Measuring Impact: An Interview with Media Development Investment Fund’s Harlan Mandel

Harlan Mandel is Chief Executive Officer of Media Development Investment Fund (MDIF), a global investor in independent media companies. In this interview, Harlan provides insight on generating and measuring impact in portfolio companies and in the societies in which they operate.

MDIF seems to be uniquely structured, with diverse sources of capital and varying investment vehicles. Can you describe how MDIF raises and invests capital?

For most of our 20 years, we’ve invested from a revolving pool of funds on our own balance sheet, but recently we’ve also set up separate debt and equity funds under our management. In all three cases we’ve relied on outside capital.

For our own revolving pool, we’ve been privileged to have been provided by funders with a base of philanthropic capital, and then we’ve raised debt from investors on top of that. We’ve had quite a diverse range of investors—foundations, development agencies, impact investment funds and individuals, as well as commercial banks. To attract more private capital, we’ve used guarantees from the Swiss and Swedish governments, as well as from foundations, to offer debt products with more commercially competitive risk-return profiles. For example, we’ve done three such debt issuances through Bank Vontobel, a Swiss private bank, in partnership with Swiss asset manager responsAbility, including one structured product listed on the Zurich stock exchange.

More recently, we’ve developed and begun to manage separate debt and equity funds. These structures give us access to additional mechanisms, such as first-loss positions and guarantees, to mitigate risk for investors and thereby offer more attractive risk-return profiles. Having dedicated debt and equity funds also provides better matching of assets and liabilities, and better alignment of risk and reward for our investors.

As an impact investor focusing on independent media, how does MDIF go about measuring impact?

More than 80% of people in the world—more than six billion people—don’t have access to reliable, quality news. MDIF invests in independent media businesses that provide the information that people need to make informed decisions about their lives, that hold leaders to account and expose wrongdoing.  As a mission-focused investment fund, impact measurement is of critical importance to our work. Our investors rightly want to know that their funds are making a real difference to investee businesses and, ultimately, the lives of ordinary people living in challenging conditions. The results of our impact assessments also help inform MDIF’s work as a whole.

Since 2005, we have published our Impact Dashboard to publicly present the findings of our annual analysis. The Dashboard describes the impact results from the preceding year as well as providing a longitudinal analysis of outcomes across our portfolio. We focus our impact assessment efforts on two levels: the direct impact of our investment on client businesses and our clients’ impacts on their societies.

At the first level, our primary objective is to support independent media with the financing and technical assistance they need to grow their business. Experience shows that making a media company succeed financially as a business is key to preserving its editorial independence, while expanding a company’s audience both increases revenues and expands the reach of its information and thereby its impact. In this way, our mission goals and financial goals for our investments are closely aligned. So to assess the extent to which our support contributes to these mission goals, we evaluate a set of uniform, objectively verifiable data-points: how the audience reach, sales and viability of each media company change over the course of its involvement with MDIF.

At a higher level, our ultimate goal is to invest in media as a way of helping people build free, thriving societies. Our second level of impact assessment focuses on three ways in which our investees impact their communities: exposing corruption and holding leaders accountable, providing citizens with the reliable information they need to make economic and political decisions, and supporting democratic participation by fostering debate and motivating citizens to participate in public life.

One option for measuring impact is to do so within a fund’s industry or niche—for MDIF, this would be in the media industry. What opportunities do you see for impact measurement to go beyond sector or industry specific benchmarks to span diverse funds and strategies?

It makes sense to standardize impact measurement whenever possible—not least to provide investors with the information they need to make informed decisions—but I don’t think a one-size-fits-all approach can fully capture social impact across a wide range of investments. Indicators like sales or numbers of employees are relevant across a range of industry sectors if your purpose is to strengthen a business or create jobs, but these don’t provide insight into the amplified social impact that some investments bring, such as a media company holding corrupt leaders to account or an education program helping the most disadvantaged. In those types of situations, comparisons become impossible. The best thing we can do as an investment fund is to standardize measurement whenever

it’s relevant, make public as much quality analysis of our work as we can and work with our investors to provide them with the information they need for their own internal assessment processes.

MDIF is a non-profit backed largely by development finance institutions and philanthropic investors. With this in mind, how would you characterize the relationship between impact and commercial returns?


As I mentioned earlier, we see a close alignment between our mission goals and financial returns, because building commercially robust media companies is essential for preserving their independence and expanding their impact. Taking it from another direction, we invest in companies that have high levels of reliability and audience trust as their competitive advantage, so mission dovetails with commercial success.

This relationship plays out in our own investment process. We start with a threshold mission-screen, which means that the first thing we look for when making any investment decision is social impact. If a potential investee doesn’t meet our social impact threshold we don’t consider an investment. But passing that screen—and we’re incredibly selective with regards to editorial integrity and content quality—is just the beginning. From there, we go through a deep examination of the business and its commercial prospects, and only invest if we’re convinced of its potential for commercial success and meeting our target returns.

Why are private equity and private credit the best investment strategies for accomplishing MDIF’s social impact goals?

For the news outlets in emerging and frontier markets that we invest in, there are no local sources of acceptable capital. Local banks don’t have the specialist knowledge to invest in the sector, and they and other potential providers of capital may not want to be associated with a company that takes a critical eye to those in power. Often the only available financing comes from vested interests who want to influence editorial decision-making.

MDIF provides an alternative: equity financing from start-up to expansion stage, as well as affordable debt. In all cases we support investee companies with strategic advice and tailored technical assistance to help our investees grow audiences and revenues. MDIF capital and media management assistance help investees protect their editorial independence by building robust businesses. Our goal of fostering investee social impact by developing their financial viability is perfectly aligned with aims of the companies we work with, and I think it’s this that makes it the most effective model.