Social Impact Measurement: The Momentus Approach

by Emily Andrews, Manager of Impact Analytics & Evaluation

At Momentus Capital, we know that to maximize our impact, we need to first understand it. Building and sustaining healthy, inclusive, and equitable communities requires capital and resources – but without measuring outcomes, it’s impossible to develop effective interventions at scale.

That’s why we’ve developed a comprehensive Impact Framework to help us track the results of not only our loan offerings but also the capacity-building programs, technical assistance, and tools that make up our continuum of capital (PDF).

This framework is at the center of our decision-making process as we work toward our mission of helping to build inclusive and equitable communities by providing people access to the capital and opportunities they deserve.

So, what are we measuring, and why?

Measuring Results, Inferring Impact

At Momentus Capital, social impact refers to the changes that borrowers, communities, and other stakeholders experience or create through our partnership. Because these long-term changes can be difficult to quantify, our Impact Framework focuses on measuring the short-term and intermediate results that can be directly attributed to the financial, knowledge, and social capital we offer. We then use rigorous third-party research to infer how those results can lead to long-term social impacts.

We refer to the quantitative metrics and key performance indicators that we use to measure results as Impact Data. These numbers include:

• Loan volume
• Number of businesses supported
• Number of jobs created and retained as a result of every loan we originate
• Percentage of our loans that go to women, BIPOC, and veteran-owned businesses
• Percentage of our lending that takes place in low- to moderate-income areas
• Units of affordable housing built and maintained with our support
• Patients with expanded access to health care through our programs
• Customers with new access to healthy food
• Students enrolled in charter schools we support

We use these numbers in combination with third-party research to extrapolate likely impacts on individuals and communities. For example, suppose we know that the developers we support have built several hundred new affordable housing units in a city and increased the housing supply by a meaningful percentage. In that case, we can infer a long-term impact of increased housing stability, which in turn supports physical health, especially for children. Similarly, if supporting businesses leads to measurable minority-owned business growth and job creation, we can infer that our efforts are moving the needle toward a narrowed racial wealth gap.

Prioritizing a Place-Based Approach

The factors that drive the health and financial stability of communities are inherently interconnected, which means that investments in one area, like housing, can amplify the impacts of investment in another, such as education. Instead of spreading limited resources over large geographies, Momentus uses a place-based strategy that focuses investments in specific areas to create substantive change. This strategy also allows us to measure change more effectively and holistically.

Currently, our investments are concentrated in Detroit, the Washington, D.C. metro region, Los Angeles, and Dallas/Fort Worth, with emerging work in Atlanta and Miami. Our long-term commitment to these areas has allowed us to build strong partnerships and remain highly responsive to what each community needs and wants. It also allows us to measure outcomes more effectively and over longer periods.

Understanding the Social Determinants of Health

To make those extrapolations and understand how the capital and opportunities we provide are improving the health and well-being of the communities we serve, we use an impact measurement approach built on the Social Determinants of Health (SDOH).

Social determinants of health are the conditions in which people are born, live, and work that affect health outcomes. They include everything from socioeconomic status and educational opportunities to access to healthy food. Extensive research demonstrates that these factors, which often interact with and compound one another, significantly impact individuals’ ability to live healthy, fulfilling, and productive lives. The United Nations’ Sustainable Development Goals are also closely aligned with SDOH.

Structural racism, classism, and sexism all impact the accessibility of social determinants of health. Marginalized communities face significant barriers to accessing employment opportunities, education, housing, and healthcare as well as financial services.

This is why our work is underpinned by a commitment to advancing racial justice by disrupting cycles of financial exclusion and ensuring that all communities, regardless of demographics, have equitable access to financial resources.

To measure our impact on racial equity and the social determinants of health, we monitor and collect data across six domains. They are:

Economic Security

Without economic stability, it’s impossible for individuals and families to sustainably access other social determinants of health. Yet stable employment and household wealth — the building blocks of financial stability — remain out of reach for many, particularly members of marginalized communities.

According to the U.S. Federal Reserve, Black and Latino families own only 15-20% as much wealth (which includes not only money, but assets such as real estate) as their white counterparts, in large part due to the long history of discrimination that has kept them from building generational wealth. Today, that gap continues to widen.

Similarly, the average Black and Latino household earns about half as much as white households, and unemployment rates are disproportionately high in communities of color. These discrepancies, which are deeply rooted in structural racism, underinvestment, and discriminatory lending practices, make it harder for families to cover basic necessities, let alone build wealth for future generations. During COVID-19, Black and Latino workers experienced higher and more prolonged rates of unemployment yet were less likely to have access to unemployment insurance payments. Further, Black and Latino people were more likely to work in “frontline” roles that carried increased risk and to lack access to paid sick leave and remote work options.

Momentus helps underserved individuals and communities earn steady incomes and build wealth by broadening access to financial resources. Since small businesses create two-thirds of new jobs in the United States, offering entrepreneurs and developers access to financial, knowledge, and social capital can have powerful ripple effects that build economic security across communities.

Neighborhood and Housing

Safe and affordable housing is a crucial cornerstone for any individual or family’s life. Without it, accessing education, employment, and other resources is difficult. In the United States, a widespread shortage of safe and affordable housing disproportionately impacts minority households, and that shortage continues to increase. Poor-quality housing is tied to a number of negative health outcomes, and data show that members of marginalized communities are more likely to live in housing that exposes them to dangerous levels of particulates, lead, mold, and other environmental hazards. The consequences of these disparities were demonstrated starkly in Flint, Michigan, where the state’s Civil Rights Commission found that structural racism contributed to the institutional failure to address high lead levels in drinking water — a failure with life-altering consequences for Black families.

Momentus has responded to this challenge with extensive investments in high-quality, affordable housing development in low- and moderate-income areas. In addition, we run several programs to train and support developers of color dedicated to housing equity.

Health Care

Access to a full range of health care services is essential for not treating disease but for promoting good quality of life. Over a third of U.S. residents live in counties with significant health care service gaps, and one in ten people lack health insurance. Hispanic and Indigenous Americans are more than twice as likely as their white peers to lack insurance, and racial disparities exist across healthcare metrics ranging from from birth weight to life expectancy. During the COVID-19 pandemic, Black, Hispanic, and Indigenous Americans experienced significantly worse outcomes than other groups due to disparities in access to health care, as well as increased risk driven by other inequities.

Momentus invests in health care projects and infrastructure ranging from small clinics to major hospitals in low- to moderate-income communities that lack the health services common in higher-income areas. Our goal with these investments is to increase access to comprehensive, high-quality treatment and preventive care.

Education

Education can unlock economic opportunities, strengthen community ties, and support the development of healthy, engaged citizens. However, in the United States, public education quality varies significantly, and lower-income areas often have overcrowded, underfunded schools. Since students of color are disproportionately represented in low-income school districts, they are impacted more than their white students.

Momentus supports charter schools and early education businesses to ensure that all children, regardless of where they live, have access to quality education. Since a child’s earliest years are crucial to their development, we also invest in early education centers.

Healthy Food

Without consistent access to healthy food, individuals and families struggle to remain healthy and productive. Currently, 54 million Americans are food insecure, and 23.5 million live in food deserts, meaning they must travel more than a mile to reach a supermarket. Black and Hispanic children are twice as likely to be food insecure as white children.

Momentus provides loans to grocery stores and food retailers in underserved areas to expand access to healthy food in communities that previously had few options.We also support food businesses with grants and technical assistance through our Nourish DC initiative, which gives preference to businesses located in or owned by residents of underserved neighborhoods..

Social and Community Context

Research shows that people are mentally and physically healthier when they feel a strong sense of community belonging. In some cases, positive community relationships can even lessen the negative mental health impacts of poor physical conditions in neighborhoods. However, if individuals lack access to other domains, such as stable housing, employment, education, and health care in their communities, it’s much harder to build and maintain  local ties.

Through our place-based strategy, Momentus helps communities increase access to services essential to safe, healthy, and equitable communities, like high-quality schools and health care facilities. Further, our investments in small local businesses help support community health by increasing productivity and employment and facilitating touchpoints between neighbors.

How We Use Our Data

Since much of our work involves direct financial support, we have access to extensive data sets from the loan application and closing process as well as reporting throughout the life of each loan. Plus, since our unique continuum of capital approach pairs monetary investment with advisory support, we have numerous touchpoints with our program participants.

We recognize the value of this data and aim to use it as effectively as possible while respecting the privacy and security of our partners.

External Uses

We also use our data externally to help scale our impact. We share anonymized information with government, non-profit, and private-sector partners to maintain accountability and share our learnings. We also use impact data and our participants’ personal stories (with their consent) to advocate for policies that promote financial equity at the federal, state, and local levels. Finally, we publish an Annual Report to highlight our successes and share what we’ve learned.

Internal Uses

The Momentus team uses data daily to refine our program offerings and models and remain responsive to our participants. For example, Momentus recently offered over $900,000 in grants through Nourish DC to Washington, D.C., food businesses. During the grantmaking process, our proactive analysis of the applications revealed that many businesses needed cold storage solutions, so we developed an additional grant for cooling systems.

Working Toward a More Equitable Future

The path toward racial equity and equitable access to the social determinants of health is long — and that makes it especially important to test, measure, and iterate programs and initiatives to find solutions that truly move the needle.

Our impact measurement work helps Momentus develop highly effective solutions and ensure that every dollar we invest promotes equity and supports the health of individuals and communities.  It gives us actionable data that we can share with partner organizations and the government, and it helps us move closer to our vision of an economic system that respects and uplifts all peoples’ right to achieve the dreams they have for themselves, their communities, and generations to come.