Impact Assessment Methodology
Forecasting the social and environmental gains on an investment has historically been largely based on intuition and instinct. In partnership with Y Analytics and Bridgespan Social Impact, The Rise Fund created a methodology to assess potential impact before a single dollar is committed. The new metric is called the Impact Multiple of Money (IMM). We deploy the IMM with the same rigor and commitment to diligence as our financial underwriting, and it enables us to manage, measure and track impact results throughout the course of our investment. Calculating the IMM allows direct comparisons between investment opportunities to evaluate their positive impact.
These methodologies are unique but are anchored by the UN
Sustainable Development Goals, the IFC's Principles of Impact Management, and the 5 Principles of Impact by the Impact Management Project.
You can read more In Harvard Business Reviews' Calculating the Value of Impact Investing.
What drives our approach
From diligence to exit, our approach has a deeply rigorous underpinning with real world applications.
Research-Based
Dollar Invested
Maryanne Hancock, CEO of Y Analytics, explains our Impact Methodology
Here are the Six Steps to Calculate the IMM of a Potential Investment
Assess the Relevance and Scale
The process commences by considering the relevance and scale of a product, service, or a project for evaluation.
Identify Target Social or Environmental Outcomes
The second step in calculating an IMM is identifying the social and/or environmental outcomes and determining whether existing research indicates that they are achievable and measurable.
Estimate the Economic Value of those Outcomes to Society
When the target outcomes have been identified, The Rise Fund seeks out an "anchor study" - academic research which will robustly translate those outcomes into economic terms.
Adjust for Risks
Despite demonstrating that academic research can be used to monetize social and environmental benefits, we recognize the risk in applying findings from research that is not directly linked to a given investment opportunity.
Estimate Terminal Value
This is not a new concept in financial analysis and due diligence, but it is a new concept in impact assessment. Attention usually centers around qualifying present or historical impact - we seek to estimate impact through the lifetime of our investment.
Calculate Social Return
The final step in calculating IMM differs for businesses and investors. Investors, like The Rise Fund, must take an extra step to account for their partial ownership of companies they are invested in.