2015 Cambridge Business & Economics Conference ISBN : 9780974211428 MONITORING OF IMPACT INVESTMENT FUNDS Renato Luiz Proença de Gouvêa BrazilianDevelopment Bank - BNDES Roberto de Oliveira Pereira BrazilianDevelopment Bank - BNDES July 1-2, 2015 Cambridge, UK 1 2015 Cambridge Business & Economics Conference ISBN : 9780974211428 ABSTRACT Investment Impact Funds are similar to Venture Capital funds in several aspects, but with one fundamental difference; their performance is also measured by the benefits provided to lower income classes. Funds invested in startups: induce management and governance changes, suggest projects to raise capacity and search for new business opportunities. These support activities demand continual screening to recognize market changes and lapses in performance to decide what actions are needed to enhance the startup’s evolution. As a contribution to the impact fund’s management, the developed model presented in this text assists the monitoring from investor's internal activities to the observation of social benefits and return of investment. Two models used by the development banks to plan, monitor, evaluate and communicate their investment performance were used to create the final model to monitor investment impact funds. So, investment impact fund’s complexity was represented by a synthesis of these two models: “Logical Framework” and “Outcome Mapping”. Logical Framework focuses on investment’s impact chain and Outcome Mapping on the change process behavior of the partners, in this case management and governance improvement. In the end, the proposed synthesis model is applied to hypothetical case, where the whole process of investment impact funds is described. Keywords: funds, impact investing fund, monitoring, Logical Framework, Outcome Mapping, new firms, startups, development bank July 1-2, 2015 Cambridge, UK 2 2015 Cambridge Business & Economics Conference ISBN : 9780974211428 MONITORING OF IMPACT INVESTMENT FUNDS INTRODUCTION The public sector often uses management tools originally developed for private companies. In this paper, an inversion of this will be proposed: the adjustment of management tools developed in government and multilateral institutions for monitoring startups supported by “impact investment funds”, which are essentially private funds. Impact investment funds are similar to the Venture Capital (VC) funds, with a crucial difference: the performance of impact funds is assessed both in relation to the social impact generated and to the capital return. The main contribution of such funds is the supporting of innovation in products and services targeted at lower income classes. Such funds constantly monitor the development of companies supported through decision making concerning new support actions until disinvestment, which takes place when it is deemed that the investment has achieved the expected return or that the company lacks potential to achieve its goals. In order to prepare a model for monitoring impact investment funds, expertise of the Government and Multilateral Development Financial Institutions (GMDFIs) is used. For decades such institutions have been developing instruments for supporting the management cycle of their initiatives, as well as improving planning, monitoring and assessment routines. One of the focuses of such activities is the monitoring of products and services delivered and the scope of the end goals of projects and programs supported. The proposal for monitoring such funds is based on a model that summarizes two tools: Logical Framework and Outcome Mapping. July 1-2, 2015 Cambridge, UK 3 2015 Cambridge Business & Economics Conference ISBN : 9780974211428 VENTURE CAPITAL AND IMPACT INVESTMENT FUNDS Venture Capital Funds The European Venture Capital and Private Equity Association defines Venture Capital as investment in companies in the initial stage of development with expected profits that are much higher than the opportunity cost. Such high return is due to the high growth potential and to the value added by managers of such funds to the companies. According to the National Venture Capital Association of the United States, the main characteristics of the Venture Capital investments are i) the companies that receive the investment are usually privately held corporations; ii) most companies have fast growth potential, are innovative and belong to the high technology sectors; iii) investment provides assistance for the development of the company and of new products or services, taking a high risk with expected profits; iv) invested resources come from private funds, pension funds, gifts, foundations, companies and individual investors; v) investors usually transform their interests into shares of the companies. Research conducted by Fred Dotzer (2001) reported the main benefits to the business ofVenture Capital funds, according to entrepreneurs: financial management, hiring of personnel for higher management, strategic instructions, working capital planning, organizational planning, performance monitoring and feedback, and building relationships with other companies. The funds must continuously monitor the company’s progress and actively participate in its management to guarantee that VC investments generate the value expected by its investors. The purpose is to detect deviations or problems, aid decision making concerning actions necessary for the company’s progress and make strategic changes from time to time. Such monitoring is planned in the initial stage of financial investment, and includes a series of follow-up actions: meetings, visits, boardroom participation and preparation of reports. Such July 1-2, 2015 Cambridge, UK 4 2015 Cambridge Business & Economics Conference ISBN : 9780974211428 monitoring activities demand significant effort from the investment fund managers, which may lead to increased management costs. For such reason, VC funds often establish partnerships with “company accelerators” after investment of capital. (Kaplan, Strömberg, 2001) The accelerator´s funds complement VC funds by selecting small startups with growth potential, usually specializing in the same sector, by providing strategic and operational instructions by means of mentors, connecting the company to networks for the exchange of experience and technologies and by attracting new investors and clients. The relationship of accelerators with startups usually lasts from three to six months. After this term, more resources are demanded in order for the the further development of the startup. At such stage, the accelerator eventually transfers its interest to other larger investors (Mille and Bound, 2011). Impact Investment Funds Since the expression “impact investment” was first coined in 2007 during a meeting of officers at the Rockefeller Foundation, this type of investment has been spreading all over the world (Addis, McLeod, Raine, 2013). The most distinguishing feature of impact investment is its purpose of reaching a positive social, cultural and/or environmental benefit with financial return. The financial return differentiates the impact investment from philanthropic support. The intentional design aimed benefits for the society separates it from other traditional investments. Impact investment encourages innovations focused on society’s lower socialeconomic classes. Such private investments can complement the action of governments for improving social services and may provide solutions that philanthropic interventions usually do not achieve. These funds invest in several areas: culture, community development, education, July 1-2, 2015 Cambridge, UK 5 2015 Cambridge Business & Economics Conference ISBN : 9780974211428 employment, health, environmental management, sustainable agriculture, renewable energy, justice and housing (RIIA, 2013). These funds join private and public interests to combineprofitable investments to achieve social goals, a blended value. The International Finance Corporate (IFC), for example, teamed up with the insurance company New York Life Insurance to create a fund for supporting the creation of jobs for small and medium startups (SMEs) in the City of Sichuan, China. (Clark, Emerson, Thornley, 2014) Startup strategy must be adapted constantly to react to changes inthe market. The demands of developing effort to build social startups, envolves daily challenges and many setbacks. Impact funds, like Venture Capital funds, needaccurace of data to steer the organization in the right direction. (Westaway K., 2014). Fund´s managers are increasingly looking to create a social management information system to assist them innot only tracking performance and impacts but also assessing the relative value of the impacts they generate (BuggLevine, Emerson, 2011). Concerning monitoring, the most commonly used system of indicators for monitoring impact investments is Impact Reporting and Investments Standards (IRIS), which provides a catalogue of indicators per sector, proposed by The Global Impact Investing Network (GIIN). IRIS indicators encompass social, environmental and financial impacts. Such impact indicators are used for subsidizing the calculation of the Global Impact Investing Ratings System (GIIRS), one of the most used tools for assessing the generation of impacts of the companies. As a result, GIIRS provides a rating of the development stage of each company, which allows it to compare impact results between different companies (without identifying them) and to follow up the progress of the company itself. The GIIRS assessment involves 50-120 questions considered by their importance for each sector. The questions were originally divided into four impact categories (B-Lab, 2011): July 1-2, 2015 Cambridge, UK 6 2015 Cambridge Business & Economics Conference i) ISBN : 9780974211428 Governance - mission and engagement, governance, anticorruption, transparency and reward policy. ii) Workers - benefits, training, participation in decisions and results, flexible work environment, nondiscrimination policies, policy for hiring third parties and occupational safety. iii) Community - policy for verifying conduct of suppliers concerning social, environmental and legal requirements, development of local economy, promotion of diversity(including women, physically-impaired individuals and minorities in general), support of social action by means of gifts and participation of employees. iv) Environment - policies for reducing environmental impact on raw materials, purchases, environmental management, recycling, less polluting production, incentives for employees to use public transportation, reduction of business trips, environmental standard certificates, reduction of waste and emissions. Subsequently, another area was created for dealing with impact business models: v) Socially & Environmentally Beneficial Business Model - generation of services and products for the lower socioeconomic classes, incentive for renewable energy, environmental preservation, and pollution prevention and education. According to JP Morgan, apudLazzarini,Pongeluppe and Yoong (2013), the impact investment market has been rapidly growing over the last few years. It is a market with expected direct investment potential from US$ 400 million to US$ 1 trillion before 2020. July 1-2, 2015 Cambridge, UK 7 2015 Cambridge Business & Economics Conference GOVERNMENT AND MULTILATERAL ISBN : 9780974211428 DEVELOPMENT FINANCIAL INSTITUTIONS (GMDFI) GMDFIs play a key role in financially supporting economic and social development, with the purpose of improving quality of life. Supported interventionsare analyzed for their economic and financial feasibility, which allows generation of return in order to offset financing, and by virtue of benefits concerning development. Such institutions were first created in France in 1852, called banquesd´affaires, aiming at launching and financing infrastructure projects, businesses and industrial companies, which needed long-term financing. After World War II, a number ofGMDFIs expanded in order to encourage development and efforts for economic recovery, among them was the Bank for Reconstruction and Development (IBRD), which is nowadays a division of the World Bank, founded in 1944. (ABDE, 1994).These institutions primarily loaned to governments, but they realized that private companies also needed investment support. The World Bank, founded in 1946, for example, launched International Finance Corporate to invest directly into the private sector in 1956 (Bugg-Levine, Emerson, 2011). Over the years, GMDFIs have developed models for formulating, monitoring and assessing projects. The necessity for this is motivated both by the need for using management instruments and to report back to stakeholders. INSTRUMENTS USED BY GMDFIs FOR DESCRIBING THE LOGIC OF INTERVENTIONS: LOGICAL FRAMEWORK, OUTCOME MAPPING AND SYNTHESIS MODEL Theory of Change In order to monitor projects or programs, it is necessary to know how to keep up with the progress of interventions by means of indicators. The first step is logically defining the July 1-2, 2015 Cambridge, UK 8 2015 Cambridge Business & Economics Conference ISBN : 9780974211428 intervention´s Theory of Change. Interventions are represented in a structure that, from assessment of cause and effect implications of a problem situation, outlines strategies and means for changing such situation. (Pfeiffer, P., 2005). The process shows the relation between activities to be performed, products and services to be delivered and expected effects, usually represented by figures (Lazzarini, 2013). After definition of the logic of the desired change, the next step is to identify indicators that allow follow up at each development stage of the intervention. Logical Framework Description Logical Framework (Logframe) is one of the most disseminated instruments for representing the Theory of Change. It is used for planning, monitoring and assessing development programs and projects. The representation of Logframe is linear, from activities necessary for the delivery of products and services to expected direct and indirect effects. Figure 1 represents the impact chain from which Logframe is created: Figure 1, Impact Chain Logframe represents the impact chain in two categories: a vertical logic and horizontal logic. Vertical logic clarifies the expected impact chain (Activities, Products and Services delivered, Direct Effects, Indirect Effects). Horizontal logic describes how each stage of the impact chain of the project/program will be monitored by means of indicators, with description of their sources of evidence and external prerequisites for the success of the intervention. Figure 2 below presents the Logical Framework Matrix. July 1-2, 2015 Cambridge, UK 9 2015 Cambridge Business & Economics Conference ISBN : 9780974211428 Figure 2, Logical Framework Intervention Logic Objectively measurable and verified Indicators Source of verification Indirect Effects Wider problems the project or program will help to resolve Ways of measuring the achievement of indirect effect Sources of information Direct Effects The immediate impact on the area or target group to be achieved by the program/project Ways of measuring the achievement of direct effect Sources of information Products and Services Deliverable results expected form the program/project to attain the direct effect Ways of measuring the services and product delivery Sources of information Activities Summary of tasks to deliver the products and services Activities’ status Sources of information Important Assumptions External factors necessary to sustain objectives in the long run External actors necessary if achieved project/ program contribute to reaching the indirect effect Factors out of program/project control which, if present, could restrict progress from outputs to direct effects Factors out of program/project control which, if present, could restrict progress from activities to achieving outputs Logframe and impact investment funds Logframe is used for defining and detailing activities, products and services delivered and impacts on the company and social impacts planned by the impact investment funds. It is not suitable for dealing with changes in the management of the companies supported, an essential condition for achieving the expected results. Outcome Mapping Model Description Outcome Mapping (OM) methodology was proposed in 2001 for filling gaps that existed in the Logical Framework´s approach. It by highlights the importance of behavior changes of intermediary agents of financing, who are usually representatives of local governments, for the success of interventions and sustainability of results. This is the case of support of GMDFIs support in developing countries, when the sustainability of effects of improved quality of life are only feasible by means of the participation of local groups: NGOs, July 1-2, 2015 Cambridge, UK 10 2015 Cambridge Business & Economics Conference ISBN : 9780974211428 community and others stakeholders(called boundary partners by Outcome Mapping methodology). (Earl, Carden, Smutylo, 2001). Other factors that differentiate OM from Logframeare the proposal of a management cycle (planning, monitoring and assessment) and the relation of contribution of products and services for the purposes (effects) in a less direct way than in Logical Framework. The three stages for development of the management cycle are described below: The first stage of the cycle consists of the Project of Intentions, where intervention is planned. The first activity of this stage consists of defining the vision, that is, the goal and effects it intends to achieve as a result of implementation of interventions. Afterwards, there is definition of the mission, which describes how the program will contribute to the vision. After definition of the mission, the behavior outcomechallenges are set forth for each boundary partner. The changes, encouraged by the program, are monitored from the establishment of logical progress markers. A set of progress markers are defined for each of the outcome challenges and represent a change model expected for the boundary partner. The progress markers represent the information that fund’s managers have to gather in order to monitor the achievement towards the desired outcomes. Progress markers can be considered as sample indicators ofbehaviour changes. Figure 3 Example of Progress Markers Expect to see L MH LMH: low , medium , high Who? Board of directors have a important role in decision process July 1-2, 2015 Cambridge, UK 11 2015 Cambridge Business & Economics Conference ISBN : 9780974211428 Within this phase, a strategic matrix is created with actions planned by GMDFIs for contributing to changes and results. There are three types of matrix actions: the causal type, which leads a high probability of produce changes, for instance new equipment delivery. The second type is the persuasion for change, in which there is description of the support to be made for training, dissemination of information and planning workshops. The third type is supporting the sustainability of changes,this includes building of community networks for exchanging of knowledge and hiring consultants. These purposes are defined for individuals and groups, as shown below: Figure 4, Strategy Map Source: Earl, S., Carden, F., Smutylo, T. (2001). The last part of the first phase, having defined the goals and how changes will be encouraged, is to set forth how the organization will internally act for improving its contributions towards reaching expected results. The second phase encompasses the structure for monitoring the implementation of strategies and the progress markers of changes. The third and final phase is assessment planning. The entire process is depicted below: July 1-2, 2015 Cambridge, UK 12 2015 Cambridge Business & Economics Conference ISBN : 9780974211428 Figure 5, Monitoring and Assessment Process Source: Earl, S., Carden, F., Smutylo, T. (2001). OM and impact investment funds The approach of OM, by focusing on the challenges of behavior changes, clearly shows the importance of the continual influence of the external agents (funds) for the evolution of partners (companies). The concepts of challenges of changes, progress markers and strategy maps are major contributers to modelling this typeof intervention. For impact investment funds, changes are mainly made to the company’s management and capacity. Another relevant item, arising from the continual effort to stimulate changes, is the description of activities to establish change strategies. Synthesis Model Roduner and Walter Schläppi (2008) proposed a methodological evolution, by joining the strengths of Logframe and OM methodologies. The Synthesis Model (SM) proposed by them allows representation of both the evolution of changes in partners and the results provided for in terms of products and services and their effects. According to the authors, the SM July 1-2, 2015 Cambridge, UK 13 2015 Cambridge Business & Economics Conference ISBN : 9780974211428 proposed is only an initial reference for proposals of intervention structuring, that is, an analysis structure from which a specific solution must be created for each case, depending on the context. SM proposed by Roduner, Ambrose (2009) is represented below: Figure 6, Synthesis Model Description: Overall Goal: clear and concrete formulation of the desired impact, it is an overall goal that must guide interventions. Direct effects of products and services and behavioral changes (Program Goal): direct effects expected as a result of projects completion and changes in the partners behavior. Challenges of Changes of Partners (Outcome Challenge): the results of the external agent actions to change organizational practices and structures are formulated for each partner. For each challenge, qualitative and quantitative indicators are used as gradual July 1-2, 2015 Cambridge, UK 14 2015 Cambridge Business & Economics Conference ISBN : 9780974211428 progress markers for each partner in order to allow the monitoring of changes. Progress markers must be continuously monitored so to detect project deviations and implement occasional corrections. Products and Services delivered (Output): deliveries from the contribution as an external agent. The products and services reflect concrete deliveries, which may be verified by means of indicators. Strategy Map: setting out tasks, duties and liabilities to be performed for delivery of products and services. The definition of the set of strategies to be performed is a result of the performance planning of the agent. The strategies adopted must be periodically reviewed for effectiveness, efficiency, and, most of all, their contribution to changes. Results must be plausibly connected with change challenges. Mission: it defines the role of change external agent (IFDGs) in relation to partners and results. It includes the organizational practices of the change agent: internal strategies of the external agent so that its performance is innovative, creative, efficient and relevant. Model for monitoring Impact Funds (MFI) The purpose of this model is to provide a representative model for the development stages of the startups supported by impact investment funds, to monitor the actions and results. Whilst preparing the model proposal, practices and instruments developed by GMDFIs for monitoring their investments were considered. This decision was deemed relevant because of the similar goals of the impact investment funds and GMDFIs, since both of them seek to associate benefits for the society and financial return. The proposal adjusts the Synthesis Model to the specificities of the impact investments, that is, changes are made for representing the investment and efforts of management of the funds July 1-2, 2015 Cambridge, UK 15 2015 Cambridge Business & Economics Conference ISBN : 9780974211428 for developing the supported countries. The first change is that there is only one “partner” in this case, which is the invested company, contrary to the Synthesis Model which covers for many partners. Furthermore, the challenges of change become the ones that will help the company in a sustainable way, with management and governance compatible with its growth and increased capacity. Another fundamental aspect to be considered is that there are two expected effects of the performance of strategies: financial return and social and environmental impact (blended value). Although GRIIS is commonly applied in full four impact categories for assessing results of the companies supported by the impact investment funds, due to the still incipient state of the supported companies, the decision was made to only use two categories: “Governance” and “Business Social and Environmental Impact”. The reason for this choice was that governance is the initial focus of funds, a consequence of corporate constitution of the company and a crucial requirement sustainable. Moreover, the “Business Social and Environmental Impact” category was selected for measuring the social and environmental impact generated by the companies. Ratifying such simplification, on GIIRS website http://giirs.org/companies/getrated-companies there is a warning that GIIRS methodology may not be suitable for companies in the initial stage of growth. By adopting GIIRS, even if partially, it is still possible to compare the stage of supported companies to others of the same sector in the categories considered. Changes made in the Synthesis Model are shown in Figure 7. July 1-2, 2015 Cambridge, UK 16 2015 Cambridge Business & Economics Conference ISBN : 9780974211428 Figure 7, Model for Monitoring Impact Funds The two feedback loops show a cyclical management process. If deviations are observed during monitoring, new strategies are defined for reaching the goals. Presentation of Hypothetical Case: Total Health company In order to illustrate the use of the monitoring model proposed for impact investment funds, a hypothetical case will be used, based on the case of the company Saútil described below (Lazzarini, Minardi, Pongeluppe, 2013). The company Total Health offers information about health services. It catalogues the locations of enrolled users to facilitate their access to health care services, negotiates lower prices of medicine and provides medical advice. The majority of clients are of C, D and E socioeconomic classes. July 1-2, 2015 Cambridge, UK 17 2015 Cambridge Business & Economics Conference ISBN : 9780974211428 Clients contact of Total Health is made through an online portal. The company is 1 year old and has 20 permanent employees, on 48 hours per week contracts, and 5 part-time employees, on 40 hours per week contracts. For supporting the company, Corpo Capital impact investment fund established a partnership with the accelerator of companies Acelerasementes, which provides instructions to the management of Total Heath. Their role is share knowledge and education to startups like a mini startup MBA. They help to review and to improve the startup´s strategy and to develop through the help of mentors. The mentors are successful entrepreneurs who specialize in different fields of expertise. They oversee the balanced scorecard of disciplines needed to launch a successful business. (Romans, 2013). The Acelerasementesmentors are business owners and officers with expertise in providing managerial support, discovering new improvement opportunities, creating business-related opportunities and sharing experience and information. The purpose of Acelerasementes is, within a short period of time, to prepare Total Health so that it may reach its economic and social goals, becoming attractive to other investors. The business plan approved by the partners set forth the goal of attracting five thousand clients of C, D and E classes in the following year, of which 1,500 are from socioeconomic class E (earn of less than $2 per day), with projected revenue of $ 50,000/month and profits of 20%. For achieving this, it will be necessary to increase the number of workers of Total Health from 20 to 35 employees, purchase five servers for expansion and contingency and purchase software for increasing the safety of the online portal. Methodology Applied to the Case of Total Health The main change of the Model for Impact Funds for Total Health consists of representing the existence of two change agents: Corpo Capital and Acelerasementes. As seen, the impact results obtained through the support of Total Health are measured by means of GIIRS. July 1-2, 2015 Cambridge, UK 18 2015 Cambridge Business & Economics Conference ISBN : 9780974211428 Changes made in the Model for Total Health contemplate strategies and actions planned by Acelerasementes and Corpo Capital and definition of goals for expected effects. For monitoring corporate advances of “Governance”, indicators are used for measuring the governance progress, such as: effective performance of the board of directors, awareness of employees concerning the company’s mission and communication with clients for feedbacks and complaints. For monitoring “Business Social and Environmental Impact”, the main indicator is the percentage of clients served receiving less than $2 per day. Figure 8, Example of Model for Monitoring Impact Funds July 1-2, 2015 Cambridge, UK 19 2015 Cambridge Business & Economics Conference ISBN : 9780974211428 The stages from one to five refer to the company Total Heath. Stage 6 is defined for all companies that are part of the fund’s portfolio. Description of stages of Figure 8: Stage 1 - Mission: liabilities of support actions are shared between Acelerasementes accelerator and Corpo Capital. The mission of each one is stated in the cooperation agreement, and Acelerasementes has greater input for guiding and monitoring Total Heath. Stage 2 - Internal activities of Acelerasementes and Corpo Capital: meetings on the situation of the company, sector monitoring, performance verification, generation of ideas and approval of guidelines for new actions in the company. Stage 3 - Performance strategies: advisory actions, board participation, support (training, instructions) and definition of projects for achieving the goals of the startup, please see ‘Planning, Management and Governance’ and ‘Projects’. Stage 4.a - Planning, Management and Governance: increased management capacity, whose result is assessed by Governance-GIIRS criteria. Such improvement may result from the recommendations and the expertise of Acelerasementes´s mentors and of the managers of Corpo Capital fund, through the creation of an effective board of directors, hiring of officers and training for increased managerial capacity of current officers at Total Heath. The progress marker for the board of directors has three levels: 1) creation of the board of directors, 2) bimonthly meetings of the board and 3) influence of the board on the company’s strategic decisions. Stage 4.b - Projects: project results for providing the company with greater productive capacity and infrastructure. The main projects are the purchase and installation of new servers, increased security of online portal, training and advertizing campaign for services offered. July 1-2, 2015 Cambridge, UK 20 2015 Cambridge Business & Economics Conference ISBN : 9780974211428 Stage 5 - Investment in specific purposes, with goals established by investor and partners, namely: i. Financial and economic: financial return of the investment. To achieve revenue of $ 50,000/month and profits of 20%. ii. Social return: measure of effects produced by the company in the target public, service of 5,000 clients, of which 1,500 present earn less than $ 2 per day. Stage 6 - Portfolio purposes: financial, social and environmental results of the group of companies supported by Corpo Capital fund. This stage is not discussed in this example. Monitoring procedures of each stage in the case of Total Heath: In stage 1, the process begins with agreement between Acelerasementes and Corpo Capital for developing the business potential of Total Health. Acelerasementes plays the role of mentor to Total Health and continuously monitors the results obtained. The role of Corpo Capital fund is to cooperate with Acelerasementes and Corpo Capital to review strategic planning, through the board, and to participate in the preparation of action strategies with Acelerasementes and the company executive board. In stage 2, internal activities of agents of the program (Corpo Capital and Acelerasementes) initiates for defining or reviewing support strategies in order for Total Health to achieve its goals. In stage 3, support actions are conducted in relation to each type of strategy (causal, persuasion and support). Activities to be performed are also set out in detail for subsequent delivery of products and services and for improved management. In stage 4, results of the actions performed and defined in the previous stage are monitored for delivery of products and services (output) and performance of changes in the company’s management. Monitoring includes the verification of compliance July 1-2, 2015 Cambridge, UK 21 2015 Cambridge Business & Economics Conference ISBN : 9780974211428 with physical and financial time schedule of projects being performed until final delivery of products and services. Among the projects to be implemented in Total Health there is increased capacity of data processing and storage (acquisition of five servers), installation of information security software, hiring of consultants and training for officers. In stage 5, the results concerning social impacts and economic and financial return are measured and compared with predetermined goals. The report GIIRS, criteria of “Business Social and Environmental Impact” measures the impact results. The analysis of results made in stage 5 generates subsidies for new internal actions and strategies (Stages 2 and 3). Stage 6 refers to the monitoring of aggregate results of the investments in all companies in the portfolio of Investments of Corpo Capital Investment Fund. Its monitoring is outside the scope of this example. CONCLUSION The purpose of the proposal presented in this paper is to provide a management instrument for impact investment funds, whose characteristics are to set forth goals of financial performance and generation of social and environmental benefits. The proposed model is prepared from a combination of two instruments used by IFDGs (Logical Framework and Outcome Mapping). The purpose is to propose a monitoring model to provide assistance in the management of investments and in the communication to investors concerning actions undertaken and results achieved (from internal meetings to define support strategies to considering social and financial impacts). The model was hypothetically applied in order to clarify the proposed monitoring process clearer and to facilitate its application to real cases. July 1-2, 2015 Cambridge, UK 22 2015 Cambridge Business & Economics Conference ISBN : 9780974211428 The application of the model to real cases will allow the detailed monitoring of the entire impact chain of investment, stage by stage. July 1-2, 2015 Cambridge, UK 23 2015 Cambridge Business & Economics Conference ISBN : 9780974211428 References ABDE, (1994), Políticas de financiamento de longo prazo, funding e formatação de instituições financeiras de longo prazo Addis R., McLeod J., Raine, A. (2013). Impact–Australia Investment for social and economic benefit, Canberra: Department of Education, Government of Australia B-Lab. 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