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Social impact assessment methodology history

 

With the rise of responsible, sustainable & impact investing the III™ refers to a holistic approach that confirms & validatesimpact and ROI. Learn more about the social impact assessment methodology history.

More than a decade of experience in assessing impact has taught us a key lesson: lack of clear and regular feedback often limits or even undercuts the value of investment and development efforts.

To address this problem, we have developed both an impact assessment methodology and an impact assessment technology solution (the Investment Impact Index™) that captures, analyses and effortlessly communicates essential insights related to the impact of grant-making, philanthropic, social and impact investing programs.

 

Practicing impact measurement and management

 

Through an extensive stakeholder engagement process to collect, verify and demonstrate impact, the III™ was developed in partnership with leading social and impact investors to,

  1. Support real-time decisions
  2. Identify new dimensions of impact
  3. Align with new and emerging practices in the sustainable development field

Grounded in specific investor impact objectives the III™ moves beyond industry / regulatory compliance and reporting frameworks or sector standards.

To not only determine development impact achieved, but also identify collective return, social capital, shared value and economic return on investment created.

Over the past ten years, the development of the impact assessment methodology was an iterative process, built on traditional research methods and entrenched in global development, reporting and measurement practices.

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The Investment Impact Index™, developed by Next Generation, took into account the social impact assessment methodology and was extensively peer reviewed and tested by several external consultants, academia, evaluation and sector experts. 

Our rigorous impact assessment and analysis methodology, and innovative data technology enable our clients to proactively report their impact to key stakeholders with an emphasis on providing information that is useful and cost effective.

Impact has many dimensions and not all impact is equal. 

 

With accountability and transparency required from all stakeholders it is now even more pertinent that investors and social purpose organisations act both purposefully and ethically.

Our approach to impact assessment helps clients definitively measure the true outcomes, impact, efficiency, materiality and sustainability of their programs and therefore maximise the effectiveness of their investments.

The Investment Impact Index™ addresses the complexity of defining robust indicators to measure impact over time, compare impact within and across specific development portfolios and identify and inform defined impact strategies that purposefully aim to achieve strategic impact objectives and targets.

Through the III™ we not only identify dimensions of impact and return but are also able to compare, rank and rate impact and return dimensions. Through extensively verifying the impact achieved, as confirmed by impacted stakeholders, we can also predict future impact and return scenarios.

By providing both individual program data, as well as collective portfolio data the III™ provides an opportunity to benchmark impact and return data – across development sectors, investment portfolios and focus areas.

To address the challenges of the development industry, to effectively quantify and qualify impact, the III™ compliments existing measurement and reporting tools by integrating existing standards, frameworks and guidelines, including the;

  • Global Reporting Initiative and National Development Plans and Indicators
  • International Integrated Reporting Council Framework
  • Sustainable Development Goals and IFC Performance Standards
  • Global Impact Investing Network
  • Impact Reporting and Investment Standards and Principles
  • Impact Measurement and Management Project
  • Sustainability Accounting Standards Board, etc.

Defining measurement and management metrics

 

We conduct impact assessments using quantitative and qualitative research methods and integrate a mixed method and developmental research approach, to provide context to answer the questions of ‘how’, ‘why’ and ‘how much’.

Our rigorous impact assessment process focuses on providing useful information for decision making. Clients feed these results back into programming and strategy development processes to put learning into action.

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Helping all stakeholders to manage, measure, understand, evaluate and report on their investment performance with our unique impact reporting system, the III™ takes the impact assessment process to the next level.

Our intention, for the emerging field of impact investing, is to effectively assist impact investors, social investors, corporate foundations, philanthropists, donors and social purpose and development/aid organisations who are serious about achieving impact for the greatest good and biggest return on investment.

The Investment Impact Index™ assists multi-stakeholders who have the intention of generating measurable, beneficial social or environmental impact alongside a financial return by;

  • Providing expert impact analysis, verification and reporting services
  • Assisting social and impact investors to design the best impact strategy

Our assessments help clients understand; what works, what doesn’t, and how they can shape their programs, portfolios, processes, strategies, objectives, goals and activities to achieve impact with meaning.

Verifying and demonstrating the difference

 

The Investment Impact Index™ is a powerful combination of our assessment methodology and supporting technological solution to process large amounts of data, associated with performance management, to effectively and transparently demonstrate the true impact.

Through participatory stakeholder engagement the Investment Impact Index™ verifies impact. Designed for any project or portfolio configuration, at any stage of the program life cycle, it ensures a shared understanding of impact and development priorities and needs.

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The III™ consists of several dimensions including;

  • An analytical dimension
    Entailing comprehensive reviews and assessment, research, engagement and collecting evidence of program/portfolio data, according to specific impact/return dimensions – including positive and negative impact, direct and indirect impact, impact depth, impact longevity, impact sustainability, etc.
  • A participatory dimension
    Consisting of engagement with all project stakeholders in a meaningful way to ensure the credibility of performance data
  • A management dimension
    Embedding the analysis and engagement elements in project decision making and management systems, from due diligence, through implementation, during project management to program evaluation, exit or re-investment.

Managing and improving impact

 

The Investment Impact Index™ provides a logical impact assessment methodology that is easy to understand, flexible and comparable over time. It captures and hosts organisational, program, stakeholder, impact and return data, on one platform that also provides an essential baseline for future performance management activities.

The data visualisation component supported by comprehensive reporting, provides detailed impact and return analysis from individual programs to collective portfolio outcomes, impact and ROI.

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By linking program and portfolio objectives and outcomes to impact and return indicators, while integrating monitoring and evaluation data, the III™ provides key insights into;

  • Lessons learned
  • Challenges experienced
  • Perceptions of impact and return
  • Best practices
  • Comparative and benchmark data
  • Impact strategies, theories of change, and reinvestment or exit strategies

With the III™ investors can track and verify their development impact, program progress, use verified data to inform their investment strategies, use dashboards as a management and reporting tool as well as share insights with all their stakeholders and contribute to a community of practice and learning.

The Investment Impact Index™ then assists with determining the most effective and efficient development approaches, practices and processes with a clear social impact assessment methodology.

The Investment Impact Index™ empowers investors with continual insight, knowledge and learning as well as verified impact and return on investment results.

Become more effective, drive increased impact and return on investment and contribute to sustainable development with the Investment Impact Index™.

Contact us for measuring shared value, improved decision making, a deeper understanding and better communication of impact results.

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