We have developed a range of qualitative and quantitative approaches to track progress toward your impact goals. These core principles inform all our evaluation approaches:

• Use quantitative evidence to assess impact potential. We use economic, scientific, and social science research to estimate a company’s impact potential.
• Assess impact potential in due diligence. We assess impact of companies during live diligence, elevating it to be on par with estimates of financial return. We also evaluate the risks to achieving impact and craft relevant mitigation strategies.
• Manage impact during ownership. We help identify key performance indicators to track and manage impact on an ongoing basis during holding and/or at exit.

We believe that core aspects of impact assessment fit well within the standard diligence process. The same underlying estimates of the company’s output and operations drive both financial and social returns (e.g., number of units sold, number of users reached, revenue projections). The impact assessment process should match the decision-making style of the firm. (e.g., qualitative vs. quantitative, consensus driven vs. top down, etc.)

The Impact Multiple of Money is a methodology designed to bring the rigor of financial performance measurement to the assessment of social and environmental impact. Bridgespan Social Impact and The Rise Fund, a $2 billion impact investing fund managed by TPG Growth, developed this approach. The methodology estimates—before any money is committed—the financial value of the social or environmental good likely to result from each dollar invested.

Impact risk is the risk that your investment does not achieve the expected social or environmental benefits, despite meeting promised financial returns. Just as you can address and manage for financial risk, however, it is possible to do so with impact risk. During due diligence, this might include identifying possible risks, assessing probability of occurrence, and working with important stakeholders to limit these risks. We work with you to identify suitable risk-mitigation strategies, which may include writing mitigation strategies into an investment contract or creating an impact covenant to outline enforceable obligations to maximize the positive impact of an investment.

Your impact journey continues after investment. We can help you both develop a process and select key performance indicators for measuring impact throughout ownership, letting you track and manage the impact of portfolio companies during the holding period in much the same way that you manage assets to increase their financial value. Fund managers can also regularly communicate the impact results of their holdings to limited partners as well as to the public. Impact measurement during the holding period is one of the next frontiers of better impact practice.

We recommend sharing impact results with LPs annually, and we can help by developing templates for this report tied to your overarching impact-measurement methodology. Public companies can share impact results along with regular financial reporting (e.g., annual company meetings or shareholder reports). Private companies can use their discretion to provide a public, high-level impact narrative.