In as much monitoring and evaluation holds investee organisations to account, it is fitting for impact investors themselves to be transparent and accountable. Impact funds will have their own investors to report to, but for funds and independent investors alike, reporting and accountability extends also to their investees, their stakeholders more generally, and to the sector and the public at large.
Holding investors to the same standards as their investees implies asking them the same questions — in particular, those involved in monitoring and evaluation (see 4 Monitoring and Evaluation). In preparing their impact reports, investors may wish to work through the monitoring and evaluation section self-reflexively, paying similar attention to:
- the investor’s use of capital
- the quality of information that the investor is able to provide
- the impact risk that the investor’s portfolio is exposed to (how sure can you be that you are effecting real change?)
- the impact generation that the investor’s investments have facilitated (as demonstrated by the results of your investee organisations)
- the future outlook for the investor
As the investors’ impact results are necessarily based on those reported to them by their investees, investor accountability only underlines the need for effective monitoring and evaluation, and of the importance of the chain of information leading all the way down to the beneficiary, and the tangible benefits they experience.