One of the most fundamental questions in our sector

Impact measurement is usually justified on one of two grounds. Measuring to improve means collecting data for your own use, to find out what is working and run the organisation better. Measuring to prove means collecting it for stakeholders, especially funders and investors, on the assumption that demonstrated impact opens access to capital. But does it?

The claim is made constantly, while research and practice have produced little evidence until now.

A June 2026 paper by Emanuele Colonnelli (University of Chicago), Tim McQuade (Berkeley Haas), Natalia Rigol and Benjamin Roth (both Harvard University) is the first RCT to answer that question. 163 Indian social enterprises, recruited through the incubator Villgro, received an identical course in impact measurement and management covering Theory of Change, indicator frameworks like IRIS+, lean data approaches and impact reporting & communication. Randomisation then determined which firms also received implementation support:

• One-to-one sessions to select a measurement framework and define organisation-specific outcome indicators.
• Support in primary data collection among their customers, employees and suppliers.
• A personalised impact report synthesising the results.
  

The control group received the course alone.

What changes when an organisation actually measures

Organisations that received implementation support outperformed the control group on two key outcomes that matter to an early-stage organisation.

• Revenue grew at approximately twice the rate of the control group.
• Outside capital raised was approximately double, across equity and debt.

Exposure to IMM concepts was identical in both arms, which locates the entire effect in implementation rather than in knowledge.That means, the differential in organisation growth and capital raised arises entirely from the hands-on implementation phase, specifically defining an impact logic, selecting appropriate indicators, reaching stakeholders and collecting data, and finally converting what those stakeholders reported into impact evidence.

A companion experiment identifies why funders reward this. 223 early-stage investors rated startup profiles whose attributes were randomised, allowing the effect of each attribute to be isolated.

• Quantified impact data drawn from a company's own customers raised investment interest by an amount comparable to the company being profitable, and exceeding the premium for strong revenues.
• A qualitative impact statement, with no data evidence, of the type organisations routinely publish about themselves, produced no measurable effect.
• Each figure was shown against the median of the comparison set, simulating a benchmark investors currently lack. Ranking above it gained a company as much interest as ranking below it lost.

That symmetry is what separates stakeholder evidence from positioning. It carries downside as well as upside, which is why investors weigh it as they weigh a financial indicator. Asked directly about barriers to impact investing, half of the sample reported an inability to assess and compare impact and an absence of standardised data, while 47 per cent cited the cost of diligence.

Two conclusions follow, one for each side of the market. 

For an impact organisation, measurement is an investment with a return, realised through revenue growth and access to capital. For an impact investor, credible stakeholder evidence is decision-relevant in the same way financial performance is, which makes the quality of impact data across a portfolio a determinant of where impact capital is allocated.

A methodological note: The sample comprises high-growth social enterprises from a single incubator in one country, and the intervention was deliberately bundled, so individual components cannot be identified separately. What the study establishes is the effect of the package.

How we work

The study confirms something we have long believed. The group that only took the course did not pull ahead. The organisations that grew were the ones that did the work: they decided what genuinely matters, asked their customers, employees and suppliers directly, and turned the answers into evidence that holds up under a funder's scrutiny. The investor experiment shows why that matters, since quantified stakeholder data moved investors much as profitability does, while the kind of impact language organisations usually write about themselves moved them not at all.

That principle runs through everything we do at leonardo. IMM is an ongoing practice that grows with an organisation, so we work holistically, bringing knowledge, tools and hands-on support together. We also build capacity and expertise inside the organisations we work with, so that the knowledge stays when we leave and their teams can carry the work forward themselves. That is why we offer both advisory, to work out what to measure and how, and software solutions, to collect, manage and report the evidence over time.

What follows from this

The study establishes that implementation, rather than familiarity with IMM, produces the returns to impact measurement, and that stakeholder-level evidence is priced by investors much as financial performance is. Both conclusions reduce to one operational question: Whether an organisation's measurement reaches the people it affects, and whether the resulting evidence holds up when someone examines it.

To discuss what that requires in your organisation or across your portfolio, book a call with our CEO Dr. Jan Moellmann at [email protected].

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