Key Points

Foundations have a long history of putting impact at the center of their decision-making when allocating resources for grantmaking. Effective grantmaking follows clear processes that have similarities to the best practices employed by the impact investing community for effectively deploying and managing an impact investing portfolio. This is exemplified by the Operating Principles for Impact Management, a leading market standard for how to integrate impact considerations throughout the investment life cycle.

As a growing number of foundations embrace impact investing, understanding and comparing the impact management approach for grants (where it is enabled through monitoring, evaluation, and learning) versus that for investments (where the equivalent practice is typically referred to as impact measurement and management) can help practitioners harmonize and enhance their practices for assessing whether their interventions are achieving their desired objectives.

This article uses a case study of The Rockefeller Foundation’s Zero Gap Fund, an impact investment platform established in partnership with the John D. and Catherine T. MacArthur Foundation, to elucidate the IMM practices used by impact investors, as well as to show how and why the impact investment field is using independent verification and benchmarking to strengthen practices.

BlueMark, a provider of impact verification services, conducted an independent verification of the fund’s IMM systems in 2021 as a means for the ZGF team to improve its approach to IMM. Expanding on the themes in the case study, this article also discusses trends among impact investors more broadly, drawing on BlueMark’s 60-plus verifications (as of March 2022) across a diverse group of impact investors, as well as the parallels and opportunities for learning between impact measurement and management and monitoring, evaluation, and learning professionals.

Open Access