When It Comes to Impact Investing, VALUE Beats IMPACT By Several Electoral Votes

We are all fresh from the US polls, so I had to work in an election metaphor. Too soon? All right, let's talk about impact, impact investing, and whatever else is out there that makes everyone feel good about themselves. There's this illusion going around today that impact KPIs translate into real community value. I am sorry to break it to you. This is not always the case. I know I am not the only one who has been around millions of dollars chasing impact and delivering no value, or worse, eroding value.

Hopefully, an example might help. Imagine an impact fund investing in a tech project for rural healthcare. The main KPI might be the number of clinics that have "adopted new technology." But look closer and tell me if the clinics are equipped to use the technology. Are patients receiving better care, or did the number of tech installs go unnoticed by the weak and the sick? The purpose of a rural clinic is to deliver care to the community. I don't care if you are running it on the cloud or the moon; if you are not delivering better health outcomes because of it, you just made statistics and no impact. Real impact is measured in value delivered, not numbers counted.

As capital merges with philanthropy through impact investing, let's remember that capital could be the best form of philanthropy if that capital delivers real solutions to society. There is no better impact than LinkedIn allowing me to send you this newsletter. I don't need LinkedIn to go all fuzzy and soft on me, promising impact. All I need them to do is make this platform darn good for you and me. There! That's the best form of impact right there.

I must confess, "impact" feels really good on the tongue. It feels so transformational, progressive, and inspiring. Yet, if we were all honest with ourselves, we could see that much of what passes for "impact" today has little to do with meaningful change and much more to do with checking boxes on the spreadsheet of tallied achievements. Seldom do we ask, "Did we really deliver value?"

Impact investors are everywhere addressing big issues like poverty, education, and clean energy. Strategists, psychologists, and social scientists are crafting KPIs in board rooms. While quants are busy pricing assets, executing trades, hedging, optimizing, and analyzing portfolios for the rich, the poor are waiting for impact to hit their plates.

There is nothing wrong with impact investing if absolute value is considered. If impact investing is about generating positive social change alongside a financial return, what has traditional investment been delivering all along? What has Ford Motors been doing since 1903 besides moving families to church and school? What has GE been doing since 1892 other than lighting the world? So, what kind of impact is impact investing bringing that Google didn't deliver when it organized all the world's information for you to become more intelligent? For a fee. What more impact do you need from AI companies besides helping you become more polite in your business memos?

Impact KPIs are created to measure success. But success for whom? KPIs such as "communities reached" or "initiatives launched" can look good on paper. But when you analyze them for value, you might be hard-pressed to find real change delivered to the communities served.

Here is the beauty of putting value above impact: When real value is delivered, no one needs a pie chart to prove it. Value makes itself known. It's the difference between a clinic with shiny, unused computers and one that's well-stocked with medical supplies, staffed by trained professionals, and capable of truly serving its community's needs. Value is not about the number of projects started; it's about the number of lives improved. Value doesn't need beautiful KPI dashboards to shine. It speaks for itself in how people live, succeed, and grow.

When value is present, impact happens naturally. Value is the root, the foundation. When projects focus on delivering something of worth, such as clean water, improved literacy, job opportunities, or healthcare that works for all, communities don't just get "touched" by impact; they are transformed by it. An impact KPI for a skills training center or program might measure the number of trainees enrolled. But delivering value means ensuring trainees leave with skills they can apply, jobs they can secure, and lives they can enjoy.

For everyone who speaks impact, it's time to get honest with the metrics. If we are in the impact game to make a difference, it's time to ask tougher questions. How is this project creating lasting value for people and planet? What does this mean for the next generation? Is this KPI a true reflection of lives changed, or just a convenient number?

Real impact doesn't come from projects that make headlines. It comes from initiatives that make a difference, even if that difference is seen slowly over time. Value-based impact remains after the funding cycle ends. It takes root, grows, and becomes part of the community. The choice between value and impact isn't really a choice at all. Because value is impact. When we commit to creating real value, impact is inevitable. No gimmicks. No glamorized dashboards. Just change. Real change.