Social Impact Value Creation

After reading both the "Measuring Social Value" and "Calculated Impact" articles, I started researching to find a simple way to benchmark the metrics that result from SROI calculations.  I came across IRIS: Impact Reporting & Investing Standards.  According to the Global Impact Investing Network, GIIN, IRIS is a set of standardized metrics that can be used to describe an organization’s social, environmental, and financial performance.  IRIS' independent and credible performance measures help organizations assess and report on their social performance.  IRIS metrics span an array of performance objectives and include sector-specific metrics for areas such as financial services, agriculture, and energy among others.  Like financial accounting standards, IRIS provides a basis for performance reporting and organizations need only use relevant metrics from the IRIS library.

IRIS was founded by the Rockefeller Foundation, Acumen Fund, and B Lab. It provides relevant information to all stakeholders in the impact investing industry, including Investors in Funds, Direct Investors, Companies, and Member Organizations/Intermediaries. Currently IRIS is divided up into a industry sectors, including Financial Services. 

The metrics can be found here: http://iris.thegiin.org/iris-standards

I was unable to locate IRIS metrics for Social Impact Bonds, and I have a few theories as to why that is.  First, Social Impact Bonds are relatively new and only a few examples of SIBs exist.  Furthermore the few SIBs operating today do not make for a representative sample of the total SIB market potential.  So how can our SIB venture be benchmarked to other SIBs?  Moreover, how can we identify metrics for success in order to return to our investors for additional capital?

Because we are operating in a new market without metrics to compare the success and impact of our venture to competitors, it is difficult to measure efficiency.  It will be incredibly important for us to calculate SROI on the non-profits we are funding.  With this information we can present our ROI calculations to governments and investors to gain initial interest in participating. 

Social Impact Value Creation is somewhat nebulous in nature due to the ambiguity of measuring impact.  Regardless, with databases like IRIS and measurements such as SROI, maintaining a structure of evaluation will help social ventures achieve integrity and benchmarking information.  Properly utilizing these metrics will help social ventures to obtain capital and opportunities for operational efficiencies.