Just two months into the year, 2018 may be shaping up as the ‘Year of Data’ in the impact investing world, as urgency rises for impact investors to demonstrate concrete and measurable results. Among dozens of examples include: the work of the Impact Management Project to create frameworks for investors to manage the impact performance of their portfolios, much as they do their financial performance; an emerging standard for contextualizing impact in the United Nations’ Sustainable Development Goals (SDGs); the Toniic T100 Project studying the impact portfolios of Toniic members; and new initiatives being launched by the Global Impact Investing Network (GIIN) and others to help investors navigate their impact.
For years, Aeris has stood at the intersection of CDFIs and impact investors. Through conversations with myriad impact investors and their intermediaries since our spin-off from OFN in 2012, it has become clear to us that impact investors seek digestible impact data that align with the values they desire to promote through their investments. Often those values are expressed in very different terms than the ones used by those of us steeped in the community and economic development movement. Think: “economic security”—the desired impact—versus “small business lending"—one way to achieve the impact.
Considering the billions of dollars that family offices, high net worth individuals, and others can bring to bear creating opportunity in under-resourced communities, it is critical that CDFIs communicate their impact value propositions in terms that impact investors understand. That’s one reason Aeris has been working in partnership with CDFIs and the GIIN to compile a core set of metrics that are 1) commonly reported by CDFIs and 2) readily recognized across a range of community investments.
I’d like to provide you with a brief update on this work.
In 2017 we completed the development and testing of functional changes to the Aeris Cloud database, updating the CDFI Selector to reflect the new impact themes and aligned standardized metrics developed by CDFI Working Groups and reported in the newly-revised guidance paper. Last summer, our MBA Impact Intern, Gillian Robinson, communicated with all 140+ institutions that report data to the Aeris Cloud to verify their impact themes, sub-areas, and related metrics. This paved the way for institutions to begin reporting standardized impact data, which they did as of late last year.
You can see the changes for yourself by visiting the Aeris CDFI Selector, where community development-oriented categories have now been replaced with social and environmentally-oriented impact themes, sub-impact areas, and target beneficiaries. We are now adjusting the metric set and definitions to incorporate feedback from reporting CDFIs. This feedback is invaluable, and we encourage CDFIs to continue to share their input—we’re listening and grateful for your input!
This spring, our data team will be reviewing the reported data and following up with CDFIs as needed. Starting in 2019, users will have the capability to aggregate impact data across our database.
We are grateful to the dozens of individuals and organizations that made this project possible, especially the 55 members the CDFI Working Groups, whose input was critical to the creation of the community investing metric set, the GIIN, and our funders for their generous financial support: the Annie E. Casey Foundation, the Ford Foundation, JPMorgan Chase Global Philanthropy, MetLife Foundation, and the W.K. Kellogg Foundation. We look forward to continuing to work together to help CDFIs tell their impact stories to providers of capital, policymakers, and others.