatory health package?
- How can critical health services be delivered sustainably by MFIs and other organizations working in global development?
We delve into these questions in greater detail and present the full scope of Global Partnerships’ Health Services Initiative to date in our recently published case study, Sustainable Health Solutions for People Living in Poverty in Latin America.
Blog Tags: Ecuador Espoir Friendship Bridge Guatemala health health services Health Services Fund Latin America microfinance Nicaragua Pro Mujer in Nicaragua sustainable health village bank women's health
Behind the scenes: Stories from the field
by Evonne Liew, marketing and communications officer, Global Partnerships
Global Partnerships' marketing and communications team recently traveled to Central America to capture interviews, photos and videos. This is the first of several "behind the scenes" stories from the trip. In this post, the team visits an off-grid community to interview a client whose life has been improved through obtaining access to solar lights.
Don Roberto, our driver, stomps down on the accelerator but our car continues to roll downhill. We've lost traction on the steep road to El Aguacate, a remote village perched on top of a mountain in Boaco, Nicaragua. We need to get there to interview Maritza, a client of Global Partnerships' partner, MiCrédito. I begin to worry that we won't make it.
Thankfully, Don Roberto manages to get the car going again. It whines the whole way up, filling the interior with burnt rubber fumes. When we arrive, Maritza welcomes us to her modest home, which consists of two main wooden buildings with dirt floors. We learn that the community has no running water, electricity or a sewage system. But through Global Partnerships' partner MiCrédito, Maritza and her family now have access to solar lights, fulfilling a crucial basic need for her family.
Despite living in difficult conditions, Maritza, 62, is extremely upbeat. Without hesitation, she latches on to my wrist and pulls me around, proudly introducing me to family members. I learn that Maritza has been married to her husband Diego for 44 years. Together, they have 13 children, 27 grandchildren and four great-grandchildren. The men work on the family farm, which is a two-hour walk down the road.
They cultivate beans, corn and other crops on 40 manzanas of land (approximately 138 acres). They also own about 60 cattle. While this may sound like a lot of resources, they have an enormous family to provide for.
After the introductions, our team splits up to film and photograph what daily life looks like for Maritza and her family. At one point, Maritza takes me to see the stunning view behind her home: a sea of green hills in every direction. It's here that I meet some of her neighbors. I explain that we're capturing the story of Maritza and her family's use of solar lights. Then I ask if they use solar lights too. One neighbor says he does. Another says she would like a solar light but thinks they are too expensive. She and her family still use candiles—modified tin cans filled with kerosene. Candiles emit dim light and toxic fumes. They are also expensive; the neighbor explains that she spends about 400 córdobas (about 14 USD) per month on kerosene. She's unaware that the small solar lights offered through our partner MiCrédito cost about 1,500 córdobas (about 55 USD) each. Four months of kerosene costs could pay for a solar light with a lifespan of five years. That is five years of bright, smoke-free light that enables families to be productive at night and save hundreds of dollars in kerosene costs.
Maritza tells me that about one year ago, she took out a loan from MiCrédito to purchase three Sun King Pro solar lights (manufactured by GP partner Greenlight Planet). Fully charged, they provide between six and 30 hours of light, depending on which of three brightness settings is used. The lights can also charge cellphones, enabling Maritza and her family to save money on cellphone charging costs too.
To film the solar lights in action, we stay until after dark. Soon after 6:00 p.m., the sun sets and it quickly becomes pitch black. It's easy to understand why Maritza and her family used to go to bed shortly after sunset. The crew and I turn on our headlamps, while Maritza proudly uses one of her three Sun King Pros to light her kitchen to cook dinner for the family.
After dinner, one of Maritza's daughters shows us how the Sun King Pro provides ample illumination for her to sew at night. While she works, she explains that she makes all kinds of designs—from table cloths to clothes—whatever her customers ask for. Her sewing has brought in vital additional income for the family.
Some of the children show us how they use the Sun King Pro to do their homework. It used to be difficult to study because the wind would blow out the candiles. Now, sometimes even the neighbors' kids come over to Maritza's house to study.
At one point I walk to the car to get something and place my hand on a rock wall to find my way. Someone tells me to stop doing that. They tell me that several weeks ago a man was bitten by a poisonous snake after doing the exact same thing. I retract my hand immediately and think about the toilet that I used earlier—an open-air rock field behind Maritza's home. I imagine using it in the dark with snakes slithering around and gain an even greater appreciation for the solar lights.
After we finish our visit, I reflect on the day during the drive back to our hotel. It's clear that a solar light by itself is not going to lift Maritza and her family out of poverty. But they now have opportunities to work and study at night if they choose to, and they save money. Additionally, Maritza and her family can stay up until 9:00 or 10:00 p.m. chatting with one another. After all, spending quality time together after the work day is over is important too.
By investing in social enterprises like MiCrédito, Global Partnerships expands opportunity for millions of people who deserve the opportunity to succeed. Maritza's story is just one of hundreds we have heard over the past two decades. Stories like hers keep us inspired to continue finding market-based ways of delivering opportunity to those who need it most.
Finding Inspiration in Peru
by Peter Solar, donor relations officer, Global Partnerships
As Global Partnerships' Donor Relations Officer, I have the unique opportunity to plan our twice-yearly Impact Journeys. It was just a few months ago that I returned from Guatemala, where I took a group of GP donors and investors to witness the work of GP's partners firsthand. We ventured across rough roads, traveled in small ferry boats and rode in the backs of pick-up trucks to meet microentrepreneurs, visit their businesses and attend spirited village bank meetings. Now, I'm on the road again, this time with a new group of travelers, headed to Peru. I am excited to venture off the beaten path again to show our travelers firsthand how Global Partnerships' and our partners' work has real, meaningful impact at the household level.
Our first stop is the dusty Cayma neighborhood on the outskirts of Arequipa, Peru's second largest city wedged between towering volcanoes in the Andean desert. We are about to meet Gerarda and her husband Clemente, a couple who have been making and selling ice cream for more than 40 years.
Gerarda, who owns the ice cream business, is a member of ADRA Microfinance, a GP partner organization that serves primarily women in peri-urban areas who experience high levels of income inequality. ADRA provides women like Gerarda with access to working capital and brings them together in village bank settings that promote solidarity and serve as a channel to deliver additional services like access to savings, business and financial literacy education.
When we first meet Gerarda, she greets us with a gracious smile. She seems laid-back and relaxed, but when she speaks, her voice is firm and business-like. Clemente arrives moments later, pedaling a cream-colored bike cart, his smile widening as he approaches us. He is more soft-spoken than Gerarda, but he is clearly excited about our visit, rubbing his palms together as soon as he gets off his bike cart and waving us toward the couple's home.
They lead us down a steep road and into a tight, shaded alley that shields us from the searing heat of the Peruvian sun. We enter their brick house from the back and walk into the cool, dark room where the ice cream is made. We gather around the ice cream machine, a rectangular box the size of a chest freezer, its vivid blue paint peeling off around the corners.
"The machine is for the most part a freezer," explains Clemente. The freezer unit is attached to a spinning pot where the couple pours a homemade liquid ice cream mix. "Chocolate and lemon are the most popular flavors," laughs Gerarda. Once the pot starts spinning, the machine blasts it with freezing air, while the couple makes sure the layers of ice forming on the sides of the pot are returned to the mixture as it thickens and turns into ice cream.
Clemente explains that the ice cream machine was a big investment, but one that has paid off: They sell a cup of ice cream for two soles, or about $0.70 USD, and take home about 100-120 soles, roughly $30-$40, every day.
Selling ice cream has become more than just a business; with ADRA's guidance, it has helped the couple improve their lives. They have been able to set aside money for an emergency fund to cover existing loans, save a bit for retirement and consider expanding their business. "[ADRA] encourages us, they offer good advice on managing profits, and they bring people together in village banks to think about new ideas and discuss business challenges," says Gerarda.
Gerarda tells us that one of the couple's business challenges is distribution. Although both she and Clemente are in good health, selling ice cream from the bike cart limits them to only a few surrounding neighborhoods and Gerarda is thinking of purchasing a used car. She already has a model picked out and she is optimistic that she can make it happen with her village bank's guidance.
When we ask about family, Gerarda and Clemente talk about their six children with pride. They were able to send all of them to school with money made from selling ice cream. One of their daughters is a nurse; others are working professionals. But the conversation turns somber when the couple tells us about one of their sons who passed away not too long ago. "He used to come along every day and help us make ice cream," says Clemente as he firmly grips the side of the ice cream machine. "Our business and community is our source of strength and it keeps us going," he adds.
Both Gerarda and Clemente repeatedly tell us they feel proud and grateful for a visit from so far away. "We are encouraged to know there are so many people standing beside us in solidarity and we are humbled that you will be sharing our story with your friends and families," says Clemente and invites us outside for a cup of ice cream with a warm smile curling below his mustache.
We go back up the steep hill to where we met the couple earlier and gather around the ice cream cart. Clemente opens up the refrigerator lid and starts serving ice cream—the raspberry sorbet with swirls of mango ice cream I had was truly refreshing in the scorching desert heat. A small hatchback zips by and Gerarda points at it, "This is it! This is the car I want." The entire group erupts in cheers, everyone feeling uplifted by her entrepreneurial spirit.
A local stops by to purchase ice cream and we say our goodbyes, wishing Gerarda and Clemente strength and luck as we board the bus to continue our journey.
This is Peru as few visitors know it and these are the kinds of remarkable people we have the privilege to meet on our Impact Journeys, learning about their successes, challenges and dreams. We make friends along the way and return home with a deeper understanding of the promise market-sustained solutions hold for communities living in poverty.
To learn more about Global Partnerships' Impact Journey program, or to sign up for our next trip, click here!
Why Careful Microfinance Works
by Mark Coffey, chief investment & operating officer, Global Partnerships
Within the impact investing industry, microfinance has historically been viewed as a fine example of an investable, market-sustained solution to poverty. Hundreds of millions of dollars have flowed to microfinance institutions (MFIs) and microfinance investment vehicles—across asset classes—generating social impact alongside consistent and stable financial returns.
Yet despite the popularity of microfinance as an investment sector, recent press has questioned its social impact in the lives of the people being served. For example, a recent article in The Guardian argues that most microfinance loans are used for consumption—not income generation—and therefore "end up making poverty worse."
While Global Partnerships invests into many types of channels, such as agricultural organizations and solar businesses, our roots are in microfinance institutions (MFIs), and we continue to selectively invest through this channel. Over our 20+ year history, we have learned many lessons, and one guiding principle has been "it takes more than a loan to lift someone out of poverty." We observed, for example, that extending credit to someone living in poverty that led to over-indebtedness clearly had a negative social impact, and providing a loan for consumption or non-productive purposes at unnecessarily high costs did not lift people out of poverty, and might make their situation worse.
On the other hand, certain models can be highly effective. For example, the combination of women-centered credit and tailored education—especially when delivered through the group lending platform at a reasonable cost—can have a meaningful impact at the household level. Clients become empowered and informed decision makers and are able to smooth their incomes and consumption, build assets and increase their capacity to anticipate and deal with major expenses.
So, the question should not be whether microfinance as a whole results in positive or negative outcomes, but rather "what MFI models are most effective at the household level?" As with any product or service, we believe that the most positive impact occurs when the provider has the best interests of the household in mind. We work with a relatively select portfolio of MFIs, but have examined hundreds with which we have chosen not to work. We begin our process by understanding whether the institution is more focused on the household or on their own growth and financial returns, and to what extent their model delivers value in a sustainable and scalable way. We are wary of institutions that cannot provide meaningful metrics of how they evaluate impact, or that serve the interests of the owners and managers more than their clients.
Noting that many MFIs exclusively provide financial services and have moved up-market to better-off clients to enhance growth and returns, GP primarily seeks out small and mid-size MFIs that have a combination of solid financial performance and positive impact at the household level. We look for business models that have carefully been built to leverage and integrate various services that a person in poverty needs. Alternativa Peru, a GP partner since early 2014 and the featured partner in our most recent Investors Report, represents this type of model where we seek to invest, for highest impact and a well-managed fund investment.
Are there microfinance lenders interested primarily in maximizing profit? As in most industries, yes. However, there are also many dynamic social enterprises that recognize that microcredit is just one small piece of what people living in poverty need in order to improve their lives. These organizations are client-centered and understand their needs far better than anyone looking on from abroad. At GP, we work to identify and partner with the best of these organizations and learn from them what combination of goods and services has true impact at the household level. We then seek positive social returns at the household level by carefully directing our capital to these types of organizations.
Challenges in Financing the Future
by Kusi Hornberger, director of investment research, Global Partnerships
After joining Global Partnerships in June, participating in the 2015 Biennial of the Americas Financing the Future: New Frontiers in Impact Investing clínica as a respondent last month was an interesting way to review the field's current themes and challenges from the perspective of a new role. The discussion was lively, with broad representation from across the impact investing space, including wealth advisors, accelerators and nonprofits. The clínica touched on a number of themes across the industry, but I wanted to share my thoughts on four of the challenges discussed that are most relevant for GP, as well as the impact investing industry as a whole:
- Impact investing has emerged—now we need to improve its execution. The growth and amount of capital deployed in the impact investing space is astounding. A report from Bain & Company last year1 found that capital committed to impact investing had increased from $160 million in 2008 to $2 billion in 2013 in Latin America alone. A recent GIIN report, The Landscape for Impact Investing in East Africa, suggests that non-development finance institution (DFI) impact investors have deployed more than $1.4 billion to date in the region through more than 550 deals. Every day more organizations are being formed that seek to raise or deploy capital to invest in ventures aimed at addressing social issues. The challenge now is execution: Over the next five years, industry actors will need to show that impact investing can achieve and maintain scale. Meeting this challenge is at the heart of GP's rigorous due diligence process for new partners, and is how our five funds have achieved 40 consecutive quarters of positive social and financial returns.
- Despite industry growth, early-stage social ventures still face gaps in funding. There is a funding gap for earlier-stage ventures. Mature investors are less willing to invest at this stage because of a lack of understanding of the business models involved or a lack of confidence in the maturity of the business plans of many earlier-stage social ventures. Organizations like the Eleos Foundation, Endeavor Catalyst and Vox Labs have begun to set up innovative approaches to address this gap, but more resources are needed.
- Balancing impact evaluation with still-developing metrics. As the industry matures, foundations and DFIs are placing increasing importance on impact measurement and evaluation. At the same time, impact measurement tools such as GIIRs, IRIS and B Analytics are recognizing that the metrics and tools available to impact investors remain inherently imperfect, as they continue to evolve rapidly. To date, metrics have generally been output-driven, when what many impact evaluators strive for is outcomes, which are much more difficult to measure and take time to prove. Overcoming this tension will be a critical challenge for the industry as we move forward. GP reports impact evaluation metrics to IRIS (individuals receiving technical assistance, for example), recognizing that not all of the metrics we track are a perfect fit and trying to control for the possible evolution of metrics over time.
- Maintaining focus as the industry landscape continues to evolve. Many impact investors have had difficulty focusing their resources, but reaching clarity on what they do and do not do is essential to focusing their investments in the areas where their efforts can have the greatest impact. This can be challenging, but is critical to success as competition increases and the industry continues to evolve. GP's core value, "aim well and follow through," helps us focus carefully on the initiatives and social enterprise partners where our capital can achieve the greatest impact.
My first two months at Global Partnerships have been exhilarating, as I am now able to focus full-time on an approach to helping reduce poverty I am truly passionate about. Participating in the clínica was a great way to gain perspective on GP's role in the broader impact investing industry and on my role within the team.
After ten years of investment and strategy consulting experience across the public and private sectors, it is gratifying to put what I have learned to work on some of the most important challenges of our day. Namely, how to identify and invest in the most impactful and financially sustainable approaches to economic development in Latin America and East Africa, as well as to support GP's development as a successful impact investor as we—and the industry—continue to grow. I look forward to sharing more of my insights and research moving forward.
1Full disclosure: Kusi Hornberger is one of the report's authors.
Expanding Opportunity for Smallholder Farmers
by Danny Stokley, director of business development, Global Partnerships
By supporting COOPEFACSA with a working capital loan, GP aims to support their plans to add new members and expand their non-financial services offerings.
Global Partnerships (GP) recently disbursed a working-capital loan to a new partner, COOPEFACSA (Cooperativa de Ahorro y Crédito Fondo Campesino de San Antonio), a savings and credit cooperative offering financial services to rural populations in the Autonomous Region of the South Atlantic (RAAS) in Nicaragua. This region remains underdeveloped compared to the rest of Nicaragua, with limited infrastructure, lower literacy rates and a higher percentage of the population living in poverty1. COOPEFACSA is member-owned and deeply integrated within the region. Committed to professional development for both employees and members, COOPEFACSA is one of the only sources of financial services and adult training and education available to the cooperative's 2,800 members. This cooperative is an excellent example of how people living in a remote region can be empowered to expand their own opportunities—the belief at the heart of GP's work in rural livelihoods.
One way that COOPEFACSA supports members is by combining flexible credit, technical assistance and market access in order to help producers begin cultivating cacao. This particular crop requires significant investment in saplings, labor and inputs, and trees only begin producing after two to three years. However, once farmers begin harvesting cacao, they report significantly higher income than from other agricultural uses of their land.
How COOPEFACSA works with outgrowers to create impact
"Outgrowers" are a type of social enterprise GP has recently added to our portfolio. Typically privately-owned companies (agricultural processors or exporters), outgrowers purchase crops from individual farmers or farmer cooperatives. Many also offer training and purchase guarantees that can significantly reduce the economic risks farmers take to run their businesses.
With a lengthy turnaround between a farmer's initial investment and the first harvest, cacao production comes with a number of risk factors that can be particularly worrisome for smallholder farmers. COOPEFACSA's partnership with an outgrower limits their members' exposure to that risk. COOPEFACSA works with INGEMANN, an outgrower that provides technical assistance to farmers, allowing them to produce higher value crops, and guarantees purchase of what they produce. COOPEFACSA provides the loan that allows members to purchase saplings and inputs, and negotiates minimum prices with INGEMANN on behalf of their members. As part of GP's due diligence process, I had the opportunity to visit COOPEFACSA in January, and learned a bit about how this partnership with an outgrower reduces COOPEFACSA members' risk, making an investment in cacao production attractive.
- The first major hurdle smallholder farmers face with cacao is that it can take up to three years from the time saplings are planted until the first harvest. This is a substantial investment that yields no return for several years. COOPEFACSA assists members by offering credit tailored to cacao production, with a grace period of three years. Frank, the cooperative member pictured with his family above, shared that this loan was crucial, as he wouldn't have been able to put his own money into such a long-term investment.
- The next obstacle is a lack of local knowledge of how to plan, maintain and harvest cacao. To overcome this, INGEMANN offers interested COOPEFACSA members a certification course in growing cacao. INGEMANN technicians also visit each member every week to provide onsite technical assistance while farmers cultivate their first plot of trees.
- Perhaps the most worrisome risk for farmers is uncertainty about the ability to sell a new crop after such a significant investment of time and resources. INGEMANN also addresses this concern by guaranteeing to buy 100% of farmer production at a contractual minimum price based on predefined quality standards. While the minimum is set, the final price may be higher, depending on world cacao prices when the farmer is ready to sell.
This partnership allows smallholder farmers to transition to growing a higher value crop with minimal risk, and connects smallholder farmers in an underserved area of Nicaragua with an exporter that supplies gourmet chocolate producers abroad. While the evidence is anecdotal at this stage, COOPEFACSA members confirmed that they were happy with the services received through INGEMANN after several years, and were earning more income than before. Cacao trees also produce fruit year-round, unlike many crops available to smallholder farmers, resulting in a much more consistent source of income over time. As many of the largest chocolate producers globally are warning of an upcoming chocolate shortage, cacao will likely continue to be a lucrative crop for smallholder farmers in certain parts of Latin America2, and relationships between farmers and outgrowers will be essential in cultivating that opportunity.
Why we invest in local partners
COOPEFACSA's employees and owners are all from the region, their current Credit Manager began her career with the cooperative on the janitorial staff, and most of their board members are smallholder farmers themselves. Nearly every employee, from credit officers on up through management, utilizes the organization's financial services offerings. This integration is one reason COOPEFACSA has such a thorough understanding of the products and services most appropriate to, and those that will be most appreciated by, their members. From offering members small savings accounts and a place to receive remittances, to the technical assistance and market access offered through partnerships with outgrowers, all of their activities are driven by local needs. With strong ties to the surrounding community, local partners like these know what their clients need better than anyone else. GP is proud to partner with them and increase the life-changing impact they bring to their clients.
Reflections on Impact Evaluation
by KJ Zunigha, impact evaluation officer, Global Partnerships
Last month, I joined nearly 100 of my monitoring and evaluation peers in Washington, DC to talk impact, measurement and data at the 2015 Metrics Conference hosted by the Aspen Network of Development Entrepreneurs (ANDE). Held annually since 2010, the conference provides people working in the impact evaluation space the opportunity to dig deep into the exciting, challenging and often nebulous nature of measuring how much and what kind of impact the social enterprises in which we invest are having on the lives of the people they serve.
Three of the top themes that emerged from the conference were:
1. Right-sizing evaluations
Although randomized controlled trials (time- and resource-intensive studies) are considered the gold standard in evaluation, they are not always the right type of evaluation to conduct. As an impact investor working to categorize and evaluate the impact we and our partners have at the household level, Global Partnerships (GP) needs to look at the size of the project, the question(s) we want answered, and the resources we and our partners have available to help guide evaluation design. We must always keep our partners and their clients at the forefront of this process so that any evaluation activities we undertake do not overly burden or interrupt the work of the people we are ultimately working to serve. The right evaluation must be as rigorous as possible within the bounds of the environment in which we and our partners operate.
2. Understanding different audiences and communicating effectively
Impact evaluators collect, analyze, synthesize and report impact data for a wide variety of audiences, each of which has different needs. Some may need only an "elevator pitch" or talking points, some want to dive deep into the details, while others are looking for a specific kind of finished product—a case study, a story, a trend report or projection. There are countless ways we can measure, discuss and share data, so as evaluators it is critical for us to understand the needs of our various audiences so that we are able to communicate our work effectively.
3. Maintaining continuity with investors at all stages
GP provides debt financing to social enterprises that are looking to grow and scale their organizations, and may be one of a number of investors and supporters. Too often in this sector, investors at various stages in a social enterprise's development don't communicate their measurement approaches. This creates the likelihood of a dramatic shift in measurement activities and data requirements—and a potentially significant burden for the social enterprise—as it grows and seeks new types of capital.
While measurement approaches and indicators may change as a social enterprise grows and matures, it is important that all investors at every stage of a social enterprise's development have visibility into each other's measurement activities to create a more streamlined approach and a sense of continuity.
Tara Murphy Forde, GP's Director of Impact & Strategic Initiatives, led a conference session on this topic with Vox Capital's Rebecca Obara, looking at the impact frameworks of their respective organizations. The session focused on Vox's custom, hands-on approach to working with its investees as an early-stage investor, and GP's approach that focuses on impact at the household level across our portfolio and multiple initiatives. One way GP supports visibility into our impact framework is by feeding our data into IRIS (Impact Reporting and Investment Standards), a database of social impact metrics intended to help create a common framework for impact measurement.
Perhaps the greatest overall takeaway from this year's ANDE metrics conference is that, with our broad portfolio of initiatives, Global Partnerships' best opportunity to gain meaningful data and insight is to approach impact measurement with flexibility. With an eye on the big picture, the data we collect from each of our partners can tell us about what their work really means for the people they serve.
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