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How Technology Can Help Solve the Riddle of Impact Measurement & Management

Updated: Sep 28, 2021

The emphasis of the Impact Investing Podcast is the very first word: impact. We’re constantly exploring how organizations and individuals can invest more responsibly, in a way that makes a real difference for people, communities, and the environment.

That sounds simple enough. But when it comes time to measure the impact that an investment has made, that’s where most initiatives fall short. It’s difficult to understand what impact really means, especially with such a wide and diverse set of potential criteria. Some might even call it a riddle.


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On this episode of the podcast, we sat down with Jenelle Sobey, the CEO and Co-Founder of Riddl. Riddl is an organization that helps companies, charities, and nonprofits of all sizes track, analyze, and share their social and environmental impact data.

One of their biggest goals is to show organizations the many different types of impact, and how they can reach the ones that matter most to their mission. The firm’s software allows organizations to manage their goals, activities, and collaboration all in one place.

Solving social problems with technology

Jenelle’s interest in solving social problems started in childhood seeing homelessness on full display as she would go to the market with her family each Saturday. It hit home with her even at a young age and as she got older she started to think about the problem more strategically.

“I started looking at - at a systems-level - what's missing? What are we not doing? We've got smart people. We've got lots of capital and resources that are going to nonprofits and companies who are trying to solve these large social complex problems. But why are we still not solving them?”

This inspired her to study political science at the University of Waterloo, where she could attempt to solve problems through politics and governance. While there, she realized that there was a tool that could truly scale impact: technology.

“No matter what solution we come up with as humans, you can apply technology.”

After graduating, Jenelle bought into a custom software firm and joined as a managing partner. She learned an entirely new vocabulary set and experienced managing a team of 22 developers. This experience is what helped her understand technology and the role it can play in solving social problems. And, ultimately, what led her to start Riddl with co-founders Derek Hatchard and Jessica Peters.

So, how exactly can you measure impact?

Riddl was created in response to the rise in impact investing.

“There’s a new breed of investor, the impact investor, who is more curious about solving real-world problems than they are in necessarily a financial return.”

This doesn’t mean that they’re not interested in financial return, but they’re curious about how they can make a true impact. Jenelle and her team are seeing investors pouring billions of dollars into that curiosity.

Measuring impact can involve a wide variety of frameworks, causes, and metrics including frameworks like ESG (environmental, social, and governance) or the UN’s Sustainable Development Goals (SDGs). An environmental measurement might be carbon offsetting. A social measurement might be homelessness. And a governance measurement might be diversity or gender within a corporate board.

The main challenge Riddl is tackling is providing investors and companies with the tools to not only measure these types of impact, but compare and understand them.

To do this, Jenelle says there needs to be a clear bar of what success looks like for all stakeholders. From there, you can look at how companies are delivering upon a specific indicator or impact goal, and then compare to try and understand who is solving the problem and how they can receive the resources they need to continue.

The ultimate goal for Riddl, and impact measurement at large, is to make sure that capital allocation is making it to the organizations that are really moving the needle on complex problems.

Allowing room for failure in impact measurement

Of course, it would be extremely helpful as an impact investor to have all of those comparisons in front of you. That way, you can understand where your money is making the greatest impact.

While Jenelle agrees with this sentiment, she feels it’s important to not make the assumption that all organizations are the same and, therefore, the way that they make an impact is the same. In fact, this might be the underlying issue with measurement overall.

Jenelle says once there is room for understanding failure in impact measurement, this will also create room for innovation. Plus, failure measurements can be used internally to help organizations learn and grow.

“You can look at being able to essentially create a win-win, where you can measure and start to compare at a higher level. But then we can also start to learn from the emergent outcomes - the failures and the innovative solutions that are happening.”

There’s a data problem

Clearly, there are many different ways to measure impact. But the challenge comes in when organizations and companies need to see all this impact data in one place and actually understand it.

Many companies will only measure impact through risk and compliance. But Jenelle says that there is a massive chunk of data missing when it comes to performance. This is the big data problem: the one that is stopping organizations from understanding their impact.

That’s why Riddl has built tools like the workspace and the social return on investment calculator. These types of technological solutions are what can help companies - and the world - better understand their data. Ultimately, Riddl’s North Star is to solve the data problem.

“Our hope is that we'll be able to solve the world's toughest problems faster by being able to leverage and harness the data. And of course, that's a big goal. But that's certainly the motivation behind why Jess, Derek, and I work as hard as we do.”

How does Riddl work?

Riddl’s software is designed for two main customer segments:

  1. Asset allocators and funders who want to track the impact of their investments.

  2. Social enterprises that want to report back to their investors about the impact of their dollars, while tracking impact for internal purposes.

Jenelle says they wanted to make Riddl as flexible as possible to ensure whoever was using it could track what they needed to.

“Putting a lot of flexibility and customization into the tool was quite intentional to allow for people to select the outcomes maps that they want to use and to be able to track impact the way that they need to for their organizations.”

For example, one of Riddl’s users is a government-run social services department that gives out a substantial amount of grants per year. Riddl’s software allows them to outline their impact objectives, give grants that are intended to drive those impact outcomes, and track all of this impact data in one workspace across the entire team.

By seeing this quantifiable perspective and understanding exactly where they’re moving the needle, they can then internally improve and communicate publicly how every dollar invested is showing a return.

“That can be really impactful when we're looking at building policies that are proactive as opposed to reactive. Investing early on in issues, as opposed to spending a lot of money on programs that deal with issues after they've become really big.”

Ultimately, Riddl hopes to make recommendations to its users for performance metrics, almost like a digital consultant. Once there is more standardization of measurements, these recommendations can provide more value than ever before.

“As opposed to saying, the majority of your peers are using this, it’s more powerful to be able to say, X percentage of companies and organizations using this indicator in this sector with these variables are being 86% successful.”

Are social challenges harder to quantify?

Although it may seem that environmental and governance metrics are easier to measure, Jenelle argues that social challenges are not always harder to quantify. For example, measuring gender diversity within a company or the amount of employment created by a VC firm.

Moreover, Jenelle believes that if something seems too complex to measure, that simply means we haven’t become clear yet on how to solve the problem.

“If you're not clear on the solution and if the solution is actually solving the problem, then it's always going to be hard to measure.”

The social return on investment calculator

One of the more exciting aspects of Riddl’s development is its social return on investment (SRI) calculator.

This product allows users to set their own kind of impact formula - essentially, how they’re going to translate dollars into impact. Then, the calculator gives them a way to document the assumptions that were used and why they used those assumptions for the overall SRI calculation.

Many, including Jenelle, feel that all organizations should be required to measure their SIR. That’s why Harvard Business School has created a methodology for how companies and government organizations can track their positive and negative impact value on financial statements.

“I believe that’s the future. And our role in that is helping organizations be able to start to quantify what that positive and negative value is.”

A positive outlook for the future

With so many people joining the impact investing space, Jenelle is excited to see the changes happening and to play a small but crucial role in that change.

She says that we are all getting so much closer to solving the data problem and, in turn, solving many of the world’s largest social problems.

“That puts the entire world in a much better position to be able to solve for some of these complex problems. I don't think we're going to have to live with them forever.”

To learn more about Riddl, visit their website, listen to their podcast, and follow them on social media:

Listen to the full podcast episode here and don’t forget to leave a 5-star review on Apple Podcasts!

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