M easuring Impacts Toolkit of the Community Development Venture Capital Alliance by Kerwin Tesdell Measuring the Social and Environmental Impacts of Community Based Investing December 11, 2007

2 Community Development Venture Capital  CDVC  Invest in underinvested urban and rural markets and in companies that create good entry-level employment, seeking market rates of return  80 domestic funds, more outside US  $1 billion under management domestically  CDVCA  Trade association of CDVC Fund  Provide training & networking, public policy, research, best practices, consulting, investments in funds and co- investments with businesses

3 Measuring Impacts Toolkit  Step-by-step methodology for measuring impact  Excel spreadsheets, data map, data definitions, users manual  Result of 18-month project led by practitioners  5 leading fund groups chosen in RFQ, represented 17 funds domestically and internationally  Iterative approach of designing methodology and gathering data  Practical orientation  Close relationship between funds and portfolio companies allows for gathering extensive information

4 Measuring Impacts Toolkit  Core Survey  16 modules plus a qualitative component  Enhanced Survey  12 modules  Users Manual  Discussion of Methodology  HUD median family income data

5 Core Survey--Overview  Unit of analysis is the portfolio company  77 total questions, 18 ‘hard’ questions, 27 questions answered by fund  Three major question areas:  How many jobs?  Who gets the jobs?  What is the quality of the jobs?  Additional impacts, such as environmental, minority and women ownership, and taxes paid  Qualitative questions

6 Core Survey Modules  Company information and survey tracking  Employment and employment change  Wages  Promotions and career ladders  Benefits—health, retirement, sick leave, vacation, & tuition remission  Wealth-building—broad based stock options, ESOPs, phantom stock program, profit sharing, structured bonuses  Training—trade specific, computer related, customer service/soft-skills

7 Core Survey Modules  Community impacts  Environmental impacts  Export-oriented sales  Taxes  Minority/woman-ownership or control  Sector classifications—SICC, NAICC, VEIC  Locational characteristics—MSA, census tract, etc.,  Qualitative questions

8 Strengths and Limitations  Strengths of broader industry approach  Standardizes definitions for such variables as full-time equivalents, ‘jobs retained,’ jobs created,’ and ‘low-income’ based on the area median family income  Reduces double counting  Limitations of numerical data  The ‘but for’ question  Effects beyond portfolio company and beyond investment period  Impacts on individuals  Qualitative questions are necessary for fullest impact