How do you rigorously measure the impact of funding a for-profit company?

At the Africa Jobs Fund, we have a single core target, spending less than $10 of philanthropic money to double one person’s income for a year. If we can hit that, it would make us multiple times more cost-effective than GiveWell’s top charities (a vetted set of the most effective development interventions).

The catch is that techniques for the rigorous measurement of impact in global development are built for charities running programmes, not for-profit companies.

Our model is to catalyse new businesses in export manufacturing and international labour mobility the two sectors we think can most effectively create large-scale income gains for low-income workers in Africa. We back world-class entrepreneurs with seed capital, network, and operating support, usually to build companies completely from scratch.

Companies scale in a way programmes don’t. Once a portfolio company is off the ground, it funds itself through revenues and commercial capital rather than perpetual philanthropic subsidy. And when one pioneer firm proves that a new model or corridor works, copycats follow, multiplying the impact well beyond anything we funded directly.

There are not many organisations that combine a focus on building for-profit companies with an underlying calculus rooted in cost-effectively creating impact. We think in many cases it could be the most effective way to generate positive impact with philanthropic Dollars. For those who want to dig in further, our full cost-effectiveness analysis is public on our impact page, assumptions and all.

The standard approaches to rigorously assessing a non-profit will not work for for-profit companies. Randomised-control-trials produces the causal, welfare-linked evidence that rigorous funders expect. But bolting an RCT onto a fast-moving startup imposes costs and constraints that can strangle the business you’re trying to measure.

However, most impact measurement in the for-profit space is too vague to properly convince cost-effectiveness focused philanthropists and non-profits of the substance. Light-touch reporting keeps portfolio firms nimble, but “we created 500 jobs” tells a serious funder almost nothing. How many of those jobs would have existed anyway? How big was the income lift, and for how long? How much of the impact can be credited to us versus the founder’s, the co-investors’, the copycats’?

As much as possible, we want to achieve the analytical rigour of the GiveWell-adjacent funding world applied to real, fast-moving, early-stage businesses. Ideally, finding unobtrusive ways to collect enough data on portfolio companies to properly estimate counter-factual impact.

Ultimately, the goal is a measurement approach that our funders trust and our portfolio companies barely notice.

We’re hiring a part-time M&E consultant (roughly 5-10 hours a week to start) to design this with us. The right person has deep expertise in impact measurement or development economics, speaks the language of cost-effectiveness and counterfactual impact, and has enough operating experience (ideally including experience in for-profits) to reach for the lightest method that still answers the question.

If that sounds like you, or someone you know, the full role description and application are here.

And if you have expertise in this area and would be keen to share ideas on how we ought to measure this then we’d love to hear from you: hello@africajobsfund.com