by Marta Maretich @maximpactdotcom
Data is a hot topic in the worlds of government, business and philanthropy. As information technologies mature, the increased availability of data, coupled with advances in analysis, mean that many sectors are reaping the long-promised rewards; and feeling the pressure of a new age of data immersion.
This data boom will affect the growing impact investment sector on several levels. First, it will provide new opportunities for research and development. As others follow the lead of institutions like the World Bank and the UNDP, and governments like the Netherlands and Sweden, and begin to make their data public in open data initiatives, huge amounts of information about countries, communities and projects will be available online for the first time. This information is are source for entrepreneurs and investors, who can use it to identify markets, develop deals and target capital where it will have the most impact.
Impact measurement will be another field influenced by the rise of data. As the sector develops, investors from every part of the spectrum will come under increasing pressure to collect data and use it to demonstrate impact. How to measure impact is still an issue and the race is on to find the right tools for the job: IRIS and GIIRS are already available and other systems will emerge as the sector expands. Yet measurement is here to stay. As impact investing gains popularity, the call for evidence-based accountability grows louder and serious players will need to answer.
The call for transparency is another dimension of data. Like many other sectors, the impact sector is coming under more pressure to share its data publicly. ImpactIQ,a nonprofit media platform for social finance, has challenged the sector to “put its data where its mouth is” and contribute deal information to an open database. The aim is to collect data for analysis and research to build the sector. Several Maximpact funds, including Toniic, the Unreasonable Institute and Impact Engine, are already taking part. For more, see this blogpost by ImpactIQ editor David Bank.
The overall message for the sector is to get ready for data: using it, collecting it, analyzing it, sharing it and publishing it as never before. With its philosophy of openness, Maximpact supports this move to a more transparent future for data and for the sector as a whole. By sharing more, we stand to gain a lot.