The first focus area for the project is specifying the universe of impact investors and their portfolio companies. We define impact investors to be investors with the explicit dual objective of generating social good and financial returns.

In order to delineate the universe of impact investing, our team has drawn upon several established resources, including: the Community Development Venture Capital Association (CDVCA), ImpactAssets, ImpactBase, and Preqin’s alternative assets database. We have further used commercial databases to connect impact investors to particular investments. For each impact investor, we have recorded the portfolio company names listed by each of our sources. In addition, to verify and augment our list of portfolio companies, we have reviewed impact investor websites and have collected the names of their listed portfolio companies.

Ultimately, we have identified a universe of over 13,000 portfolio companies of more than 400 impact investors. This research enables the segmentation and analysis of the impact investing universe at a previously unprecedented level of depth and scope. We will continue to refine this database to present an ever-more complete picture of the impact investing landscape.

The second focus area of the project takes an in-depth look at a group of 200 portfolio companies, which are sampled to reflect some of the main trends in the U.S. impact investing market. The goal of this research is to investigate the processes that drive the dual attainment of financial success and social impact across industries. Through a qualitative, empirical study, our contribution is getting behind the numbers and studying the work of impact investment companies and professionals on the ground.

The first stage of this research is archival and constructs a timeline of how our sampled companies evolved, including key events such as executive hires and departures, mergers and acquisitions, set-backs and successes, as well as exits. Next, we conduct interviews with leading players within our sample, including founders, investors, CEOs, as well as Impact and Finance Executives. These in-depth interviews aim to get firsthand information on how impact is defined, measured, and achieved alongside financial returns within these companies as well as how this process may differ across firm-level characteristics.

Currently, our sample focuses on impact investors and portfolio companies based in the United States, where approximately 52% of the world’s impact investors are located.[5] Future research will expand the Project on Impact Investments to leading impact investing firms across the globe.

The third focus area of the project will undertake a joint statistical project with the U.S. Census Bureau to better quantify the implications of the growing impact investing market. An outsized majority of impact investing transactions provide capital to privately held firms. In contrast to public markets investments where standardized disclosures can be obtained through public filings, information on these private companies’ finances is limited. Given the size and expected growth of the impact investing market, it is critical to examine whether such investments actually deliver on the promises of the fund managers.

The goal of this project is to build upon previous work from the Private Capital Research Institute (PCRI) and the Harvard Business School Private Capital Project which has spent years matching private equity funds with investee companies, gathering and coding the certificates of incorporation for such companies. The work of this project seeks to expand upon this by linking the impact investment companies to Census data, which will provide the means to better understand the impact investing market. In addition, our project seeks to facilitate the accessibility and documentation of data on the activities of impact investors and the social impact of private equity to the greater community of researchers and practitioners.