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Managing vs. Measuring Impact Investment

Giving Compass' Take: • Morgan Simon shares how Transform Finance developed their employment-focused impact investing plan.  • How can other funders learn from these lessons? What else do impact investors need to consider?  • Learn about the current dilemma facing the impact investing sector.  This last year was an intense learning experience for both us and for Huntington Capital. It has informed our work moving forward in a few ways: We are now acutely aware of the difference between outputs and outcomes, and try to assess the impact additionality of our potential investees. We therefore spend much more time on the impact management systems of funds and entrepreneurs, rather than focusing just on measurement systems. We recognize that fund managers are tasked with an incredible amount of work for small management fees. If we want to ask managers to innovate on impact, we need to put in time ourselves, or provide them with resources for either other aligned service providers or new in-house support. We see that, particularly in the field of job creation, there is a lot of work to do to foster job quality, not just quantity. We also recognize that this approach applies beyond the context of job creation and affects all sectors within impact—how can we invest in real estate without fueling gentrification? How do we support sustainable agriculture without engaging in land grabs? Impact investment is still evolving. No one knows how to maximize impact and end poverty, or we would’ve done it already. We need to empower collaborative, innovative fund managers like Huntington to push the horizons of impact, and challenge ourselves to ensure that our capital is contributing both impact and financial additionality. Read the full article on managing vs. measuring impact by Morgan Simon at Transform Finance.