Impact measurement in the social sector currently exists within a largely compliance-based paradigm. Although impact data plays an important role in providing accountability and is critical to the impact investing field, it should first and foremost be a tool for organizations to evaluate and improve their work. The impact sector needs a simple but flexible impact measurement framework that provides value for both entrepreneurs and investors. ImpactX and the University of Virginia worked to develop a standardized measurement evaluation template that can be used to collect relevant metrics and quantify the impact on NGOs and social enterprises working to address UN Sustainable Development Goal 7: Affordable and Clean Energy. This template aims to support investors and donors looking to make decisions about how to allocate their resources and help social sector organizations quantify their impact.

Impact measurement is difficult, and it can be a meaningful burden for NGOs and social entrepreneurs, especially those that lack significant resources. A good impact evaluation template should be as simple as possible for entrepreneurs to complete, while also being detailed enough to provide investors with valuable information. To create a standardized template, our team selected NGOs that are most important in measuring actual impact. This simplification inherently means that some level of detail and nuance will be lost, which is a necessary trade-off to allow for cross-sector comparison. NGOs need to be incentivized to quantify their impact more concretely and concisely. Impact measurement must ultimately balance investors’ needs with a value-driven approach that helps NGOs evaluate and improve their work. NGOs in the energy sector fall into two broad categories: those focused on direct service (such as distributing solar lanterns) and those focused on policy change (such as those advocating for clean energy tax incentives). Although some organizations engage in both policy change and direct service, these two types of organizations generally have very different activities, metrics, and impacts.

The proposed impact evaluation framework was inspired by a matrix used by impact investors to evaluate startups. Each of the columns in the matrix corresponds to a specific impact metric, and each organization gets a score based on its impact in that category. To adjust for organizational size, each organization’s overall score is divided by its revenue score to yield a final impact score. Revenue is used as a proxy for size because investors and donors are typically interested in how much impact an organization will create with their investment or donation. Comparison of organizations doing direct service to those working in policy advocacy proves to be a challenge. Therefore, it would not be practical or feasible to compare

these vastly different types of work. Creating two scorecards is necessary, one for organizations primarily focused on direct service, and another for organizations focused on policy advocacy. Organizations that conduct both direct service and policy advocacy work will complete both matrices, and their overall score will be the sum of their scores from both matrices.

The ranges used in the columns of each of the matrices were calculated based on real data collected from 25 NGOs working in the energy sector. Percentiles for impact data in each category were calculated to determine ranges and quantifiable levels of impact created, from 0-5. The comparison-based approach allows investors to benchmark an organization’s performance against others in the field. Moreover, the matrix format lets investors see how an organization is performing on a single metric (so that they can focus on the metrics they care most about) as well as how they are performing overall, relative to their total revenue. These matrices are designed to measure impact on an annual basis; organizations will complete them each year, and investors can compare scores across years to evaluate an organization’s progress over time.

Four metrics were included, two “primary metrics” and two “secondary metrics.” The primary metrics, GHG emissions prevented and increased access to affordable clean energy. Other common and meaningful metrics were included as secondary metrics but weighed as half the value of the primary metrics. While these metrics are valuable, they are indirectly related to SDG 7 and as such carry less weight. The scoring forces organizations especially those working in the policy space, to measure and quantify the downstream effects of their work. Direct service and policy organizations are scored on the same primary metrics and the same impact ranges, with the only difference being those policy organizations are measured based on the impact of the policy they help to pass rather than on their direct work.

When evaluating policy-focused organizations, it is important to note that no single organization is ever responsible for the passage of a given policy. However, the collective impact should be incentivized rather than penalized when evaluating impact. Therefore, rather than attempting to measure the relative contribution of a given organization to a policy win (which would be nearly impossible to do accurately), organizations can report the impact of the entire policy. These matrices are meant to be used in conjunction with qualitative data. NGOs will be asked to supply qualitative data along with the quantitative data needed to calculate their impact score. Several of the metrics are associated with multiple closely related IRIS metrics, while others have only loose proxies or lack IRIS metrics entirely.

The goal is to make the impact reporting process as simple as possible for NGOs and social enterprises. The framework and calculation mechanisms are structured as a matrix, a simple questionnaire to collect the data required to complete matrices is recommended. NGOs can complete a form on ImpactX’s website, and their answers could be programmed directly into the relevant impact matrix to calculate an impact score. Investors can search or filter organizations by SDG, type of impact (direct service vs. policy change), geographic focus, size, and the metrics themselves. Search results are ranked by impact score.