Evaluating 42 Years of Impact Investing

Social Finance led an independent evaluation of Robert Wood Johnson Foundation (RWJF)’s 42-year Impact Investing Practice. The evaluation uncovered social and systems-level outcomes associated with RWJF’s impact investments; described evolutions in RWJF’s Impact Investing Practice; and surfaced insights regarding innovation, capacity-building, and partnerships. The evaluation also included practical recommendations about how RWJF could enhance impact investing practices to advance its mission and to build the impact investing field.

The Work

The Social Finance team:

• Assessed the impact associated with RWJF’s impact investments, specifically related to how those investments addressed the social drivers of health, helped organizations become more resilient, changed narratives about which communities are investable, and catalyzed additional impact investments.
• Chronicled and contextualized the evolution of RWJF’s Impact Investing Practice.
• Surfaced how RWJF’s capital and field leadership unlocked additional investment in systemically excluded communities.
• Developed practical, evidence-based recommendations to strengthen RWJF’s approach to impact investing, to inform field-building, and to enable RWJF to support more and better impact.
• Produced accessible findings that RWJF and other philanthropic investors can use to improve how they make impact investments that support racial- and health-equity.

Approach and Activities

Social Finance conducted a practical, action-oriented evaluation grounded in equitable evaluation principles and emergent learning methods. This meant engaging with partners most affected by the work, uncovering and questioning assumptions, identifying unintended outcomes, and minimizing reporting burden. Key components of Social Finance’s work included:

• Discovery & Design: Partnering with the RWJF team to develop a theory of change and learning questions and to align on methodologies.
• Portfolio Analysis: Mining financial and impact data from RWJF’s impact investments to create dashboards that showed investment type; timing; communities served; capital deployed; and associated outputs and outcomes, such as: affordable housing units built, jobs created, and businesses served.
• 41 Stakeholder Interviews: Interviewing RWJF investees, peer investors and other field-leaders (including J.P. Morgan Chase, the W.K. Kellogg Foundation, and the MacArthur Foundation), and current and former RWJF staff to capture diverse perspectives on outcomes, challenges, and opportunities.   
• Sensemaking & Recommendations: Facilitating learning sessions with RWJF to interpret findings and develop actionable, forward-looking recommendations that reflected team experience, expertise, and capacity. 

Deliverables Included

• Theory of Change that provided a graphic representation of RWJF’s impact investing objectives and strategies and of how those supported Foundation-wide goals and mission.
• Case Studies of Investees that highlighted the work of partner organizations and how RWJF impact investments build those organizations’ capacity to make and absorb investments.
• Impact Dashboard that synthesized financial and impact performance.  
• Stand-Alone Executive Summary that made findings accessible and digestible.
• Comprehensive Report that summarized key findings, evolutions in RWJF’s Impact Investing Practice, outputs and outcomes associated with investments, and recommendations.

The Findings

The evaluation found that RWJF’s Impact Investing Practice is a financially disciplined, investee-centered field leader, and that the team catalyzes investment in innovations that support health- and racial-equity. Key insights: 

• RWJF’s innovation advanced the field of impact investing. Peer investors credited RWJF with demonstrating and de-risking impact investing models others can follow.  
• Over time, RWJF’s Impact Investing Practice became more linked to Foundation-wide related generational and systems change goals. RWJF impact investments:
  • Directly addressed the social drivers of health (by providing housing, community facilities, quality jobs, etc.).
  • Built wealth and assets to narrow the racial wealth gap.
  • Built investee capacity and durability.
  • Tested innovations in impact investing and unlocked capital for those innovations.
• RWJF utilized multiple capital tools to support impact investments. RWJF used deposits, loans, equity investments, and guarantees for impact investments. RWJF’s impact investing team also made grants to pair with investments or facilitate growth of organizations in the pipeline. Investees found this funding critical and hoped other funders would follow this approach.  
• RWJF’s approach to impact investing professionalized over time. RWJF’s practice moved from an ad hoc, program-team-managed approach (1982–2019) to a professionalized, dedicated unit with formal governance, $625M allocated to impact investments, and $68M in associated grants.
• RWJF impact investments catalyzed additional investment. RWJF’s impact investments leveraged $856M in verified direct co-investment, with total leverage estimated at ~$1B. This demonstrated RWJF’s ability to mobilize capital well beyond its own balance sheet. 

Learn more about Social Finance’s Impact Measurement & Management (IMM) and Evaluation.