Research collaboration to measure value of impact investing

The Centre for Workplace Leadership is partnering with Brightlight Group to improve the measurement of impact investment outcomes.

Over the past decade, the impact investing industry has seen rapid growth. However, little is known of the actual outcomes for the people and communities the investments aim to support.

The Centre for Workplace Leadership at the University of Melbourne and Brightlight Group, an impact investment advisory, are launching a unique collaboration to improve the measurement of impact investment with a particular focus on validated beneficiary outcomes.

Led by Dr Jodi York, researchers from the University of Melbourne will work closely with investment consultants at Brightlight, to build on and validate a lean but rigorous methodology for identifying, collecting, collating and reporting impact measures that capture authentic beneficiary outcomes.

“Impact enterprises create value in a range of ways such as increasing earning capacity, health, skills, or safety,” Dr York said.

“These impact ‘outPUTS’ are often the focus of impact measurement because they are easy to match to an enterprise activity, like supplying a solar light or mosquito net. But, we really don’t know whether these things create lasting value for the beneficiaries.

“This research collaboration will help us move towards measuring impact ‘outCOMES’, which depend on a number of contextual factors. For example, did the job training delivered end up changing someone’s life? Or did it fall flat because there were no job opportunities?”

Brightlight Executive Director Mark Ingram said the project is the first step of a research collaboration between industry, government and academia that aims to lift the global standard of impact investing through evidence based, academically-rigorous research.

“As impact investors, we need to be transparent and authentic about the beneficiary outcomes of our investments. We also need to be able to carefully measure and manage risk,” Mr Ingram said.

“That is why we have committed to this partnership with the University of Melbourne.”

A core focus of the collaboration will be to enhance the measurement and management of beneficiary outcomes for Frontier Brokers – a project funded by the Department of Foreign Affairs and Trade (DFAT) and delivered by Brightlight that links investors with social enterprises in Asia-Pacific to scale their development impact. Brightlight and the University of Melbourne will work together to measure and report impact of the investments against the impact objectives of the program.

“The partnership will allow us to have a meaningful understanding of the impact on lives we seek to positively transform,” Mr Ingram said.