Dissertation Project PPT

1. Impact Investing in India
by
Sameer Kumar Thapa
MDI April 2010
Roll: 10PT1-068
Under the guidance of
Biswa Ranjan Patnaik Prof. Sandeep Goyal
Regional Program Director Assistant Professor – Finance
CARE (India), Lucknow MDI, Gurgaon
thapasamee@gmail.com

2. Impact investing in India and impact measurement
practices prevalent in India?
a) The study looks into the various aspects of impact investing in India.
b) The study will attempt to survey the current impact investment
evaluation methods prevalent in India and related aspects.

3. Methodology
A) Secondary research through literature available on the subject
B) Primary research based on survey questionnaire
https://docs.google.com/spreadsheet/gform?key=0Amz390V1cSRTdGM4MmNPX1Jla
VBYbGhXanlSbGxyVGc&gridId=0#chart

4. Results
1) Organization involved in impact investing is equally divided between private
company and NGO‟s, with NGO‟s having slightly higher percentage.
2) The 48% of respondents are existence in impact investment industry for more than
10 years and next highest percentages are of organizations that are in existence for
the last three years.
3) The Impact investors are funding multiple projects in various domain with
livelihood component having a major share.
4) Majority of a impact investing business has a turnover of less than 3 Crores.
5) Almost 65% of impact business is initially funded by personal savings and
through family and friends.
6) The Majority of initial funding for impact business seems to be from grants &
donations next highest contribution was of equity.

5. Results
7) The results shows that 57 % organizations are using tools to measure their impact
performance and 43 % are not using any tools.
8) Almost 60% of the impact investment stakeholders are not aware of the methods
of monetizing the value created by impact investing
9) The measure reason cited for non usage of impact measurement tool seems to be
the lack of awareness about the measurement tools, however all other reasons like
unavailability, difficulty and lack of standardized tools seems to be equally
prominent in non usage of measurement tools
10) The 57% who responded by saying “yes” against the question of whether they use
impact measurement tool, out of that 57% is using self designed tool and 43% are
using adapted tool
11) The results shows among measurement tools “Benefit cost analysis” is highest on
the awareness level of impact investing stakeholders (84%), followed by “Social
Impact Assessment” (SIA)(63%) and “Balance Score Card” (58%).

6. Results
11) The results show that 74% of participants are in clearly in favor of monetizing
social returns of impact investment .
12) The primary reasons for seeking impact measurement tool was cited as
transparency (79%), desire to communicate better to the investors (74%) and
accountability (68%).
13) The results shows that most of the respondents preferred disclosing impact
measurement results separately in annual reports.
14) 61% percent of the respondents are in favor of a single regulatory body for issuing
and regulating impact investment measurement standard, The respondents in favor
of accounting bodies was less than 30 %.
15) 87% of the respondents were also in favour of measuring CSR initiative of the
organisation

7. Analysis
 The study shows that people associated with the aspects of impact investment are
there for a quiet long period, showing the availability of platform for impact
investing industry.
 The embryonic stage of impact investing industry reflects in the multiple roles
performed by the impact investing community like investors, investees, employees
etc.
 There is a considerable presence of nonprofits and along with individuals funding,
funding in the nature from grants and donations contributes substantially to the
social impact business , showing a visible link between Nonprofit and For profit
business model in India.
 The scaling up of social enterprises is an issue which the impact investment industry
is yet to resolve

8. Analysis
 Study shows that, the stakeholders of impact investment community are well aware
of the need to measure the impact of impact investments
 The results shows that as a measurement tool the “Benefit cost analysis” is highest
on the awareness level of impact investing stakeholders (84%), followed by “Social
Impact Assessment” (SIA)(63%) and “Balance Score Card” (58%)
 The results show that 74% of participants are in clearly in favor of monetizing social
returns of impact investment.
 There is need to develop and designed a single standard measurement tool
acceptable to all which could be made applicable in impact investment business.
The result poses a challenge to impact investing & academic community to come up
with a solution to the problem.

9. Analysis
 The result shows that there is strong opinion that the social impact be disclosed
in annual reports separately instead of in financial statements, although
depiction of social impact in the financial statements might have larger weight
age in financial decision making. However, respondents favoring disclosure in
financial statements were also substantial. If a standardized methodology
acceptable to all can be developed, then it is very likely that the social impact
value can be put into financial statements for over all good of the impact
investment community.
 The study shows the link of impact investment in bringing „for profit‟ and „non
profit‟ sector together in India and slow transition of nonprofit model of
business to for profit model leading to the birth of social businesses. This
transition has resulted in a gap where, the measurement of performance of social
businesses and consequent measurement of returns of investments in social
business has become a topical issue.

10. Key Learning's
 There is a need to devise a legal structure which may be in between pure charity to
pure commercial structure to promote impact investing in India.
 There is a gap in availability of acceptable measurement tool which can be used for
impact investing industry
 A big potential for promoting impact investing in India by providing necessary
financial and regulatory incentives
 A slow and steady change in non profit sector in India, whereby it is turning way
from pure philanthropy to sustainable philanthropy

11. Limitations/Way forward
Limitations
 Limited responses from the industry stakeholders
 Limited personal interaction with the industry participants
 Inadequate design of questionnaire
Way Forward
 Further research with maximum stakeholders engagement
 A platform whereby academia and industry practitioners can share and exchange
views on the subject of devising acceptable impact measurement tools

12. THANKS