Michael,
Great article and great work bringing some mathematical rigor to what many of us have known in our gut for a long time - there’s usually a trade-off between risk and impact and return. We should all aim to extend our respective Efficient Impact Frontier but we don’t need to apologize for giving up risk-adjusted return when it pays big impact dividends.
It’s a good PR piece, but Mike lost me when he started talking about impacts. I wrote a few notes as I was reading:
• Expected Impact is just another way of saying ex-ante impact assessment, which is based on forecasts rather than results. This can be done reasonably well if you are dealing with a particular intervention in a known context and forecasting a direct result but becomes increasingly like guess work as one moves from the known to the unknown and from outputs to impacts.
• Knowing the impact of an intervention is tough, even after the fact, because impacts can be both intended and unintended, and can be both direct and indirect. I was part of a team that did ex-ante assessments for donors on large research projects. I can attest that the numbers we provided were well intentioned, but really just for show.
• Even if you accept that Expected Impact is meaningful, RC then produces a single number out of two indexes, enterprise and investment impact, and then they elevate investment impact. This implies all sorts of value judgments in terms of picking trade-offs, none of which are made clear in the article.
• Their efficient impact frontier is only meaningful if the data they use is accurate. Assuming that their financial return data is correct, I would argue that their impact data is almost meaningless, so their efficient impact frontier measurement is not worth much either.
• They provide no evidence that their methodology works. Anyone can come up with a formula for this or that. What would help change my gut reaction of this from skeptical to appreciative would be the presentation of evidence (e.g., an impact evaluation of RC) to demonstrate that they are meeting their own professed goals.
COMMENTS
BY Karla
ON November 21, 2016 01:30 PM
Great article!!
BY Ted Levinson
ON November 27, 2016 07:34 PM
Michael,
Great article and great work bringing some mathematical rigor to what many of us have known in our gut for a long time - there’s usually a trade-off between risk and impact and return. We should all aim to extend our respective Efficient Impact Frontier but we don’t need to apologize for giving up risk-adjusted return when it pays big impact dividends.
BY Keith Child
ON December 20, 2016 02:52 PM
It’s a good PR piece, but Mike lost me when he started talking about impacts. I wrote a few notes as I was reading:
• Expected Impact is just another way of saying ex-ante impact assessment, which is based on forecasts rather than results. This can be done reasonably well if you are dealing with a particular intervention in a known context and forecasting a direct result but becomes increasingly like guess work as one moves from the known to the unknown and from outputs to impacts.
• Knowing the impact of an intervention is tough, even after the fact, because impacts can be both intended and unintended, and can be both direct and indirect. I was part of a team that did ex-ante assessments for donors on large research projects. I can attest that the numbers we provided were well intentioned, but really just for show.
• Even if you accept that Expected Impact is meaningful, RC then produces a single number out of two indexes, enterprise and investment impact, and then they elevate investment impact. This implies all sorts of value judgments in terms of picking trade-offs, none of which are made clear in the article.
• Their efficient impact frontier is only meaningful if the data they use is accurate. Assuming that their financial return data is correct, I would argue that their impact data is almost meaningless, so their efficient impact frontier measurement is not worth much either.
• They provide no evidence that their methodology works. Anyone can come up with a formula for this or that. What would help change my gut reaction of this from skeptical to appreciative would be the presentation of evidence (e.g., an impact evaluation of RC) to demonstrate that they are meeting their own professed goals.
BY Naoki OKAMOTO
ON June 13, 2017 04:36 AM
Great