Global Partnerships Case Study: Measuring and Managing Financial Inclusion Outcomes
Highlights:
• Global Partnerships, a nonprofit impact-first fund manager, has developed an approach to impact measurement and management (IMM) that prioritizes development and intermediate outcomes. This case study explores how Global Partnerships integrates outcomes data throughout its investment cycle to inform strategy, portfolio construction, and portfolio management, showcasing how it enables financial inclusion outcomes through investments and manages impact risks.
• The case study also highlights critical enablers for effectively integrating outcomes into IMM, such as leadership commitment, integrated impact and financial due diligence, collaborative stakeholder relationships, and a continuous learning approach.
Executive Summary
Impact investors at the impact measurement and management (IMM) frontier are seeking to prioritize the measurement and management of development and intermediate outcomes of financial inclusion due to two critical factors: (i) the growing demand for impact transparency driven by the urgency of global challenges and the Sustainable Development Goals (SDGs); and (ii) the need to mitigate significant reputational, impact, and financial risks associated with negative outcomes and the risk of overstating impact performance.
This case study highlights the emerging trend among impact investors to adapt their impact measurement and management (IMM) to focus more explicitly on development and intermediate outcomes, referred to in this paper as “outcomes-focused IMM”. Outcomes-focused IMM is a comprehensive approach that involves measuring, understanding, and reporting on the effects of investments. It specifically focuses on the actual development and intermediate outcomes experienced by customers, including women, which are enabled by financial inclusion investments. This approach integrates outcomes data into the investment decision-making process and helps manage impact risks.
Global Partnerships is presented as an example of a fund manager that has developed an innovative outcomes-focused IMM practice. This case study aims to provide insights for other impact investors seeking to innovate and implement outcomes-focused IMM.
As an impact-first fund manager, Global Partnerships seeks to broaden opportunities, deepen inclusion, sustainably serve millions, and improve lives by empowering people in poverty to earn an income and improve their lives. Managing over $200 million in gross assets across multiple funds, Global Partnerships invests through its affiliated investment funds in various types of social enterprises, the majority of which are financial services providers (FSPs). Outcomes data is valued as core to business intelligence and a key driver for achieving impact, embedded in each stage of the investment cycle. This data informs investment strategy, portfolio construction, and portfolio management, playing a central role in decision-making and engagement with FSP partners and fund investors. Figure 1 provides a visual summary of Global Partnerships’ outcomes-focused IMM. This case study explains in greater detail how Global Partnerships is integrating outcomes data throughout the investment cycle to inform decisions.
- Global Partnerships’ approach highlights several key enablers to effectively integrate outcomes into IMM, including:
- Leadership valuing and investing in the practice;
- Using outcomes data to inform business decisions;
- Requiring impact due diligence and approval in addition to (and often in advance of) financial due diligence;
- Working with partners and investors with a shared focus on outcomes management;
- Facilitating transparent dialogue and collaboration with stakeholders in the capital value chain;
- Continuous monitoring and iterative learning for strategic adaptation and improvement; and
- Robust monitoring using a mixed-methods approach to generate comprehensive and actionable insights.