Think tanks and impact investing

The impact investing market is worth over USD 700 billion. Notwithstanding its size, the impact investing sector is a young industry. As such, it still faces many challenges. Central among these is its capacity to effectively plan for, measure and account for impact. We believe local think tanks have a central role to play.

The challenge

More and more investors are looking to impact investing, seeking long-term profitability while not only ‘doing no harm’ but ‘doing good’.

The impact investment industry is already worth more than USD 700 billion. 

The industry’s claims of impact are likely to attract more investment; as well as the attention of the broader research and policy community. As this movement grows and the private sector increases its explicit role in matters of public interest, new actors need to engage to avoid impact washing and ensure that the industry develops on the basis of sound evidence.

We propose that local think tanks are well-positioned to help nurture this young industry to grow in a sustainable manner, and to deliver impact by:

  • Contributing to the development of evidence-informed national and international frameworks to promote an impact investing sector that can effectively plan for, measure and account for impact
  • Complementing and strengthening the investment industry’s knowledge, skills and capacities
  • Developing and adapting appropriate impact measurement methods and tools
  • Acting as independent arbiters to the industry’s claim of impact
  • Promoting a culture of collaboration and ongoing learning about the sector.

Local think tanks are national or sub-national organisations close to the investments and their stakeholders. They possess a wealth of sectorial and contextual knowledge that is critical to inform, ex-ante, investment decisions and can contribute to ensure that individual investments and portfolios are continuously informed by the best available evidence. To find a local think tank visit the Open Think Tank Directory

OTT is working with partners, IMPACTO Consulting, the International Development Research Center (IDRC), and FinDev Canada to generate the necessary evidence and building blocks for a long term initiative.

Our initiative

The objectives of this initiative are:

  • Think tanks incorporate the policy framework for the impact investing sector as a subject of their research;
  • Think tanks incorporate the impact investing sector as a key communication audience for their own work; and 
  • Impact investors actively participate, consume and engage with local think tanks and their work.

OTT and partners IMPACTO Consulting believe that both think tanks and impact investors could benefit from a global initiative that supports this effort. Our proposed strategy involves four pillars:

  • Knowledge and resources: Short and long term efforts to provide an evidence base including:
    • National and regional needs assessments to determine the opportunities for think tanks to support and engage with impact investors;
    • National and regional think tank maps to help impact investors identify opportunities for collaboration;
    • Case studies to illustrate the contributions that think tanks can make to the impact investment industry; and
    • Useful resources including industry specific monitoring and evaluation guidelines and tools or impact investors and think tank databases
  • Learning: Short to long term learning opportunities to:
    • Introduce think tanks to the impact investing sector as well as impact investors to think tanks;
    • Develop the capacity of think tanks to better engage and communicate with impact investors including developing impact investor relevant research and communication strategies;
    • Develop the capacity of think tanks on relevant and appropriate tools and methods to monitor and evaluate the impact of impact investment; and
    • Develop the capacity of impact investors to reach out, access and use evidence from think tanks in their own decision making
  • Engagement and convening: Global, regional and national opportunities including:
    • Networking events for think tanks and impact investors to meet, learn about each other and explore opportunities for collaboration;
    • Focused communities of practice convened to address a specific challenge faced by the impact investment industry; and
    • Match-making by maintaining and using a database of think tanks and impact investors at the local and regional level to facilitate connections
  • Communication and sharing: Global and region specific communication to ensure that lessons learned by the initiative are shared with a wide audience within the field as well as in other fields. This involves a:
    • Microsite to host and link to all relevant knowledge and resources to impact investors and think tanks;
    • Suite of newsletters to keep different audiences informed about what is most relevant to them;
    • Focus on digital text based and multimedia communication outputs to ensure that lessons are consumed by different audiences in their own preferred ways;
    • Social media strategy; and
    • Partnerships with think tanks and think tank networks to ensure that they share lessons from the initiative with their own local, regional and global audiences

Our plan

We propose an initial 3 year initiative building from the bottom-up, including:

  • Year 1: A series of pilots at the national level in Latin America and Africa to provide proof of concept
  • Year 2: Scale on the basis of lessons by expanding the intervention in one or two more countries in each region and introducing activities at the regional level
  • Year 3: Consolidating lessons, expanding in more countries in each region, including a third region and introducing activities at the global level.  

Please contact us if you would like to support this initiative