GBF measures its impact by quantifying the incremental income or cost savings generated for people with low incomes
GBF’s portfolio includes many types of beneficiaries and businesses spread throughout developing countries. This makes for challenges in assessing our impact. GBF’s impact measurement methodology is pragmatic and tries to assess our achievements, learn from our experiences and improve where needed. We are finding that even basic metrics give us and our investees useful management information, while also providing GBF’s stakeholders information on our progress and results.
GBF’s approach is to collect self-reported metrics, confirm impact through surveys, and generate economic value calculations based on the information provided to calculate the long term potential impact of GBF’s investees on low income people.
To remain conservative, GBF does not quantify secondary or indirect benefits, but rather focuses on measurable outcomes to determine impact.
Each investee submits quarterly reports to GBF. In addition to financial and operational data, these reports include social metrics such as the number of beneficiaries reached, the amount of payments or cost savings generated, and the proportion of payments or cost savings going to the poor. When possible, we cross-check self-reported social data against the financial information we receive for soundness, and supplement reports with direct observations from our work with companies.
GBF’s investees work with supplier networks that average nearly 4,000 micro-suppliers (farmers or artisans) and 180 employees.
GBF also conducts occasional supplier-level surveys with clients to better understand the extent of impact on suppliers. Through these surveys, we gather demographic information about our clients’ suppliers and workers to establish a base line data set and implement a process to track changes over time.
On a semi-annual basis, we analyze our investees’ social, operational and financial metrics with our financial forecasts to estimate an Economic Rate of Return (ERR).
The ERR estimates the economic value created during 10 years of operations, expressed as an annualized economic return, relative to the capital employed to produce that impact.
Once our current $49 Million fund is fully booked, GBF’s portfolio has the potential to create close to $1 billion of incremental income and economic value.
Learn more about our ERR calculations in our Metrics Program Overview.