Investing’s Final Frontier: Impact Measurement
By Lisa Cox
The enigmatic “impact measurement” may be one of the final frontiers of investing — the moonshot for a generation that is enamored with startups and venture funds but that also is keenly aware of a whole world of social problems needing to be solved systematically.
Those in the trenches of impact measurement today are slowly standardizing metrics, establishing conventions and developing methodologies that may not be widely practiced for years to come.
Over the past decade, an entire sector has formed around measuring the impact or “social return” of money spent on enterprises and initiatives aiming to solve pressing social problems. But what Newton calculated elegantly with one equation in physics (that every action has an equal and opposite reaction) has largely eluded investors, governments, and foundations alike who seek to track down and measure the exact effect of their investments on people’s lives.
Photo courtesy of Martin Fisch.