1. Measuring Social Investments
Molly Alexander, Business Manager
October 2012

2. To show that patient capital works…
Traditional venture capital
Maximizing financial return
Patient Capital
Blending social and
Maximize financial returns
Financial
return 0% IRR
expectation
Traditional philanthropy
Maximize social returns
No return
No real Maximize
concern
Social Impact
expectation

3. We can show how we leverage capital
FY 2003-2009, $ Millions raised
$169M
4x
$69
$133
$52
$33 $12
$33.0
Initial Co-investments Additional Additional Total capital
Acumen 3rd party debt raised
Fund equity financed
investment invested
(through FY08)
3

4. Or the cash burn of our companies…
4

5. But how do you measure value of a home…
5

6. … the education from a good reading light…
6

7. … or the human dignity of a decent toilet?
7

8. We still struggle to aggregate social impact
Financial Return vs. Social Impact
2.0
Performing
Performin
Ziqitza Healthcare:
1298 Ambulances Lifespring Broadreach GEWP
A to Z Textile Mills
WHI
Expected Return on Investment
Insta Products
Books of Hope Water
Saiban VisionSpring Ecotact SHF
Mid
1.0 Housing
Energy
Agriculture
d.light design
Health
Micro Drip
FMiA Kashf Foundation
Issues/Watch
Drishtee
AyurVAID
BEEPZ
0.0
Little to none Mid High impact
Aggregate Lives Impacted

9. Overarching goals
1 2
Figure out what’s going Adjust approach to better
on in the organization implement strategy
– Are we on track for – Spot breakdowns early
achieving financial targets?
– Use data to prioritize
– Are social impact goals resources ($$$, people)
being met consistently?
– Change course when
– Is the organization operating necessary
efficiently?

10. At Acumen, we start by counting outputs
consistently
CHAIN OF CAUSALITY
Inputs Outputs Outcomes Impact
• $$$ • Liters of drinking • Reduced • Proof that the
water purified incidence of outcomes wouldn’t
• Staff diarrheal disease have happened if
• # anti-malarial not for the
• Technology bednets sold • Fewer cases of intervention (the
malaria in the “counterfactual”)
• # students community
graduating from
school • Improved literacy
rate
• Increased
incomes

11. Acumen’s approach
Understandable
Inexpensive Useful
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12. Acumen’s Metrics Philosophy
• Often M&E looks like an autopsy:
o Too late to help
o Intrusive
o Often inconclusive
• Instead, metrics should be like taking a
“pulse”:
o Real-time, frequent
o Light touch
o Useful, actionable

13. Our metrics mantra
+ Don’t ask for information that is not fundamentally important
for our companies to run their businesses and deliver on
their social objectives
+ Don’t ask our portfolio companies to generate new reports
they aren’t capable of generating from their current
systems…
+ …But, if their current systems can’t collect essential data to
run their business & track their social impact, we will help
them find a way to do so
Metrics must be:
Understandable, Inexpensive, and Useful
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14. Managing the process
• When are targets set?
• How to insure they’re
2. Set realistic?
targets
• Who collects data?
• What are the key • How frequently?
drivers? 1. Select 3. Collect • Where’s it stored?
metrics data
• How should they • How’s it audited?
adjust over time? • How is compliance
ensured?
• What outputs are created
• How frequently is each 5. Review 4.
& take Synthesize from the raw data?
output reviewed?
action outputs • How frequently?
• By whom?
• For whom?

15. 2. Set
1. Select Metrics
targets
1. Select 3. Collect
metrics data
1) Identify a few key areas that drive success 5. Review &
take action
4.
Synthesize
outputs
for the organization
– E.g., customer satisfaction; brand quality; franchisee
profitability; low fixed costs; employee effectiveness
2. Devise a handful of key metrics that are:
- Quantifiable & meaningful
- Not too burdensome to collect (the fewer the better)
3. Create reporting templates for synthesizing the raw
data
– Incorporate qualitative information as well
– 1-2 pages
4. Schedule regular reviews and get started

16. 2. Set
Typical Acumen Metrics
targets
1. Select 3. Collect
metrics data
For example, Acumen tracks 3 categories of
standard metrics for each company…
4.
5. Review &
Synthesize
take action
outputs
• Revenues
• Net Income
Financial • Cash balance
• Months of cash on hand
• # products sold
Operational • # employees
• # customer visits
Social • # active or registered customers
… and 10-12 add’l company-specific metrics

17. 2. Set
Cash is king
targets
1. Select 3. Collect
metrics data
4.
5. Review &
Synthesize
take action
outputs
+ If you only track one financial metric, let this be
it: “Months of cash on hand”
 If you run out of cash, there is no mission.

18. 2. Set
2. Set targets
targets
1. Select 3. Collect
metrics data
+ Targets must be set in advance of
4.
5. Review &
Synthesize
take action
outputs
reporting period
 January 2013 is too late to budget for 2013
+ Ensure targets are realistic and achievable
+ Review all data against these targets, and
hold managers accountable for unrealistic
projections

19. 2. Set
3. Collect Data
targets
1. Select 3. Collect
metrics data
Process matters more than technology
4.
5. Review &
Synthesize
take action
outputs
+ Institutionalize processes for capturing /
synthesizing / reviewing data
– Develop written procedures
– Train staff
+ Hold individuals accountable
+ …but build checks & balances to ensure data
accuracy

20. Start with “pencil & paper” systems
2. Set
targets
1. Select 3. Collect
metrics data
4.
5. Review &
Synthesize
take action
outputs
+ First, make the process work
– Hammer out the kinks, build consistency
+ Then, graduate to more sophisticated
technology solutions

21. 2. Set
4. Synthesize Outputs
targets
1. Select 3. Collect
metrics data
We produce concise monthly reports 5. Review &
take action
4.
Synthesize
outputs
… and we prioritize support based on them

22. 2. Set
5. Review & Take Action
targets
1. Select 3. Collect
metrics data
4.
5. Review &
Synthesize
take action
outputs
Transparency cannot be underestimated

23. Some points of caution…
+ We manage what we measure, so be careful
what metrics you choose…
+ And just as we balance the social & financial
returns…
+ We need to know that not everything of value
can be measured, so don’t ignore
immeasurable value and values
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