Accelerating Measurement within Impact Investing: Five Critical Lessons
A new case study, authored by WDI’s Performance Measurement & Improvement (PMI) team, gives advice to impact investors and investees on new and emerging methods to strengthen their impact measurement practices. The case tracks the WDI team as it pilot-tested a new impact measurement framework with three social enterprises in Nicaragua, Brazil and Peru. The case also provides recommendations to improve the impact measurement practices of investors, as well as the enterprises they support.
For investors, creating a standardized set of indicators to be shared across enterprises is beneficial for aggregating data, using resources efficiently, and facilitating shared learnings across their network of investees. For investees, impact measurement can expose vulnerabilities along the value chain that affect enterprise objectives to facilitate better management of business challenges, such as turnover and client loyalty. Standardized data can also be collectively reviewed by investors and investees, providing a space to speak using a shared language and reflect on lessons learned both within and across stakeholders.
In the case, the PMI team shares five valuable lessons they learned from working on the three pilots. These findings are summarized in the table below:
| Recommended activity | Value for Impact Investors and Social Enterprises |
| Use standard indicators, not standard measures | Contextualize data collection to ensure accurate data |
| Use a Theory of Change | Articulate impact, decide what to measure, assign indicators |
| Support M&E capacity building techniques | Speak the same language, conduct M&E without external teams, maintain sustainable M&E practices |
| Mix social outcomes with key business performance indicators | Strengthen mission and ability to scale |
| Foster a senior-level staff as a M&E champion | Help facilitate embedding of data collection into existing business processes |
This case was written as part of PMI’s contributions to the World Economic Forum’s Working Groups 1 and 2, which focus on creating connections and sharing knowledge between evaluators and impact investors.