In mid-December, the New York Times reported on the launch of a new impact investment fund, RISE. RISE, a fundraising effort overseen by TPG Growth, is engaging philanthropists, venture capitalists, investors and development proponents alike in the quest to pursue rigorous financial and impact goals. The $2 billion effort—one of the largest of its kind—is yet another empowering sign that more mainstream investors—and their clients—are looking to Impact Investing as a viable opportunity to pursue a range of material returns.

While this announcement creates continued confidence around the momentum in this space, the article references a supposed laziness of Impact Investing efforts to-date. Most notably failed experimentation, relaxed expectations on returns (social or otherwise) and the sacrifice of charity. But that criticism, while valid in the early days of the movement, doesn’t ring true today. In fact, in the last two years alone, a combination of diverse engagement, deeper performance tracking and diligent impact measurement is driving Impact Investing from a niche to mainstream strategy.

Three observations in particular encourage us on the way forward, and should be more heavily featured in the overall Impact Investing narrative:

  1. Market size and opportunity indicates the potential for real growth

In 2016, the Global Impact Investing Network (GIIN) estimated that 157 respondents committed USD $15.2 billion toward impact investing, with 7,551 total investments tracked during the year. In the 2015 report by the same group, 146 respondents committed USD $10.6 billion, with a total of 5,404 impact investments tracked.

The number of investments and the number of engaged investors continues to increase year over year. Strong platform and product development by financial institutions like BlackRock and Prudential, expansive divestment efforts by the Rockefeller Brothers Fund and impact investments by historically “traditional” venture capitalists like Mark Andreessen indicate that “niche” is no longer an appropriate qualifier.

But, we’re not home yet. The continued growth of Impact Investing will require a lot more catalytic capital brought to bear through varied instruments across the risk/return spectrum. It will also require new thinking around expectations, goals and tools—moving past traditional norms around investment behavior.

  1. Exit tracking and performance indicates the potential for real returns

Across the field, varied definitions of “Impact Investing” have slowly merged into a more common set of principles. Often used to exclusively describe private investment activity in key geographies and sectors, Impact Investing now spans multiple investor types and asset classes. The bulk of historical activity, however, continues to include investments into companies and funds, and funds remain a predominant choice. Particularly for large investors, first time LPs, and organizations looking to co-invest with peers, this vehicle allows investors to learn, explore and meet their goals together.

The pressure for General Partners (GP) to find liquidity in their funds and generate a sizable return for their LPs means that exit performance dominates the conversation. For impact fund managers, according to a Wharton Social Impact Initiative report, that pressure is even more intense given how little track record, performance management and all around evolution we can point to for such a young industry.

But that track record is building. Cambridge Associates, in partnership with the GIIN, conducted research to determine performance within private equity and venture capital impact investment funds. Their analysis covered 51 private funds launched between 1998 and 2010. Findings indicate that impact funds outperformed comparable non-impact funds. At the $100 million fund size and below, impact funds realized returns of 9.5% (IRR) compared to non-impact funds which achieved 4.5% (IRR). Impact funds underperformed non-impact counterparts at differing fund levels and in certain regions, though performance in emerging markets (particularly across Africa) was stronger.

Continued quantifiable analysis such as this is critical in hammering home what the research shows—that impact investments are not inherently concessionary. Understanding where Impact Investing is most successful, where it’s not and how it has evolved in a short period of time are all equally important elements of successfully talking about this space.

  1. Sophistication around the articulation and measurement of social objectives indicates the potential for real impact

Early criticism of Impact Investing focused on a lackluster process for prioritizing and/or measuring social impact. Either the framework was absent, or the rigor of measurement was missing altogether. Since formalization of the term in 2007, various groups have been working to increase the sophistication of the tracking and articulation of non-financial objectives. The IRIS standards, GIIRS ratings and B Impact Assessment are just a few tools that help us to determine what to measure, what that means and how to compare our performance across similar benchmarks.

But the proliferation of these tools also requires real adoption. In the 2016 GIIN survey previously referenced, respondent activation increased in standardization across IRIS, integration of impact measurement across investment teams and integration of impact performance into decision making.

Investors have often been urged to clearly articulate and track their goals around social impact, but those metrics have been under-developed, prohibitive or clunky. As the articulation of social impact objectives becomes increasingly sophisticated, the actual monitoring of performance across indicators will also improve. This early data demonstrates that we have a long way to go, but consideration of impact objectives is an important part of the broader performance conversation.

As the field continues to develop around terminology, performance measurement and the growing market opportunity, we are excited about the potential for even more capital to flow into the Impact Investing space. In our work, we’ve seen increasing commitment on all fronts to further develop the field in a way that enhances the ability of Impact Investing to meet its full potential. It is our hope that continued rigor and sophistication will get us one step closer to tipping point.