Module 17 – Negative Outcomes


Much attention in impact investing and other forms of innovative finance is placed on the positive outcomes expected of and achieved by such interventions. However, as in all fields, things can go wrong. Businesses can fail. Portfolios can underperform. Funds may be stolen. A calamity, like an accident, or even a fatality, may occur on a project. Some years ago in India, there were suicides by microcredit borrowers despondent because of their mounting debt.

These issues are challenging enough in their own right, and require substantive solutions. But when such negative or unintended outcomes also become media stories another dimension is added to how they must be managed. While such outcomes are not usually extreme in nature, is important for leaders in the impact investing field, and those who undertake impact assessment in that space, to be prepared to deal with a range of these situations—and, in fact, to expect them.


In East Africa, a social enterprise producing organic tea, and with a strong orientation to women’s empowerment, receives several high-profile investments from non-profit and DFI investors. The business does well for five years, but inattention to management issues and aggressive new market entrants reduce its business viability, to the point where it has to be shut down, at least temporarily. The investors and owners are reassessing the business. It may be restructured and re-launched—or it may be closed altogether. (This scenario is based on an actual case in Africa).


In small working groups for 30 minutes, after choosing a chair and a rapporteur, please answer the follffffffowing questions:

  • How should the investors, on whose websites the enterprise figures prominently, communicate about this investment to their investors and to the general public?
  • What should be done with the enterprise itself?
  • How should this situation be treated by the monitoring and evaluation team?

Report back to the plenary and share your responses via a five-minute presentation by your rapporteur. The instructors will facilitate the plenary session and will record the responses from all groups.


Anderson, S. A Bridge Too Far? Bridge International Academies Responds to Ugandan Government’s Allegations and Closure Plans, Next Billion, 2016.

Bank, D. and D. Price. Unintended Consequences: How a strategic investment steered an educational-technology startup into trouble, Stanford Social Innovation Review, Special Supplement, 14(3), 2016, 11-13.

Jackson, E.T. Evaluating Social Impact Bonds: Questions, Challenges, Innovations and Possibilities in Measuring Outcomes in Impact Investing, Community Development: Journal of the Community Development Society. 44(5), 2013,1-9. Please note, copy and paste this link to your browser to access it:

Seelos, C. and J. Mair. When Innovation Goes Wrong, Stanford Social Innovation Review, Fall 2016.

Shah, S. and M. Pease. Diverse Perspectives, Shared Objectives: Collaborating to Form the African Agricultural Capital Fund, Case Study, Global Impact Investing Network, New York, June 2012.