As KLF’s impact partner, we were asked to review and report on the social impact of their impact investment portfolio, building on the work we did with KLF in 2015.
Charly and Lisa Kleissner have over 14 years’ experience of impact investing through their KL Felicitas Foundation (KLF), where they invest 100% of their assets for impact while achieving market-rate returns. Their wide-reaching portfolio has more than 40 different investments, ranging from microfinance institutions to organic farms, land restoration funds to cookstove businesses.
But how do you compare the impact of a fund restoring land in the US with a social business providing affordable healthcare in Kenya?
We used a range of new and existing frameworks to understand, explain and measuring the impact of the foundation. Across case studies of their investees we used the UN’s Sustainable Development Goals (SDGs) and the Impact Management Project’s 5 dimensions to provide a thematic overview of the impact of the Foundation’s investments. We updated and applied our own Impact Risk Classification (IRC) to the whole portfolio—a tool to assess an organisation or fund’s impact management practice, using that score as a proxy for impact achieved. And we explored the relationship between the financial returns and the social impact of KLF’s investments.
The project enabled the Kleissners to understand their own impact and inform future decisions, as well as showing the field that impact can be achieved while achieving market-rate returns.
The report, In pursuit of deep impact and market-rate returns, was published in April 2018. It has been welcomed for its transparency in reporting on both financial and social returns, and is an illustration of what is possible when impact management is prioritised by investors and investees alike.
The updated IRC was launched in a separate research paper. We are working with partners to review how it can be further developed and used as a practical impact management tool by investors with portfolios as diverse as the Kleissners’.