Impact investing has been gaining popularity in recent years as more investors look to make a positive social or environmental impact alongside financial returns. The Bridgespan Group, a global nonprofit consulting firm, has been at the forefront of driving impact investing through research, advising clients, and developing innovative approaches. In this article, we will explore how Bridgespan is promoting impact investing in areas like impact measurement, portfolio construction, and capacity building.
Bridgespan developed tools to measure and maximize impact
A major challenge in impact investing is how to quantify the social or environmental impact. Bridgespan has developed methodologies like the ‘impact multiple of money’ to estimate the projected social or environmental return per dollar invested. They also created the ‘impact weighting’ approach which helps construct portfolios to optimize impact versus financial returns. These tools enable investors to make more data-driven decisions when allocating capital for impact.
Bridgespan advised leading impact investing funds
Bridgespan has partnered with prominent impact investors like TPG’s Rise Fund, a $2 billion impact fund, to develop investment strategies and measure performance. Drawing on Bridgespan’s nonprofit experience, they have helped craft theories of change, select metrics, and build impact models to steer investments towards scalable solutions. Bridgespan’s guidance has been invaluable for large funds looking to formalize their impact processes.
Bridgespan focused on growing the impact investing field
Beyond direct consulting engagements, Bridgespan has undertaken field-building initiatives to spur the growth of impact investing. They have conducted research on topics like impact washing to understand challenges preventing mainstream adoption. Bridgespan also recently launched the Impact Finance Center to provide free tools and education tailored for impact investors. By strengthening the broader ecosystem, they aim to catalyze capital flows into high-impact investments.
Through pioneering measurement approaches, advising major funds, and field-building efforts, the Bridgespan Group has significantly advanced the practice of impact investing. Their work has brought more rigor and transparency to balance financial and impact performance. Bridgespan’s contributions will help impact investing move further into the mainstream.