Measuring Social Impact

The focus on impact is at the centre of everything we do and is a fundamental part of our investment process and deal analysis.

Once an investment opportunity has passed the initial screening, a detailed social impact assessment is conducted following social impact guidelines developed by IVUK’s investment advisor LGT Impact. Reporting on social impact follows current industry best practice. Our impact assessment methodology focuses on the quantitative and the qualitative dimensions of social impact: reach and depth.

Investees benefit from our team’s diversified experience in the investment and social impact sectors, as well as the Investment Committee’s expertise and connections. Together, they allow us to offer investees a first-class mentoring and support framework that they can draw upon whenever the need arises.

Reach

This measures the number of direct beneficiaries that are targeted by the organisation’s product/services.

Depth

This defines the qualitative benefits of the organisation’s product/service for the beneficiaries, according to five components of human wellbeing and quality of life as defined by the United Nations Millennium Ecosystem Assessment (MA): material, physical, and social well-being; improved security; and improved freedom.

Our Methodology

In order to capture the impact created, IVUK uses two tools: the Depth of Impact Grid (DIG) and the Logical Framework Analysis (LFA).

The DIG is based on the five constituents of human well-being and quality of life as outlined by the MA, and consists of a set of scales describing five ranges in each component from low to high quality. The tool compares baseline and outcome evaluations in groups/individuals to determine an organisation’s specific contribution to increasing beneficiaries’ quality of life.

The LFA is based on W.K. Kellogg Foundation’s Logic Development Model, (Michigan, 2001), and it links an organisation’s organisation’s planned work (use of resources in activities), with its intended results in regard to outputs, outcomes, and impact:

  • Output: Captures the results of the reach of impact using measurable Key Performance Indicators (KPI)
  • Outcome: Captures the depth of impact created

Upon investment

Following an investment we use this methodology to develop social impact metrics alongside our social enterprises. We choose explicit metrics to reflect a social enterprises’ reach and its depth of outcome for beneficiaries.  Our enterprises typically forecast one to three metrics and report on progress in meeting social impact targets.  We link metrics to the IRIS impact measurement framework through PULSE.

IVUK records the social impact performance of each entity and of the portfolio in aggregate.  We use this data to evidence social return on investment for ourselves and to report to our investors.

Our impact assessment methodology focuses on the quantitative and the qualitative dimensions of social impact: reach and depth.

Prince Max

Opinion

Sustainability Instead of Populism

Prince Max von Liechtenstein, CEO of LGT, sees dangerous trends in the many environmental issues, but in the increasing concentration of income and wealth too.