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EXPANDING OPPORTUNITY FOR PEOPLE LIVING IN POVERTY

IMPACTIN THIS ISSUE

Indicates that accompanying links may be found in the e-version of IMPACT at www.globalpartnerships.org/newsletter

FEATURE ARTICLEIMPACT: More Than

Just a Number (page 1)

PERSPECTIVES What Makes a Successful Partnership

That Results in Impact? (page 2)

THE ROUND UPReports, Articles, and Highlights

on Impact Investing (page 2)

IMPACT IN ACTIONLighting the Way Forward (page 3)

FROM THE FIELDHow do we Monitor

Social Impact? (page 4)

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IMPACT: MORE THAN JUST A NUMBER

We are frequently asked, “What’s your impact?” It’s a difficult question to answer. While many organizations respond with metrics like “number of people reached,” Global Partnerships (GP) believes that a number alone cannot fully represent scope of impact. This is because unlike traditional investing, defining and measuring success in impact investing requires us to account for complex variables that influence quality, sustainability, and scale of services provided. And so, to present a more accurate glimpse into our impact, we want to share a simplified look at our measurement methodology. Before diving in, we’d like to make 3 key points about measurement:

1. Measuring impact is hard but necessary to ensure we remain accountable to the most important stakeholders: the people we serve. Each organization has a different approach to measurement; our friends at Root Capital strive to capture impact at the farmer and community level, meanwhile the Global Impact Investing Network (GIIN) is attempting to develop a robust set of standardized metrics for the industry.

2. There isn’t a single indicator that will determine “success,” so we must define the change we hope to see and then test into measurements that matter.

3. Understanding impact is easiest when one has close proximity to the issue, and when one is perpetually learning and establishing channels to capture insights and improve practices.

METHODOLOGY: To measure impact, GP first develops a plan that reflects why and how we think a specific intervention will create opportunities for people living in poverty. We then define the areas in which we want to have an impact. Next, we acquire valuable market knowledge. After that we partner with high performance social enterprises and take an active role working with them to define success and to understand what is measurable and what isn’t.

EXAMPLE: In GP’s health services impact area we have worked alongside our partner COMIXMUL (Honduras) to design a sustainable community pharmacy program that provides rural families with affordable and timely access to essential medicines. As a result we believe the health of rural families will improve due to their enhanced access to basic medicines, both in terms (cont’d on page 3)

FALL 2013 | VOL 11 ISSUE 1

UPCOMING EVENTS

MACRO MICRO

Featuring Global PartnershipsSept. 25 | 7pm | Burke Museum Info at: www.globalpartnerships.org/events

Oct. 8 | see pg. 3

ON

THE ROUND UP

PERSPECTIVES

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Reports, articles and highlights on impact investing.

Moving Beyond the Numbers

In a Forbes blog post, Root Capital asserts that it’s not enough to have a set of aggregate numbers to measure such things as number of people reached; nor is it enough to use a standard set of metrics across the industry. Instead, they argue for both a standardized set of metrics (such as what the GIIN is proposing) and more importantly, for meaningful numbers that reflect the context and conditions of the different business models that are being deployed & tested so they can understand what the impact is at the family level.

Measuring With Numbers That Have Meaning

Randall Kempner, executive director of the Aspen Network for Development Entrepreneurs (ANDE), published his “Top 3 Take Aways” from the ANDE Metrics Conference. These include: 1) more metrics is not necessarily better; however, “grounding performance metrics in the context of the key business success factors is critical;” 2) be transparent in the definitions of outcomes, outputs and inputs; and 3) understand better the complexity of the business models to understand what the metrics are telling us and listen closely to all stakeholders to “understand how much impact we can attribute to our work and how [families] perceive and value it.”

Measuring Impact Performance

A 2011 paper (In Search of Gamma: An unconventional perspective on impact investing) points out that impact measurement happens at different levels. The authors argue that “impact investment performance indicators actually serve two different purposes that cannot be made compatible in one measure.” Measurements taken at the business level serve to track impact as a result of organizational activity.

WHAT MAKES A SUCCESSFUL PARTNERSHIP THAT RESULTS IN IMPACT? (VIDEO ONLINE)

“ “

preventive health education, including breast cancer detection;

We worked with Espoir to design health packages that include: access to dental care;

access to discounted medications; and more.

Watch our chat with Francisco Moreno, executive director of Espoir, one of our partners in Ecuador, and a new addition to our Health Services Fund, at http://bit.ly/1fW45uk.

A successful relationship is achieved through mutual respect. It’s about ideas, [...]

coordination, [...] a joint reflection about work, and it’s about defining an adequate plan.

CONTINUED FROM PAGE 1

IMPACT IN ACTION

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LIGHTING THE WAY FORWARD

A pile of utility poles lay on the ground one block from Florinda Salinas’ house in rural Santo Domingo, Honduras. They have been there for months, maybe even years. Florinda explains that the poles are intended for an electrical expansion project that will connect her town to the nearest energy grid. She then laughs and says, “I will believe it when I actually see light bulbs glowing in town.” Electricity will not be coming to Santo Domingo any time soon.

Roughly 1.4 million people, or 40 percent, of Hondurans living in rural areas deal with the consequences of energy poverty. This means not having enough light to work or study at night, spending limited and often unstable income on expensive and unhealthy sources of energy such as kerosene, and difficulty charging electronics like cell phones to conduct business or keep in touch with loved ones. Florinda was bound by these limitations until she received a loan to buy a solar home system through Global Partnerships’ (GP) partner, COMIXMUL, a cooperative that provides women with savings and credit products and access to health services/education and green technologies.

With the solar home system, Florinda and her husband Oscar save money on kerosene costs and can continue weaving hammocks into the night; the Salinas’ hammock business is their main source of income, so maximizing work hours is critical. They can also charge their cell phone, which they use to communicate with their wholesale hammock buyer and keep in touch with their eldest son, who is studying on scholarship in Tegucigalpa, a city over 100 miles away.

Additionally, their younger sons, Edras (8), Edson (10), Lester (15) and Eric (17) can now study under bright solar powered lights. Florinda, who only attended school until the sixth grade, is certain that education is the key to her sons’ success. “I want my kids to become professionals. I don’t want them making hammocks. I want a better life for them,” and having the solar home system helps

light the way forward.

of distance and price point. We might not be able to measure the improved health status of rural communities, but we plan on documenting cost savings for a sample of households who buy medicines from the community pharmacy compared with their next best alternative.

In the near term, GP aims for our investment in the program to catalyze operational sustainability across a network of 200 pharmacies – a goal which depends on each pharmacy achieving a target sales result and on COMIXMUL’s capacity to restock those pharmacies on a timely basis. We’ve also learned that pharmacists’ economic and social status in the community affects their ability to make sales. Therefore, in order to monitor progress towards sustainability, we receive monthly reports on sales per pharmacy, how many pharmacies were restocked, the number of new and repeat customers served, and whether or not those customers found the medicines they needed. Data about which medicines sell more, and which pharmacies perform better, will also inform ongoing refinement of the medicine inventory list, as well as the pharmacist profile used to identify expansion sites. As you can see, the complexity of measuring success with COMIXMUL— just one of our 37 current partners— is the reason why we cannot use a one size fits all approach to impact measurement.

GP’s close collaboration with partners is what allows us to develop meaningful metrics for measuring our investments’ impact. A recent Stanford Social Innovation Review article explains this concept well: “The closer nonprofits are to their beneficiaries, the better they are able to represent them. Good impact measurement will ensure that they remain close, and understand the details and nuance of their lives.”

BUSINESS OF HOPE

Florinda is the featured speaker at

our Business of Hope Luncheon on

Oct. 8 at the Westin. Register/learn

more: call 206.456.7834 or visit

www.globalpartnerships.org/boh

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FROM THE FIELD

NONPROFIT ORGUS POSTAGE PAIDSEATTLE, WAPERMIT NO. 6624

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IN THIS ISSUE

• Measuring impact is difficult; we share our approach in Impact: More Than Just a Number

• Our partner Espoir shares their view on What Makes a Successful Partnership that Results in Impact?

• Upcoming events including Macro on Micro & Business of Hope

HOW DO WE MONITOR SOCIAL IMPACT?By Jonathan Vanegas, Portfolio Officer (Nicaragua) and

Tara Murphy Forde, Director of Fund Performance As an impact investor Global Partnerships seeks to understand the intensity, reach, and efficacy of specific interventions that create opportunities for people living in poverty. In turn we engage in rigorous analysis of our partners’ business models, looking to understand the key variables that either enable or prohibit them from offering quality services, sustainably and at scale. We then come alongside them with strategic capital and resources to help them further their impact. But how do we know if our investments are catalyzing the intended results? Can our partners demonstrate or articulate the impact their services are having on the lives of their clients?

In our relentless desire to answer these questions, we engage in ongoing monitoring and evaluation of our partners’ non-financial service provision. This monitoring entails the collection of both quantitative and qualitative information gathered via field visits and/or phone interviews with executive leadership.

For example, we recently engaged in a focused assessment of our partner FODEMI’s education program. FODEMI is a nonprofit microfinance institution in Ecuador that provides small working capital loans coupled with basic education including financial literacy, budgeting, and women’s empowerment. As part of the assessment we wanted to know how many clients received education during the last year, but beyond that we wanted to understand the content and structure of the curriculum, the perceived efficacy of the delivery method and what, if any evidence exists that participants’ lives are improving as a result. By engaging partners in conversations like this, we can go beyond output indicators to understand the contexts and practices that determine program performance and drive impact.