To reach them, we embraced impact management years ago, and since then we have become seasoned impact managers who constantly improve our approach. This is how we did that in 2020.
“Impact means making a real difference”
In 2020, we refined our vision of impact. We’ve noticed that positive change can’t always be expressed in numbers, like the price a farmer’s cooperative receives for its crops. Impact also includes how a smallholder dairy farmer can become more resilient to the changing climate, or the relief a person in the Netherlands feels after finding a job. In other words: it’s about what people need in life. We measure our impact on that based on our theories of change. These theories describe exactly how our financing, knowledge, network and innovative solutions improve lives in the Netherlands and abroad.
Impact through and through
In 2020, we put our new vision into practice by integrating impact into every part of our work. For example, the theories of change have become part of our strategy. We also forecast and manage impact using the Potential Impact Performance Model (PIP model), and we use impact surveys, research and analysis of case studies to monitor and correct our progress as necessary. We learn as an organization from all of these insights, and we eagerly share our knowledge with Rabobank departments and our project partners.
Constant learning within an impact culture
Our focus on impact means that we not only strive to identify the expected impact; we can also monitor and manage the impact during the collaboration with an organization. To do that, we constantly ask ourselves and our project partners critical questions. This gives us up-to-date knowledge needed to correct our course along the way. That definitely came in handy during the coronavirus pandemic, because we can only spend a euro one time, so we need to do it in places where we can add the most value.
Mature theories of change
In this overview of the past year, we will zoom in closer on the foundations of our impact: our theories of change for the Netherlands and abroad that we refined in 2020. Why did they need refining? Because the world is also constantly changing. For example, climate change is increasingly affecting the work of smallholder farmers. So it gained a more prominent place in our theory of change.
With these updated theories of change, everyone at Rabo Foundation has a clear perspective on how we are willing and able to contribute to a better future for our target groups. And how the organizations we finance can grow sustainably. That makes these theories the ideal measure for every project we finance.
Forecasting and adjusting impact with our PIP model
To support our theories of change, in 2020 we also developed the Potential Impact Performance model (PIP model). This allows us to better assess whether a project ties in to our strategy and if it has added value when we provide financing, share knowledge or help with innovative solutions. That in turn enables us to choose to collaborate with a project with a high credit risk, if it would also have a high impact. We ask 20 questions to identify an organization’s broader impact and the goal of each loan.
The answers to the questions determine whether the organization shares our strategic goals. With projects in other countries, we consider whether it would help reduce post-harvest losses, facilitate climate-smart agriculture or reinforce the value chain. We also determine the type of impact a project will have by asking: how will it change the lives of individual farmers? Finally, we consider what added value we would offer as an impact lender. And what else we can offer aside from financing; things like assistance in finding other lenders, coaching or access to new buyers.
Since early 2021, we have evaluated every project application using the PIP model. That helps us not only forecast the impact a project will have, but also to measure its progress and manage over the course of the project. Is it having the expected impact? Or should we use other tools to bring about the desired change?
The big picture
In short; we find that managing impact is just as important as managing your finances or your own employees. It’s no longer just about collecting data. It’s at least as important to know the story of the people who are touched by a project, and the organizations that help them. Those are the stories that provide the essential context that we can learn from. And those lessons learned can lead us to make even more focused choices to make a real difference. We use that knowledge to constantly improve our impact approach; not just at the project level, but all the way up to our strategy.
Would you like to know more about these stories behind the numbers? Then read all about them in the impact case studies we’ve selected for this year’s impact report.