Social Impact Measurement and Impact Investing for Social Enterprises

  • Olumuyiwa Ogunfowora

Student thesis: Phd


There is increasing demand for social enterprises to demonstrate social value and measure impact in order to attract additional funding through impact investing. Impact investing is the provision of financial capital to organisations or enterprises with the intention to address social needs and the explicit expectation of a measurable social or environmental impact, as well as financial return (O’Donohoe, Leijonhufvud and Saltuk, 2010). Social enterprises play critical roles in addressing complex social needs such as poverty, inequality and climate change; these complex social and environmental challenges are aligned with the United Nations Sustainable Development Goals (SDGs). The SDGs comprise of 17 goals that provide a common framework with indicators for all enterprises to achieve sustainability by 2030. Impact measurement is becoming increasingly important for social enterprises as funders including impact investors, policy makers and philanthropy organisations now demand measurable outcome as key requirement to provide more funding and enhance financial sustainability. Effective impact measurement requires both academic and practitioner scrutiny, thereby the need to understand various social impact measurement approaches from data collection, through analysis and how the results are utilized (Arvidson et al, 2010). Impact measurement is also a critical enabler for the widespread diffusion of impact investing, an innovative financial concept, in ensuring the scalability and sustainability of social enterprises. Most previous research and existing literature on social impact measurement are mostly from practitioners with focus on developing new impact measurement approaches (Arena, Azzone, and Bengo 2015) rather than to identify commonalities and relevant theoretical frameworks across the existing approaches (Epstein and Yuthas, 2014). Furthermore, there is limited literature with insights on the linkage of impact measurement and impact investing with sustainability especially the SDGs, hence the identified knowledge gap in literature. This research provides a better understanding of the underlying theory for impact measurement to fill the gap in the literature. The research achieves this by drawing on academic literatures from development evaluation, non-profit management, corporate social responsibility, social innovation, social performance management, socially responsible investing, and sustainability. The insight from the literature review establishes that theoretical framework for effective impact measurement comprises of the application of theory of change, stakeholder theory and SDGs for sustainability. These findings were further validated through a comparative analysis of the commonly used impact measurement approaches to identify the commonalities across the existing approaches, expert interviews from academics, practitioners and in-depth case study analyses. The policy implication of the findings is that funders, impact investors, policy makers, social enterprises and all the stakeholders in the impact measurement and impact investing ecosystem need to have impact measurement approach that is framed around common guiding principles or theoretical framework integrating theory of change, stakeholder theory and sustainability.
Date of Award1 Aug 2020
Original languageEnglish
Awarding Institution
  • The University of Manchester
SupervisorKate Barker (Supervisor) & Efthymia Amanatidou (Supervisor)


  • Sustainable Development Goals
  • Sustainability
  • Social Impact Measurement
  • Impact Investing
  • Social Enterprise

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