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Impact Measurement: An Interview with The Bridgespan Group

Impact measurement and management are integral to making effective impact investments.

In this article, Michael Etzel and Mariah Collins from the Bridgespan Group, a leading social impact advisor to nonprofits and NGOs, philanthropists, and investors, shares some insights about impact measurement with one of our course educators.


Jeremy : In your opinion, what role can SDGs together with their targets and indicators play in impact measurement?

Michael and Mariah: The Sustainable Development Goals (SDGs) are a set of 17 goals for ‘people and the planet’ that were adopted by the United Nations in 2016 with the overarching goal to eradicate global poverty. The only way that we will know progress is being made against the SDGs is if impact investors measure impact alongside financial performance. The SDGs cover a huge range of sectors and sub-sectors, and from our experience, nearly every impact investment thesis can be tied to at least one SDG. The SDG frame is catching on—three out of four investors currently track their investment performance to the SDGs or plan to, according to The GIIN survey.

The breadth of the SDGs makes them universally accessible as an impact reporting framework. However, the goals and their indicators don’t inherently offer a path to informing investment decision-making. This is where the efforts of others, perhaps most notably the Impact Management Project come into play. This collaborative effort has identified five dimensions of impact that can put goals like the SDGs into context for impact investors and entrepreneurs:

  1. What tells us what outcomes the enterprise is contributing to and how important the outcomes are to stakeholders.
  2. Who tells us which stakeholders are experiencing the outcome and how underserved they were prior to the enterprise’s effect.
  3. How Much tells us how many stakeholders experienced the outcome, what degree of change they experienced, and how long they experienced the outcome for.
  4. Contribution tells us whether an enterprise’s and/or investor’s efforts resulted in outcomes that were likely better than what would have occurred otherwise.
  5. Risk tells us the likelihood that impact will be different than expected.

Jeremy: What is needed to achieve an impact measurement convention? What ideas might you have to accelerate the process?

Michael and Mariah: The industry is increasingly shifting toward considering impact measurement as a component of the broader work of impact management. Efforts like the Impact Management Project (referenced above) are seeking to define the common language necessary for this kind of convergence. At the same time, broader principles (e.g., the IFC’s Operating Principles for Impact Management ) are under development. These, and other efforts, are gaining increased alignment for the field on a convention.

Today, the reality is that excellence is self-imposed in pursuit of impact. At the highest level, the industry must align on the premise that there is a bar for “what counts” as impact. Whether or not an investment is truly an impact investment depends on many factors such as the balance with negative externalities (very relevant for listed equity in particular), who the positive impact influences (e.g., is the benefit exclusively for higher-income or well-served populations?), and how much benefit there actually is (e.g., how does the benefit relate to the size of the investment?). This is where conventions are especially helpful—in aligning the industry on a common litmus test.

One path to accelerating convergence on these high-level principles and conventions is through the influence and requirements of the asset owner’s community. In the absence of clear demand from the ultimate holders of capital, it is challenging for investment managers to effectively self-regulate. As this high-level alignment increases, further innovation is needed in the actual tools and processes used to gather and manage impact performance data.

Jeremy: How should impact investors working with entrepreneurs in low-income markets think about the challenge of high costs associated with impact measurement?

Michael and Mariah: The idea that “perfect is the enemy of good” applies to impact measurement. There are gold standard measurement and evaluation practices such as randomized controlled trials. In some cases, these are powerful tools that can have a significant influence on products and practice. In other cases, these are expensive, time-consuming, and not ethically, operationally, or financially feasible. There are a handful of lower cost impact assessment models that are gaining steam and recognition. For example, Acumen’s Lean Data is focused on capturing the consumer’s voice and uses low-cost technology and methods to gather high-quality data.

Most importantly, a fund and an entrepreneur’s or company’s impact measurement should be “right-sized for rigor.” There is not a one size fits all. Some best practices to keep in mind that can keep impact measurement manageable and affordable:

  • Build your measurement tool around a clear set of decisions or goals: Don’t try to measure everything; focus on the most important key performance indicators tied to impact.
  • Consistency is more important than perfection: Some data is better than no data; figuring out what you can capture that is meaningful and is trackable over time is most important.
  • Right size your measurement expectations for the stage of your investments and/or company: Calibrate the sophistication of your measurement system to the sophistication of your company and/or investment profile. This also means that as your organization evolves, your approach to measurement can evolve too.

Jeremy: How can we make existing research evidence more accessible/digestible to impact investors to help them develop appropriate impact goals and metrics for their portfolio?

Michael and Mariah: There is an incredible amount of research and evidence available in the world—by one estimate there are 2.5 million studies on various products, services, and interventions published every year. Development agencies, foundations, NGOs, and policymakers have pioneered the use of research to guide funding for social programs with proven results. This “what works” movement has gained momentum at a time when the social sector increasingly strives to achieve measurable outcomes—real change in people’s lives—not outputs—such as headcount of people served. The hunger for evidence of what works in the social sector has spurred the development of an industry around measurement, led by organizations like MDRC, a nonprofit social policy research organization; Jameel Poverty Action Lab at MIT; and Innovations for Poverty Action.

The challenge is making sure this research is accessible to impact investors—not just those in the public and social sectors. The Rise Fund took this on when it set out to use the existing evidence base to underwrite its investments. Through that process, Rise, in partnership with The Bridgespan Group, assembled a database that captures studies that they used in their underwriting and that are highly relevant to impact investing sectors. Rise established a legally separate public benefit corporation, to continue this effort by engaging the academic community to ensure relevant research is digestible and can be translated for use by investors. This group also strategizes on how to fill gaps in the field’s research base as it pertains to impact investing sectors. Separately, the GIIN has also developed Navigating Impact to summarize the evidence-base for specific sectors and sub-sectors.

Jeremy: Any specific resources you would share to help those learning about impact measurement?

Michael and Mariah: On Bridgespan.org, we have a number of resources around impact measurement (including our “Measuring to Improve” page). In terms of impact investing specific sources, we would recommend checking out The Global Impact Investing Network (The GIIN) and The Impact Management Project, as mentioned above. Two other resources (also mentioned above) include: The Abdul Latif Jameel Poverty Action Lab (JPAL) and Innovations for Poverty Action (IPA), both of which have a stronger research orientation. Recent publications also provide helpful materials: “Ten Reasons Not to Measure Impact – and What to Do Instead” and “At the Heart of Impact Measurement, Listening to Customers” both published in SSIR and/or SSIR.org are good sources, and SSIR has published a number of interesting articles on the topic beyond these two.


Michael Etzel is a partner in The Bridgespan Group’s Boston office. Michael focuses on effectiveness across the full spectrum of social innovation financing, advising corporate, institutional, and family philanthropists and investors—including The Bill & Melinda Gates Foundation, The Ford Foundation, Bain Capital Double Impact, and Goldman Sachs, The MacArthur Foundation, and Texas Pacific Group’s Rise Fund. Much of Michael’s work explores what it takes to use tools of innovative finance and impact investing to solve pressing social problems. His work and research in philanthropy also focuses on the question of what it takes to deliver results. He regularly speaks and publishes on both topics.

Mariah Collins is a Manager in Bridgespan’s Boston office. With many of her nonprofit clients, she has helped to chart a path to achieving transformative scale, shifting from serving clients to solving a social problem. With her philanthropy clients, including the Bill and Melinda Gates Foundation, the Robert Wood Johnson Foundation, and the Steven and Alexandra Cohen Foundation, Mariah has helped to strengthen operations, identify grantmaking priorities, set impact targets, and identify potential grantees, including those for Big Bets. She has also spent significant time in the world of impact investing exploring how private capital can move the needle on pressing global issues. Much of her impact investing work has focused on supporting clients on best practices around impact measurement and management.

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Impact Investing: Profit and Purpose

Jindal Centre for Social Innovation + Entrepreneurship

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