How do you measure the impact of reliable weekly milk purchases on the lives of small-scale Indian dairy farmers? What if you need to compare that with the impact on American college students of courses about dating violence and sexual harassment?

This is the kind of valuation challenge impact investors have been grappling with for years. Purely financial investments come with an accepted methodology for measuring return on investment. But with investments in projects or organizations working to deliver social or environmental impact, there’s no shared accounting framework for measuring the value of what’s been achieved.

Attempts have been made for years to systematize and popularize various flavors of impact measurement, but no single method has achieved mass adoption. The latest move toward standardization comes from one of the industry’s biggest investors and is built around calculating impact in dollars. The $2 billion Rise Fund, managed by $72 billion private equity giant TPG Capital, spelled out the methodology behind its new measure, the “impact multiple of money,” in an articlein Harvard Business Review in January.

Using the new measure, Rise calculated that its investment in EverFi, the educational technology company that produces the dating-violence course, was delivering $1.1 billion in social value and a 5X impact multiple of money (IMM), or $5 for every $1 invested.

“We spent two years and millions of dollars working with BridgeSpan to develop our Impact Multiple of Money framework, and we pressure-tested it with 80 organizations,” Bill McGlashan, founder and CEO of the Rise Fund, told ImpactAlpha in an on-stage interview in February. “What it creates is a map of the derivative and second-derivative impact effects of really sophisticated, complicated, scalable businesses that deliver measurable real outcomes.”

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