60 seconds with…Itad’s Impact Investing theme

Our ‘60 Seconds with…’ blogs are designed to provide a quick rundown of what our staff do here at Itad. To celebrate their launch, we’re talking to Itad’s new Impact Investing and Innovative Finance theme about what they do…

Why an Impact Investing theme?

Over the past few years, we have seen growing trends in investments in developing countries seeking to have a social or environmental purpose. The impact investing industry is nascent, the phrase itself first used around 2007. Knowledge and practice in results measurement and impact measurement and management are still emerging, and we saw a potential niche for Itad. Throughout 2016 we started talking to potential asset owner and fund manager clients to understand their social impact measurement, evaluation and evidence needs to inform investment decisions. We then started taking on projects in 2017.

Who makes up the Impact Investing theme?

We are a team of two staff who are able to draw on Itad’s staff of over 80 professionals dedicated to finding out what works in international development, in areas such as health, agriculture, education and climate change. The theme is led by me (Charley Clarke), supported by Ruth Wainwright. I joined Itad in 2014 and Ruth joined just recently in January 2018.

I have over 15 years’ experience in international development, with a particular focus on sustainable private sector development. I first became interested in the impact of business and investment on people and the environment during my university studies in geography and environmental management. I then went on to specialise in planning and environmental and social impact assessment of industrial and business growth projects in Laos and then Sudan. Following this, I have worked in multiple developing countries in Africa and the Asia-Pacific region in development management, PSD and governance and M&E. At Itad, before starting up this new theme, I led multiple results measurement initiatives in private sector development for example: the Rockefeller Foundation Digital Jobs Africa Initiative monitoring and learning (M&L), M&L for BEAM Exchange (a learning platform for market systems development) and was Itad’s initial lead for Mastercard Foundation Savings Group Learning Initiative.

Ruth brings experience from the City at the Financial Conduct Authority and in economic development consultancy, where she conducted assessments into ineffective competition. She then moved into international development, doing evaluation work for international development charities. Ruth’s experience provides an excellent new lens and energy to the theme.

Who else does the Impact Investing theme work with within Itad?  

In addition to direct project inputs from other themes to measure sector-specific results, we also partner with the gender theme, to ensure that the latest thinking on gender sensitivity, mainstreaming and targeting is integrated into what we do. This is particularly important as there is an emerging drive in impact investing sector for gender-lens investing. We also find that many PSD projects have a focus on the enabling environment for investment or catalysing investment directly, so we partner with the PSD theme to advise on and deliver M&E initiatives. We also have a strong link with CDI: the New Frontiers for Evaluation event, convened by CDI, was important for shaping our understanding of the intersection between evaluation and impact investing, and on a project basis we are collaborating with CDI on the CDC Longitudinal Study to bring the latest thinking and leading experts in Contribution Analysis to the design of the study.

What is the Impact Investing theme working on right now?

We have a busy and varied portfolio of work at the moment!

We are delivering five evaluations for Argidius Foundation’s support to intermediary organisations who in turn are supporting small growth businesses grow, become investment ready and access right-fit investment and finance. We are wrapping up the baseline phase of the evaluation of the Dutch Good Growth Fund, working with the Dutch Ministry of Foreign Affairs and Fund Managers. We have just completed an impact audit of Nesta Impact Investments (a UK-based impact investment fund manager), designed primarily to assess the extent to which NII has implemented their impact measurement and management strategy in practice. And we are half-way through the one-year inception phase of the 10-year longitudinal study measuring CDC’s mobilisation of private capital mentioned above.

How would you categorise what you offer?

We build on Itad’s wealth of monitoring, evaluation and learning experience and tailor it to the needs of this emerging sector. We are delivering quite a wide-ranging set of services – investment portfolio-wide evaluations (DGGF and Argidius Foundation), impact audits (NII), results measurement system advisory (Impact Hub and Alterna), long-term studies (DGGF, DFID-CDC). The focus of measurement is also wide-ranging: mobilisation of capital (CDC), service delivery and sustainable business outcomes (Argidius Foundation), impact strategy into practice (NII), additionality and sustainable business outcomes (DGGF).

What innovations are you excited about in your sector?

 Our aim is to make the business case for impact measurement and management and to help the sector understand what good practice looks like through CDI and publishing knowledge products from our work. This is very important in order to grow the impact investing industry and prevent ‘impact washing’: There is much claimed about the impact that investments have, and understandably so from a promotional perspective. But, in a fledgeling industry, far less is known about actual impact and what evidence really counts.

There are some interesting initiatives trying to build the field and deepen knowledge – there is much debate to have.  For example, the Impact Management project is working to build an emerging consensus for good practice IMM. The Global Impact Investing Network has a team dedicated to IMM and shares tools and resources on the business value to build understanding of good practice and the sector state of practice. Rockefeller Foundation recently highlighted the importance of improved evidence as a priority in Impact investing, a critical issue. The Stanford Social Innovation Review is great to tap into the latest discussions.

We feel that we can also contribute to this, drawing on techniques from our work in international development and offering insights on innovative ways to capture, analyse and report on social change. Examples of this are recent projects in the PSD theme: PEPE, Mastercard Foundation Savings Learning Lab, and we have successfully brought across this knowledge to these new clients and sectors (Nesta, Argidius portfolio, and Co-op).

Understanding and recognising good measurement practice is one thing, however actually capturing, analysing, reporting on, and learning from data and evidence is another. This is still an emerging space in the sector and ongoing debates over who should pay and standards of evidence. Though impact measurement is still heavily subsidised by DFIs, donors and foundations, we are now also seeing fund managers and private investors themselves making increasing commitments and integrating measurement into their investment models. We hope this trend continues!

 What has been a recent highlight for the Impact Investing theme?

We’ve been so busy over the last six months, we already have quite a few highlights to share. Most positively, we’ve had feedback from clients and partners on the usefulness and use of the work we’ve been doing. Our evaluation of Enclude’s Variable Payment Obligation Programme pilot – the first of the Argidius portfolio evaluations – has already helped to inform next steps in scaling their pilot. Our theory of change and measurement system advisory work for Impact Hub’s enterprise scaling programme in Latin America helped them design a results measurement plan and prepare for two evaluations. And we’re now working with Nesta Impact Investments to work out how to disseminate our soon-to-be-published impact audit report and contribute to improving practice in IMM for impact investing.

Charley Clarke, May 2018