Beyond profit vs. purpose: Transactional-relational practices in impact investing

The emergence of impact investing over the past decade has been accompanied by increased interest in impact measurement to understand both social and financial returns. One of the constantly re-occurring themes in the research on impact measurement is the tension between financial return and social/environmental mission. However, we challenge this binary view by addressing the following questions: is the profit/purpose trade-off dilemma an immutable feature of impact investing? And, if so, how are investor-investee relationships negotiated through those tensions to keep the impact measurement process flowing productively? Using an exploratory multi-round Delphi Method study (15 panellists) and 22 semi-structured interviews, we discover a new set of impact measurement practices, which are relational and non-transactional in nature. These two levels of engagement, the transactional and the relational, occur in sequence and reinforce each other, ultimately creating both instrumental and intrinsic value. In the end, we propose the Transactional-Relational Spiral model and encourage further research and validation.