Messiness, Mutality, & Methodology: 10 Tips From Our Experiment in Impact Measurement
At the end of 2022, our impact investment firm Candide Group celebrated moving over $200m of client capital into 110+ social justice-focused companies, funds, and organizations since our inception. But what was the actual impact of those impact investments? That’s the question my team and I spent two+ years seeking out answers to, culminating in our first-ever comprehensive public Impact Report.
Candide Group works with families, foundations, and other investors who believe that finance can serve as a tool of empowerment rather than a weapon of extraction. As a Registered Investment Advisor (RIA), we focus on private assets — debt, private equity, real assets, and innovative new structures — where there are both real capital needs and opportunities for mission-aligned investors to build impactful portfolios. The report dives into both the “what” and the “how” of impact, including how we approached data collection from a lens of authenticity and mutuality, the distinct dimensions where we assess and support impact, and community stories in investees’ own words. As Director of Impact, here are my top 10 tips for meaningful impact measurement and reporting processes that serve all stakeholders — not just those providing financial capital.
Tip 1: Embrace messiness.
Tip 2: Center mutuality.
Tip 3: Align methodology with your core values.
Tip 4: Set clear expectations with respondents up front.
Tip 5: Let participants “choose their own adventure” with optional questions.
Tip 6: Prioritize ease, accessibility, and multiple ways of data storytelling.
Tip 7: Be available to support throughout the reporting period.
Tip 8: Take note of what didn’t work.
Tip 9: Take note of what exceeded expectations.
Tip 10: Let this be an opportunity to deepen relationships.
As a note: The impact report I’m referring to in this piece aggregated impact data from 83 of those entities — LLCs, fund managers, and other organizations — that Candide advised client investments into and/or directly made investments through our Olamina Fund. For most entities, we’ve facilitated multiple investments (for example, investments into multiple funds or parts of the business, investments from multiple clients over time, etc.) Throughout this article, we refer to these entities as simply “investees.”
Tip 1: Embrace messiness.
Honestly, I don’t particularly love the oversimplification inherent in the term “impact measurement” because it brings to mind a yardstick in which one length may be objectively longer (i.e., better) than another. As an RIA that works across industries, sectors, geographies, asset classes, and cultures, we know there is no “one size fits all” approach to impact measurement and management. No single investee solution is “better” than another. Bringing solar power and energy to Indian Country, expanding homeownership to build generational wealth, building worker-owner opportunities for those creating healthy meals in urban food deserts, reclaiming land for stability and healing… all are needed to transform our society into one that provides dignity, opportunity, and safety for all communities.
So, rather than leaning on a single existing impact metric framework to externally “rate” the companies and funds we have investment relationships with (and set siloed goals around certain metrics), we created a custom survey that gave respondents the agency to identify the dimensions of impact unique to them: capturing the nuances and potential opportunities to deepen impact in its many flavors.
Our ethos at Candide is that those most proximate to the communities they serve and the issues they work to solve are also most likely to make a real, lasting impact. They know their impact best; we’re just here to bring visibility to it and support when called upon. So, the work of listening, researching, and experimenting with the amalgamation of data points we call impact metrics throughout the social investing field is both art and science to us. And that’s what makes it particularly worthwhile: the constant opportunity to learn and grow from the ingenuity of impact makers and the communities they serve beyond neat boxes to tick.
Tip 2: Center mutuality.
Data is a powerful tool that can be used as a vehicle to help our investees advance their goals and increase their impact. As the intermediary between investors and investees, we want to challenge the traditional power dynamics and false binaries of “giver” and “receiver” often assumed in investment relationships.
Finance has been a tool of pain, oppression, and trauma to poor and working-class people as well as Black, Indigenous, and other racialized communities in the US and the Global South. Impact measurement is an opportunity to interrogate impact investing practices from all angles and is critical to how we hold ourselves accountable to communities. For example, does how we collect data reinforce historical power dynamics between financiers and entrepreneurs, or does it build bridges for more equitable, dynamic relationships? Are we sharing impact insights as marketing materials for financial intermediaries or as evidence of what’s possible when we center the frontline communities driving social change?
We want to contribute to a new reality where all communities can thrive, sustain, and innovate — leveraging finance as a tool of empowerment rather than a weapon of extraction. We deeply trust the people we direct investments towards and want to always be conscious of not overburdening investees with irrelevant/mundane/excessive reporting requirements. They’re busy doing more important work in the world. That’s why, in the past, we simply collected updates verbally and did our best to support impact where we could. At the same time, with clarity from an intentional J.E.D.I. (justice, equity, diversity, and inclusion) strategic planning process, we concluded that as Candide’s portfolio grew, so did our role in the ecosystem to continue unlocking capital from the field to the investees we believe in.
In impact data collection and reporting, centering mutuality means working to transform investor and intermediary practices to be more transparent and less extractive. This data collection has been an experiment that we approached with curiosity and openness, creating space to learn where we can concretely help investees deepen their impact when that support is requested. As a token of gratitude and acknowledgment of the time and effort for participating in our survey, I created and sent a tailored 1-page impact synopsis to each investee, which they were then welcome to use in their data rooms, with other investors, or wherever they might find it useful.
Tip 3: Align methodology with your core values.
We decided it was time to pilot a comprehensive impact measurement project with this primary goal: stay accountable to our investees with internal impact indicators we can track and support over time. As a full team, we went through a year-long strategic planning journey that helped articulate our core values. Here’s how we thought about each value in the context of an impact measurement process.
Methodology matters, especially in the context of a growing field like impact measurement and management. With the increased attention to DEI, one important point we want to draw attention to is the lack of clear standards in the field around labeling a company or fund as “BIPOC-” or “women-led.”
To our disappointment, the bar is generally low. While some firms may choose to consider any team with at least 30% underrepresented individuals “diverse” (in our view, inflating the appearance of real diversity, equity, and inclusion in impact reporting,) we made the decision to get granular, asking for and sharing out exact percentages from our survey.
Remember, values represent intentions. Operationalizing these intentions is a practice that takes experimentation and grace. Aim for integrity and progress, not perfection.
Tip 4: Set clear expectations with respondents up front.
As a trauma-informed communicator and financial practitioner (shout out to the Trauma of Money community), I know a new reporting request from investors can rile the nervous system, even for the most seasoned entrepreneur and their team. My colleague starkey baker and I reached out to contacts at every active company, fund, and organization where we’ve directed client capital or directly invested as a part of our Olamina Fund. Our emails and the survey itself included
- Clear timelines;
- A FAQ section;
- Explanation of why we were asking for the data;
- A PDF of all questions;
- An estimation of how long the survey would take to complete;
- A reassurance that this survey is for us to better learn how we can serve them — not the other way around.
It was important for us to make clear there would be no penalization for not completing the survey. By the nature of our work as an intermediary, there are some investees we may have facilitated investments with years ago, whom we rarely interact with. Others, we talk to on a near-weekly basis. The report reflected the range of relationships and opened up pathways to remind investees “We’re here if you need us, and cool if you don’t.”
If this point about not mandating 100% participation shocks you — I get it. There’s a benefit to striving for comprehensive data. Still, we see a bigger benefit in running a process that centers agency and self-reporting rather than what might traditionally “serve us” as investors. For non-respondents, we briefly considered pulling publicly available impact and demographic data to fill in the gaps. We ultimately assessed that it wasn’t in line with the integrity of our self-reporting methodology. For decades, white male entrepreneurs haven’t had to report their demographics or impact data as a requirement for investment. We don’t believe it serves anyone in this field to now mandate that for our community, who are predominately women and people of color.
Tip 5: Let participants “choose their own adventure” with optional questions
How can we be mindful of requesting an investee’s time and energy on a survey while also making space for deeper engagement? We give them the agency to choose the depth and breadth with which they engage in impact reporting. For practitioners, this necessitates mindfulness around what data is a “must-have” and what’s a “nice-to-have” for your stakeholders (team, clients, the field, etc.)
Our impact survey had approximately 60 questions. That’s a lot of questions; however, about 30 were marked as required, while the other half were optional. Only four of the required questions asked for short answers rather than check boxes or numerical values. The required questions were important for us to accurately aggregate data across our entire portfolio — such as in the realms of Founders, Owners, Leaders, and Customers/End Users — so we could get a picture of demographics across our portfolio. The optional questions, on the other hand, were tailored to better understand the unique needs and goals of the individual organizations, such as procurement data, policies and benefits, and specific community outcomes. We provided the guidance, “Just fill out what’s most relevant and feel free to leave the rest… or fill out the entire survey to help us better serve you.”
Tip 6: Prioritize ease, accessibility, and multiple ways of data storytelling.
We decided to use the survey platform Typeform for its user-friendly experience, including features like auto-save, desktop and mobile views, and customization (adding nice personal touches like the respondent’s name and relevant graphics). Throughout the survey, we made sure to clarify terminology wherever we could, even linking to educational resources for further reading, such as in the case of terms like BIPOC and gender-non-conforming. When asking participants about the justice, equity, diversity, and inclusion policies they have or are interested in, we included links to our own policies and external resources (including salary caps, a living wage calculator, and non-discrimination policy language inclusive of formerly incarcerated citizens and undocumented folks).
All qualitative and quantitative data — including identities, experiences, and highlights — were self-reported by investees rather than just coming from our outside assumptions. Instances marked as “not reported” mean an investee did not return a survey or was unable/chose not to share a particular data point. Even for the “mandatory” questions, rather than getting caught up and not completing the survey, we allowed investees to note when they just didn’t have a particular data point and keep it movin’.
Tip 7: Be available to support throughout the reporting period.
This one may sound obvious, but it’s important to have at least one staff member available to answer questions throughout the whole reporting period. We meticulously tracked who submitted their surveys, who reached out with questions, and who we hadn’t heard back from (allowing us to send gentle reminders as we neared the end of our month-long data collection window). We also noted that investees could call me directly with questions, though email ended up being the prevailing method of communication.
For us, making clear who was behind the data collection and making it personal was crucial. I’m fortunate to be in a role (Director of Impact) where my full-time job is dedicated to “impact.” However, the period of this impact measurement pilot still required me to step away from some other work responsibilities to focus my capacity and energy on data collection, analysis, and presentation. Every step of the process — from designing the methodology, testing questions, and drafting the report — was made possible by the support and input from my larger team. This work is better when it’s collaborative (plus, a lot more fun).
Tip 8: Take note of what didn’t work.
As we wrapped up our data collection pilot, we paid attention to what we would want to improve upon in the future. For example, I designed the Typeform survey so that questions asking for numerical values allowed for short answer responses if needed. This led to a ton of variability in the data formats, where the same question could yield answers like “25,” “25%,” “.25,” and “a quarter.” As you can imagine, that was a pain point when it came down to finding the average across 83 answers! Moving forward, I plan to standardize response formats for ease on the backend.
We also saw a pattern of participants having challenges in answering some demographic questions. Instead of a general question about leader demographics, we asked specifically about three distinct dimensions of power: “founders” (i.e., whose dreams are we investing in and why?) “owners” (i.e., who shoulders the risk and reaps the reward of profitability?), and “leadership” (i.e., who does management report to on a daily basis?). Unsurprisingly, tracking ownership demographics proved tricky business. The entities we flow capital toward come in all shapes and sizes, such as
- LLCs with ownership split between founders, employees, and investors
- Public benefit corporations
- Worker/member-owned cooperatives
- Trust stewardship-owned institutions
- 501(c)(3) nonprofits and social enterprises
- And more.
For many of our investees, owners generally refer to a combination of founders, employees, and outside investors. When entities accept equity investments or transform into worker cooperatives, for example, they can watch their ownership expand from one person to 10 people to 500 people.
Additionally, many investor-owners represent institutions or families; still, other entities aren’t “owned” (think non-profits). Only 70% of our respondents could access and share demographic information on ownership at this time. The data was incomplete, but we believe it’s still a question worth asking to get a broad picture of the portfolio.
Tip 9: Take note of what exceeded expectations.
As our first comprehensive endeavor of this kind, we weren’t sure what to expect regarding response rates, but we were more than satisfied to receive completed surveys from 83% of our partners! While the process was far from perfect, feedback from investees repeatedly included notes about the ease and enjoyability of the survey process compared to other impact reporting mandates they’ve experienced.
Since inception over the last decade, we’ve sought meaningful ways to add value beyond just flowing financial capital. That brings me to my favorite part of the impact reporting process: assessing “additionality.” As an RIA, our principal legal obligation is to support our community of investors in finding and supporting the impact opportunities they seek. However, we see our role and responsibility as so much more — serving not only our families and foundations but also the entrepreneurs, social movements, and communities that are fundamentally reshaping our economy.
“Additionality” refers to the extent to which impact happens as a result of our involvement (that would likely not have occurred in the absence of our involvement). We heard from respondents that during the course of our relationship so far, we can be credited with making significant capital contributions through our community of investors (73%), influencing the investees’ social impact approach and/or policies implemented (24%), helping amplify their story (24%), helping design the investment structure (20%), serving as the lead investor (20%), and helping investees preserve ownership (7%). Rather than taking broad-sweeping credit for all the “wins” our investees make, we now have more data that speaks to our specific role in those wins. We encourage other investors and intermediaries to try this.
Tip 10: Let this be an opportunity to deepen relationships.
Most sections of the survey (leadership, ownership, workplace policies, procurement, and customers/beneficiaries) ended with an opportunity for investees to express their impact goals regarding that area of work and name how Candide might be able to support those aspirations. Through this, we were able to identify patterns of where we can best be dedicating our capacity when prioritizing work activities and strategies, like:
- Introducing investees to other investors
- Highlighting investee impact stories across Candide’s media channels
- Connecting investees with other investees in the Candide universe
- Creating educational webinars and resources about deepening impact
Again — an impact report is more than a marketing and communications asset: it’s a portal for accountability and building relationships. This is true with our respondents (investees) and our internal full team, clients, and external ecosystem partners.
Broadly speaking, “impact” refers to the tangible and intangible contributions to improved realities on the ground for people and the planet. For us, this means approaching impact as a journey rather than a destination — embracing what emerges rather than just settling for a goal that may have been set under an outdated context. While we’re proud of and humbled by this journey so far, what fuels us each day is the possibility of learning, experimenting, and modeling even deeper impact at all levels… right alongside the organizations we proudly support. What comes next for us looks like further integrating impact reporting into our diligence processes, curating more educational material and impact conversations, and, of course, kicking off year two of our impact data collection experiment.
In all, designing and implementing an impact measurement process that serves multiple stakeholders and challenges conventions is no small task, but the rewards are immense. In fields like impact investing and beyond, we get to innovate and iterate on our processes to find what works best for the communities we serve. We‘re excited to keep experimenting with others in the ecosystem.
Disclosure: The information contained in this document is intended for educational and information purposes only and should not be considered investment tax or legal advice or a recommendation to buy or sell any particular security. Certain information has been provided by third-party sources, and, although believed to be reliable, it has not been independently verified, and its accuracy or completeness cannot be guaranteed. Any opinions, projections, forecasts, and forward-looking statements presented herein are valid as of the date of this document and are subject to change. The views and opinions are those of the author as of the date of publication and are subject to change at any time. This material represents an assessment of the market environment at a specific point in time and is not intended to be a forecast of future events, or a guarantee of future results. Candide Group is under no obligation to update this information after the date of this publication. An investor should consider the investment objectives, risks, charges and expenses of any financial product carefully before investing. Investing involves various risks, including loss of principal. Charts and graphs provided herein are for illustrative purposes only. For more information about Candide, please see our Form ADV, Part 2A.
For your convenience, this post may contain hyperlinks to websites and servers maintained by third parties. Candide Group does not control, evaluate, endorse or guarantee content found in those sites. We do not assume any responsibility or liability for the actions, products, services and content of these sites or the parties that operate them. Your use of such sites is entirely at your own risk.
