The 5 NGO’s we selected to test our methodology are Clean Water Fund, International Water Initiative for Sanitation and Hygiene Inc. (IWSH), Splash International, Clean Water for Haiti and Heal the Ocean. The Clean Water Fund is a non-profit organization based in Washington D.C. that focuses on helping people successfully campaign for cleaner and safer water, cleaner air, and protection from toxic pollution. They reach and involve more than one million households each year through
outreach, education, organizing, advocacy and policy action at the local, state, and national levels. Through their work, they place an emphasis on health, consumer, environmental, and community problems. In addition to their website, additional information can be found through their charity navigator page as well as their annual report.

Looking at the finances, the Clean Water Fund has a relatively healthy revenue of nearly $5 million from the year 2020. Their spending patterns show significant accountability as over 80 percent of these funds is funneled directly into their programs. These programs consist of prompting state policies and federal action to remove toxic chemicals from drinking water sources. As well as campaigning in support of the transformational For the People Act and the John Lewis Voting Rights Advancement Act which ultimately makes it easier for people to register to vote and realize long-term water and health protection goals in certain regions. Other programs aim at promising “green infrastructure” solutions to remove lead from drinking water sources and reduce runoff pollution. These programs received a total of almost $4 million in funding in the 2020 fiscal year.

In terms of accountability, the Clean Water Fund made it extremely easy to locate their financial data. In addition to having financial data presented through the Charity Navigator site, The Clean Water Fund’s website also granted easy access to their form 990, their 2020 Financial Report, as well as their annual report on their achievements and progress. One aspect that was not very clear was their expenditures on salaries or if they had any paid employees to which their funding was directed towards. Because it was not mentioned, we assumed that salaries were not a valid expense for this NGO. Nonetheless, it would be helpful for them to mention this in their statements. The Clean Water Fund did not display many numerical values in terms of their work measurements and outputs. However, their financial data illuminates their project priorities.

IWSH is a non-profit organization that focuses on plumbing as they help develop and enhance the role of the plumbing industry in community collaborations and education exchanges throughout the world. They center their work around design and construction projects that help increase access to water, sanitation, and hygiene resources for a number of communities in need. In addition to their website, more information can be found through their charity navigator page.

Financial-wise, IWSH had a significant focus on projects in terms of their expenditures. With a revenue of $336,870 at the end of the 2019 fiscal year, they put almost $200,000 towards programs (71.7%). The remaining third of revenue was put towards fundraising and administrative costs for the organization. At the end of the year, the organization netted a total of $133,818 after liabilities. 

When it comes to accountability, IWSH’s financials were not as clearly communicated and easy to find as some of the other researched NGOs. Additionally, their last updated financial data presented in their form 990 was from the 2019 fiscal year. While still relatively recent, the lack of updated financial information serves as a barrier in analyzing the impact of this NGO, especially if that data were to be compared to the 2020 financials of similar caliber organizations who have presented their updated information in the presence of Covid-19 during the 2020 term.

IWSH did not present a lot of numerical data in terms of its metrics which makes sense because they focus on advocacy and policy action at various local, state, and national levels. As a result, it makes it tremendously difficult to trace specific numerical and quantitative impact outcomes from their organization. 

Splash International is a Seattle-based NGO that focuses on installing clean water filters, drinking stations, and handwashing stations in schools in Addis Ababa, Ethiopia and Kolkata, India. They aim to serve approximately 1,600 schools in the next five years that house nearly one million children. 

Financially, Splash International is by far the fiscally healthiest NGO we researched, with their revenue in 2019 reaching almost $10 million dollars. 72.2% of this goes directly into their programs with 14.82% of their program funds - or $610,294 - going toward the WASH implementation itself. They’re fairly efficient when it comes to fundraising, with $1 invested towards fundraising costs resulting in about $14 being raised.

In terms of accountability, Splash International made it fairly easy to find the information necessary for this report. On their website, they have links to both their Financial Statements and their Annual Report. One area of concern is the discrepancy between revenue and expenses; it is unclear where $4,216,859, or 42.5%, of their revenue, is going. This amount could likely double the impact of their projects if it were to be invested.

Clean Water for Haiti is a Vancouver-based NGO that focuses on bringing clean water and jobs to Haiti. As it stands, most of the Haitian water sources are contaminated with diseases, but many residents have no other choice but to drink it. Clean Water for Haiti aims to change that through their bios and filtration system and by training locals as technicians installing and sustaining the filters.

Financially, Clean Water for Haiti provides subsidized - not free - filters to Haitian residents. The logic behind this is that they “have learned things with value are used and taken care of” (Who We Are page). It costs $5 for a family to purchase a filter, with $95 being subsidized through the organization. In terms of their technician training program, it costs prospective technicians $250 to join the training program and includes materials, class time, 3 meals a day, and accommodations in the organization’s guest house. Although Clean Water for Haiti is a small organization, it does a good job at distributing the capital it does have. 64.4% of all money raised goes towards their projects. They have done a great job investing in fundraising efforts, with every $1 put towards raising money resulting in over $15 earned.

Paying attention to accountability, Clean Water for Haiti did not make it easy to find information about their financials, besides some of the metrics they report on their website. The most recent 990-EZ we could find was directly through the IRS website, and their tax returns have only been published through 2018. Because of this, we were unable to find much information on their Total Asset and Total Liabilities. On their 990-EZ, however, they did clearly break down their finances so that readers could determine exactly where every dollar was headed, from insurance costs to the amount spent on printing and postage.

Heal the Ocean is a Santa Barbara-based NGO that focuses on wastewater infrastructure (sewers and septic systems) as well as ocean dumping practices that have contributed to ocean pollution. In addition to their own website, they can also be viewed via Charity Navigator. 

Financially, Heal the Ocean focused significantly on their projects in terms of their expenditures. 55.3% of all spending for the 2020 year was invested into project outcomes, with about a third of their expenditures accounting for administration and salary costs, and the remaining 10% accounting for fundraising. Overall, Heal the Ocean was valued at approximately 1 million dollars for the 2020 fiscal year.

Heal the Ocean had a variety of metrics they reported on. They did not include specific information as to how many dollars were invested in each specific category, but they did provide their 2020 990 forms, which allowed us to have an overall view of the company’s financial prospects.

The long-term goals include the metric tracing spreadsheet, our goal for ImpactX is to reach the point where they can efficiently create financial benchmarks for each metric category in terms of dollars spent. However, NGO spending data on that level of specificity is not widely available. Our goal was for this chart to be completed. 

With the ability to measure financial efficacy in the same metric category, it would allow complete financial transparency between NGO competitors who focus their work in the same ways. However, our team recognizes this dream is a long way off from reality. In order to get to a point to be able to quantify metrics in terms of the dollars invested each year, ImpactX will need to collect a lot of data, to begin with, and find a way to evaluate impact efficiency without the missing piece - the benchmark of average dollars spent per metric.

It is our belief that in the future, benchmarks that establish metric output as a dollar ratio will be the gold standard in the impact investment space for investors. In the meantime, our proposal is as follows: work with the information available, primarily through collecting the data available in the 990 forms. This will then allow ImpactX to sort NGOs based on their reported metrics and will evaluate their outputs in comparison to one another. This approach is scalable to other industries, as it does not tie itself to the metrics as a means to create spending benchmarks. Instead, investors can evaluate NGO efficiency based on their self-reported metric outputs.

From our research, our initial goal was to produce a rating system that would allow ImpactX to create benchmarks based on the financial efficacy of each metric category. Generally speaking, it is our conclusion that the search costs for finding the dollar-metric spending from each NGO is too high, due to a lack of reporting of these statistics, or an unwillingness from NGOs to be transparent with this data. As a result, it is not currently possible to compare each NGO in terms of financial efficiency within each metric category. Currently, we do not have widely available data within the impact investing space to be able to make comparisons between the financial efficacy of different metric categories. We do, however, have the ability to look at metric outputs from NGOs as a whole, and compare them to other NGOs.

Our proposal to ImpactX is to save time in terms of data-gathering within each NGO. Our main barrier in creating a functional, operating and scalable measurement system and the subsequent template is that the search costs for this kind of information are extremely high. It is our belief that the goals of scalability and depth are, for the moment at least, mutually exclusive. If ImpactX seeks to embark into the impact measurement space, it will need to find a way to rectify this conflict between the measurement systems scalability, and the ability of the system to accurately report on the massive amount of nuances within each individual industry.

Our proposal is for ImpactX to put the information-gathering process back into the hands of the NGOs. Without specific data as to how each of the NGOs performs in comparison to other NGOs with work in the same metric category, it will be extremely difficult to produce a measurement system that compares their efficacies. Our proposal is for ImpactX to begin first by gathering that data by putting it as a requirement in their scoring system. Having this data is, from our research, the only means of comparing financial efficiency at the metric level.

Looking into our short-term proposal, In order to ease the difficulty associated with comparing various NGOs directly on a wide variety of metrics, our approach gives impact investors the flexibility to choose what NGOs they want to compare, as well as what metrics they wish to compare between these organizations. By adding this “filter” option to the existing ImpactX website, investors will have the ability to search for a particular metric (or metrics) and narrow down comparable NGOs based on that particular metric criteria. For example, if an investor were to search for ‘pollution’ as a keyword in the filter bar, comparable NGOs that have a large focus on pollution will come up.

In order for a proper comparison, these NGOs will have similar financial profiles as well as a focus on the given metric (in this case pollution). The optimal way to gauge if the NGO has a focus on the metric is by looking at the self-reported impact of those expenditures. Without specific cost-per-metric data, the only way we can make strong comparisons is by the metric category and letting potential investors decide which reported output they feel is up to their own standards.

Without information as to where each specific dollar is spent in terms of metrics, it is difficult to provide an Impact Measurement system that evaluates financial efficiency in each metric category, as dollar-metric information is rarely available. Instead, we have focused our evaluation on the output of the organization in a holistic sense. This approach has three advantages: 1) it removes the necessity to deep-dive into each specific NGO and discover their spending in each metric category, and 2) it allows for greater nuances for each NGO to defend their outputs, as some metrics may have subtle differences. For instance, one NGO could install a WASH facility for 1⁄2 of the price of a second NGO, but its quality may suffer severely.

This approach moves us away from a strict dollar-metric interpretation to allow for industry-specific nuances. Finally, 3)
the third advantage is this approach’s scalability. As ImpactX gathers information in each SDG category, it will be able to create categorizations for the entire SDG. This approach recognizes that each metric may carry nuances, but does not seek to delve into minute details that may not carry significant importance to potential investors.

Our holistic approach in developing a scalable methodology to measure impact across various types of impact endeavors ultimately boils down to flexibility and consistency. It is important to recognize the importance of NGOs being related in order for a proper comparison to take place. By comparing similar organizations, investors can get an idea of how to quantify impact by taking into account the revenue, expenditures, and specific metrics associated with various NGOs. It is vital to draw conclusions from these comparisons only when there is consistency across the board between the contrasting NGOs.

As an incentive for NGOs to report their metric spending in the varying metric categories to the ImpactX website, their organizations will be advertised to potential impact investors. In other words, the ImpactX website will serve as a platform for these NGOs to acquire attention from potential investors. Submitting their financial data across metric categories will increase the chance for investors to view their organization as they compare different NGOs based on reported metrics and spending patterns.