Using Poverty Data to Speak Truth to Power in Impact Investing >

Editor's note: This post originally appeared on the American Evaluation Association's AEA365 blog.

I am Heather Esper of the William Davidson Institute at the University of Michigan. At AEA 2018 I’ll be joined with my co-panelists, Julie Peachey of Innovations for Poverty Action and Scott Graham of FINCA International, to share how poverty data can provide unique insights into a company’s clients or program’s beneficiaries.

Hot Tip: Collecting poverty data can uncover truths of who is being reached and their needs, presenting opportunities for a company or program to better meet those needs. It is valuable to understand poverty beyond using economic data; as poverty is multi-dimensional and involves a range of well-beings from health to environmental. As investors, evaluators, and managers, we can collect poverty data to give power to the voice and realities faced by our clients and beneficiaries. Poverty data can be used to inform decisions to create mutual value for the company or program by increasing their impact and their effectiveness, while also enhancing the impact on their clients’ or beneficiaries’ lives.

Hot Tip: During our session at AEA 2018 (Saturday, November 3, 2018, 9:15am-10:00am), we will share a range of poverty measurement tools as well as our own experiences collecting and using data to give power to the voices of those living in poverty including:

• The Poverty Probability Index (PPI^®) uses a statistical learning model to leverage national survey data, creating an easy-to-use poverty measurement tool. The country-specific 10-question survey places a low burden on both surveyors and respondents. Answers are converted to individual household poverty likelihoods and group poverty rates. The PPI uses a consumption-based definition of poverty and provides results for national, international and relative poverty lines, thus it is both objective and standard, allowing organizations to compare poverty rates within and across countries and sectors. Custom versions of the tool can be made for various contexts.

Rad Resource: On the PPI blog there are a number of examples of organizations using the PPI to understand and give voice to their poor clients.

• FINCA’s Mission Monitor uses predictive statistics to assess an organization’s outreach to the poor, as well as its impact in terms of job creation and client empowerment. Data is collected through a 2-minute telephonic survey with incoming clients, using customized survey instruments to understand indicators of the clients’ families’ well-being, including educational status, daily consumption and the quality of their health. The digital, cloud-based infrastructure supporting the Mission Monitor includes rigorous data quality controls to eliminate errors and bias in the data.
• The Indicator Framework for Inclusive Distribution Businesses includes short- and long-term poverty indicators including the PPI, among other indicators such as empowerment, self-efficacy, quality of life for children, social support, aspirations, and nutrition. Lessons learned in using this framework to identify, collect and analyze standardized poverty indicators across three inclusive distribution businesses are available and will be shared.

Rad Resource: Reach out to hmoehle@umich.edu for surveys we’ve developed that capture these well-being indicators. We hope to see you at AEA 2018!