Metrics Matter
Acumen Fund’s metrics framework is designed to tackle the difficult questions facing many impact investors interested in social returns - how do we know whether the health clinic we have invested in is reaching the poor and delivering social value? How do we measure our financial and social returns against other investors in the sector? Are we making a material impact on our mission to find market-based solutions that help solve problems of poverty?
By evaluating financial, operational and social metrics, including environmental impact, across our portfolio, we have developed a comprehensive approach that begins from the moment we start analyzing a new investment opportunity and ends when we share our results and benchmark our performance against industry peers.
Comparing Alternatives
In addition to a rigid due diligence process, Acumen Fund takes an additional step by applying our internally developed framework called the Best Available Charitable Option (BACO). By comparing each investment with a real or hypothetical charitable option, Acumen Fund can quantify how our social impact--how each dollar invested--compares with that of other philanthropic options.
Tracking Metrics
In response to our challenges of tracking and measuring investees across geographies and industries, Acumen Fund developed a portfolio data management system called Pulse – a web-based vehicle to collect social, operational and financial data from our investments. Information is gathered quarterly and portfolio companies are rated to ensure that the investees are on track to hit their forecasts.
Co-developed with Google engineers, Pulse has proved itself as a robust tool that has garnered industry-wide interest. To date, Pulse has benefited from the input of over 140 organizations, many of which have committed to using the system on delivery and are anxiously waiting its broad release on the salesforce.com platform.
Benchmarking our results
Realizing the importance of talking the same language with our peers and donors, Acumen Fund, with the support of key partners and the input of the impact investing community, has worked to develop a set of industry standards called the Impact Reporting and Investment Standards (IRIS), that is transforming the way we will be measuring and evaluating our investments in the future.
With these standards, we will be able to aggregate sector-wide data, analyze it and compare it across organizations with our data analysis engine. The grass-roots initiative driven by a broad coalition of partners will utilize the same technology format that the Securities Exchange Commission uses to extract and aggregate data from public companies. Our ultimate goal, shared by the larger impact investing community, is to provide transparency for investors and organizations looking to maximize their philanthropic and investment capital.
More resources
+ Learn about the Investing Reporting and Investment Standards
+ For more information on Pulse please contact: Brad Presner
+ Read more about Acumen Fund’s BACO methodology
