At the Impact Evaluation Lab, we assess fund managers on the authenticity and rigor with which they pursue their stated impact mandate, as well as the consistency with which they report their achieved financial and non-financial goals.
We are frequently – and appropriately – asked: how do you define impact? We are also asked: how do you measure impact?
Rather than introducing a new or proprietary definition, our approach to impact assessment builds on established work in the field. The foundation of our methodology is outlined in the Impact Authenticity Score white paper, co-authored with the Sorenson Impact Institute at the University of Utah. We also draw on widely recognized frameworks, including the Five Dimensions of Impact developed by Impact Frontiers.
Defining Impact
We believe that impact requires outcomes — real-world changes resulting from an enterprise’s activities. These outcomes can be positive or negative and should be evaluated relative to a relevant counterfactual: in short, we rigorously assess what would have happened in the absence of the enterprise or investment.
At its core, impact is about answering a simple and analytically provable question:
What change was created?
To answer this meaningfully, we consider and rigorously measure:
Who experiences the change
What type of change occurs
How much change is created
This logic and framing applies at multiple levels – from a single company and its products or services, to an investment manager deploying capital across a portfolio of companies.
Impact Investing
Impact investing is the intentional deployment of capital with the aim of generating measurable social, environmental or economic outcomes alongside financial returns.
In practice, this requires more than stated intent. It requires:
A clearly defined impact objective
A credible approach to achieving that objective
Ongoing measurement and reporting of outcomes
At IEL, we focus on assessing the degree to which these elements are present and executed with rigor.
Impact Measurement and Management (IMM)
Impact Measurement and Management (IMM) refers to the processes and systems used to define, track, and improve impact performance over time.
Strong IMM practices enable investors and fund managers to:
Set clear impact goals
Measure progress against those goals
Use data to inform decision-making
IMM is not just about reporting – it is a core part of how impact is achieved, tracked, and ultimately how it can be strengthened.
